Exhibit 10.2
Execution Copy
***Text Omitted and Filed Separately
with the Securities and Exchange Commission.
Confidential Treatment Requested
Under 17 C.F.R. Sections 200.80(b)(4)
and 240.24b-2.
AMENDED AND RESTATED LICENSE AGREEMENT
     This Amended and Restated License Agreement (the “Agreement”) is entered
into as of June 20, 2010 (the “Execution Date”) between Cypress Bioscience,
Inc., a corporation organized and existing under the laws of the State of
Delaware and having its principal place of business at 4350 Executive Drive,
Suite 325, San Diego, CA 92121 (“Cypress”), and BioLineRx Ltd., a corporation
organized and existing under the laws of the State of Israel and having a
principal place of business at 19 Hartum Street, P.O. Box 45158, Jerusalem
91450, Israel (collectively, “BioLineRx”). BioLineRx and Cypress are sometimes
referred to herein individually as a “Party” and collectively as the “Parties.”
RECITALS
     Whereas, BioLineRx is a clinical-stage biopharmaceutical company developing
clinical and pre-clinical candidates for central nervous system diseases,
oncology, cardiovascular, auto-immune and metabolic diseases; and
     Whereas, Cypress has substantial expertise in the research, development,
manufacture, distribution, sales and marketing of pharmaceutical products; and
     Whereas, BioLineRx controls certain intellectual property covering BL-1020,
a first in class antipsychotic that combines dopamine antagonism with GABAergic
activity, and is engaged in the development of BL-1020 for central nervous
system diseases; and
     Whereas, BioLineRx desires to grant to Cypress, and Cypress desires to
obtain, exclusive rights to pre-commercialize, manufacture and commercialize
product(s) containing BL-1020, all on the terms and conditions set forth herein;
and
     Whereas, the Parties executed that certain License Agreement on June 20,
2010 and now wish to amend and restate that License Agreement as set out herein;
     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 “Acceptance” has the meaning set forth in Section 8.2(b).
     1.2 “Acquisition” has the meaning set forth in Section 15.5.

1

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

 

     1.3 “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 fifty
percent (50%) or more of the voting stock of such entity, or by contract or
otherwise.
     1.4 “BioLineRx Indemnitees” has the meaning set forth in Section 11.2.
     1.5 “BioLineRx Know-How” means all Information that is Controlled by
BioLineRx or its Affiliates as of the Effective Date or at any time during the
Term (including BioLineRx’s interest in any Joint Inventions) 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, BioLineRx Know-How excludes the BioLineRx Patents. Notwithstanding the
foregoing, BioLineRx Know-How shall not include Information controlled by an
acquiror or merger partner of BioLineRx that: (a) such acquiror or merger
partner of BioLineRx controlled prior to the date of closing of such acquisition
or merger; or (b) was developed after the date of closing of such acquisition or
merger without using BioLineRx Know-How, Cypress Know-How, Joint Know-How or
inventions claimed in BioLineRx Patents, Cypress Patents or Joint Patents, and
in the case of (b) is not used in connection with Pre-Commercialization or
Commercialization.
     1.6 “BioLineRx Patents” means all Patents in the Cypress Territory (a) that
are Controlled by BioLineRx or its Affiliates as of the Effective Date or at any
time during the Term (including BioLineRx’s interest in any Joint Patents), and
(b) directed to the Pre-Commercialization, Commercialization or manufacture of
the Products in the Field in the Cypress Territory. Notwithstanding the
foregoing, BioLineRx Patents shall not include Patents controlled by an acquiror
or merger partner of BioLineRx that: (i) such acquiror or merger partner of
BioLineRx controlled prior to the date of closing of such acquisition or merger;
or (ii) were developed after the date of closing of such acquisition or merger
without using BioLineRx Know-How, Cypress Know-How, Joint Know-How or inventions
claimed in BioLineRx Patents, Cypress Patents or Joint Patents, and in the case
of (ii) are not used in connection with Pre-Commercialization or
Commercialization. The BioLineRx Patents existing as of the Effective Date are
set forth on Exhibit B attached hereto, listed under UA Patents and BioLineRx
Patents, as applicable.
     1.7 “BioLineRx Pre-Commercialization Activities” has the meaning set forth
in Section 4.3(a).
     1.8 “BioLineRx Pre-Commercialization Expenses” has the meaning set forth in
Section 4.7(c).
     1.9 “BioLineRx Regulatory Data” means Regulatory Data generated by or on
behalf of BioLineRx (or its Affiliates, licensees or sublicensees) after the
Effective Date, and Controlled by BioLineRx during the Term.

2

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

 

     1.10 “BioLineRx Prosecuted Patents” has the meaning set forth in
Section 9.4(b).
     1.11 “BioLineRx Technology” means the BioLineRx Patents and BioLineRx
Know-How.
     1.12 “BL-1020” means BioLineRx’s proprietary compound known as BL-1020,
having the chemical structure set forth on Exhibit A, or salt, solvate,
polymorph, or other non-covalent derivate thereof.
     1.13 “Commercialization,” with a correlative meaning for “Commercialize”
and “Commercializing,” means all activities in the Cypress Territory undertaken
before and after obtaining Regulatory Approvals relating specifically to the
pre-launch, launch, promotion, detailing, medical education and medical liaison
activities, marketing, pricing, reimbursement, sale, and distribution of the
Products in the Cypress Territory, including: (a) strategic marketing, sales
force detailing, advertising, medical education and liaison, and market and
Product support; (b) 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 (c) all
customer support, Product distribution, invoicing and sales activities.
     1.14 “Commercialization Plan” has the meaning set forth in Section 6.1(a).
     1.15 “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.
     1.16 “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 January 28, 2010, as amended through the Effective
Date, shall be deemed to be such Party’s Confidential Information disclosed
hereunder.
     1.17 “Control” means, with respect to any material, Information, or
intellectual property right, that a Party owns or has a license to such
material, Information, or intellectual property right and, in each case, 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.
     1.18 “Cypress Indemnitees” has the meaning set forth in Section 11.1.
     1.19 “Cypress Know-How” means all Information that is Controlled by Cypress
or its Affiliates as of the Effective Date or at any time during the Term
(including Cypress’ interest in any Joint Inventions) and is necessary or useful
for the Pre-Commercialization, Commercialization or manufacture of the Products
in the Field in accordance with the terms of

3

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

 

this Agreement. For clarity, Cypress Know-How excludes the Cypress Patents.
Notwithstanding the foregoing, Cypress Know-How shall not include Information
controlled by an acquiror or merger partner of Cypress that: (a) such acquiror
or merger partner of Cypress controlled prior to the date of closing of such
acquisition or merger; or (b) was developed after the date of closing of such
acquisition or merger without using BioLineRx Know-How, Cypress Know-How, Joint
Know-How or inventions claimed in BioLineRx Patents, Cypress Patents or Joint
Patents, and in the case of (b) is not used in connection with
Pre-Commercialization or Commercialization.
     1.20 “Cypress Patents” means all Patents (a) that are Controlled by Cypress
or its Affiliates as of the Effective Date or at any time during the Term
(including Cypress’ interest in any Joint Patents) and (b) with a Valid Claim
covering the Pre-Commercialization, Commercialization or manufacture of the
Products in the Field in the Cypress Territory. Notwithstanding the foregoing,
Cypress Patents shall not include Patents controlled by an acquiror or merger
partner of Cypress that: (i) such acquiror or merger partner of Cypress
controlled prior to the date of closing of such acquisition or merger; or
(ii) were developed after the date of closing of such acquisition or merger
without using BioLineRx Know-How, Cypress Know-How, Joint Know-How or inventions
claimed in BioLineRx Patents, Cypress Patents or Joint Patents, and in the case
of (ii) are not used in connection with Pre-Commercialization or
Commercialization.
     1.21 “Cypress Pre-Commercialization Activities” has the meaning set forth
in Section 4.4(b).
     1.22 “Cypress Pre-Commercialization Expenses” has the meaning set forth in
Section 4.7(b).
     1.23 “Cypress Regulatory Data” means Regulatory Data generated by or on
behalf of Cypress (or its Affiliates, licensees or sublicensees) after the
Effective Date, and Controlled by Cypress during the Term.
     1.24 “Cypress Prosecuted Patents” has the meaning set forth in
Section 9.4(a)(2).
     1.25 “Cypress Technology” means the Cypress Patents and Cypress Know-How.
     1.26 “Cypress Territory” means the United States, Canada and Mexico,
including each of their territories, possessions and provinces, as the case may
be.
     1.27 “Dollar” means a U.S. dollar, and “$” shall be interpreted
accordingly.
     1.28 “Effective Date” means the date on which the written consent of the
OCS with respect to this Agreement has been obtained 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).
     1.29 “Excluded Claim” has the meaning set forth in Section 14.4.

4

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

 

     1.30 “Execution Date Agreement” has the meaning set forth in Section 2.1.
     1.31 “Executives” has the meaning set forth in Section 3.1(d).
     1.32 “FDA” means the United States Food and Drug Administration and any
successors thereof.
     1.33 “Field” means the use of the Product for the prevention, diagnosis and
treatment of all human diseases.
     1.34 “First Commercial Sale” means the first sale of a Product by Cypress
or its sublicensees to a Third Party in a given regulatory jurisdiction within
the Cypress Territory after Regulatory Approval for such Product has been
obtained in such jurisdiction.
     1.35 “Generic Product” means, with respect to a Product in the Field in the
Cypress Territory, another pharmaceutical product that is: (a) a Product; (b) is
bioequivalent to such Product with respect to pharmacokinetic properties; and
(c) is (i) either approved for use in the Cypress Territory by the Regulatory
Authority, or (ii) launched by a Third Party in the Cypress Territory pursuant
to Paragraph IV of the Drug Price Competition and Patent Term Restoration Act of
1984, as amended, or any successor regulations (or its comparable regulation in
a jurisdiction within the Cypress Territory).
     1.36 “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).
     1.37 “Indemnify” has the meaning set forth in Section 11.1.
     1.38 “Indication” means Initial Indication or Additional Indication. As
used herein, “Initial Indication” means a class of human disease or condition
listed in The Diagnostic and Statistical Manual of Mental Disorders, 4th Edition
(“DSM-IV”) within the DSM-IV defined class of “Schizophrenia and Other Psychotic
Disorders” (as the DSM-IV may be amended or updated during the Term), for which
a Product has been approved by a Regulatory Authority; and “Additional
Indication” means a separately defined, well-categorized class of human disease
or condition, other than the Initial Indication, for which a Product has been
approved by a Regulatory Authority. For clarity, pediatric extension of the
Initial Indication is not an Additional Indication.

5

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

 

     1.39 “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.
     1.40 “Initiation” has the meaning set forth in Section 8.2(b).
     1.41 “JAMS Rules” has the meaning set forth in Section 14.3.
     1.42 “Joint Inventions” has the meaning set forth in Section 9.1(b).
     1.43 “Joint Patents” has the meaning set forth in Section 9.1(b).
     1.44 “Joint Steering Committee” or “JSC” has the meaning set forth in
Section 3.1(a)
     1.45 “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.
     1.46 “Losses” has the meaning set forth in Section 11.1.
     1.47 “Major Country” means any one of the following countries: France,
Germany, Italy, Spain and the United Kingdom.
     1.48 “[...***...] Study” means the ongoing pre-clinical study which is
being conducted by [...***...] for BioLineRx, which is BioLineRx’s only ongoing
pre-clinical study concerning the Product as of the Execution Date.
     1.49 “NDA” means a new drug application as defined in the United States
Federal Food, Drug, and Cosmetic Act (and any successor acts thereto), as
amended from time to time.
     1.50 “Net Sales” means, with respect to a particular time period, the total
amounts invoiced by Cypress and its Affiliates or sublicensees for sales of
Products made during such time period to unrelated Third Parties in the Cypress
Territory, less the following deductions to the extent actually allowed or
incurred with respect to such sales:
          (a) trade discounts, credits or allowances including cash and quantity
discounts provided by means of chargebacks, rebates and administrative fees
charged by customers or health care organizations determined based upon sales;
          (b) credits or allowances additionally granted for damaged, outdated,
spoiled, returned or rejected Products, including in connection with recalls;
 

***   Confidential Treatment Requested

6

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

 

          (c)freight, shipping and insurance charges, to the extent included in
the invoiced amount;
          (d) Taxes, tariffs, duties or other governmental charges (other than
income taxes) levied on, absorbed or otherwise imposed on sales of the Products
in the Cypress Territory, as adjusted by any refunds, provided that such Taxes,
tariffs, duties and other governmental charges are included in the applicable
invoiced amount and identified in the applicable invoice; and
          (e) rebates, discounts or other payments on sales of Products that are
mandated by a Governmental Authority.
Notwithstanding the foregoing, amounts invoiced by Cypress and its Affiliates or
sublicensees for the sale of Products between Cypress and its Affiliates or
sublicensees for resale shall not be included in the computation of Net Sales
hereunder. For purposes of determining Net Sales, a “sale” shall not include
reasonable transfers or dispositions, at no cost, as samples or for charitable
purposes, or transfers or dispositions at no cost for preclinical, clinical or
regulatory purposes.
Each of the deductions set forth above shall be reasonable and customary, and in
accordance with United States Generally Accepted Accounting Principles (“GAAP”).
If Cypress proposes to Commercialize a Product as part of a Bundled Product (as
defined below), Cypress shall inform BioLineRx of such proposal and the Parties
will discuss in good faith whether, and under what conditions, such Bundled
Product should be Commercialized. For purposes of this paragraph, “Bundled
Product” means products (including one or more Products) that are either (A)
packaged together for sale or shipment as a single unit or sold at a single
price or (B) marketed or sold collectively as a single product. For clarity, a
Bundled Product is not a Combination Product (as defined below).
For the purpose of determining royalties due to BioLineRx, Cypress shall
calculate Net Sales of Combination Products (as defined below) by multiplying
Net Sales of such Combination Product by a fraction A/A+B, where A is the sale
price of the Product portion of such Combination Product when sold separately
and B is the sale price of the other active ingredient(s) in such Combination
Product when sold separately; provided, however, that if the Product portion of
such Combination Product or any of the other active ingredients in such
Combination Product is not then sold separately, then Cypress shall calculate
Net Sales of such Combination Products by the fraction C/C+D, where C is a
reasonable estimate of the fair market value of the Product portion of such
Combination Product, D is a reasonable estimate of the fair market value of the
other active ingredients in such Combination Product, and the estimates of C and
D are determined by mutual agreement of the Parties. As used in this
Section 1.50, “Combination Product” means a product in which one or more active
ingredients that are not Products are sold in a single formulation with a
Product.

7

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

 

     1.51 “Non-Breaching Party” has the meaning set forth in Section 13.2(a).
     1.52 “Notified Party” has the meaning set forth in Section 13.2(a).
     1.53 “OCS” has the meaning set forth in Section 2.1.
     1.54 “Ordinary Shares” has the meaning set forth in Section 8.2(a).
     1.55 “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.
     1.56 “Pharmacovigilance Agreement” has the meaning set forth in
Section 5.3.
     1.57 “Phase 3 Clinical Trial” means a pivotal human clinical trial on
sufficient numbers of patients which is designed to (a) establish that a Product
is safe and efficacious for its intended use; (b) define warnings, precautions
and adverse reactions that are associated with such Product in the dosage range
to be prescribed; and (c) support Regulatory Approval of such Product, as
further defined in 21 C.F.R. 312.21(c), as amended from time to time, or the
corresponding regulation in jurisdictions within the Cypress Territory other
than the United States. For clarity, a Phase 2/3 Clinical Trial shall be
considered to be a Phase 3 Clinical Trial if it is considered by a Regulatory
Authority to be a pivotal clinical trial for the Product as determined at the
time of Acceptance by the FDA of an NDA for a Product in the United States.
     1.58 “Pre-Commercialization,” with a correlative meaning for
“Pre-Commercialize” and “Pre-Commercializing,” means all activities in the
Cypress Territory relating to preparing and conducting preclinical testing,
toxicology testing, human clinical studies, and regulatory activities (e.g.,
regulatory applications) with respect to the Products, together with the
formulation and manufacturing of the Products for the purpose of conducting the
foregoing activities and manufacturing scale-up of the Product necessary for
Commercialization, all for the purpose of obtaining, maintaining or expanding
Regulatory Approval. This includes preparation, submission, review, and
development of data or information for the purpose of submission to a
Governmental Authority in the Cypress Territory to obtain Regulatory Approval of
Products. Pre-Commercialization shall 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.
     1.59 “Pre-Commercialization Costs” has the meaning set forth in
Section 4.6.
     1.60 “Pre-Commercialization Plan” has the meaning set forth in
Section 4.2(a).

8

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

 

     1.61 “Prime” means the then-current prime rate reported by JPMorgan Chase
in New York City.
     1.62 “Product(s)” means BL-1020 in any dosage form or formulation or mode
of administration, alone or in combination with other therapeutically active
ingredients.
     1.63 “Regulatory Data” means data and filings generated and prepared for
the purpose of obtaining, maintaining or expanding regulatory approvals in a
jurisdiction, including analytical and manufacturing data, data generated from
preclinical, clinical and non-clinical trials and other studies, and clinical
data relating to the Products. For the avoidance of doubt, Regulatory Data shall
not include Product Inventions.
     1.64 “Regulatory Data Costs” means direct and indirect costs 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).
     1.65 “Product Infringement” has the meaning set forth in Section 9.5(a).
     1.66 “Product Inventions” has the meaning set forth in Section 9.3.
     1.67 “Product Marks” has the meaning set forth in Section 6.3.
     1.68 “Regulatory Approval” means, with respect to a Product in any country
or jurisdiction in the Cypress Territory, 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 or
market and sell such Product in such country or jurisdiction.
     1.69 “Regulatory Authority” means, in a particular country or regulatory
jurisdiction in the Cypress Territory, any applicable Governmental Authority
responsible for granting Regulatory Approval.
     1.70 “Regulatory Exclusivity” means market exclusivity granted by a
Governmental Authority in the Cypress Territory designed to prevent the entry of
Generic Product(s) onto the market in the Field, including new chemical entity
exclusivity, new use or indication exclusivity, new formulation exclusivity,
orphan drug exclusivity and pediatric exclusivity, or any equivalent of the
foregoing in the Cypress Territory.
     1.71 “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 in the Cypress Territory and any supplement or amendment thereto.

9

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

 

     1.72 “Retained Territory” means all countries and territories in the world
outside the Cypress Territory.
     1.73 “Royalty Term” has the meaning set forth in Section 8.3(b).
     1.74 “SEC” has the meaning set forth in Section 12.4(a).
     1.75 “Share Amount” has the meaning set forth in Section 8.2(a).
     1.76 “Sole Inventions” has the meaning set forth in Section 9.1(a).
     1.77 “Sublicense Agreement” has the meaning set forth in Section 2.4.
     1.78 “Successful Completion” has the meaning set forth in Section 8.2(b).
     1.79 “TASE’s Approval” has the meaning set forth in Section 8.2(a).
     1.80 “Taxes” means taxes (other than income taxes), duties, tariffs or
other governmental charges levied on the sale of Products, including consumption
taxes.
     1.81 “Term” means the term of this Agreement, as determined in accordance
with Article 13.
     1.82 “Territory” means the Cypress Territory or the Retained Territory, as
applicable.
     1.83 “Third Party” means any person or entity other than BioLineRx or
Cypress or an Affiliate of either of them.
     1.84 “Third-Party Claim” has the meaning set forth in Section 11.1.
     1.85 “Third Party Data” has the meaning set forth in Section 4.7(e).
     1.86 “Third Party Partner” has the meaning set forth in Section 4.7(e).
     1.87 “Third-Party Payment” has the meaning set forth in Section 8.3(c).
     1.88 “UA Patents” has the meaning set forth in Section 9.4(a).
     1.89 “Upfront Fee” has the meaning set forth in Section 8.1.
     1.90 “Upstream Agreement” means that certain Research and License Agreement
between BioLineRx Ltd. and Bar-Ilan Research and Development Company Ltd. and
Ramot at Tel-Aviv University Ltd. (collectively, the latter two parties are
referred to herein as the “Upstream Licensors”) dated April 15, 2004, as amended
through the Execution Date.
     1.91 “Valid Claim” means, with respect to any country in the Cypress
Territory: (a) a claim of an issued and unexpired patent (as may be extended
through supplementary protection

10

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

 

certificate or patent term extension or the like) included within the BioLineRx
Patents, the Cypress Patents or the Joint Patents to the extent such claim has
not been (i) held invalid or unenforceable by a non-appealed or un-appealable
decision of a 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 BioLineRx Patents, the Cypress Patents or the
Joint Patents.
     1.92 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.
ARTICLE 2
LICENSES AND EXCLUSIVITY
     2.1 Effective Date. The Parties acknowledge that the Office of the Chief
Scientist of the Ministry of Industry, Trade and Labor of the State of Israel
(the “OCS”) must consent to this Agreement before this Agreement is made
effective. BioLineRx 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 [...***...] days after the
Execution Date. If the OCS has not provided such consent during such [...***...]
days, then BioLineRx shall have the right, and Cypress shall have the right to
require BioLineRx, to continue to use best efforts to obtain such consent. In
addition, (i) Cypress shall have the right to have a representative present at
all meetings, conference calls and any other interactions between BioLineRx’s
representatives and the OCS relating to such consent, and (ii) BioLineRx shall
(A) provide Cypress with a reasonable opportunity to review and approve any
communications related to the request for consent submitted to the OCS or
prepared in anticipation of an in-person meeting, conference call or any other
such interactions and (B) keep Cypress fully informed as to the progress of such
request for consent and shall consult with Cypress 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 specific, formal
 

***   Confidential Treatment Requested

11

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

 

written requests of the OCS and the Parties shall consider any such proposed
modifications in good faith; provided that (a) 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 BioLineRx; (b) 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 (c) after
the Parties have considered any such proposed modifications in good faith,
Cypress shall not be required to agree to any modifications to the Execution
Date Agreement that would have, or would be likely to have, a material adverse
impact on Cypress’ rights or obligations as set forth in the Execution Date
Agreement. Notwithstanding anything herein to the contrary, the provisions of
this Execution Date Agreement other than this Section 2.1 and Sections 8.1 and
13.5 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 Licenses to Cypress. Subject to the terms of this Agreement, BioLineRx
hereby grants to Cypress:
          (a) an exclusive (even as to BioLineRx), royalty-bearing license, with
the right to grant sublicenses (through multiple tiers) subject to Section 2.4
below, under the BioLineRx Technology, to Pre-Commercialize, use (solely for the
purpose of carrying out its obligations and exercising its rights under this
Agreement), sell, offer for sale, have sold, import and otherwise Commercialize
the Products in the Field in the Cypress Territory, and subject to Section 7.1,
to make and have made Products for Commercialization in the Cypress Territory
(provided that Cypress shall not be deemed to have exceeded the scope of this
right and license to the extent that Commercialization activities conducted by
or on behalf of Cypress in compliance with applicable Law, internal policies and
procedures and using Commercially Reasonable Efforts via the Internet or other
global electronic means or methods targeted to persons within the Field in the
Cypress Territory may reach persons outside of the Field or the Cypress
Territory); and further provided that BioLineRx retains all rights to make and
have made Products, and to license manufacture of Products, outside of the
Cypress Territory;
          (b) a non-exclusive, fully-paid, royalty-free license, with the right
to grant sublicenses (through multiple tiers) subject to Section 2.4 below,
under Product Inventions, to use any Product Inventions for the
pre-commercialization, manufacture and commercialization of products other than
the Products in the Cypress Territory; and
          (c) subject to Section 4.7(c), an exclusive, fully-paid, royalty-free
license, with the right to grant sublicenses (through multiple tiers) subject to
Section 2.4 below, to use BioLineRx Regulatory Data to Pre-Commercialize,
Commercialize or manufacture the Products in the Cypress Territory, including
the right to use any and all such BioLineRx Regulatory Data in any Regulatory
Filings.
     2.3 Licenses to BioLineRx. Subject to the terms of this Agreement, Cypress
hereby grants to BioLineRx:

12

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

 

          (a) a non-exclusive, fully-paid, royalty-free license under the
Cypress Technology to perform BioLineRx’s obligations under this Agreement (with
the right to grant sublicenses to a mutually agreed-upon Third Party service
provider or agent, in accordance with the then-effective Pre-Commercialization
Plan; provided that the service provider to be used in the conduct of the
[...***...]Study is hereby mutually agreed-upon); and
          (b) subject to Section 4.7(b), an exclusive, fully-paid, royalty-free
license, with the right to grant sublicenses (through multiple tiers) subject to
Section 2.4 below, to use Cypress Regulatory Data to research, develop, make,
have made, use, sell, offer for sale and import Products in the Retained
Territory, including the right to use any and all Cypress Regulatory Data in any
regulatory filings in the Retained Territory.
     2.4 Sublicenses. Each Party shall have the right to grant sublicenses under
the licenses in Section 2.2 or 2.3, as applicable, to its Affiliates or Third
Parties, in the case of BioLineRx, without the prior written consent of Cypress,
and in the case of Cypress, only with the prior written consent of BioLineRx
(not to be unreasonably withheld, conditioned or delayed). The sublicensing
Party shall remain primarily responsible for the performance of the obligations
hereunder by each of its sublicensees. The sublicensing Party shall, within
[...***...] days after granting any sublicense, notify the other Party of the
grant of such sublicense and provide the other Party with a true and complete
copy of such sublicensing agreement. Each sublicense agreement shall be
consistent with the terms and conditions under this Agreement, and, to the
extent applicable to the UA Patents or to the BioLineRx Know-How licensed under
the Upstream Agreement and sublicensed to Cypress hereunder, each sublicense
agreement entered into by Cypress shall be in compliance and not inconsistent
with the terms and conditions of the Upstream Agreement (including the
limitation on Cypress’ ability to sublicense as set forth in Section 5.2.2.3 of
the Upstream Agreement and the requirement to obtain BioLineRx’s prior written
consent as set forth in Section 5.2.2.5 of the Upstream 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: (i) the sublicensee is required to
provide the following to the sublicensing Party if such Sublicense Agreement
terminates: (A) the assignment and transfer of ownership and possession of all
Regulatory Filings and Regulatory Approvals held or possessed by such
sublicensee, and (B) the assignment of, or a freely sublicenseable exclusive
license to, all intellectual property Controlled by such sublicensee with a
Valid Claim covering the Pre-Commercialization, Commercialization or manufacture
of the Products in the Field in the applicable Territory and 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; and (ii) upon the
reasonable request of a Cypress sublicensee in good standing under its Cypress
sublicense which wishes to retain its continuous rights granted to it by Cypress
under such sublicense, BioLineRx and such sublicensee shall enter into a direct
license agreement, the terms of which shall be substantially similar to the
terms of this Agreement (adjusted to take into account any differences in
territory or field in such sublicense).
 

***   Confidential Treatment Requested

13

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

 

     2.5 Negative Covenants.
          (a) Cypress Negative Covenants. Cypress covenants that it will not,
and it will not permit any of its Affiliates or sublicensees to, use or practice
any BioLineRx Technology outside the scope of the license granted to it under
Section 2.2 above.
          (b) BioLineRx Negative Covenants.
               (1) BioLineRx covenants that it will not, and it will not permit
any of its Affiliates or sublicensees to, use or practice any Cypress Technology
outside the scope of the license granted to it under Section 2.3.
               (2) BioLineRx covenants that, with respect to Cypress’ or its
sublicensees’ under this Agreement acts of making, having made, using, selling,
offering for sale or importing of or otherwise Commercializing Products in the
Field in the Cypress Territory in accordance with this Agreement during the
Term, BioLineRx will not bring suit against Cypress or such sublicensees to
enforce Patents that BioLineRx owns or Controls as of the Effective Date or
during the Term and that claims priority to a common priority document in the
priority chain of any BioLineRx Patent set forth in Exhibit B. The covenant not
to sue described in this Section 2.5(b)(2) shall bind any assignee, licensee or
transferee of BioLineRx with respect to such Patents.
     2.6 BioLineRx Retained Rights; No Implied License.
          (a) Retained Rights. BioLineRx retains the right to practice and
license the BioLineRx Technology outside the scope of the license granted to
Cypress in Section 2.2(a) above.
          (b) No Implied License. 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. For clarity, (a) BioLineRx shall not have any
license rights to Cypress Regulatory Data, Cypress Patents or Cypress Know-How
in the Cypress Territory, and (b) Cypress shall not have any license rights to
BioLineRx Regulatory Data, Product Inventions or BioLineRx Technology in the
Retained Territory.
     2.7 Upstream Agreement. Subject to this Section 2.7, BioLineRx shall have
sole responsibility for exercising its rights and discharging its obligations
under the Upstream Agreement.
          (a) Copy. On or before the Execution Date, BioLineRx has delivered to
Cypress a true and complete copy of the Upstream Agreement. Cypress acknowledges
and agrees that the sublicense granted in Section 2.2(a) under the BioLineRx
Technology which has been licensed to BioLineRx under the Upstream Agreement is
subject to the terms and conditions of the Upstream Agreement.

14

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

 

          (b) Cypress Covenants. Cypress covenants not to take or fail to take
any action that violates a material term of the Upstream Agreement applicable to
Cypress as a sublicensee of BioLineRx under the Upstream Agreement, or that
would cause BioLineRx to be in breach of any of the material terms of the
Upstream Agreement. The Parties agree and acknowledge that BioLineRx shall
remain responsible for payments due under the Upstream Agreement.
          (c) BioLineRx Covenants.
               (1) BioLineRx will not modify, amend or waive any provision of
the Upstream Agreement in such a manner that could reasonably be expected to
have an adverse impact on Pre-Commercialization, manufacture or
Commercialization hereunder, without the prior written consent of Cypress, such
consent not to be unreasonably withheld, conditioned or delayed.
               (2) BioLineRx will immediately (but in no event later than
[...***...] business days) notify Cypress if BioLineRx fails to meet any of its
obligations, including any payment obligations, under the Upstream Agreement or
receives notice from the Upstream Licensors alleging any such failure.
          (d) Cypress Step-in Rights. If a failure described in
Section 2.7(c)(2) above occurs, the Executives shall promptly meet and confer on
how best to proceed to effect a cure of such failure. BioLineRx will keep
Cypress timely informed of its efforts to cure or remedy such failure. Cypress
will have the right to step-in and meet the failed obligations, including the
right to make payment on behalf of BioLineRx, and BioLineRx will take all
necessary steps such that the Upstream Licensors accepts performance by Cypress
on behalf of BioLineRx for such obligations. Before Cypress exercises its right
to step-in under this Section 2.7(d), Cypress shall deliver to BioLineRx written
notice of its intent to exercise such “step-in” right, which exercise shall not
occur sooner than [...***...] days after receipt by Cypress of written notice of
any such failure. Any amounts owed by BioLineRx and paid by Cypress pursuant to
the immediately preceding sentence will be credited towards any amount due to
BioLineRx from Cypress under this Agreement.
     2.8 Further Cooperation by the Parties. The Parties shall cooperate in good
faith to effectively and efficiently implement the objectives of this Agreement,
which shall include cooperation to coordinate the implementation of the
arrangements contemplated in this Article 2. Following the Effective Date,
BioLineRx will reasonably make available to Cypress BioLineRx personnel with
appropriate skill and experience, at BioLineRx’s expense, for this purpose.
BioLineRx and Cypress will cooperate to minimize the expenses associated with
such activities.
     2.9 Restrictive Covenants. As to such countries outside of their respective
Territory, each Party (i) shall not, and will ensure that its 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
 

***   Confidential Treatment Requested

15

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

 

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 immediately
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.
ARTICLE 3
OVERVIEW; MANAGEMENT
     3.1 Joint Steering Committee.
          (a) Formation. With thirty (30) days after the Effective Date, the
Parties will establish a joint steering committee (the “Joint Steering
Committee” or “JSC”) to oversee and coordinate the Parties’ activities under
this Agreement with respect to Pre-Commercialization, Commercialization and
manufacture activities with respect to the Products in the Field in the Cypress
Territory.
          (b) Members. Each Party shall initially appoint three
(3) representatives to the JSC, each of whom will 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
mutual consent of the Parties, provided that the JSC shall at all times consist
of an equal number of representatives of each of BioLineRx and Cypress. Each
Party may replace its 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, 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
BioLineRx or Cypress. The initial chairperson shall be selected by Cypress. 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 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. No later than [...***...] business days prior to any regularly
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. 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
 

***   Confidential Treatment Requested

16

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

 

one (1) representative of each Party 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 [...***...] business
days after each JSC meeting. The members of the Committee shall have [...***...]
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 within the later of [...***...] 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 Party’s representatives’ 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 BioLineRx
members and Cypress members of the JSC, either Party may refer the matter to one
senior executive of each Party (i.e., the Chief Executive 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 [...***...]
business days, then such Executive of Cypress shall have the final decision
making authority on such matter, provided that any final determination made by
such Executive of Cypress shall be consistent with the terms of this Agreement;
further provided that, within the first [...***...] months following the date on
which the Pre-Commercialization Plan is incorporated by reference herein
pursuant to Section 4.2, Cypress shall not make any decision with respect to the
Pre-Commercialization Plan so as to materially delay the anticipated
Pre-Commercialization schedule or commercial launch of the Products without the
consent of BioLineRx.
     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.
     3.3 Discontinuation of JSC. The JSC shall continue to exist throughout the
Term unless (a) the Parties mutually agree to disband the JSC, or (b) a Party
provides to the other Party written notice of its intention to disband and no
longer participate in such JSC. Once a Party has provided written notice as
referred to in subclause (b) above, the JSC will be disbanded and the JSC shall
have no further authority under this Agreement. Thereafter, direct interaction
of the Parties shall be substituted for the JSC’s roles, responsibilities and
actions. For example, the Parties thereafter shall consult (as set forth in
Section 4.1(b)) and keep each other informed (as set forth in Section 4.4(c)) on
a regular basis on pre-commercialization activities conducted for their
respective Territories, and the Parties shall consult and keep each other
informed on commercialization activities conducted in their respective
Territories (as set forth in Section 6.1(b)), with Cypress retaining sole
responsibility for Pre-Commercialization and Commercialization.
 

***   Confidential Treatment Requested

17

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

 

ARTICLE 4
PRE-COMMERCIALIZATION
     4.1 Overview of Pre-Commercialization.
          (a) Overview. The Parties desire and intend to collaborate with
respect to the Pre-Commercialization in the Cypress Territory in the Field,
under the oversight of the JSC (or if the JSC is disbanded, as set forth in
Section 3.3), as and to the extent set forth in this Agreement. As described in
more detail in this Article 4, Cypress shall be solely responsible for the
conduct of Pre-Commercialization with the goal of obtaining Regulatory Approval,
in accordance with the Pre-Commercialization Plan. In addition, BioLineRx shall
be responsible for the BioLineRx Pre-Commercialization Activities.
          (b) Consultation. Each Party shall provide advice, suggestions and
constructive feedback on the other Party’s pre-commercialization strategy, plans
and activities in its respective Territory (especially in view of such Party’s
rights outside the other Party’s Territory, and the Parties’ desire to achieve
(to the extent appropriate) global harmonization of Product
pre-commercialization activities worldwide), either through the JSC or directly
if the JSC is disbanded. The other Party will reasonably and in good faith
consider any advice, suggestions, constructive feedback, comments and
recommendations that such Party may have with respect to the other Party’s
pre-commercialization of the Product in its respective Territory.
     4.2 Pre-Commercialization Plan.
          (a) General. Within [...***...] days of the Execution Date, Cypress
shall propose a draft plan for the initial Pre-Commercialization of the Products
in the United States. Such draft plan shall thereafter be reviewed and mutually
agreed by the Parties within [...***...] days of the Execution Date and upon
such agreement shall be incorporated by reference herein (as the same may be
further updated from time to time as set forth in Section 4.2(b), the
“Pre-Commercialization Plan”). The Pre-Commercialization Plan shall describe
(i) the proposed overall program of Pre-Commercialization in the Cypress
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 anticipated tasks and
responsibilities of Cypress and BioLineRx under the Pre-Commercialization Plan,
and (iv) an associated comprehensive budget for all Pre-Commercialization Costs.
In the event of any inconsistency between the Pre-Commercialization Plan and
this Agreement, the terms of this Agreement shall prevail.
          (b) Updates to Pre-Commercialization Plan. From time to time during
the Term, and at least on a [...***...] basis, Cypress shall propose updates and
amendments, as appropriate, to the then-current Pre-Commercialization Plan,
subject to BioLineRx’s consent (if applicable) as set forth in Section 3.1(d).
Each updated or amended Pre-Commercialization Plan shall become effective and
supersede the previous Pre-Commercialization Plan.
          (c) Rationalization with Upstream Agreement. BioLineRx shall promptly
update or amend the Development Plan (as defined in the Upstream Agreement) to
ensure that such Development Plan is consistent with the Pre-Commercialization
Plan. In addition, Cypress hereby agrees that BioLineRx may provide a copy of
the Pre-Commercialization Plan (as it may be updated from time to time) to the
Upstream Licensors, which shall constitute the
 

***   Confidential Treatment Requested

18

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

 

Development Plan related to the Products for the Cypress Territory.
     4.3 BioLineRx Pre-Commercialization Activities
          (a) BioLineRx shall use Commercially Reasonable Efforts to diligently
continue and complete the [...***...] Study (the “BioLineRx
Pre-Commercialization Activities”). Upon the reasonable request of Cypress that
BioLineRx conduct additional Pre-Commercialization activities in the Cypress
Territory, and with the written agreement of BioLineRx to undertake such
additional Pre-Commercialization activities, such additional
Pre-Commercialization activities performed by BioLineRx shall be added to the
BioLineRx Pre-Commercialization Activities. BioLineRx shall conduct all
BioLineRx Pre-Commercialization Activities in accordance with the
Pre-Commercialization Plan and standard scientific principles and under the
oversight of the JSC (or if the JSC is disbanded as set forth in Section 3.3).
          (b) For as long as BioLineRx is conducting BioLineRx
Pre-Commercialization Activities, the status, progress and results of BioLineRx
Pre-Commercialization Activities shall be discussed in detail at meetings of the
JSC, and BioLineRx shall provide the JSC with a written summary report on the
status and progress of such BioLineRx Pre-Commercialization Activities at least
[...***...] business 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 BioLineRx Pre-Commercialization
Activities shall be discussed directly with Cypress, and such written summary
reports and requested information shall be provided directly to Cypress (with
the costs associated with such activities being borne by the Party incurring
them). In addition, BioLineRx shall make available to Cypress such information
about BioLineRx Pre-Commercialization Activities as may be requested by Cypress
from time to time.
          (c) Beginning on the Effective Date and continuing through receipt of
first Regulatory Approval, BioLineRx shall have the right to have one
representative of BioLineRx at the Cypress facility located in San Diego,
California, for the purpose of visiting such facility, meeting with Cypress
personnel involved in Pre-Commercialization, or accessing Product-related
information available at this facility. In the event that BioLineRx places such
representative at the Cypress facility, such BioLineRx representative may be
made available to reasonably assist Cypress as a participant in the
Pre-Commercialization in the Field in the Cypress Territory; provided that
BioLineRx has no obligation to provide such representative/participant. The
costs and expenses associated with such representative, including relocation,
housing, per diem and other expenses, shall be borne solely by BioLineRx. In
addition, such representative shall comply with Cypress’ standard policies
applicable to consultants, including undertaking his or her participant
activities at the Cypress facility under Cypress’ direction.
     4.4 Cypress Pre-Commercialization Activities
          (a) Cypress shall use Commercially Reasonable Efforts to conduct
Pre-Commercialization activities necessary to seek and obtain Regulatory
Approval for the Products in the Field throughout the Territory.
 

***   Confidential Treatment Requested

19

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

 

          (b) Without limiting the generality of Section 4.4(a), Cypress shall
diligently conduct all Pre-Commercialization activities, including seeking
Regulatory Approval in the Field, other than the BioLineRx Pre-Commercialization
Activities (the “Cypress Pre-Commercialization Activities”). Cypress shall
conduct all Cypress Pre-Commercialization Activities in accordance with the
Pre-Commercialization Plan and standard scientific principles. Without limiting
the foregoing, Cypress shall first seek Regulatory Approval for the Product in
the Initial Indication.
          (c) The status, progress and results of Cypress’s
Pre-Commercialization Activities shall be discussed in detail at meetings of the
JSC, and Cypress shall provide the JSC with a written summary report on the
status and progress of such Cypress Pre-Commercialization Activities at least
[...***...] business days prior to each scheduled JSC meeting, or, if the JSC
meeting occurs less frequently that 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 (with the
costs associated with any such review being borne by the Party incurring them).
In addition, Cypress shall make available to BioLineRx such information about
Cypress Pre-Commercialization Activities as may be reasonably requested by
BioLineRx from time to time.
     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. Cypress shall have the right to
engage subcontractors for the performance of its obligations under the
Pre-Commercialization Plan, and shall cause the subcontractor(s) engaged by it
to be bound by written obligations of confidentiality and invention assignment
consistent with those contained herein. Cypress remains primarily responsible
for the performance of such subcontractor(s). For clarity, BioLineRx shall not
have the right to engage subcontractors for the performance of the BioLineRx
Pre-Commercialization Activities without the prior written consent of Cypress,
not to be unreasonably withheld, conditioned or delayed; provided that, as of
the Execution Date, Cypress has consented to the engagement of [...***...] for
the [...***...] Study.
          (b) Each Party shall maintain complete, current and accurate records
of all work conducted by it under the Pre-Commercialization Plan (including
activities relating to chemistry, manufacture and control), 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. Each Party shall have the right to review all
records maintained by the other Party at reasonable times, upon a reasonable
written request.
     4.6 Pre-Commercialization Costs. Cypress shall bear all costs incurred in
carrying out Pre-Commercialization activities (including BioLineRx
Pre-Commercialization Activities) in accordance with the approved
Pre-Commercialization Plan (“Pre-Commercialization Costs”).
 

***   Confidential Treatment Requested

20

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

 

     4.7 Access to Data.
          (a) The Parties acknowledge each other’s interests in global
harmonization of Product pre-commercialization activities worldwide, including
in connection with generating Regulatory Data. Notwithstanding Section 2.9, each
Party has the right to conduct clinical trials and other studies in the other
Party’s portion of the Territory for the purpose of generating Regulatory Data
in support of regulatory submissions to the regulatory authorities in its own
portion of the Territory as follows: (i) Cypress may perform Product clinical
trials outside of the Cypress Territory in accordance with the
Pre-Commercialization Plan, but such clinical trials may only be used in
connection with obtaining Regulatory Approval and Commercialization in the Field
in the Cypress Territory; and (ii) BioLineRx may perform Product clinical trials
inside the Cypress Territory, but such clinical trials may only be used in
connection with obtaining regulatory approval and commercialization of Products
outside of the Cypress Territory. In the event that either Party performs
clinical trials in the other Party’s Territory and such clinical trials require
the submission of regulatory filings with a regulatory authority in the other
Party’s Territory, then the Parties shall coordinate and determine which Party
shall file such regulatory filing in the applicable Territory.
          (b) Subject to the reimbursement of Cypress Pre-Commercialization
Expenses as set forth in this Section 4.7(b), Cypress shall, in a timely manner
and compliant with all applicable Laws provide BioLineRx with the right to use
any and all Cypress Regulatory Data in accordance with Section 2.3(b). BioLineRx
shall reimburse Cypress for [...***...] of the Regulatory Data Costs incurred or
paid by Cypress (or its Affiliates, licensees or sublicensees) plus interest
accrued at Prime from the date any such Regulatory Data Costs are incurred (such
[...***...] share of Regulatory Data Costs plus interest, the “Cypress
Pre-Commercialization Expenses”) as follows: (A) in the event BioLineRx or its
Affiliates enter into a definitive agreement with a Third-Party granting any
rights in the Cypress Regulatory Data for use in either the European Union or
the Retained Territory as a whole, BioLineRx shall pay to Cypress a lump sum
amount equal to [...***...] of the Cypress Pre-Commercialization Expenses;
provided, however, that in no event shall such amount exceed [...***...] of any
upfront payment received by BioLineRx or its Affiliates upon the execution of
such definitive agreement; provided, further, that BioLineRx shall carry forward
any unpaid amounts due under this subsection (A) to the payment described in
subsection (B); (B) in the event such Third-Party includes any Cypress
Regulatory Data in a regulatory filing for regulatory approval of a Product in
the Retained Territory, BioLineRx shall pay to Cypress a lump sum amount equal
to [...***...] of the Cypress Pre-Commercialization Expenses plus any amounts
carried forward from the payment described in subsection (A) above, provided,
however, that in no event shall such amount exceed [...***...] of any milestone
payment received by BioLineRx in connection with such regulatory filing under
such Third Party agreement; and (C) BioLineRx shall pay to Cypress any remaining
unpaid Cypress Pre-Commercialization Expenses upon receipt of regulatory
approval in a jurisdiction in the Retained Territory. Notwithstanding the
foregoing, in the event that BioLineRx solely by itself (or with its Affiliates)
develops, manufactures or sells the Products in the Retained Territory, in any
Major Country or in [...***...], BioLineRx shall reimburse Cypress for the
Cypress Pre-Commercialization Expenses in accordance with subsection (C) above
(but in such event shall owe no payments under subsections (A) and (B) above).
 

***   Confidential Treatment Requested

21

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

 

          (c) Subject to the reimbursement of BioLineRx Pre-Commercialization
Expenses set forth in this Section 4.7(c), BioLineRx shall, in a timely manner
and compliant with all applicable Laws provide Cypress with the right to use any
and all BioLineRx Regulatory Data in accordance with Section 2.2(c). Cypress
shall reimburse BioLineRx for [...***...] of the Regulatory Data Costs incurred
or paid by BioLineRx (or its Affiliates, licensees or sublicensees) plus
interest accrued at Prime from the date any such Regulatory Data Costs are
incurred ([...***...]) share of Regulatory Data Costs plus interest, the
“BioLineRx Pre-Commercialization Expenses”) as follows: (A) Cypress shall pay to
BioLineRx a lump sum amount equal to [...***...] of the BioLineRx
Pre-Commercialization Expenses upon submission of an NDA in the United States by
Cypress or its sublicensees which NDA includes any BioLineRx Regulatory Data;
and (B) Cypress shall pay to BioLineRx any remaining unpaid BioLineRx
Pre-Commercialization Expenses upon receipt of Regulatory Approval of such NDA
in the United States.
          (d) Each Party shall provide to the other Party summary reports
generated in the conduct of pre-commercialization activities in such Party’s
Territory, as well as written summaries of the regulatory filings regarding the
Products in such Party’s Territory, upon completion of each phase of clinical
trials or completion of tests within pre-clinical and non-clinical studies (such
summary reports shall not be deemed Regulatory Data). All such Information
exchanged hereunder (including such summary reports and written summaries) shall
include sufficient information to enable the recipient Party to understand each
study and its results. In addition, upon reasonable request by a Party in
writing in advance, the other Party shall provide access at its facility(ies) to
the extent necessary to enable the requesting Party to review on-site the
study-specific portions of detailed Product-related analyses, raw data generated
by a Party 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. Except as provided in this
Section 4.7(d), the requesting Party shall not make or remove any copies of any
Regulatory Data or other documentation to which the requesting Party was given
access. Any out-of-pocket costs that are incurred by the Party granting such
access to the requesting Party shall be fully reimbursed by the requesting Party
promptly after receipt of invoice(s) for such out-of-pocket costs. If the
requesting Party decides that it wishes to obtain a copy of the full report
regarding such Regulatory Data, the requesting Party shall provide written
notice of such decision to the other Party. The Parties will discuss the manner
in which such full report copy (which shall constitute Regulatory Data) will be
produced and provided to the requesting Party, with the expenses of copying such
full report to be paid by the requesting Party.
          (e) Each Party acknowledges and understands that the other Party may
license or sublicense (as the case may be) rights to the Products in the Field
in their respective Territory to one or more Third Party licensees or
sublicensees (as applicable), for Pre-Commercialization and Commercialization
(each a “Third Party Partner”), and pursuant to such arrangements, such Party or
such Third Party Partner will generate additional Regulatory Data for use in
seeking regulatory approval in such Party’s Territory (the “Third Party Data”).
Each Party must include in its contractual agreement(s) with such Third Party
Partners the right to transfer to the other Party for its use in its respective
Territory any Third Party Data, subject to the requesting Party reimbursing the
other Party as set forth in this Section 4.7, as applicable.
 

***   Confidential Treatment Requested

22

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

 

          (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).
ARTICLE 5
REGULATORY MATTERS
     5.1 Initial Transfer. Within [...***...] days after the Effective Date,
BioLineRx shall transfer to Cypress ownership of IND No. [...***...]. BioLineRx
will provide Cypress with an electronic copy of such IND and copies of all
material Regulatory Filings submitted to Regulatory Authorities. BioLineRx and
Cypress shall execute such documents and take such actions as are reasonably
necessary to effectuate the foregoing transfers.
     5.2 Cypress Regulatory Responsibilities.
          (a) Cypress shall own all Regulatory Filings and Regulatory Approvals,
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. BioLineRx shall consult with Cypress as Cypress may
reasonably request in connection with the preparation and filing of such
Regulatory Filings.
          (b) Cypress shall keep BioLineRx informed of material regulatory
developments specific to Products throughout the Cypress Territory, and
BioLineRx may contribute to the regulatory plans and strategies for the Products
in the Cypress Territory, in each case through the JSC or directly if the JSC
has been disbanded.
          (c) Cypress shall be solely responsible for any discussions with any
Regulatory Authority related to any Pre-Commercialization in the Field, provided
that Cypress will inform BioLineRx of any material discussions in advance to the
extent practicable, and will reasonably consider any input from BioLineRx in
preparation for such discussions.
          (d) To the extent permitted by the applicable Regulatory Authority and
as requested by BioLineRx, Cypress shall allow representatives of BioLineRx to
participate in any material scheduled conference calls and meetings between
Cypress and the Regulatory Authority. If BioLineRx elects not to participate in
such calls or meetings, Cypress shall keep BioLineRx reasonably apprised of the
discussions between Cypress and the Regulatory Authority that take place during
such calls or meetings.
          (e) Cypress shall be responsible to ensure, at its sole expense, that
the Pre-Commercialization, manufacture and Commercialization of the Products in
the Cypress Territory are in compliance with applicable Laws in all material
respects, including all rules and regulations promulgated by applicable
Regulatory Authorities. Specifically and without limiting the foregoing, Cypress
shall file all compliance filings, certificates and safety reporting (subject to
Section 5.2(a)) in the Cypress Territory at its sole expense.
 

***   Confidential Treatment Requested

23

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

 

          (f) With respect to all Regulatory Filings, Cypress shall, and shall
ensure that its sublicensees 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.
     5.3 Adverse Events. Within [...***...] of the Execution Date, the Parties
shall discuss in good faith and enter into a pharmacovigilance and adverse event
reporting agreement setting forth the worldwide pharmacovigilance procedures for
the Parties with respect to such Product, such as safety data sharing, adverse
events reporting and prescription events monitoring (the “Pharmacovigilance
Agreement”).
     5.4 Additional Regulatory Negative Covenants. If either Party 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 Cypress Territory, as applicable, such Party shall
have the right to bring the matter to the attention of the JSC (or directly to
the other Party if the JSC is disbanded). Without limiting the foregoing, with
respect to the Products, unless the Parties otherwise agree: (a) Cypress shall
not communicate with any regulatory authority having jurisdiction in the
Retained Territory, unless so ordered by such regulatory authority, in which
case Cypress shall provide immediately to BioLineRx written notice of such
order; (b) Cypress shall not submit any regulatory filings or seek regulatory
approvals for the Products in the Retained Territory (other than in connection
with clinical trials as permitted pursuant to Section 4.1); (c) BioLineRx shall
not communicate with any Regulatory Authority, unless so ordered by such
Regulatory Authority, in which case BioLineRx shall provide immediately to
Cypress written notice of such order; and (d) BioLineRx shall not submit any
Regulatory Filings or seek Regulatory Approvals (other than in connection with
clinical trials as permitted pursuant to Section 4.1).
     5.5 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 notify the other Party thereof by telephone
or facsimile and use Commercially Reasonable Efforts to 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 Party 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, Cypress
will retain ultimate responsibility for deciding whether to conduct a recall of
Product in the Field in the Cypress Territory and the manner in which any such
recall will be conducted.
 

***   Confidential Treatment Requested

24

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

 

ARTICLE 6
COMMERCIALIZATION
     6.1 Overview of Commercialization in the Cypress Territory.
          (a) Overview. Cypress will be solely responsible for all aspects of
the Commercialization in the Field, which shall be conducted in material
compliance with all applicable Laws and in accordance with a Commercialization
plan for the United States to be prepared by Cypress and provided to BioLineRx
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 [...***...] basis by Cypress. As
between the Parties, Cypress shall book sales for the Products in the Cypress
Territory.
          (b) Consultation. Each Party may provide advice, suggestions and
constructive feedback on the other Party’s commercialization strategy, plans and
activities (especially in view of such Party’s rights outside the other Party’s
Territory, and the Parties’ desire to achieve (to the extent appropriate) global
harmonization of Product commercialization activities worldwide), either through
the JSC or directly once the JSC is disbanded. The other Party will reasonably
and in good faith consider any advice, suggestions, constructive feedback,
comments and recommendations that such Party may have with respect to the other
Party’s commercialization of the Product. For clarity, as between the Parties,
each Party shall be solely responsible for commercialization of the Product in
its respective Territory.
     6.2 Cypress Performance.
          (a) Commercial Diligence. Cypress shall use Commercially Reasonable
Efforts to Commercialize in the Field throughout the Cypress Territory. Without
limiting the generality of the foregoing, Cypress 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 Cypress
Territory within [...***...] after obtaining Regulatory Approval and to market
Products following such launch.
          (b) Reports. From and after the date that is [...***...] months before
the anticipated date of First Commercial Sale, Cypress shall update BioLineRx at
least [...***...] in each calendar quarter regarding Cypress’s Commercialization
activities, including at BioLineRx’s reasonable request providing annual sales
guidance forecasts. In addition, from and after the date that is [...***...]
months before the anticipated date of First Commercial Sale, Cypress shall
present a written quarterly report to BioLineRx summarizing Cypress’s
Commercialization activities pursuant to this Agreement, at a level of detail
reasonably requested by BioLineRx and sufficient to enable BioLineRx to
determine Cypress’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 BioLineRx, Cypress shall provide to BioLineRx on an
interim basis then-current Commercialization figures and data of Cypress and its
sublicensees that are reportable to
 

***   Confidential Treatment Requested

25

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

 

BioLineRx under this Agreement. For clarity, all reports and information shared
with BioLineRx pursuant to this Section 6.2(b) shall be deemed Cypress
Confidential Information.
     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 sole right to use such trademark(s) throughout the Territory. Cypress
shall have the right to brand the Products using Cypress related trademarks and
any other trademarks and trade names it determines appropriate for the Products
after good-faith consideration of any comments from BioLineRx related thereto
(“Product Marks”). Cypress shall own all rights in 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. BioLineRx shall not, and shall ensure that its
Affiliates and sublicensees will not make any use of any trademark similar to
any of the Product Marks. Cypress shall not, and shall ensure that its
Affiliates and sublicensees will not, make any use of any trademark similar to
the trademark used by BioLineRx in commercializing the Products in the Retained
Territory. Notwithstanding the foregoing, Cypress may use, as required by
applicable Law, the corporate trademark or logo of BioLineRx in connection with
Commercialization; provided that each such usage shall be in compliance with
BioLineRx’s then-current guidelines for such trademark or logo usage (which
shall be provided to Cypress upon its request and thereafter upon each update or
amendment).
ARTICLE 7
MANUFACTURING
     7.1 Manufacture by or on Behalf of Cypress. Cypress shall be solely
responsible for manufacture and supply of Product for use in the
Pre-Commercialization and Commercialization after the Effective Date of the
Agreement, for pre-clinical, clinical and commercial purposes. Manufacture of
Products for use in the Pre-Commercialization and Commercialization will be
performed in the Cypress Territory, and may be performed by Cypress itself or on
behalf of Cypress by a Third Party. Notwithstanding the foregoing, if Cypress
wishes to engage a Third Party to manufacture Product outside the Cypress
Territory, BioLineRx must consent to Cypress’ engagement of Cypress’ intended
Third-Party manufacturer, which consent shall not be unreasonably withheld or
delayed. If BioLineRx consents to Cypress’ use of a Third-Party manufacturer
outside the Cypress Territory, all Product manufactured outside of the Cypress
Territory shall be solely for use in Pre-Commercialization and
Commercialization. Cypress shall bear all costs and expenses incurred by the
Parties in connection with the manufacturing and supply of the Products for the
Cypress Territory after the Effective Date, including all clinical manufacturing
costs, the cost of qualifying its facilities, and the cost of qualifying a Third
Party supplier for manufacture of the Products.
     7.2 Coordination of Manufacturing. As appropriate, the Parties will discuss
the most efficient structure for the manufacture and supply of Product for the
Parties’ Pre-Commercialization and Commercialization. If the Parties determine
that coordination in Product manufacturing is appropriate, the Parties will
establish a joint manufacturing committee to

26

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

 

coordinate such manufacturing efforts. Each Party shall designate as its
committee representatives individuals who have the requisite experience and
knowledge to discuss the manufacture of Products. Such coordinated manufacturing
efforts may include, for example, an agreement among the Parties and a
Third-Party contract manufacturer in Israel, or an agreement between Cypress and
a Third-Party contract manufacturer that grants to BioLineRx a right to obtain a
supply of Product from such Third-Party contract manufacturer.
     7.3 Manufacturing Technology Transfer. In accordance with Section 7.2, the
Parties shall cooperate to expedite transfer of Product manufacturing Know-How
Controlled by BioLineRx to a facility designated by Cypress, where manufacturing
will be conducted by or on behalf of Cypress. BioLineRx will make available to
Cypress to facilitate such transfer up to [...***...] FTE with appropriate skill
and experience during a consecutive [...***...] month period at an appropriate
time, at BioLineRx’s expense. BioLineRx and Cypress will cooperate to minimize
the expenses associated with such transfer and to ensure that the transfer of
such Product manufacturing is effectively coordinated.
ARTICLE 8
FINANCIAL PROVISIONS
     8.1 Upfront Fee. Within one business day after the Execution Date, Cypress
shall deposit with a mutually agreed-upon escrow agent Thirty Million dollars
($30,000,000) (the “Upfront Fee"), pursuant to the terms and conditions set
forth in an Escrow Agreement (in a form reasonably acceptable to both Parties;
provided that, in the event of a conflict between the Escrow Agreement and this
Agreement, this Agreement shall govern) providing for the release to BioLineRx
from the escrow established under the Escrow Agreement of the Upfront Fee on the
Effective Date and also providing that in the event of termination of this
Agreement pursuant to Section 13.5, the Upfront Fee shall be released to Cypress
from the escrow established under the Escrow Agreement on the effective date of
termination. Upon release to BioLineRx, the Upfront Fee shall be non-refundable
and non-creditable.
     8.2 Milestone Payments. Cypress shall make the following non-refundable and
non-creditable milestone payments to BioLineRx within [...***...] days after the
first achievement of each milestone event for a Product in the Field in the
Cypress Territory as set forth in this Section 8.2 by Cypress or its Affiliates
or sublicensees. Each milestone payment by Cypress to BioLineRx hereunder shall
be payable only once, regardless of the number of times achieved by the
Products, provided that, if more than one sales milestones that are triggered by
annual aggregate Net Sales that have not been previously paid are triggered at
the end of any particular calendar year, then each and every of such sales
milestones shall be deemed to have been achieved upon the end of such calendar
year and the corresponding milestone payments triggered by each and every of
such sales milestones shall become due at the end of such calendar year;
provided, however, that if such cumulative milestone payments imposes a
financial burden upon Cypress, the timing of such payments may be reasonably
adjusted by up to [...***...].
 

***   Confidential Treatment Requested

27

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

 

          Milestone Event   Milestone Payment  
Regulatory Milestones
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
Sales Milestones
[...***...]
    [...***...]  

 

***   Confidential Treatment Requested

28

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

 

          Milestone Event   Milestone Payment  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  

          (a) The [...***...] regulatory milestone #1 may be paid as follows, in
Cypress’ sole discretion: (i) [...***...] in cash; or (ii) subject to the
approval of the Tel Aviv Stock Exchange (“TASE’s Approval”), [...***...] in cash
and [...***...] in consideration of the purchase of that number of ordinary
shares of BioLineRx (the “Ordinary Shares") equal to the lower of (A)
[...***...] divided by the average of the closing price of the Ordinary Shares
on the [...***...] days preceding the date on which regulatory milestone #1
(Initiation of the first Phase 3 Clinical Trial for a Product) occurs, and (B)
[...***...] of BioLineRx’s issued share capital (where such number of Ordinary
Shares (as set forth in (A) or (B), as applicable) is referred to as the “Share
Amount”). If the value represented by the Share Amount is less than [...***...],
then the cash consideration will be adjusted so that the total consideration in
respect of regulatory milestone #1 will equal [...***...]. Upon the reasonable
request of Cypress following the occurrence of regulatory milestone #1,
BioLineRx will provide to Cypress all documentation and information related to
the Ordinary Shares, including any restrictions or limitations on such Ordinary
Shares. Cypress shall make its election under this Section 8.2(a) within
[...***...] days following the achievement of regulatory milestone #1. If
Cypress elects to receive Ordinary Shares, BioLineRx shall issue Cypress the
Share Amount following the receipt of the consideration in respect of the Share
Amount. In addition, to the extent necessary to permit Cypress to re-sell the
Share Amount without restriction, BioLineRx shall, promptly following the
issuance of the Share Amount, use its best efforts to complete the registration
for re-sale of the Share Amount issued hereunder within [...***...] days of the
issuance of the Share Amount to Cypress. BioLineRx shall use its best efforts to
receive TASE’s Approval promptly following the Execution Date.
          (b) For purposes of this Section 8.2, the following definitions shall
apply: (i) [...***...]; (ii) [...***...]; and (iii) [...***...].
          (c) For clarity, if an [...***...] (as
 

***   Confidential Treatment Requested

29

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

 

described in regulatory milestone #3) is not required for [...***...]
(regulatory milestone #4) [...***...], then upon such [...***...], Cypress shall
be deemed to have achieved both regulatory milestones #3 and #4, and Cypress
shall pay BioLineRx [...***...] ([...***...] for achievement of regulatory
milestone #3 and [...***...] for achievement of regulatory milestone #4).
     8.3 Royalties.
          (a) Royalty Rates. Cypress shall pay to BioLineRx a running royalty at
the following royalty rates, on Net Sales in the Cypress Territory during the
Royalty Term.

          Aggregate Annual Net Sales of the   Royalty Rate Applicable to Such
Net   Products in the Cypress Territory   Sales  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  
[...***...]
    [...***...]  

For example, if the aggregate annual Net Sales to which the royalty obligations
in this Section 8.3(a) apply were [...***...], the [...***...] royalty rate
would apply to the first [...***...] of such Net Sales, the [...***...] royalty
rate would apply to the next [...***...] of such Net Sales, and the [...***...]
royalty rate would apply to the final [...***...] of such Net Sales.
          (b) Royalty Term. The royalty payment obligation under Section 8.3
shall apply, on a country-by-country and Product-by-Product basis in the Cypress
Territory, during the period of time beginning upon the First Commercial Sale of
such Product in such country, and ending upon the later of: (i) the expiration
of the last-to-expire Valid Claim of a BioLineRx Patent covering the use,
import, manufacture or Commercialization of such Product in such country;
provided that, for purposes of this Section 8.3(b)(i) only, such “last-to-expire
Valid Claim” shall not be a claim of a pending patent application within the
BioLineRx Patents if such claim has been on file with the applicable patent
office in such country for more than [...***...] years from the earlier of its
date of filing or earliest claim of priority under 35 U.S.C. §119 or §120 (and
its successors in the United States) or its equivalent in the applicable country
in the Cypress Territory; (ii) the expiration of Regulatory Exclusivity covering
such Product in such country; and (iii) the date on which sales of Generic
Products in such country are (on a unit basis) at least [...***...] of the total
units sold of both Products and such Generic Products in such country; provided
that, in the event that a pending (but not an issued) Valid Claim of a BioLineRx
Patent exists in such country on the date described in this clause (iii), only
 

***   Confidential Treatment Requested

30

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

 

the later of clauses (ii) and (iii) will be used to determine the end of
Cypress’ royalty payment obligation (such period, the “Royalty Term”).
          (c) Royalty and Milestone Adjustments for Third Party Intellectual
Property. BioLineRx shall be responsible for any and all royalties and other
payments made prior to the Effective Date or that become due after the Effective
Date under any Third Party agreements in effect as of the Effective Date with
respect to the Products in the Cypress Territory. Following the Effective Date,
if it is necessary for Cypress to obtain a license to Know-How or Patents from
any Third Party that claim or cover the composition of matter, manufacture, use,
handling, storage, sale or other disposition of Products in the Cypress
Territory in order for Cypress or its sublicensees to Pre-Commercialize or
Commercialize (in the reasonable opinion of an independent patent attorney) and
Cypress pays such Third Party any up-front fee, milestone, royalty, or other
payment in consideration of obtaining such license (each, a “Third Party
Payment”), then Cypress shall have the right to deduct from royalty payments due
BioLineRx under Section 8.3(a), [...***...] of any such Third Party Payments
made by Cypress; provided, however, that in no event shall such credit cause any
royalty amounts payable to BioLineRx for any particular calendar quarter, to be
reduced by more than [...***...] of the royalty amounts that would otherwise be
payable for such period; provided, further, that Cypress may deduct from royalty
payments in future calendar quarters any amounts that it did not deduct due to
the foregoing limitations.
          (d) Royalty Reduction. For a particular Product and in a particular
country in the Cypress Territory, if a Generic Product is launched and sales of
such Generic Product are: (i) at least [...***...] but less than [...***...] of
the total units sold of both Products and such Generic Products in such country
during a calendar quarter, thereafter the royalties due to BioLineRx shall be
reduced by [...***...] from what would otherwise have been due under
Section 8.3(a); and (ii) at least [...***...] but less than [...***...] of the
total units sold of both Products and such Generic Products in such country
during a calendar quarter, thereafter the royalties due to BioLineRx shall be
reduced by [...***...] from what would otherwise have been due under Section
8.3(a).
          (e) Royalty Payments and Reports. Subject to 8.3(b) above, within
[...***...] days after the end of each calendar quarter, Cypress shall deliver
to BioLineRx a report containing the following information for the prior
calendar quarter: (i) the gross sales associated with each Product sold by
Cypress and its sublicensees; (ii) a calculation of Net Sales of each Products
that are sold by Cypress and (if applicable) sublicensees; and (iii) a
calculation of payments due to BioLineRx with respect to the foregoing.
Concurrent with these reports, Cypress shall remit to BioLineRx any royalty
payment due for the applicable calendar quarter. If no royalties are due to
BioLineRx for such reporting period, the report shall so state. Any extension of
time in which BioLineRx is required to report/pay under the Upstream Agreement
shall similarly extend the time for delivery of reports and payments under this
Section 8.3(e).
     8.4 Foreign Exchange. Net Sales made in currencies other than dollars will
be converted into dollars using the closing exchange rates reported in The Wall
Street Journal (U.S., Western Edition) on the last business day of the
applicable calendar quarter.
 

***   Confidential Treatment Requested

31

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

 

     8.5 Payment Method; Late Payments. All payments due hereunder shall be made
by wire transfer of immediately available funds into an account designated by a
Party. If a Party 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 to such Party
until the date of payment at the per annum rate of [...***...] over Prime or the
maximum rate allowable by applicable Law, whichever is lower.
     8.6 Records; Audits. Each Party will maintain complete and accurate records
in sufficient detail to permit the other Party 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 [...***...] years from the end of the calendar year to which they
pertain for examination at the expense of the applicable Party, and not more
often than [...***...] each calendar year, by an independent certified public
accountant selected by such Party and reasonably acceptable to the other Party,
for the sole purpose of verifying the accuracy of the financial reports or
payments furnished by the other Party pursuant to this Agreement. Any such
auditor shall not disclose to the other Party a Party’s Confidential
Information. Any amounts shown to be owed but unpaid shall be paid within
[...***...] days from the accountant’s report, plus interest (as set forth in
Section 8.5) from the original due date. The auditing Party shall bear the full
cost of such audit unless such audit discloses an underpayment by the audited
Party of more than [...***...] of the amount due, in which case the audited
Party shall bear the full cost of such audit.
     8.7 Taxes.
          (a) Payments to BioLineRx. Cypress acknowledges that under current US
law, regulatory interpretations, and treaties it will not be required to deduct
and withhold, nor will it deduct and withhold, any United States Tax from any
payments made to BioLineRx pursuant to Sections 8.1 or 8.2 (solely with respect
to regulatory milestone payments). If any of the payments required to be made by
Cypress to BioLineRx under Section 8.2 (other than with respect to Regulatory
Milestones) or Section 8.3 is subject to a deduction of Tax or withholding Tax,
then, subject to Section 8.7(b) below, the sum payable by Cypress (in respect of
which such deduction or withholding is required to be made) shall be made to
BioLineRx after deduction of the amount required to be so deducted or withheld,
which deducted or withheld amount shall be remitted in accordance with
applicable Laws. In all events, it is acknowledged that Cypress may deduct and
withhold the required Taxes from payments due to BioLineRx in the event of any
 

***   Confidential Treatment Requested

32

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

 

changes in Tax law, administrative interpretations or treaties that may change
current rules as applicable to such payments, subject to providing BioLineRx
with at least sixty (60) days’ advance notification of the intention to withhold
such Taxes and giving BioLineRx an opportunity to provide a written Tax opinion
or other form of evidence that such Taxes should not be withheld, which will be
given reasonable consideration by Cypress.
          (b) Tax Cooperation. The Parties shall use all reasonable and legal
efforts to reduce or eliminate Tax withholding or similar obligations in respect
of royalties, milestone payments, and other payments made by Cypress to
BioLineRx under this Agreement. To the extent Cypress is required to deduct and
withhold taxes on any payment to BioLineRx, Cypress shall pay the amounts of
such Taxes to the proper Governmental Authority in a timely manner and promptly
transmit to BioLineRx an official Tax certificate or other documentation of the
payment of any such withholding Taxes, including copies of receipts or other
evidence reasonably required and sufficient to enable BioLineRx to document such
tax withholdings adequately for purposes of claiming foreign tax credits and
similar benefits. BioLineRx shall provide Cypress any Tax forms that may be
reasonably necessary in order for Cypress to not withhold tax or to withhold Tax
at a reduced rate under an applicable bilateral income Tax treaty. BioLineRx
shall use reasonable efforts to provide any such tax forms to Cypress at least
thirty (30) days prior to the due date for any payment for which BioLineRx
desires that Cypress 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, value added 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 or value added Tax. Cypress
shall require its sublicensees in the Cypress Territory to cooperate with
BioLineRx in a manner consistent with this Section 8.7(b).
ARTICLE 9
INTELLECTUAL PROPERTY
     9.1 Ownership of Inventions. Following the Effective Date:
          (a) Each Party shall own any inventions made solely by its own
employees, agents, or independent contractors in the course of conducting its
activities under this Agreement, together with all intellectual property rights
therein, that cover or claim the Products (“Sole Inventions”); and
          (b) The Parties shall jointly own any inventions that are made jointly
by employees, agents, or independent contractors of each Party in the course of
conducting its activities under this Agreement, together with all intellectual
property rights therein, that cover or claim the Products (“Joint Inventions”).
All Patents claiming patentable, jointly owned Joint Inventions shall be
referred to herein as “Joint Patents.” Except to the extent otherwise set forth
in this Agreement, each Party shall be entitled to practice and exploit the
Joint Inventions without the duty of accounting or seeking consent from the
other Party consistent with the terms of this Agreement.

33

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

 

Inventorship shall be determined in accordance with U.S. patent laws. For
clarity, all BioLineRx Sole Inventions which come within the definition of
BioLineRx Technology shall be subject to the licenses set forth in this
Agreement.
     9.2 Disclosure of Inventions. Each Party shall promptly disclose to the
other Party any invention disclosures, or other similar documents, submitted to
it by its employees, agents or independent contractors describing inventions
that are either Sole Inventions or Joint Inventions, and all Information
relating to such inventions to the extent necessary for the preparation, filing
and maintenance of any Patent with respect to such invention.
     9.3 Assignment of Product Inventions. Notwithstanding anything to the
contrary in Section 9.1, and subject to the license set forth in Section 2.2(b),
Cypress hereby assigns and shall assign to BioLineRx, for no additional
consideration, all right, title and interest in and to any Sole Inventions owned
by Cypress that cover or claim the Products (“Product Inventions”). Cypress
shall execute, and cause its employees, agents and subcontractors to execute
(directly or through assignment to Cypress and assignment by Cypress to
BioLineRx), assignments to BioLineRx of all right, title and interest in and to
any such Product Inventions, and any Patents directed to such assigned Product
Inventions shall be BioLineRx Patents, subject to the licenses set forth in this
Agreement. BioLineRx shall consult with Cypress regarding the advisability of
seeking patent protection for any Product Invention. Should the Parties
determine that such protection is advisable, BioLineRx shall prosecute and
reasonably maintain in the Retained Territory all of the patents and patent
applications with claims covering such Product Inventions. BioLineRx shall
provide Cypress with a reasonable opportunity to comment on all draft filings
for the Product Inventions in the Retained Territory prior to their submission
to the relevant patent authority. Should BioLineRx decide that it is no longer
interested in maintaining or prosecuting a particular Patent with claims
covering a Product Invention in a country or other jurisdiction in the Retained
Territory, it shall promptly advise Cypress, and Cypress may assume such
prosecution and maintenance at its sole expense. Any such Product Invention
shall be the sole and exclusive property of BioLineRx. Cypress shall require any
sublicensee to assign any Product Inventions to Cypress in accordance with the
terms of this Section 9.3 as applicable to Cypress.
     9.4 Prosecution of Patents.
          (a) Cypress Prosecuted Patents. The Parties shall cooperate with each
other to achieve (to the extent appropriate) global harmonization of filing,
prosecution and maintenance of BioLineRx Patents, recognizing that Cypress shall
be pursuing BioLineRx Patent-related activities in the Cypress Territory and
BioLineRx shall be pursuing BioLineRx Patent related activities in the Retained
Territory. The Parties acknowledge that certain BioLineRx Patents have been
licensed to BioLineRx under the Upstream Agreement and are sublicensed to
Cypress in the Cypress Territory under this Agreement (the “UA Patents”). With
respect to these UA Patents, Cypress and BioLineRx shall consult regarding the
preparation, filing, prosecution and maintenance of such UA Patents in the
Cypress Territory in accordance with Section 4.1 of the Upstream Agreement.

34

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

 

               (1) Subject to Section 9.4(a)(3) below, all UA Patents shall be
prepared, filed, prosecuted and maintained through a law or patent attorney firm
mutually agreed upon by Cypress and BioLineRx, at [...***...]. Such firm shall
take into account the Parties’ intention that Cypress will prepare, file,
prosecute, obtain and maintain the UA Patents in a manner that will provide the
maximum economic advantage and return to the Parties. Further, counsel shall
confer with Cypress and BioLineRx regarding the content of patent applications
contained within the UA Patents, the prosecution of the UA Patents and the
content of communications with the relevant patent agencies in the Cypress
Territory regarding the UA Patents, prior to any communications with such
agencies. Without limiting the generality of the foregoing, Cypress shall have
the first right to conduct Patent-related activities in the Cypress Territory
regarding such UA Patents, and Cypress shall ensure that BioLineRx is provided
with (i) a reasonable opportunity to review and comment on such UA
Patent-related activities regarding such UA Patents, and (ii) a copy of
communications from any patent authority in the Cypress Territory regarding such
UA Patents, and shall provide drafts of any substantive filings, responses or
other communications to be made to such patent authorities a reasonable amount
of time in advance of submitting such filings, responses or other communications
for BioLineRx’s review and comment. Cypress shall reasonably consider comments
by BioLineRx in connection with the UA Patent-related activities regarding the
UA Patents so long as such comments are received by Cypress a reasonable amount
of time in advance of any filing deadlines.
               (2) Subject to Section 9.4(a)(3) below, all BioLineRx Patents
(other than UA Patents), including all Patents with claims covering Product
Inventions, and all Joint Patents in the Cypress Territory (collectively, the
“Cypress Prosecuted Patents”) shall be prepared, filed, prosecuted and
maintained by Cypress, at Cypress’ sole expense.
               (3) If Cypress decides to cease the Patent-related activities
regarding any UA Patent or Cypress Prosecuted Patent, it shall notify BioLineRx
in writing sufficiently in advance so that BioLineRx may, at its discretion,
assume the responsibility for such Patent-related activities regarding such UA
Patent or such Cypress Prosecuted Patent, at BioLineRx’s sole expense. Joint
Patents which constitute such Cypress Prosecuted Patents shall be assigned to
BioLineRx. Thereafter, such UA Patents or such Cypress Prosecuted Patents shall
be included in the BioLineRx Prosecuted Patents and the terms of Section 9.4(b)
shall apply to such Patents.
          (b) BioLineRx Prosecuted Patents. BioLineRx shall have the sole right
to prepare, file, prosecute and maintain all UA Patents and Cypress Prosecuted
Patents for which the responsibility for Patent-related activities regarding
such UA Patents or Cypress Prosecuted Patents has transferred to BioLineRx
pursuant to Section 9.4(a)(3) above (the “BioLineRx Prosecuted Patents”).
          (c) 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).
 

***   Confidential Treatment Requested

35

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

 

     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 BioLineRx Patents in
the Cypress Territory through the Pre-Commercialization or Commercialization in
the Field by a Third Party, of which such Party becomes aware, including any
equivalent filing in the Cypress Territory to a “patent certification” filed in
the United States under 21 U.S.C. §355(b)(2) or 21 U.S.C. §355(j)(2), and of any
declaratory judgment, opposition, or similar action alleging the invalidity,
unenforceability or non-infringement of any of the BioLineRx Patents in the
Cypress Territory (collectively “Product Infringement”).
          (b) Product Infringement.
               (1) For any Product Infringement, each Party shall share with the
other Party all Information available to it regarding such alleged infringement.
With respect to any UA Patent, the Parties’ rights and obligations recited in
this Section 9.5 are subject to BioLineRx’s obligations under Section 10.1 of
the Upstream Agreement; BioLineRx shall exercise its rights thereunder to the
extent requested by Cypress under this Section 9.5. Cypress shall have the first
right, but not the obligation, to bring an appropriate suit or other action in
the Cypress Territory against any person or entity engaged in such Product
Infringement, subject to Section 9.5(b)(2) through 9.5(b)(4), below. If Cypress
fails to institute and prosecute an action or proceeding in the Cypress
Territory to abate the Product Infringement within a period of [...***...] days
after the first notice is delivered under Section 9.5(a), then BioLineRx (or one
of the Upstream Licensors, if Section 10.1.3 of the Upstream Agreement is
applicable) shall have the right, but not the obligation, to commence a suit or
take action in the Cypress Territory to enforce the applicable BioLineRx Patents
against such Third Party perpetrating such Product Infringement, at its own cost
and expense. In the event that BioLineRx (or an Upstream Licensor, if
applicable) exercises such right to commence such suit or to take action in the
Cypress Territory regarding such Product Infringement, Cypress shall reasonably
cooperate with BioLineRx (or the Upstream Licensor, if applicable) in connection
with such BioLineRx Patent enforcement efforts.
               (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 Party 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 Product Infringement action in the Cypress Territory, it shall
bear all external costs and expenses for such action.
               (4) The Party not bringing an action with respect to Product
Infringement under this Section 9.5(b) shall be entitled to separate
representation in such matter
 

***   Confidential Treatment Requested

36

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

 

by counsel of its own choice, but such Party shall at all times cooperate fully
with the Party bringing such action.
          (c) Infringement Other Than a Product Infringement. For any and all
infringement of any BioLineRx Patent other than a Product Infringement
(including the enforcement of BioLineRx Patents against infringement in the
Retained Territory), as between the Parties, BioLineRx 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 shall bear all related expenses and retain all related
recoveries. BioLineRx shall keep Cypress regularly informed of the status and
progress of such enforcement efforts and shall reasonably consider Cypress’
comments on any such efforts.
          (d) Settlement. Cypress shall not settle any claim, suit or action
that it brought under this Section 9.5 involving BioLineRx Patents in any manner
that would negatively impact such Patents or that would limit or restrict the
ability of BioLineRx to pre-commercialize, make, import, use, offer for sale,
sell or otherwise commercialize Products anywhere in the Retained Territory or
to make or have made Product anywhere in the world for such
pre-commercialization, use, sale or import anywhere in the Retained Territory,
without the prior written consent of BioLineRx, which consent shall not be
unreasonably withheld or delayed. Nothing in this Article 9 shall require
BioLineRx to consent to any settlement that would have a material adverse impact
upon any BioLineRx Patent in the Retained Territory, or to the
pre-commercialization, commercialization, manufacture, use, importation, offer
for sale or sale of the 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 that, in the event Cypress
is the Party bringing suit, the amount of such recovery which is lost profits
(but not including any other damages) and which is retained by Cypress after
such reimbursement shall be included in Net Sales and shall be subject to the
royalty payment by Cypress to BioLineRx under Section 8.3.
     9.6 Infringement of Third Party Rights in the Cypress Territory. Subject to
the indemnification obligation as set forth in Article 11, if any Product used
or sold by Cypress or its sublicensees becomes the subject of a Third Party’s
claim or assertion of infringement of a Third Party Patent granted by a
jurisdiction within the Cypress Territory, Cypress shall promptly notify
BioLineRx of such event and the Parties shall promptly meet to properly handle
the claim or assertion and take the appropriate course of action.
ARTICLE 10
REPRESENTATIONS AND WARRANTIES
     10.1 Mutual Representations and Warranties. Each Party hereby represents
and warrants to the other Party that, as of the Effective Date:

37

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

 

          (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 BioLineRx. For purposes
of this Section 10.2, the phrase “the knowledge of BioLineRx” means the actual
knowledge of BioLineRx’s executive officers (as defined in Rule 16a-1(f)
promulgated under the Securities Exchange Act of 1934, as amended from time to
time (or any successor rule)) and the senior employee of BioLineRx responsible
for patent matters, in each case after reasonable inquiry. BioLineRx represents
and warrants to Cypress that, as of the Execution Date:
          (a) It has not received any written notice from any Third Party
asserting or alleging that research or development of any Product by BioLineRx
infringed or misappropriated the intellectual property rights of such Third
Party.

38

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

 

          (b) There are no actual, pending, or to BioLineRx’s knowledge, alleged
or threatened adverse actions, suits, claims, interferences or formal
governmental investigations involving the Products or the BioLineRx Technology
relating to the Products by or against BioLineRx in or before any court,
governmental or regulatory authority.
          (c) To the knowledge of BioLineRx, there are no asserted claims,
interferences, oppositions or demands of any Third Party against the BioLineRx
Technology in the Territory.
          (d) BioLineRx owns or otherwise Controls the BioLineRx Know-How;
BioLineRx is the exclusive licensee under the Upstream Agreement of the
BioLineRx Patents.
          (e) There are no liens or security interests currently existing on or
to the BioLineRx Technology that could reasonably be expected to adversely
affect Cypress’ rights and licenses under this Agreement.
          (f) To the knowledge of BioLineRx, there is not any pending claim or
litigation which alleges that its activities under the Upstream Agreement or its
use of the BioLineRx Technology have violated the intellectual property rights
of any Third Party.
          (g) The Upstream Agreement is in full force and effect, subject to
bankruptcy, insolvency, reorganization or similar laws affecting the rights of
creditors generally and to equitable principles.
          (h) Exhibit B to this Agreement sets forth all of the “Licensor Patent
Rights” under the Upstream Agreement which claim the Product, or methods of
making or using the Product, in the Field in the Cypress Territory, as the term
“Licensor Patent Rights” is defined in the Upstream Agreement.
          (i) To the knowledge of BioLineRx, no event has occurred which, after
the giving of notice or the lapse of time or both, would constitute a material
breach by BioLineRx under the Upstream Agreement or would constitute a material
breach by the Upstream Licensors.
          (j) BioLineRx has not received notice of any potential Licensed
Product proposed by one or both of the Upstream Licensors that incorporates
BL-1020.
          (k) To the knowledge of BioLineRx, no license from a Third Party is
required to practice the rights granted to BioLineRx under the Upstream
Agreement with respect to the Products in the Field in the Cypress Territory.
          (l) All of the studies and tests of the Products conducted by or on
behalf of BioLineRx prior to the Execution Date were conducted in all material
respects in accordance with (i) applicable Laws of the jurisdiction where
conducted at the time such studies and test were conducted; and (ii) the
prevailing scientific standards applicable to the conduct of such studies and
activities.

39

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

 

BioLineRx shall update the representations and warranties in this Section 10.2
as of the Effective Date. Any revision of a BioLineRx representation or warranty
in such updated Section 10.2 shall not be grounds for termination by Cypress for
BioLineRx’s breach of Section 10.2. Notwithstanding the foregoing sentence, if
prior to the Effective Date, the representations and warranties set forth in
Sections 10.2(a), (b), (c), (g) or (i) above with respect to the Cypress
Territory are no longer true and correct, then BioLineRx shall notify Cypress in
writing, and in such event either Cypress or BioLineRx may terminate this
Agreement prior to the Effective Date.
     10.3 Covenants.
          (a) No Debarment. In the course of the Pre-Commercialization or
Commercialization, each Party shall not use any employee or consultant who has
been debarred by any Regulatory Authority, or, to the best of such Party’s
knowledge, is the subject of debarment proceedings by a Regulatory Authority.
          (b) Amendment of Upstream Agreement. Promptly following the Effective
Date but in all events at least [...***...] prior to the anticipated date of
First Commercial Sale, the Parties will diligently work to amend certain
provisions of the Upstream Agreement to enable them to more efficiently progress
the pre-commercialization and commercialization of the Product throughout the
Territory, including Sections 8.1.1 and 13.3.2 of the Upstream Agreement.
     10.4 Disclaimer. Cypress understands that the Products are the subject of
ongoing clinical research and development and that BioLineRx cannot assure the
safety or efficacy of the Products, or that the Products will be approved by any
Regulatory Authority in the Cypress Territory.
     10.5 No Other Representations or Warranties. 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, OR NON-MISAPPROPRIATION OF THIRD PARTY INTELLECTUAL
PROPERTY RIGHTS, IS MADE OR GIVEN BY OR ON BEHALF OF A PARTY.
ARTICLE 11
INDEMNIFICATION
     11.1 Indemnification by BioLineRx. BioLineRx hereby agrees to defend, hold
harmless and indemnify (collectively, “Indemnify”) Cypress or its Affiliates,
agents, directors, officers and employees (the “Cypress 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 directly or indirectly out of (a) a breach of any of BioLineRx’s
obligations under this Agreement, including BioLineRx’s representations and
warranties set
 

***   Confidential Treatment Requested

40

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

 

forth in Article 10, (b) the research, development, manufacture, use, handling,
storage or other disposition of Products by or on behalf of BioLineRx in the
conduct of BioLineRx Pre-Commercialization Activities, or (c) the research,
development, manufacture, use, handling, storage, sale or other
commercialization or disposition of Products in the Retained Territory by
BioLineRx, its Affiliates or agents. BioLineRx’s obligation to Indemnify the
Cypress Indemnitees pursuant to this Section 11.1 shall not apply to the extent
that (i) the Cypress Indemnitees fail to comply with the indemnification
procedures set forth in Section 11.3 and BioLineRx’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 Cypress
Indemnitee or sublicensee or from any activity for which Cypress is obligated to
Indemnify the BioLineRx Indemnitees under Section 11.2.
     11.2 Indemnification by Cypress. Cypress hereby agrees to Indemnify
BioLineRx or its Affiliates, licensees, agents, directors, officers, employees
and the Licensor Indemnitees (as defined in the Upstream Agreement) (the
“BioLineRx Indemnitees”) from and against any and all Losses in each case
resulting from Third Party Claims arising directly or indirectly out of (a) a
breach of any of Cypress’ obligations under this Agreement, including Cypress’
representations and warranties set forth in Article 10; or (b) the
Pre-commercialization, manufacture, use, handling, storage, sale or other
Commercialization or disposition of Products in the Cypress Territory by or on
behalf of Cypress or its sublicensees, including as a result of any infringement
claims or product liability claims. Cypress’ obligation to Indemnify the
BioLineRx Indemnitees pursuant to this Section 11.2 shall not apply to the
extent that (i) the BioLineRx Indemnitees fail to comply with the
indemnification procedures set forth in Section 11.3 and Cypress’ 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 BioLineRx Indemnitee or from any activity for which BioLineRx is obligated
to Indemnify the Cypress Indemnitees under Section 11.1.
     11.3 Procedure. The indemnified Party shall provide the indemnifying Party
with prompt 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

41

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

 

the indemnifying Party promptly after final determination that such indemnified
Party is entitled to such indemnification by the indemnifying Party.
     11.4 Limitation of Liability. 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 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.
     11.5 Insurance. Each Party shall procure and maintain insurance, including
product liability insurance, adequate to cover its obligations hereunder and
which are consistent with normal business practices of prudent companies
similarly situated at all times during which any Product is being clinically
tested in human subjects or commercially distributed or sold by such Party. It
is understood that such insurance shall not be construed to create a limit of
either Party’s liability with respect to its indemnification obligations under
this Article 11. Each Party shall provide the other Party with written evidence
of such insurance upon request. Each Party shall provide the other Party with
written notice at least thirty (30) days prior to the cancellation, non-renewal
or material change in such insurance or self-insurance which materially
adversely affects the rights of the other Party hereunder.
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 five (5) 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;

42

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

 

          (d) is subsequently disclosed to the receiving Party by a Third Party
who has a legal right to make such disclosure; or
          (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; (ii) is reasonably
necessary for prosecuting or defending litigation as contemplated by this
Agreement or (iii) is reasonably necessary in connection with the obtaining of
the consent of the OCS to 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 directors, attorneys, independent accountants or
financial advisors 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 acquirors 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 acquirors are bound
by confidentiality and non-use obligations consistent with those contained in
the Agreement;
          (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; and
          (d) such disclosure is reasonably necessary to its collaborators in
its respective Territory (including CROs, hospitals, doctors, consultants,
subcontractors and Affiliates) for the purpose of the Pre-Commercialization,
Commercialization or manufacture, 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.

43

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

 

     12.3 Publication. Each Party to this Agreement recognizes that the
publication of papers containing results of and other information regarding
pre-commercialization of Products in the Field (except as provided hereinafter),
including oral presentations and abstracts, may be beneficial to both Parties
provided such publications are subject to reasonable controls to protect
Confidential Information. In particular, it is the intent of the Parties to
maintain the confidentiality of any Confidential Information included in any
Patent Controlled by a Party until such Patent has been published. Accordingly,
the other Party shall have the right and obligation to review and approve any
paper proposed for publication or other public disclosure by the other Party,
including oral presentations and abstracts. Before either Party may submit any
paper, oral presentation or abstract for publication or other public disclosure,
the Party proposing publication shall deliver a complete copy of such materials
or proposed public disclosure to the other Party prior to submitting the paper
to a publisher or the date set for presentation. The other Party shall review
any such paper and give its comments to the publishing Party within [...***...]
days of the delivery of such paper or proposed public disclosure to the other
Party. With respect to oral presentation materials, the other Party shall make
reasonable efforts to expedite review of such materials, and shall return such
items as soon as practicable to the publishing Party with appropriate comments,
if any, but in no event later than [...***...] days from the date of delivery to
the other Party. With respect to abstracts, the other Party shall make
reasonable efforts to expedite review of such abstracts, and shall return such
items as soon as practicable to the publishing Party with appropriate comments,
if any, but in no event later than [...***...] days from the date of delivery to
the other Party. The publishing Party shall comply with the other Party’s
request to delete references to the non-publishing Party’s Confidential
Information in any such paper, proposed public disclosure or other materials.
Notwithstanding anything to the contrary in this Agreement, neither Party shall
have the right to publish in any form any Confidential Information of the other
Party without such other Party’s prior written consent.
     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 either
Party or its Affiliates, and no Party shall use the name, trademark, trade name
or logo of the 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 the other Party, except as may be required by Law.
          (a) A Party may disclose this Agreement and its terms in securities
filings with the Securities Exchange Commission or other regulatory agency
(“SEC”) (or equivalent foreign agency, including the Israel Securities Authority
or the Tel Aviv Stock Exchange) 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 seven (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 SEC
regulations or equivalent foreign agency regulations. The Party seeking such
disclosure shall exercise Commercially Reasonable Efforts to obtain confidential
treatment of the Agreement
 

***   Confidential Treatment Requested

44

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

 

from the SEC or equivalent foreign agency 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 the SEC
or other agency) 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 that the Party seeking such disclosure first provides the other
Party 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 [...***...]
business 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) Notwithstanding the foregoing, and subject to BioLineRx’s
obligations under Section 9.1 of the Upstream Agreement (if applicable), the
Parties will agree on language of one or more press releases announcing this
Agreement.
          (d) During the Term, and subject to Section 14.2 of the Upstream
Agreement and Section 12.4(c) above, 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, such as announcing the commencement and completion of clinical
studies for the Products in countries of the Cypress Territory, the filing and
obtaining of Regulatory Approvals for the Products in countries of the Cypress
Territory, the First Commercial Sale of the Products in countries of the Cypress
Territory, and the publication of data and results in accordance with
Section 12.3. 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.
          (e) The Parties agree that after a public disclosure pursuant to
Sections 12.4(a). (b), (c) or (d) has been reviewed and approved by the other
Party, 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.
          (f) Cypress acknowledges that BioLineRx is required to furnish the
Upstream Licensors a fully executed copy of this Agreement, promptly after the
Execution Date, pursuant to Section 5.2.3 of the Upstream Agreement.
 

***   Confidential Treatment Requested

45

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

 

     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 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 Cypress Territory.
Upon the expiration of the Royalty Term in a given country in the Cypress
Territory, (a) the license granted to Cypress under the BioLineRx Technology in
such country shall become fully-paid, royalty-free and non-exclusive, and
(b) BioLineRx and the Upstream Licensors shall be free to use the BioLineRx
Technology to develop, make and have made, use, offer to sell, sell, have sold,
import, export, otherwise transfer physical possession of or otherwise transfer
title to Products and to grant others licenses under the BioLineRx Technology to
do the same in such country.
     13.2 Termination for Breach.
          (a) Notice. If either Party believes that the other Party is in
material breach of this Agreement, then the Party holding such belief (the
“Non-breaching Party”) may deliver notice of such breach to the other Party (the
“Notified Party”). The Notified Party shall have thirty (30) days after receipt
of such notice to cure such breach, or, if such breach is not susceptible of
cure within the stated 30-day period and the Notified Party uses diligent good
faith efforts to cure such breach, the stated 30-day period shall be extended by
an additional thirty (30) days.
          (b) Failure to Cure. If the Notified Party fails to cure a material
breach of this Agreement 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 thirty (30) days following the date of the notice of breach (or such
other time period applicable pursuant to Section 13.2(a)). 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.

46

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

 

     13.3 Termination for Convenience or for Adverse Regulatory Actions. Cypress
shall have the right to terminate this Agreement in its entirety for any reason
or no reason at all by providing BioLineRx with at least one hundred eighty
(180) days prior written notice to BioLineRx of such termination. In addition,
Cypress may, in its sole discretion, terminate this Agreement in its entirety,
upon at least thirty (30) days written notice to BioLineRx in the event of any
significant adverse clinical events or other adverse toxicity, safety or
efficacy data relating to a Product or if Cypress determines that there is no
basis for filing an NDA for a Product.
     13.4 Termination for Patent Challenge. BioLineRx shall have the right to
terminate this Agreement in its entirety upon at least thirty (30) days prior
written notice to Cypress if (a) Cypress or any of its Affiliates or
sublicensees files a lawsuit or brings any other legal or administrative
proceeding, or knowingly assists or supports any Third Party in filing a lawsuit
or bringing any other legal or administrative proceeding, challenging any of the
BioLineRx Patents licensed hereunder, including any action in connection with an
opposition, re-examination, revocation, invalidation or cancellation proceeding,
or requests a declaration of an interference against or otherwise attacks the
validity or enforceability of any BioLineRx Patents licensed hereunder, or
contests or disputes BioLineRx’s entitlement to or ownership of any BioLineRx
Patents licensed hereunder, and (b) Cypress or its Affiliate or sublicensee (as
applicable) fails to cease such lawsuit, proceeding, action, request, attack,
contest or dispute within the thirty (30) day period following Cypress’ receipt
of such notice from BioLineRx. In such event, the Agreement shall terminate upon
expiration of the thirty (30) day notice period (and the cure and dispute
provisions set forth above in Section 13.2 shall not apply).
     13.5 Termination Prior to Effective Date. Notwithstanding anything to the
contrary in this Article 13, (a) Cypress may terminate this Agreement following
a response from the OCS and each Party’s discharge of its obligations under
Section 2.1, with no liability to BioLineRx or Cypress, if (i) Cypress exercises
its right to withhold agreement to modifications to the Execution Date Agreement
in accordance with Section 2.1(c); or (ii) 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 (b) either Party may terminate this Agreement as set forth in
the last paragraph of Section 10.2. The provisions of Section 8.1 (including the
Escrow Agreement) and this Section 13.5 shall survive such termination, but all
other terms, provisions, representations, rights and obligations contained in
this Agreement shall terminate.
     13.6 Termination of Upstream Agreement. The Parties acknowledge that, upon
termination of the Upstream Agreement (in whole or in part), pursuant to
Section 5.2.2.2 of the Upstream Agreement, Cypress has the right to request that
the Upstream Licensors enter into a new agreement with Cypress on substantially
the same terms as those contained in this Agreement.
     13.7 Effect of Termination of the Agreement.
          (a) Upon any termination of this Agreement the following shall apply:
               (1) Regulatory Filings; Data. To the extent permitted by

47

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

 

applicable Laws, Cypress shall transfer and assign to BioLineRx all Regulatory
Filings, Regulatory Approvals, and Cypress Regulatory Data.
               (2) Cypress License and Assignment. Cypress hereby grants to
BioLineRx an exclusive, royalty-free license, with the right to grant multiple
tiers of sublicenses, under Cypress Technology to Pre-Commercialize, make, have
made, use, sell, offer for sale, have sold, import and otherwise Commercialize
the Products in the Cypress Territory, which license shall be effective as of
the date of such termination. Cypress hereby assigns to BioLineRx, effective
only (A) in the event of such termination, (B) upon BioLineRx’s confirmation
that BioLineRx desires such assignment at the date of termination, and (C) after
reimbursement of all out-of-pocket costs related to such Product Marks, all of
its rights and interests in and to the Product Marks (other than the corporate
names of Cypress).
               (3) Transition Assistance. Cypress shall provide such assistance,
at BioLineRx’s request and cost, as may be reasonably necessary for BioLineRx to
commence or continue developing, Pre-Commercializing or Commercializing Products
in the Cypress Territory, to the extent Cypress is then performing or has
performed such activities, including transferring or amending, as appropriate,
upon request of BioLineRx, any agreements or arrangements with Third Party
vendors to sell Products in the Cypress Territory. To the extent that any such
contract between Cypress and a Third Party is not assignable to BioLineRx,
Cypress shall arrange a transition period in which to provide such services with
the goal of promptly transitioning the arrangement to BioLineRx.
               (4) Licenses. The licenses granted in Article 2 shall terminate,
and the other rights and obligations of the Parties under this Agreement also
shall terminate.
          (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 either Party from pursuing all rights and remedies it may have
hereunder or at law or in equity with respect to any breach of this Agreement,
nor prejudice either Party’s right to obtain performance of any obligation.
     13.8 Bankruptcy. All rights and licenses granted under this Agreement by
one Party to the other Party are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code, licenses of rights to
“intellectual property” as defined under Section 101(35A) of the Bankruptcy
Code. The Parties agree that a Party shall retain and may fully exercise all of
its rights and elections under the Bankruptcy Code 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 the
Bankruptcy Code, 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.
     13.9 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

48

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

 

definitions are embodied in the following listed Articles and Sections of this
Agreement; Articles 11, 12, 14 (with respect to a dispute arising prior to the
effective date of termination or expiration) and 15; and Sections 2.4 (with
respect to any direct license requested by a sublicensee), 4.7 (with respect to
Regulatory Data generated prior to the effective date of termination or
expiration), 5.5 (with respect to Product dispositions 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 8.7, 9.1
through 9.3, 10.5, 13.7, and this 13.9. 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.
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, other than a dispute related to an alleged
breach of this Agreement or the Upstream Agreement by BioLineRx, as to which
Cypress may elect to pursue any available legal or equitable remedy, subject to
the limitation on liability set forth in 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 [...***...] days after
such dispute is first identified by either Party in writing to the other, the
Parties shall refer such dispute to the Executives of the Parties for attempted
resolution by good faith negotiations within [...***...] days after such notice
is received.
     14.3 Binding Arbitration. If the Executives are not able to resolve such
disputed matter within [...***...] days and either Party wishes to pursue the
matter, each such dispute, controversy or claim that is not an Excluded Claim
(defined in Section 14.4 below) shall be finally resolved by binding arbitration
administered by JAMS pursuant to JAMS’ Streamlined Arbitration Rules and
Procedures then in effect (the “JAMS Rules”), and judgment on the arbitration
award may be entered in any court having jurisdiction thereof. The Parties agree
that:
          (a) The arbitration shall be conducted by a panel of three persons
experienced in the pharmaceutical business: within [...***...] days after
initiation of arbitration, each Party shall select one person to act as
arbitrator and the two Party-selected arbitrators shall select a third
arbitrator within [...***...] days of their appointment. If the arbitrators
selected by the
 

***   Confidential Treatment Requested

49

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

 

Parties are unable or fail to agree upon the third arbitrator, the third
arbitrator shall be appointed by JAMS. The place of arbitration shall be New
York, New York U.S.A., and all proceedings and communications shall be in
English. The panel of arbitrators shall decide the issue within [...***...] days
after appointment of the third arbitrator, and shall render this decision in
writing and provide reasons for the decision and any award.
          (b) Either Party may apply to the arbitrators 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. 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
regardless of the outcome of such arbitration.
          (c) A Party shall be entitled to deduct or otherwise offset any damage
finally awarded under a proceeding initiated under Section 14.3 against payments
due under this Agreement.
          (d) 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 both
Parties. 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 New York statute of
limitations.
     14.4 Excluded Claim. As used in Section 14.3, the term “Excluded Claim”
shall mean a dispute, controversy or claim that concerns (a) the scope,
validity, enforceability, inventorship or infringement of a patent, patent
application, trademark or copyright; or (b) any antitrust, anti-monopoly or
competition law or regulation, whether or not statutory.
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.
 

***   Confidential Treatment Requested

50

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

 

     15.2 Force Majeure. Each 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 nonperforming 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 nonperforming Party
takes reasonable efforts to remove the condition. For purposes of this
Agreement, force majeure shall include conditions beyond the reasonable control
of the nonperforming 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 persists for more than ninety (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, facsimile
transmission (receipt verified) or 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 BioLineRx:   BioLineRx Ltd.
 
      19 Hartum Street
 
      PO Box 45158
 
      Jerusalem, 91450, Israel
 
      Attention: Dr. Kinneret Savitsky
 
      With a copy to: CFO
 
      FAX: +972 (2) 548-9101
 
            With copies to (which shall not constitute notice):
 
       
 
      Cooley LLP
 
      11951 Freedom Drive
 
      Reston, VA 20190-5656
 
      Attention: Ken Krisko, Esq.
 
      Fax: 703-456-8100
 
       
 
  If to Cypress:   Cypress Bioscience, Inc.
 
      4350 Executive Drive, Suite 325
 
      San Diego, California 92121
 
      Attention: Dr. Jay D. Kranzler
 
      With a copy to: Legal Department
 
      Fax: +1 (858) 452-1222

51

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

 

         
 
  With copies to (which shall not constitute notice):
 
      Latham & Watkins LLP
 
      12636 High Bluff Drive, Suite 400
 
      San Diego, California 92130
 
      Attention: Faye H. Russell, Esq.
 
      Fax: +1 (858) 523-5450

     15.4 No Strict Construction; Headings. This Agreement has been prepared
jointly and shall not be strictly construed against either 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. Neither Party may assign or transfer this Agreement or any
rights or obligations hereunder without the prior written consent of the other,
except that a Party may make such an assignment without the other Party’s
consent to Affiliates or to a successor to substantially all of the business of
such Party to which this Agreement relates (whether by merger, sale of stock,
sale of assets or other transaction) (the “Acquisition”). Any permitted
successor or assignee of rights or obligations hereunder shall, in writing to
the other Party, expressly assume performance of such rights or obligations. Any
permitted assignment shall be binding on the successors of the assigning Party.
Any assignment or attempted assignment by either Party in violation of the terms
of this Section 15.5 shall be null, void and of no legal effect.
     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. Each Party hereby guarantees the performance by
its Affiliates of such Party’s obligations 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 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. Each Party agrees 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

52

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

 

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 BioLineRx or Cypress 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 the State of New York, without giving effect to any
choice of law principles that would require the application of the laws of a
different state.
     15.14 Counterparts. This Agreement may be executed in one (1) 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.

53

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

 

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

                      BioLineRx Ltd.       Cypress Bioscience, Inc.    
 
                   
By:
Name:
  /s/ Kinneret Livnat-Savitsky
 
Kinneret Livnat-Savitsky, PhD       By:
Name:   /s/ Jay D. Kranzler
 
Jay D. Kranzler, MD, PhD    
Title:
  Chief Executive Officer       Title:   Chief Executive Officer    

 

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

 

Exhibit A
Chemical Structure of BL-1020
[...***...]
 

***   Confidential Treatment Requested

 

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

 

Exhibit B
BioLineRx Patents
(all of the BioLineRx Patents set forth in Exhibit B as of the Execution Date
are UA Patents)
Family I

                                                                               
              Filing Date     Issue Date         Our Ref   Title     Country    
Earliest Priority     Entry Date     Application No.     Patent No.     Status  
[...***...]
    [...***...]       [...***...]       [...***...]               [...***...]  
    [...***...]       [...***...]  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]       [...***...]       [...***...]  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]       [...***...]       [...***...]  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]               [...***...]  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]               [...***...]  
 
                                                       
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]               [...***...]  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]               [...***...]  

Family II

                                                                               
              Filing Date     Issue Date         Ref   Title     Country    
Earliest Priority     Entry Date     Application No.     Patent No.     Status  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]               [...***...]  

 

***   Confidential Treatment Requested

 

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

 

                                                                               
              Filing Date     Issue Date         Ref   Title     Country    
Earliest Priority     Entry Date     Application No.     Patent No.     Status  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]               [...***...]  
[...***...]
    [...***...]       [...***...]       [...***...]       [...***...]      
[...***...]               [...***...]  

Family III

                                                                               
              Filing Date     Issue Date         Ref   Title     Country    
Earliest Priority     Entry Date     Application No.     Patent No.     Status  
[...***...]
    [...***...]       [...***...]                       [...***...]            
  [...***...]  

Family IV

                                                                               
              Filing Date     Issue Date         Ref   Title     Country    
Earliest Priority     Entry Date     Application No.     Patent No.     Status  
[...***...]
    [...***...]       [...***...]                       [...***...]            
  [...***...]  

 

***   Confidential Treatment Requested

 

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

 

Family V

                                                                               
              Filing Date     Issue Date         Ref   Title     Country    
Earliest Priority     Entry Date     Application No.     Patent No.     Status  
[...***...]
    [...***...]       [...***...]                       [...***...]            
  [...***...]  

 

***   Confidential Treatment Requested