EXHIBIT 10.26

     

    AGREEMENT

     

    Made on this 16 day of April 2007 (“Effective
Date”)

     

    by and between

     

    MEDGENICS
MEDICAL ISRAEL, LTD.

    A company
organized and existing
under the laws of
Israel

    with
offices at 12 HaNapach St. Karmiel, Israel

    (“MMI”)

    


    and

    


    MEDGENICS,
INC.

    A company organized and existing
under the laws of Delaware, USA,

    with
principal place of business
at 8000 Towers
Crescent Dr.

    Suite
1300

    Vienna,
Va. 22182 USA

    (“Medgenics”)

    


    WHEREAS MMI has applied for
funding from the OCS (as defined below) under the Law (as defined below) for an approved budget
for the period commencing on June
1, 2006 and ending May
31, 2007 for the research and development projects titled Biopump: Medical device for preparation of autologous skin
implants (OCS file Numbers 37503 and 37679)(the “Grants”); and

    


    WHEREAS The Grants have been
approved by the research committee of the OCS (the “Approved Programs”) and the parties hereto wish to
enter into a development
and license
agreement, pursuant to the terms and conditions set forth
herein;

    


    NOW THEREFOR the parties
hereto agree as follows:

     

    
      	
              1.

            	
              Definitions

            


    

     

    
      	
              1.1

            	
              “Intellectual Property Rights” shall mean patents, patent applications,
      mask works,
      copyrights, trade secrets, “moral” rights,
      confidential and proprietary information of a technical and business nature and
      know-how. Intellectual Property
      includes, but is
      not limited to,
      designs, inventions, algorithms, processes, recipes, schematics,
      logic diagrams, software, hardware,
      firmware, and technical specifications, whether in documentary or non-documentary
      form.

            


    

     

    
      	
              1.2

            	
              “Technology” - the
      know-how, technology and process and other results developed and that will be
      developed by MMI under
      the Approved Programs supported by the OCS or deriving
      therefrom.

            


    

    
       

      
        	
                l.3

              	
                “Technology IP” – all rights in and to the
      Technology.

              


      

    

    


    
      	
              1.4

            	
              “Law” – the Encouragement of Research and Development
      in Industry Law
      (5744-1984) and the regulations
      rules and procedures
      promulgated pursuant thereto as may be amended from time to
      time.

            


    

     

    
      
         


      

      
        
        

        
          

        

      

      
         


      

    


    
      	
              1.5

            	
              “Net Sales” - gross amount billed on
      sales by MMI of the products covered by the claims of the
      Background IP, 1ess the following: (i) customary trade, quantity, or cash
      discounts and commissions to non-affiliated brokers or agents to the extent actually
      allowed and taken; (ii) amounts repaid or credited by reason of rejection
      or return; and (iii) to the extent separately stated on purchase orders,
      invoices, or other documents of sale, any taxes or other governmental
      charges levied on the production, sale, transportation, delivery, or use
      of such product which is paid by or on behalf of
      MMI;

            


    

     

    
      	
              l.6

            	
              “OCS” – the Office of Chief Scientist of
      the Ministry of Industry, Trade and
  Labor.

            


    

    


    
      	
              2.

            	
              Ownership of
      Rights

            


    

     

    MMI is
and shall remain the Sole owner of the Technology and Technology IP created in
the course of the Approved Programs supported by the OCS or deriving therefrom
and any utilization of such Technology and Technology IP and the results of the
Approved Programs and any other rights deriving from the Approved Programs or
their execution, is subject to the provisions of the Law.

    
       

    

    
      	
              3.

            	
              License

            


    

    
       

      Subject
to obtaining the required prior approvals from the OCS and compliance with the
provisions of the Law, MMI may grant Medgenics licenses for manufacturing, marketing and
distributing of products incorporating or based on the Technology and/or the
Technology IP.

    

     

    
      	
              4.

            	
              Non-Exclusive License
      to Background IP

            


    

     

    
      	
              4.1

            	
              License
      Grant. Medgenics
      herby grants MMI a non-exclusive, worldwide, non-transferable.
      sub-licensable irrevocable license to use Medgenics’ Intellectual Property
      Rights, as existing at date of application made for financial support from
      the OCS under the Grant or developed or obtained independently by
      Medgenics thereafter, as well as such intellectual property rights
      licensed to Medgenics under the certain License Agreement with Yissum
      dated November 23, 2005 (the “Background IP”), solely to the extent
      demonstrated, to the reasonable satisfaction of Medgenics, as required for
      the performance and execution of the Approved Programs and any research
      and development programs support by the OCS, to be technically
      indispensable for MMI in order to develop and commercialize the products
      based on the Technology and Technology IP (all such
      rights granted herein, the “Non-Exclusive License”). The Background IP and all
      Intellectual Property Rights therein shall remain in the sole ownership
      of' Medgenics.

            


    

    


    
      	
              4.2

            	
              Royalties.
      In consideration for
      the grant of the Non-Exclusive License to MMI, MMI shall pay Medgenics a
      royalty equal to the five percent (5%) of the Net Sales of
      the products based on
      the Background IP.

            


    


    
      
         


      

      
        2

        
          

        

      

      
         


      

    

    


    
      	
              5.

            	
              Undertaking

            


    

    
       

      Each of MMI and Medgenics, recognize that
(i) the Technology and Technology IP was developed with financial support of
the Government of the State of Israel through the OCS under the Law, and that (ii) the Law places strict
restrictions on the transfer of know-how and/or manufacturing right,
making all such transfers subject to the absolute discretion of the
Research Committee of the OCS (the “Research Committee”), acting in accordance with the aims
of the Law, and requiring that any such transfer receive the prior written approval of the
Research Committee. Each of MMI and Medgenics hereby undertake: (i) to observe
strictly the requirements of the Law including those relating to the prohibition on transfer
of know-how and/or production rights,
and those relating to payment royalties; (ii) to notify the OCS in any event of
a procedure taken by or against MMI in respect of a liquidation of MMI, or an
appointment of a trustee, liquidator or receiver for MMI, or similar legal
procedures.

    

    


    
      	
              6.

            	
              Miscellaneous

            


    

    
       

      
        	
                6.1

              	
                Governing
      Law and
      Jurisdiction. This Agreement
      shall be governed by
      and construed according to the laws of the state of
      Israel, without regard
      to the
      conflict of
      laws provisions thereof. All disputes
      hereunder shall be resolved in the
      courts of Israel, sitting in Tel
Aviv-Jaffa.

              


      

    

    


    
      
        	
                6.2

              	
                Entire
      Agreement.
      This Agreement constitutes the entire agreement between the parties relating
      to the subject matter hereof, and supersedes and annuls all
      oral or written representations or agreements, privileges or
      understandings between the
      parties relating to the subject matter
      hereof.

              


      

    

    


    
      	
              6.3

            	
              Amendments. This
      Agreement may only be amended
      or modified by an agreement in writing duly signed by the parties hereto.
      The parties undertake to obtain the approval of the OCS for any
      amendment or modification for which such approval is required under
      the Law.

            


    

    


    
      
        	
                6.4

              	
                Severability.
      If any non material condition,
      term or covenant of this Agreement shall at any time be held to be
      void, invalid or unenforceable by a court of final jurisdiction, then
      such
      condition, covenant or term shall be
      construed as severable and such holding shall attach only to such
      condition, covenant or term and shall not in any way affect or render
      void, invalid or unenforceable
      any other condition, covenant or term of this Agreement, and this
      Agreement shall be carried out as if such void, invalid or unenforceable
      term were not embodied
      herein.

              


      

    

    


    
      	
              6.5

            	
              Waiver.
      The failure at any time of either party to enforce any of the terms or
      conditions or any right or to exercise any option of this
      Agreement, will in no way be construed to be a waiver of such
      terms, conditions, rights or options, or in any way to affect the validity
      of this Agreement.

            


    

    


    
      	
              6.6

            	
              Preamble.
      The preamble
      to this Agreement shall form
      an Integral part
thereof.

            


    

    


    
      	
              6.7

            	
              Headings.
      The headings in this Agreement are inserted only as a matter of
      convenience, and shall
      not be taken into consideration in the interpretation
      of this
Agreement.

            


    

    


    
      	
              6.8  

            	
              Notices.
      Any notice,
      demand, request, consent, approval, declaration, delivery
      or other communication hereunder to be
      made pursuant to the provisions of
      this
      Agreement
      shall be sufficiently given or made if in writing and delivered in
      person with receipt acknowledged, sent by registered or
      credited mail, receipt requested, posted prepaid,
      sent by overnight courier with
      guaranteed next day delivery or sent by telex or facsimile
      to the party to whom
      directed at the respective address
      indicated above or to such other
      address as a party may designate
      in writing
      in accordance with
      the provisioins of this Subsection 6.8. A copy of any notice shall
      be also sent to:

            


    

    Pearl,
Cohen Zedek Latzer LLP


    
      
         


      

      
        3

        
          

        

      

      
         


      

    

     

    7 Shenkar
Street, 2nd Gav-Yam
Building,

    Herzelia,
46733, Israel

    Fax:
972-9-972-8001

    Att:
Attorney Mark Cohen

     

    
      	
              6.9

            	
              Further Assurances. The parties hereto shall take any and all
      actions as may be required to satisfy the terms, goals and intent of this
      Agreement and shall take no actions in contravention of
      thereof.

            


    

    


    
      	
              6.l0

            	
              Counterparts. This Agreement may be executed in any
      number of counterparts, each of whom shall be deemed an original and
      enforceable against the parties actually executing such counterpart, and
      all of which together shall constitute one and the same
      instrument.

            


    

    


    IN WITNESS WHEREOF the parties have
signed this Agreement as of the date first above written.

     

    
      
        
          
            
              
                
                  	
                          MMI,
      LTD.

                        	 
      	
                          MEDGENICS,
      INC.

                        
	 
      	 
      	 
      
	
                          Signature:

                        	
                          /s/
      Andrew L. Pearlman

                        	 
      	
                          Signature:

                        	
                          /s/
      Andrew L. Pearlman

                        
	 
      	 
      	 
      
	
                          Name:
      Dr. Andrew L. Pearlman

                        	 
      	
                          Name:
      Dr. Andrew L. Pearlman

                        
	 
      	 
      	 
      
	
                          Title:
      CEO

                        	 
      	
                          Title:
      President and
CEO

                        


                

              

            

          

        

      

    

     

    
      
         


      

      
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