EX-10.7 Research and License Agreement



 





Exhibit 10.7



Portions of this exhibit have been omitted pursuant to a request for confidential treatment.
The omitted portions, marked by [***], have been separately filed with the Securities and Exchange
Commission.




RESEARCH AND LICENCE AGREEMENT




Between




YEDA RESEARCH AND DEVELOPMENT COMPANY LIMITED





a
company duly registered under the laws of Israel of 
P O Box 95,
Rehovot 76100, Israel



(hereinafter, “Yeda”)




and




PROTALIX BIOTHERAPEUTICS LIMITED





a
company duly registered under the laws of Israel, 
having its
principal place of business at 2 Snunit St, 
Science Park, POB 455,
Carmiel 20100, Israel



(hereinafter, “the Company”)




PREAMBLE:




	 	 	 	 	 
	WHEREAS:

	 	(A)
	 	in the course of research conducted at the Weizmann Institute of Science (“the
Institute”), under the supervision of Professor Anthony H. Futerman of the Department of
Biological Chemistry, Professor Joel L. Sussman of the Department of Structural Biology and
Professor Israel Silman of the Department of Neurobiology (“the Scientists”), the Scientists
together with other scientists of the Institute, all of the aforementioned persons,
collectively “the Inventors” arrived at an invention entitled [***](“the Invention”), being
the subject of and more fully described in PCT patent application number [***] and the other
patent applications listed in Appendix A hereto [***](“the Existing Patent Applications”) and
created and/or generated the know-








 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



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	 	 	 	how and other information relating to the Invention as described in
Appendix B hereto (“the Know-How”); and
	 
	 	 	 	 
	 

	 	(B)
	 	the Company is: (i) interested in the performance of
further research at the Institute under the supervision of the Scientists
in the field of the Invention, as specified in the research program
attached hereto, marked Appendix C (“the Research Program” and “the
Research”); and (ii) willing, subject to and in accordance with the terms
and conditions of this Agreement, to finance the performance of the
Research in accordance with the budget attached hereto and marked Appendix
D (“the Research Budget”); and
	 
	 	 	 	 
	 

	 	(C)
	 	Yeda is willing, subject to and in accordance with
the terms and conditions of this Agreement, to procure the performance of
the Research at the Institute as aforesaid; and
	 
	 	 	 	 
	 

	 	(D)
	 	by operation of Israeli law and/or under the terms of
employment of the Inventors at the Institute and pursuant to an agreement
between the Institute, Yeda and the Inventors, all right, title and
interest of the Inventors and/or the Institute in and to the Invention, in
any results deriving from the performance of the Research at the Institute
and in the Existing Patent Applications vests and shall vest in Yeda; and
	 
	 	 	 	 
	 

	 	(E)
	 	subject to and in accordance with the terms of this
Agreement, the Company wishes to receive, and Yeda is willing to grant to
the Company, a worldwide exclusive licence in respect of the Licensed
Information (as hereinafter defined) and under the Patents (as hereinafter
defined), for the development, manufacture, production, and sale of
enzymatically active mutants of glococerebrosidase and derivatives
therefrom for the treatment of Gaucher disease and/or any other indication
(“Products”), all subject to and in accordance with the terms and
conditions of this Agreement below; and
	 
	 	 	 	 
	 

	 	(F)
	 	the Company declares that on 12 January 2006 the
Magneton Committee (appointed by the General Manager of the Ministry of
Industry, Trade and Employment (“MITE”)) approved the application filed by
the Company












 



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	 	 	 	for the receipt of government grants within the framework of the Magneton
Program (as hereinafter defined) for the performance of the Research and
for research and development activities by the Company in respect of the
Products, pursuant to a letter dated 15 January 2006 from the manager of
the Magneton Program, a copy of which is annexed hereto as Appendix E
(“the Magneton Approval”),






NOW THEREFORE IT IS AGREED BETWEEN THE PARTIES HERETO AS FOLLOWS:



1. PREAMBLE, APPENDICES AND INTERPRETATION





	1.1.	 	The Preamble and Appendices hereto form an integral part of this Agreement.
	 
	1.2.	 	In this Agreement the terms below shall bear the meanings assigned to them below, unless the
context shall indicate a contrary intention:





	 	 	 	 	 	 	 
	1.2.1.

	 	“Affiliated Entity”
	 	—
	 	shall mean, with respect to
any party hereto, any
company, corporation, other
entity or person
(hereinafter, collectively,
“entity”), which directly or
indirectly, is controlled by,
or controls, or is under
common control with, such
party. For the purposes of
this definition, “control”
shall mean the ability,
directly or indirectly, to
direct the activities of the
relevant entity (save for an
ability flowing solely from
the fulfilment of the office
of director or another
office) and shall include,
without limitation, the
holding, directly or
indirectly, of more than 30%
(thirty percent) of the
issued share capital or of
the voting power of the
relevant entity or the
holding, directly or
indirectly, of a right to
appoint more than 30% (thirty
percent) of the directors of
such entity or of a right to
appoint the chief executive
officer of such entity;












 



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	1.2.2.

	 	“Development Program”
	 	—
	 	shall mean, with respect to
any Product or Products, a
development program
specifying the activities and
timetable necessary to
develop such Products to
commercialisation, including
the performance of steps
required for obtaining
regulatory approvals from all
relevant authorities for such
Products and/or the sale of
such Products ;
	 
	 	 	 	 	 	 
	1.2.3.

	 	“Exchange Rate”
	 	—
	 	shall mean, with respect to
any amount to be calculated,
or which is paid or received
in a currency other than US
Dollars, the average of the
selling and buying exchange
rates of such currency (in
respect of cheques and
remittances) and the US
Dollar prevailing at Bank
Hapoalim B.M. at the end of
business on the date of
calculation, payment or
receipt, as the case may be;
	 
	 	 	 	 	 	 
	1.2.4.

	 	“First Commercial Sale”
	 	—
	 	shall mean, with respect to
any Product in any country,
the first commercial sale of
such Product in such country
after U.S. Food and Drug
Administration (“FDA”) New
Drug Approval, European
Medicines Agency (“EMEA”) or
national medicinal agency
marketing approval or
equivalent approval in such
country has been obtained for
such Product;
	 
	 	 	 	 	 	 
	1.2.5.

	 	“Licence”
	 	—
	 	shall mean an exclusive
worldwide licence under the
Licensed Information and the
Patents, for the development,
manufacture, production, use,
marketing, distribution and
sale of the Products, subject
to the provisions of clause
7.1 below and the other terms
and conditions of this
Agreement;
	 
	 	 	 	 	 	 
	1.2.6.

	 	“Licensed Information”
	 	—
	 	shall mean: (i) the
Invention; (ii) the Know-How;
and (iii) all and any
inventions, products,












 



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	 	 	 	 	 	materials, compounds, compositions,
substances, methods, processes, techniques,
know-how, data, information, discoveries
and other results of whatsoever nature
discovered or occurring in the course of,
or arising from, the performance of the
Research;
	 
	 	 	 	 	 	 
	1.2.7.

	 	“Magneton Directive”
	 	—
	 	shall mean Directive 8.6 of the
General Manager of MITE dated 22
August 2001 entitled “The
Encouragement of Technology
Transfer from Academia to
Industry – Magneton”
	 
	 	 	 	 	 	 
	1.2.8.

	 	“Magneton Program”
	 	—
	 	shall mean the program for the
encouragement of the transfer of
generic technology from academic
to commercial bodies
administered by MITE, as
described in the Magneton
Directive;
	 
	 	 	 	 	 	 
	1.2.9.

	 	“Net Sales”
	 	—
	 	shall mean the total amount
invoiced by the Company and the
total amount invoiced by each
Sublicensee (and, subject to
clause 7.4.4.6 below, each
Further Sublicensee (as
hereinafter defined)) in
connection with the sale of
Products (for the removal of
doubt, whether such sales are
made before or after the First
Commercial Sale of any Product
in any country); provided that,
with respect to sales which are
not at arms-length and/or are
not in the ordinary course of
business and/or are not
according to then current market
conditions for such a sale, the
term “Net Sales” shall mean the
total amount that would have
been due in an arms-length sale
made in the ordinary course of
business and according to the
then current market conditions
for such sale or, in the absence
of such current market
conditions, according to market
conditions for












 



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	 	 	 	 	 	 	sale of products similar to the Products,
in all cases after deduction of:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(i)
	 	sales taxes (including value added
taxes) or customs duties to the extent
applicable to such sale and included
in the invoice in respect of such
sale;
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(ii)
	 	credits or allowances, if any,
actually granted on account of price
adjustments, recalls, rejections or
returns of Products previously sold;
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(iii)
	 	freight and insurance charges to the
extent such items are applicable to
such sale and are separately itemised
on invoices; and
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(iv)
	 	bad debts (as determined in
accordance with relevant GAAP rules)
deriving from Net Sales in respect of
which royalties were paid by the
Company pursuant hereunder;
	 
	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	and provided further that, with respect to
sales by the Company and/or a Sublicensee
and/or a Further Sublicensee, as
applicable, to any Affiliated Entity of the
Company or of such Sublicensee or Further
Sublicensee, as the case may be, the term,
“Net Sales” shall mean the higher of (but
for the avoidance of doubt, not both of):
(a) “Net Sales”, as defined above, with
respect to sales which are not at
arms-length and/or in the ordinary course
of business and/or according to current
market conditions; and (b) the total amount
invoiced by such Affiliated Entity on
resale to an independent third party
purchaser after the













 



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	 	 	 	 	 	deductions specified in subparagraphs (i)
and (ii) above, to the extent applicable;
	 
	 	 	 	 	 	 
	1.2.10.

	 	“OCS”
	 	—
	 	shall mean the Office of the Chief
Scientist at MITE;
	 
	 	 	 	 	 	 
	1.2.11.

	 	“Patents”
	 	—
	 	shall mean: (i) the Existing Patent
Applications and all patents which may be
granted thereon; and (ii) all other patent
applications or applications for
certificates of invention covering
portions of the Licensed Information and
all patents or certificates of invention
which may be granted thereon; as well as
all continuations, continuations-in-part,
patents of addition, divisions, renewals,
reissues and extensions (including any
patent term extension) of any of the
aforegoing patents, but excluding: (a)
patents that have been invalidated or
cancelled pursuant to the final (i.e.,
unappealed or unappealable) judgment of a
competent court; and (b) patent
applications that have been withdrawn or
have expired, in each case such exclusion
to be effective only from the date of such
invalidation, cancellation, withdrawal or
expiry, as the case may be.
	 
	 	 	 	 	 	 
	 

	 	 	 	 	 	For the purposes of this Agreement, the
term “Patent” shall also mean a
Supplementary Protection Certificate
(within the meaning of such term under
Council Regulation (EU) No. 1768/92) or
any other similar statutory or
supplementary protection;
	 
	 	 	 	 	 	 
	1.2.12.

	 	“Research Period”
	 	—
	 	shall mean the [***]period
commencing on the date of
signature of this Agreement,
as may be extended in
accordance with clause 2.1
below;






		 	
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.










 



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	1.2.13.	 	“Sublicence” and

“Sublicensee”	 	—	 	“Sublicence” shall mean any
right granted, licence
given, or agreement entered
into, by the Company (or,
but without derogating from
clause 7.4.4.6 below, a
Sublicensee) to or with any
other person or entity,
permitting any use of the
Licensed Information and/or
the Patents (or any part
thereof) for the independent
development and/or
manufacture and/or
production and/or marketing
and/or distribution and/or
sale of Products (whether or
not such grant of rights,
licence given or agreement
entered into is described as
a sublicence or as an
agreement with respect to
the development and/or
manufacture and/or
production and/or
distribution and/or
marketing and/or sale of
Products or otherwise) and
the term “Sublicensee” shall
be construed accordingly;
	 
	 	 	 	 	 	 	 	 
	1.2.14.	 	“Sublicensing Receipts”	 	—	 	shall mean consideration,
whether monetary or
otherwise, received (for the
removal of doubt, whether
received before or after the
First Commercial Sale in any
country) by the Company for
or from the grant of
Sublicences or Further
Sublicences and/or pursuant
thereto, or in connection
with the grant of an option
for a Sublicence, except
for:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(i)
	 	amounts received by the Company which
constitute royalties based on sales of
the Products by Sublicensees in
respect of which the Company has paid
royalties to Yeda; and
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(ii)
	 	amounts received by the Company from
a Sublicensee and actually












 



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	 	 	 	 	 	 	expended by the Company (as
evidenced by invoices, receipts or
other appropriate documentation) in
respect of Product-related research
and/or development activities to be
performed by the Company for such
Sublicensee after the date of
signature of the relevant Sublicence
(or, as the case may be, option for
a Sublicence), provided that:
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(a)
	 	any such amounts constitute
research and/or development
funding only and not payment
for Products nor any other type
of grant or benefit,
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(b)
	 	such research and/or
development activities are
performed pursuant to a defined
research and development
program and research and
development budget agreed with
the relevant Sublicensee, a
copy of which is provided to
Yeda; and
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	 	 	(c)
	 	the Company submits to Yeda a
written expense report,
confirmed by the Company’s
independent accountant or chief
financial officer, setting out
the time and materials
utilised, and reasonable
overhead costs and other
expenses actually incurred by
the Company in the conduct of
the said research and












 



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	 	 	 	 	 	 	 	 	 	development activities, which
report demonstrates that such
amounts have actually been
expended by the Company in
the conduct of such research
and/or development activities
in accordance with such work
program and budget,
	 
	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	it being agreed, for the removal of
doubt, that any amounts received by
the Company as aforesaid, but not
expended as set out above, shall be
deemed to be Sublicensing Receipts.
	 
	 	 	 	 	 	 	 	 	 	 
	1.2.15.	 	the terms: “Yeda”, “the
Company”, “the Institute”,
“the Scientist”, “the
Inventors”, “the Invention”,
“the Existing Patent
Applications”, “the
Know-How”, “the Magneton
Approval", “the Magneton
Directive”, “the Magneton
Program”, "MITE”, “the
Research Program”, “the
Research”, “the Research
Budget” and “Products”	 	—	 	shall bear the definitions assigned to them respectively in the heading or the preamble hereto, as the case may be.
	 
	 	 	 	 	 	 	 	 	 	 
	1.3. In this Agreement:
	 
	 	 	 	 	 	 	 	 	 	 
	1.3.1.	 	words importing the singular shall include the plural and vice-versa and words importing any
gender shall include all other genders and references to persons shall include partnerships,
corporations and unincorporated associations;
	 
	 	 	 	 	 	 	 	 	 	 
	1.3.2.	 	any reference in this Agreement to the term “patent” shall also include any re-issues,
divisions, continuations or extensions thereof (including measures having equivalent effect);












 



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	1.3.3.	 	any reference in this Agreement to the term “patent applications” shall include any
provisional patent applications, PCT, national or regional patent applications, applications
for continuations, continuations-in-part, divisions, patents of addition or renewals, as well
as any other applications or filings for similar statutory protection;
	 
	1.3.4.	 	any reference in this Agreement to the term “sale” shall include the sale, lease, rental or
other disposal of any Product with the exception of disposition, without charge, for
demonstration and/or testing purposes; and
	 
	1.3.5.	 	“including” and “includes” means including, without limiting the generality of any
description preceding such terms.





2. PERFORMANCE OF THE RESEARCH





	2.1.	 	In consideration of the sums to be paid by the Company to Yeda pursuant to clause 3.1 below
and, subject to the execution of such payments and to clause 3.2 below, Yeda undertakes,
subject to clause 2.2 below, to procure the performance of the Research at the Institute under
the supervision of the Scientists during the Research Period. By written agreement of the
parties, the Research Period may be extended by such period and upon such terms and conditions
as the parties shall so agree.
	 
	2.2.	 	If all of the Scientists shall cease to be available for the supervision of the performance
of the Research, such cessation shall not constitute a breach of this Agreement by Yeda. In
the event that all of the Scientists shall cease to be available as aforesaid, Yeda shall use
its reasonable efforts to find from amongst the scientists of the Institute a replacement
scientist or scientists acceptable to the Company (such acceptance to be in writing, and not
to be unreasonably withheld), but no undertaking to find such a replacement is given by Yeda.
If all of the Scientists cease to be available and no acceptable replacement scientists can be
found within 60 (sixty) days of all of the Scientists becoming unavailable as aforesaid, then
the Company shall be entitled, by written notice to Yeda, to terminate the Research Period, in
which event the Research Period and the performance of Research hereunder shall cease at the
end of a further period of 60 (sixty) days from the date of receipt by Yeda of such written
notice. In the event of such termination, Yeda shall be released from any obligation to
procure the










 



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	 	 	performance of the Research during the period after such termination, and the Company
shall be released from any obligation to finance the Research in respect of the period
commencing after such termination, but without affecting the Licence and all the other
terms and conditions of this Agreement which shall remain in full force and effect
(save for those relating to the performance and financing of the Research).
	 
	2.3.	 	It is agreed that if the performance of the Research shall involve the conduct of experiments
on and/or using animals, the performance of the Research and the Research Program shall be
subject to the Israeli Anti-Cruelty Law, 1994 and to the approval of, and any modifications
requested by, the Institutional Animal Care and Use Committee and the Safety Committee of the
Institute, in order to ensure compliance with the above law. It is agreed that, in view of
the fact that the performance of the Research may involve the conduct of experiments using
human material (such as cells, blood, tissue, DNA, RNA, lysates, or body fluids) the
performance of the Research and the Research Program shall be subject to the approval of, and
any modifications requested by the Safety Committee of the Institute and the Institutional
Review Board for Human Experimentation.
	 
	2.4.	 	For the avoidance of doubt, it is agreed that nothing in this Agreement shall constitute a
representation or warranty by Yeda, express or implied, that any results will be achieved by
the Research or that the Licensed Information or any part thereof or any results achieved by
the Research are or will be commercially exploitable or of any other value and Yeda
furthermore makes no warranties and representations, express or implied, whatsoever as to the
Research, any results of the Research, the Patents or the Licensed Information.





3. FUNDING THE RESEARCH





	3.1.	 	Subject only to clause 3.2 below, the Company undertakes to pay to Yeda the total amount (in
US Dollars) of the Research Budget (being [***]per year for each year of the Research Period)
in [***] equal [***] instalments, payable in advance at the beginning of each [***] period
during the Research Period, the first such payment to be made on the date [***] following the
signature of this Agreement. An invoice in respect of an instalment paid as aforesaid shall
be issued by Yeda promptly after the receipt by Yeda of such instalment. All payments of the
Research Budget shall be made by direct wire transfer to Yeda’s bank account, the details of
which are set out in clause 17.7






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



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	 	 	below. For the removal of doubt, nothing contained in this Agreement shall prevent
Yeda and/or the Institute from obtaining further finance for the Research from other
entities (subject to the approval of the OCS should such approval be required pursuant
to the Magneton Program and/or the Magneton Directive), provided that such other
entities are not granted any rights in respect of the Research and/or the Licensed
Information which prejudice any rights granted to the Company under the Licence.
	 
	3.2.	 	If funding approved pursuant to the Magneton Program is withheld or delayed by the OCS solely
due to a delay by Yeda in fulfilling its reporting obligations as required by such Program,
then the Company shall be entitled, by written notice to Yeda, to suspend further payments to
Yeda pursuant to clause 3.1 above until such time as such reporting obligations are fulfilled
by Yeda (and such suspension shall cease immediately upon the fulfilment by Yeda of such
reporting obligations). In the event of such suspension of payment, Yeda shall be entitled to
discontinue the performance of the Research and its reporting obligations pursuant to section
4 below until funding recommences.





4. REPORTING BY YEDA





	4.1.	 	Yeda will procure the preparation by the Scientists of, and shall submit to the Company: (i)
during the time that funding is provided pursuant to the Magneton Program, interim written
reports on the progress of the Research during the Research Period on a quarterly basis, and,
after such time, on a yearly basis, in both cases within 60 (sixty) days of the end of the
period covered by such report, (ii) a written report summarising the results of the Research
within 60 (sixty) days of the end of the Research Period; and (iii) reports of any significant
findings in the Research promptly upon such findings being made.
	 
	4.2.	 	Yeda shall submit to the Company financial reports setting forth the monies received and
expended in connection with the Research on a quarterly basis in accordance with the
requirements of the Magneton Directive. A financial report as aforesaid shall be submitted to
the Company during the Research Period on a quarterly basis, and, after such time on a yearly
basis, in both cases within 60 (sixty) days after the end of the period covered by such
report. Charges in respect of Research expenditures shall be made in accordance with the
procedures prevailing at the Institute for charging research expenditures to individual
projects of applied research and in










 



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	 	 	accordance with the Magneton Directive and/or the directives of the OCS.





5. TITLE





Subject only to the Licence, all right, title and interest in and to the Licensed Information
and the Patents and all right, title and interest in and to any drawings, plans, diagrams,
specifications, other documents, models, or any other physical matter in any way containing,
representing or embodying any of the aforegoing, vest and shall vest in Yeda.



6. PATENTS; PATENT INFRINGEMENTS





	6.1.	 	 
	 
	6.1.1.	 	Subject to clauses 6.3 and 6.4 below, [***]shall prosecute the Existing Patent Applications
using the outside patent counsel retained by [***] for such purpose prior to the execution of
this Agreement, unless otherwise agreed by the parties in writing, and shall maintain at the
applicable patent office any patents issuing from the Existing Patent Applications. The
Company and Yeda shall consult with one another and cooperate fully with regard to the
prosecution of the Existing Patent Applications and in maintenance of such patents.
	 
	6.1.2.	 	At the initiative of either party, the parties shall consult with one another regarding the
filing of patent applications in respect of any portion of the Licensed Information and/or
corresponding to the Existing Patent Applications, including the jurisdictions in which such
applications should be filed, the timing of the filing of such applications and the contents
thereof. Following such consultations, and subject to clauses 6.3 and 6.4 below, [***] shall
retain outside patent counsel to prepare, file and prosecute patent applications as aforesaid
in such jurisdiction or jurisdictions as shall be determined by the parties in consultation as
aforesaid. Subject to clauses 6.3 and 6.4 below, [***]shall also maintain at the applicable
patent office any patents granted as a result of any of the above patent applications. The
parties agree that their joint policy will be to seek comprehensive patent protection for all
Licensed Information licensed to the Company hereunder. The Company
and Yeda shall cooperate
fully in the preparation, filing, prosecution and maintenance of such patent applications and
patents. [***] shall: (i) deliver to [***], promptly, copies of all documentation prepared in
connection with the maintenance or






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



- 15 -


	 	 	prosecution of the Existing Patent Applications; and (ii) procure that [***]
receives a copy of correspondence between [***] and any patent attorney or
other professional or any competent authority (where the Patents may be filed,
maintained or made) all, in each case, relating to the prosecution and/or
maintenance of the Patents.
	 
	6.1.3.	 	Without derogating from the aforegoing, [***] shall, at its expense, take all necessary
steps as commercially feasible in order to obtain, or, at [***] election, assist [***] to
obtain, the extension of each patent referred to in this clause 6.1 above, or, in the case of
a patent in any member state of the European Union, a Supplementary Protection Certificate as
referred to in clause 1.2.11 above (including the preparation and filing of applications for
such extensions and Supplementary Protection Certificates), within the period prescribed
therefor under applicable law and, if applicable, take all necessary steps as commercially
feasible in order to obtain “Orphan Drug” status (within the meaning of such term under the US
Orphan Drug Act or under Council Regulation (EU) No. 141/2000, as the case may be), or any
other form of protection that affords exclusivity, within the period prescribed therefor under
applicable law. [***] shall notify [***] promptly in writing and shall provide a copy to [***]
of each marketing authorisation granted in respect of each Product in each country and, if
applicable, of “Orphan Drug” or other form of protection affording exclusivity granted in
respect of a Product and shall keep [***] informed and shall provide copies to [***] of all
documents regarding all applications, activities and/or proceedings regarding such extensions
and/or any Supplementary Protection Certificates and/or “Orphan Drug” or other form of
protection affording exclusivity, as aforesaid.






	6.2.	 	All applications to be filed in accordance with the provisions of clauses 6.1.2 and 6.1.3
above, shall be filed in the name of [***] or, should the law of the relevant jurisdiction so
require, in the name of the relevant inventors and then assigned to [***].
	 
	6.3.	 	In the event that, following such consultations between the parties regarding the filing,
prosecuting and/or maintenance (as applicable) of patent applications and/or patents pursuant
to clauses 6.1.1 and 6.1.2 above, [***]shall not wish to file and/or continue to prosecute a
patent application and/or maintain a patent in any country in relation to any part of the
Licensed Information (including any of the Existing






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
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	 	 	Patent Applications), then [***], in its discretion, may elect to file and/or continue
to prosecute such patent application and/or maintain such patent in such country at
its own cost and expense. [***] shall notify [***] in writing of [***] election to
file and/or continue to prosecute such patent application and/or maintain such patent
in such country as aforesaid, at [***] expense (such notice, “[***]”), and, in the
event that [***] shall not, within 30 (thirty) days of receipt of the [***] Notice:
(i) reimburse [***] for all out-of-pocket costs and fees incurred by [***] until the
date of the [***] (the [***] to be supported by receipts or other appropriate
documents evidencing such costs and fees) in connection with the said patent
application (in the preparation and/or filing and/or prosecution and/or maintenance of
such application) and/or such patent, such costs and fees to be expressed in the
currency in which paid by [***] and to be reimbursed or paid (as the case may be) by
[***] to [***] in US Dollars in accordance with the Exchange Rate of such currency on
the date of reimbursement or payment; and (ii) undertake in writing to [***] to bear
all additional and future expenses relating to such patent application and/or patent,
then [***] shall be entitled, at any time after the expiry of the said 30 (thirty) day
period after such notice, to terminate the Licence granted to [***] under this
Agreement in respect of such patent application and/or patent in such country, and to
take whatever action it deems fit (in its sole discretion) with respect to such patent
application and/or patent.






	6.4.	 	  
	 
	6.4.1.	 	The Company shall, on the date of signature of this Agreement, reimburse Yeda the sum of US
[***], constituting the costs and fees paid by Yeda prior to March 14, 2006 in connection with
the Existing Patent Applications, and shall pay to Yeda all additional amounts incurred, but
not as yet paid, by Yeda prior to the date of signature of this Agreement, within 30 (thirty)
days of Yeda’s first written request.
	 
	6.4.2.	 	[***] shall bear and pay all
costs and fees incurred in the preparation, filing, prosecution and the like of the Existing
Patent Applications and of all patent applications filed in accordance with the provisions of
clauses 6.1.2 and 6.1.3 above (including patent applications corresponding to the Existing
Patent Applications), and the maintenance at the appropriate patent office and the like of
all patents issuing from the Existing Patent Applications and all patent applications





	 		
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- 17 -







	 	 	 	 	 
	 	 	referred to above, and all costs and fees incurred in undertaking any
activities referred to in clause 6.1.3 above.
	 
	 	 	 	 
	6.4.3.	 	Unless otherwise instructed by [***] in writing, [***] shall pay directly to [***] relevant
outside patent counsel amounts payable by [***] pursuant to this clause 6.4 above or clause
6.3 above.
	 
	 	 	 	 
	6.5.
	 	 	 	 
	 
	 	 	 	 
	6.5.1.

	 	(i)
	 	Should the Company determine that a third party is
infringing one or more of the Patents, then the Company
shall notify Yeda promptly in writing, giving full
particulars thereof and the Company shall, after first
having consulted Yeda, be entitled to sue for such
infringement.
	 
	 	 	 	 
	 

	 	(ii)
	 	Yeda may elect, at its own initiative, to join as a
party to such action, or Yeda may consent to being named as a party to
such action (such consent by Yeda may for the removal of doubt, be
conditional upon, inter alia, the provision by the Company of security,
satisfactory to Yeda, for the payment of the expenses or costs referred to
in subparagraph (a) below).
	 
	 	 	 	 
	 

	 	(iii)
	 	Yeda shall cooperate and shall use its reasonable
efforts to cause the Scientists to cooperate with the Company in
prosecuting such litigation.
	 
	 	 	 	 
	 	 	The provisions of paragraphs (i) and (iii) above shall be subject to the
following:
	 
	 	 	 	 
	 

	 	(a)
	 	any expenses or costs or other liabilities incurred
in connection with such litigation (including attorneys’ fees, costs and
other sums awarded to the counterparty in such action) shall be borne by
the Company, which shall indemnify Yeda against any such expenses or costs
or other liabilities, the above without derogating from the provisions of
clause 12 below;
	 
	 	 	 	 
	 

	 	(b)
	 	in the event that Yeda shall be named as a party in
any such litigation then Yeda shall be entitled to select its own legal
counsel in such litigation, at the Company’s expense and, if Yeda elects
not to do so, the selection of the legal counsel representing the Company
and Yeda in such litigation shall be subject to the prior written approval
of








 




			
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	 	 	 	Yeda, which approval shall not be withheld unreasonably; and
	 
	 	 	 	 
	 

	 	(c)
	 	no settlement, consent order, consent judgment or
other voluntary final disposition of such action may be entered into
without the prior written consent of Yeda.
	 
	 	 	 	 
	6.5.2.

	 	(i)
	 	Should the Company discover any allegation by a third party that, or be sued on the
grounds that, the manufacture, use or sale of a Product by it or by a Sublicensee or a Further
Sublicensee under any of the Patents or using the Licensed Information or any portion thereof
infringes upon the patent rights of a third party, then the Company shall notify Yeda promptly
in writing, giving full particulars thereof, and the Company shall, after first having
consulted Yeda, be entitled to defend such action.
	 
	 	 	 	 
	 

	 	(ii)
	 	Yeda may elect, at its own initiative, to join as a
party to such action.
	 
	 	 	 	 
	 

	 	(iii)
	 	Yeda shall cooperate and shall use its reasonable
efforts to cause the Scientists to cooperate with the Company in defending
such litigation.
	 
	 	 	 	 
	 

	 	(iv)
	 	If an action is brought against the Company alleging
the invalidity of any of the Patents, Yeda shall have the right to take
over the sole defence of the action and the Company shall cooperate fully
with Yeda in connection with any such action. In such event, no
settlement, consent order, consent judgment or other voluntary final
disposition of such action may be entered into without the prior written
consent of the Company, which consent shall not be unreasonably withheld
or delayed.
	 
	 	 	 	 
	 

	 	(v)
	 	All expenses, costs and/or other liabilities incurred
in connection with such litigation (including attorneys’ fees, costs and
other sums awarded to the counterparty in such action) shall be borne by
the Company.
	 
	 	 	 	 
	 

	 	(vi)
	 	The provisions of clause 6.5.1(c) above shall apply,
mutatis mutandis.












 



- 19 -





	6.5.3.	 	Any recovery in any litigation relating to an infringement as aforesaid in clauses 6.5.1 and
6.5.2 above shall first be applied to cover costs and thereafter divided [***]to the Company
and [***] to Yeda.
	 
	6.5.4.	 	For the removal of doubt, Yeda shall not itself be obliged to take any action to sue for any
infringement or to defend any action as referred to in this clause 6.5 above.






	6.6.	 	If the Company fails to take action to abate any alleged infringement of a Patent, or to
defend any action as aforesaid, within 60 (sixty) days of a request by Yeda to do so (or
within a shorter period, if required to preserve the legal rights of Yeda under applicable
law), then Yeda shall have the right (but not the obligation) to take such action at its
expense and the Company shall cooperate in such action at the Company’s expense and, if
required under applicable law or contract, consent to be named as a party to any such action.
Yeda shall have full control of such action and shall have full authority to settle such
action on such terms as Yeda shall determine. Any recovery in any such litigation shall be
for the account of Yeda only.
	 
	6.7.	 	Each party shall promptly keep the other informed and provide copies to the other of all
documents regarding all such actions or proceedings instituted by or against either party as
contemplated under any of the provisions of clause 6.5 above.





7. LICENCE





	7.1.	 	Yeda hereby grants the Licence to the Company, and the Company hereby accepts the Licence
from Yeda, during the period, for the consideration and subject to the terms and conditions
set out in this Agreement. For the removal of doubt, no licence is granted hereunder with
regard to the Licensed Information and/or the Patents and/or any portion of any of the
aforegoing, with respect to any exploitation or activities (including the activities referred
to in clause 1.2.5 above) relating to any product or services, other than Products).
	 
	7.2.	 	For the removal of doubt, nothing contained in this Agreement shall prevent Yeda or the
Institute from using the Licensed Information and the Patents for academic research or other
scholarly purposes, or from applying for or receiving grants to finance such activities
(provided that such grants do not prejudice the Licence granted to






 




			
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	 	 	the Company hereunder), or from transferring any materials created in the course of
the performance of the Research financed by the Company in accordance with the
provisions of this Agreement, to scientists at the Institute or to other scientists at
other institutions for academic research purposes, provided that any such transfer of
materials shall be in accordance with a material transfer agreement substantially in
the form of the specimen agreement annexed hereto as Appendix F. For the avoidance of
doubt, the materials transferable pursuant to this clause 7.2 shall not include any
derivatives of the human acid-beta-glucosidase developed and produced by the Company.
Should Yeda obtain rights to any invention or application deriving from such academic
research in connection with the materials transferred under any such material transfer
agreement, as contemplated by such agreement, Yeda shall immediately grant Protalix a
licence (or sublicence, as the case may be) in respect of such rights upon the terms
of the Licence, mutatis mutandis (subject to any restrictions upon the rights obtained
by Yeda).
	 
	7.3.	 	 






	7.3.1.	 	The Licence shall remain in force in each of Israel and the United States of America, with
respect to each Product (if not previously terminated in accordance with the provisions of
this Agreement) until the later of:






	7.3.1.1.	 	the date of expiry of the last of any Patent (including, for the removal of doubt, any
patent application, as referred to in the definition of “Patents” in clause 1.2.11 above) in
such country covering such Product to expire; and
	 
	7.3.1.2.	 	if there is any Licensed Information that is identifiable, secret and of value relating to
such Product, the date of expiry of a period of [***]commencing on the date that FDA, EMEA
marketing approval or equivalent approval is obtained in respect of such Product in such
country, provided that and for so long as such Licensed Information remains secret and of
value.






	7.3.2.	 	The Licence shall remain in force in each country in the world (other than Israel and the
United States of America) with respect to each Product (if not previously terminated in
accordance with the provisions of this Agreement) until the later of:






 




			
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	7.3.2.1.	 	the date of expiry in such country of the last of any Patent (including, for the removal
of doubt, any patent application, as referred to in the definition of “Patents” in clause
1.2.11 above) in such country covering such Product to expire; and
	 
	7.3.2.2.	 	if there is any Licensed Information that is identifiable, secret and of value relating to
such Product, the date of expiry of a period of [***] commencing on the date that FDA, EMEA
marketing approval or equivalent approval is obtained in respect of such Product in such
country.






	 	 	For the purposes of clauses 7.3.1.1 and 7.3.2.1 above and clause 9. 2 (Royalties)
below, a Product shall be deemed to be covered by a Patent in any country even after
the Patent in such country covering such Product has expired, in the event that, and
for so long as, such Product is protected and/or covered by “Orphan Drug” status as
referred to in clause 6.1.3 above, and/or by any type of data exclusivity or data
protection or by any other regulations and/or provisions granting similar statutory or
regulatory protection of such Product in such country. The Company shall notify Yeda
in writing immediately upon the obtaining of FDA, EMEA or equivalent approval in any
country, as referred to in clauses 7.3.1.2 and 7.3.2.2 above, specifying the date
thereof, the country and the type of Product in respect of which such approval was
granted.
	 
	7.4.	 	Except as provided in clause 7.5 below, a Sublicence under the Licence may be granted by the
Company only with the prior written consent of Yeda, which shall not be withheld unreasonably,
and Yeda’s response to a request for consent as aforesaid shall not be delayed unreasonably.
The Company shall only be entitled to request Yeda’s consent if:






	7.4.1.	 	the proposed Sublicence is for monetary consideration only or other valuable consideration
that can reasonably be assessed in monetary terms;
	 
	7.4.2.	 	the proposed Sublicence is to be granted in a bona fide arms-length commercial transaction;
	 
	7.4.3.	 	the terms of the proposed Sublicence are submitted to Yeda prior to the signature thereof;






 




			
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	7.4.4.	 	the proposed Sublicence is made by written agreement, the provisions of which are consistent
with the terms of the Licence and contains, inter alia, the following terms and conditions:






	7.4.4.1.	 	the Sublicence shall expire automatically on the termination of the Licence for any
reason;
	 
	7.4.4.2.	 	the Sublicensee shall be bound by provisions substantially similar to those in clause 10
below relating to confidentiality binding the Company (the obligations of the Sublicensee so
arising being addressed also to Yeda directly);
	 
	7.4.4.3.	 	an exclusion of liability and indemnification undertaking in the same form, mutatis
mutandis, as the provisions of clause 12 below (the indemnification obligations of the
Sublicensee to be given also in favour of, and shall be actionable by Yeda, the Institute, any
director, officer or employee of Yeda or of the Institute, or by the Inventors);
	 
	7.4.4.4.	 	all terms necessary to enable performance by the Company of its obligations hereunder;
	 
	7.4.4.5.	 	that the Sublicence shall not be assignable or otherwise transferable, save as set out in
clause 7.4.4.6 below.
	 
	7.4.4.6.	 	that the Sublicence shall not be further sublicenseable other than with Yeda’s prior
written consent, which consent: (i) shall not be unreasonably withheld (and Yeda’s response to
a request for consent to a further sublicence shall not be unreasonably delayed), and (ii) may
be conditioned by Yeda on, inter alia, the payment to Yeda of:






	 	(a)	 	royalties based on the sales of the
further sublicensee (“the Further Sublicensee”), in accordance with
the provisions of clause 9.2 below; and
	 
	 	(b)	 	royalties on all consideration received
(whether monetary or otherwise) by the Company or the Sublicensee
from the Further Sublicensee (except for amounts received by such
Sublicensee which constitute royalties based on sales of the
Products










 



- 23 -


	 	 	 	by such Further Sublicensee in respect of which the Sublicensee
has paid royalties to Yeda), in accordance with the provisions of
clause 9.3 below, which consideration shall be deemed to be
Sublicensing Receipts received by the Company.






For the removal of doubt, the Company may seek Yeda’s consent to a
further sublicence (“the Further Sublicence") only if:




	 	A)	 	the proposed Further Sublicence shall be
in writing;
	 
	 	B)	 	the proposed Further Sublicence shall be
consistent with the terms of this Agreement;
	 
	 	C)	 	the proposed Further Sublicence shall be
for monetary consideration only or other valuable consideration that
can reasonably be assessed in monetary terms;
	 
	 	D)	 	the proposed Further Sublicence shall be
granted in a bona fide arms-length commercial transaction;
	 
	 	E)	 	the terms of the proposed Further
Sublicence shall be submitted to Yeda prior to the signature
thereof;
	 
	 	F)	 	the proposed Further Sublicence shall
contain, inter alia, the terms and conditions set out in clauses
7.4.4.2 and, 7.4.4.3 above and clauses 7.4.4.7, 7.4.4.8 and 7.4.4.9
below (and the references in such clauses to “Sublicence” or
“Sublicensee” shall, for the purposes of this clause, be deemed to
refer to the Further Sublicence or the Further Sublicensee, as the
case may be; and






	7.4.4.6.1.	 	the Further Sublicence shall not be assignable, otherwise transferable or further
sublicenseable; and
	 
	7.4.4.6.2.	 	the Further Sublicence shall expire automatically upon the termination of this Agreement
or of the Sublicence;






	7.4.4.7.	 	that: (i) a copy of the agreement granting the Sublicence shall be made available to Yeda,
promptly upon its










 



- 24 -


	 	 	execution; (ii) all amendments to any such Sublicence agreement shall be
subject to Yeda’s prior written consent; and (iii) the Company shall
submit to Yeda copies of all such amendments (as approved by Yeda),
promptly upon execution thereof;
	 
	7.4.4.8.	 	that the Sublicensee shall grant to Yeda the right, at reasonable times and upon
reasonable notice to the Sublicensee, to send representatives in order to examine those books
of accounts, records and other documentation of the Sublicensee as may be necessary in order
to determine the correctness or completeness of any payment made by the Company to Yeda under
this Agreement, all without derogating from clause 9.7 below; and
	 
	7.4.4.9.	 	that the Sublicensee shall, forthwith upon written request by the Company and/or Yeda, pay
directly to Yeda all royalties and/or other payments that Yeda is entitled to receive in
respect of sales by or on behalf of such Sublicensee pursuant to clause 9.2 below and the
percentage of Sublicensing Receipts as provided in clause 9.3 below and, in such event, the
last 2 (two) sentences of clause 9.7 below shall apply to the Sublicensee as if it were the
Company, mutatis mutandis;






	 	 	and
	 
	7.4.5.	 	any act or omission by the Sublicensee or the Further Sublicensee which would have
constituted a breach of this Agreement by the Company had it been the act or omission of the
Company and which is not cured within the applicable cure period, shall constitute a breach of
the Sublicence agreement with the Company entitling the Company to terminate the Sublicence,
and the Company hereby undertakes to inform Yeda forthwith upon receipt of knowledge by the
Company of such breach and, at the request of Yeda, and at the Company’s cost and expense, to
exercise such right of termination.






	7.5.	 	For the removal of doubt, the Company shall not be entitled to grant, directly or indirectly,
to any person or entity any right of whatsoever nature to exploit or use in any way the
Licensed Information or the Patents or to develop, manufacture, produce and/or sell the
Products or any part of any of the aforegoing, save by way of Sublicence










 



- 25 -


	 	 	within the meaning of such term in clause 1.2.11 above and subject to the conditions
of this clause 7 relating to any such grant.
	 
	7.6.	 	Nothing contained in this Agreement shall be deemed to be a representation or warranty,
express or implied, by Yeda that the Existing Patent Applications or any of them or any patent
applications relating to the Licensed Information or any portion thereof will be granted or
that patents obtained on any of the said patent applications are or will be valid or will
afford proper protection or that the Invention or any other portion of the Licensed
Information are or will be commercially exploitable or of any other value or that the
exploitation of the Patents, the Invention or the Licensed Information will not infringe the
rights of any third party.
	 
	7.7.	 	Notwithstanding the aforesaid in this clause 7, the Company may grant Sublicences to
subcontractors solely to manufacture the Products or solely to perform research and
development services related to the Products on its behalf without obtaining Yeda’s consent,
provided that: (i) the terms of clauses 7.4.2, 7.4.4.1, 7.4.4.2, 7.4.4.3 (to the extent
relating to clauses 12.2 and 12.3 (but not 12.1)), 7.4.4.4 and 7.4.5 above are observed; (ii)
the proposed Sublicence is made by written agreement, the provisions of which are consistent
with the terms of the Licence; (iii) the Company is jointly and severally liable with the
subcontractor to Yeda for any obligations owed to or damage caused to Yeda in connection with
or resulting from the grant of such Sublicence; (iv) such Sublicence shall not be assignable,
further sublicenseable or otherwise transferable without the prior written consent of Yeda;
and (v) such subcontractor is not granted any additional right under the Licence other than
the right solely to manufacture the Products or solely to perform the research and development
services, in both cases as subcontractor for the Company.





8. DEVELOPMENT AND COMMERCIALIZATION





	8.1.	 	Within [***]of the date of signature of this Agreement, the Company shall submit to Yeda a
Development Program for the development of Products (such Development Program, as approved by
Yeda, “the Initial Development Program”).
	 
	8.2.	 	The Company undertakes, [***] to take all necessary steps to develop and commercialise the
Products and, without derogating from the generality of the foregoing, to use its best efforts
to expedite the commencement of the commercial sale of the Products. For






 




			
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	 	 	such purpose and without derogating from the generality of the aforegoing, the Company
shall carry out and/or have a third party carry out on its behalf the performance of
the trials, tests and other works and activities detailed in the Initial Development
Program and in all further Development Programs (if any) submitted pursuant to clause
8.5 below, in accordance with the respective timetables included therein. The Company
further undertakes to continue with commercialisation of the Products diligently
throughout the period of the Licence. Without prejudice to the foregoing, the Company
undertakes to comply with all the requirements of the Magneton Approval, including
that it will perform all development activities necessary in order to meet any
milestones set out therein.
	 
	8.3.	 	The Company shall provide Yeda on December 31 of each calendar year with written progress
reports (“Progress Reports”) which shall include detailed descriptions of the progress and
results, if any, of: (i) the tests and trials (if applicable) conducted and all other actions
taken by the Company pursuant to the Initial Development Program or any other Development
Program delivered and approved pursuant to clause 8.5 below; (ii) manufacturing, sublicensing,
marketing and sales during the preceding 12 (twelve) months; (iii) the Company’s plans in
respect of the testing, undertaking of trials (if applicable) or commercialisation of Products
for the following 12 (twelve) months; (iv) projections of sales and marketing efforts; and (v)
a summary of all protocols or minutes of meetings with the FDA, EMEA or any other regulatory
authority in connection with any Product and copies of any opinions, decisions, and approvals
issued by any of the aforementioned authorities. If the Company has provided a Development
Program for more than 1 (one) Product, then such Progress Report shall provide such
information separately for each such Product. If progress in respect of a Product differs
from that anticipated in its Development Program or preceding Progress Report, then the
Company shall explain, in its Progress Report, the reason therefor and prepare a modified
Development Program for Yeda’s review. The Company shall also provide any reasonable
additional data that Yeda requires to evaluate the performance of the Company hereunder.
	 
	8.4.	 	For the removal of doubt, without derogating from the remaining provisions of this clause 8
or of clause 13.2 below, nothing contained in this Agreement shall be construed as a warranty
by the Company that any Development Program to be carried out by it as aforesaid will actually
achieve its aims and the Company makes no warranties










 



- 27 -


	 	 	whatsoever as to any results to be achieved in consequence of the carrying out of any
such Development Program.
	 
	8.5.	 	Without derogating from the obligations of the Company pursuant to this clause 8 or from the
provisions of clause 13.2 below, in the event that the Company shall wish to develop and/or
commercialise Products in addition to those specified in the Initial Development Program or to
update the Initial Development Program, the Company shall submit to Yeda a further Development
Program in respect of such additional Products or updates and the provisions of this clause 8
shall apply also with respect to such further Development Program and to the development and
commercialisation of such additional Products, mutatis mutandis.
	 
	8.6.	 	The Company agrees to supply to Yeda and/or the Institute, for (and in quantities customary
for) academic research purposes, any Products developed and/or manufactured and/or produced
under this Agreement at no cost to Yeda, the Institute or the Scientists.
	 
	8.7.	 	The Company shall mark, and cause all its Sublicensees and Further Sublicensees to mark, all
Products that are manufactured or sold under this Agreement with the number or numbers of each
Patent applicable to such Product.





9. ROYALTIES





	9.1.	 	In consideration for the grant of the Licence, the Company shall pay Yeda a non-refundable
licence fee of US $[***] per year (or part thereof) during the term of this Agreement (“the
Annual Licence Fee”) to be paid in advance at the beginning of each 1 (one) year period during
the term of this Agreement, commencing on the fifth (5th) anniversary of the date
of signature of this Agreement and until (and including) the nineteenth (19th)
anniversary thereof. For the removal of doubt, the first Annual Licence Fee shall be paid on
the fifth (5th) anniversary of the date of signature of this Agreement and
thereafter on each anniversary of the date of signature of this Agreement until (and
including) the nineteenth (19th) anniversary thereof. The amount of the Annual
Licence Fee paid by the Company as aforesaid shall be credited against royalties and/or other
payments due and payable by the Company pursuant to clause 9.2 below during the 1 (one) year
period in respect of which the Company shall have paid such Annual Licence Fee provided that
the total amount of such royalties and other payments so payable during such 1 (one) year
period exceeds US[***]. For the removal of








 




			
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- 28 -





	 	 	doubt the amount of the Annual Licence Fee paid for a particular 1 (one) year period
cannot be credited against royalties payable during another 1 (one) year period.
	 
	9.2.	 	In addition to the above, the Company shall pay Yeda royalties at the rate of:






	9.2.1.	 	[***] of Net Sales of Products used to treat Gaucher disease and
	 
	9.2.2.	 	[***] of Net Sales of Products used for other indications; provided that in the event that
there are any sales of a Product in any country that are not, at the time of such sales,
covered by a Valid Patent Claim (as defined below) in such country, then the royalty rate
referred to in this clause 9.2 shall, with respect to Net Sales of such Product made in such
country during the period such Product is not so covered by a Valid Patent Claim as aforesaid,
be reduced to [***]for Products used to treat Gaucher disease and [***] for Products used for
other indications. For the purposes of this clause 9.2, “Valid Patent Claim” shall mean (i) a
claim under an issued and unexpired patent which is included in the Patents; (ii) a claim in a
pending patent application (including a provisional application) which is included in the
Patents; (iii) any protection for such Product due to “Orphan Drug” status (as referred to in
clause 6.1.3 above); or (iv) data exclusivity or data protection or by any other regulations
and/or provisions granting similar statutory or regulatory protection of such Product in such
country.






	9.3.	 	The Company shall additionally pay Yeda the following royalty in respect of the Sublicensing
Receipts:






	9.3.1.	 	[***] of all Sublicensing Receipts received pursuant to or in connection with Sublicences
(or options for a Sublicence) signed prior to the date of submission by the Company of an
Investigational New Drug Application (IND) to the FDA or equivalent EMEA approval with respect
to any Product;
	 
	9.3.2.	 	[***] of all Sublicensing Receipts received pursuant to or in connection with Sublicences
(or options for a Sublicence) signed on or after the date of the submission of an IND
application as aforesaid but prior to the date of commencement of phase III clinical trials
with respect to any Product;






 




			
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	9.3.3.	 	[***] of all Sublicensing Receipts received pursuant to or in connection with Sublicences
(or options for a Sublicence) signed on or after the date of commencement of phase III
clinical trials as aforesaid but prior to the date of FDA or EMEA approval of any Product; and
	 
	9.3.4.	 	[***] of all Sublicensing Receipts received pursuant to or in connection with Sublicences
(or options for a Sublicence) signed on or after the date of FDA or EMEA approval.






	9.4.	 	For the removal of doubt, the Company undertakes that all sales (within the meaning of such
term in clause 1.3.4 above) of Products by the Company and each Sublicensee or Further
Sublicensee (as the case may be) shall be for cash consideration only.
	 
	9.5.	 	In calculating Net Sales and Sublicensing Receipts, all amounts shall be expressed in US
Dollars and any amount received or invoiced in a currency other than US Dollars shall be
translated into US Dollars, for the purposes of calculation, in accordance with the Exchange
Rate between the US Dollar and such currency on the date of such receipt or invoice, as the
case may be. For the removal of doubt, in calculating amounts received by the Company,
whether by way of Net Sales or Sublicensing Receipts, any amount deducted or withheld in
connection with any such payment on account of taxes on net income (including income taxes,
capital gains tax, taxes on profits or taxes of a similar nature) payable by the Company in
any jurisdiction, shall be deemed, notwithstanding such deduction or withholding, to have been
received by the Company. In the event that the Sublicensing Receipts comprise, in whole or in
part, non-cash consideration (including shares or other securities of the Sublicensee or
Further Sublicensee or any other entity), then the Company agrees, promptly upon Yeda’s
request, to execute and deliver such documents and instruments and do any other acts as may be
necessary, so that Yeda receives the percentage share of such non-cash consideration as
provided in clause 9.2.





9.6.





	9.6.1.	 	Amounts payable to Yeda in terms of this clause 9 shall be paid to Yeda in US Dollars: (i)
in the case of Net Sales, on a [***]and no later than [***] after the end of each [***],
commencing with the first [***] in which any Net Sales are made by the Company; or (ii) in the
case of Sublicensing Receipts, no later than [***] after any such Sublicensing Receipts are
received by the Company from any Sublicensees or Further Sublicensees.






 




			
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	9.6.2.	 	The Company shall submit to Yeda: (i) no later than [***] days after the end of each [***],
commencing with the first [***] in which any Net Sales are made; and (ii) no later than [***]
after any Sublicensing Receipts are received, an interim written report setting out amounts
owing to Yeda in respect of such Sublicensing Receipts, a full and detailed report, in a form
acceptable to Yeda, certified as being correct by the chief financial officer of the Company,
setting out all amounts owing to Yeda in respect of such previous [***]to which the report
refers, and with full details of:





	 	 	 	 	 
	9.6.2.1.

	 	(i)
	 	the sales made by the Company, Sublicensees and, if applicable, Further Sublicensees,
including a breakdown of Net Sales according to country, identity of seller, currency of
sales, dates of invoices, number and type of Products sold;
	 
	 	 	 	 
	 

	 	(ii)
	 	the Sublicensing Receipts, including a
breakdown of Sublicensing Receipts according to identity of
Sublicensees and, if applicable, Further Sublicensees, countries,
the currency of the payment and date of receipt thereof;
	 
	 	 	 	 
	 

	 	(iii)
	 	deductions applicable, as provided in the definition of “Net Sales”; and







	9.6.2.2.	 	any other matter necessary to enable the determination of the amounts of royalties payable
hereunder.






	9.7.	 	The Company shall keep and shall cause Sublicensees (and, if applicable, Further
Sublicensees) to keep complete, accurate and correct books of account and records consistent
with sound business and accounting principles and practices and in such form and in such
details as to enable the determination of the amounts due to Yeda in terms hereof. The
Company shall supply Yeda at the end of each calendar year, commencing with the first calendar
year in which any amount is payable by the Company to Yeda under this clause 9, a report
signed by the Company’s independent auditors in respect of the amounts due to Yeda pursuant to
this clause 9 in respect of the year covered by the said report and containing details in
accordance with clause 9.6 above in respect of the quarterly reports. The Company shall
retain and shall require and cause its Sublicensees (and, if applicable, Further Sublicensees)
to retain the aforegoing






 




			
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	 	 	books of account for 6 (six) years after the end of each calendar year during the
period of this Agreement, and, if this Agreement is terminated for any reason
whatsoever, for 6 (six) years after the end of the calendar year in which such
termination becomes effective.






	9.8.	 	At Yeda’s expense, Yeda shall be entitled to appoint representatives to inspect during normal
business hours and to make copies of the Company’s and Sublicensees’ (and, if applicable,
Further Sublicensees’) books of account, records and other documentation (including technical
data and lab books) to the extent relevant or necessary for the ascertainment or verification
of the amounts due to Yeda under this clause 9, provided however that Yeda shall coordinate
such inspection with the Company or Sublicensee or such Further Sublicensee (as the case may
be) in advance. The Company shall take all steps necessary (or in the case of its
Sublicensees or, if applicable, Further Sublicensees, use its best efforts) to ensure that all
such books of account, records and other documentation of the Company and its Sublicensees
(and, if applicable, Further Sublicensees) are available for inspection as aforesaid at a
single location for each of the Company and its Sublicensees (and, if applicable, Further
Sublicensees). In the event that any inspection as aforesaid reveals any underpayment by the
Company to Yeda in respect of any year of the Agreement in an amount exceeding [***]of the
amount actually paid by the Company to Yeda in respect of such year then the Company shall (in
addition to paying Yeda the shortfall together with interest thereon in accordance with clause
13.4 below), bear the costs of such inspection. The parties agree that the inspection of
technical data and lab books as aforesaid may only be conducted for the purposes of
determining whether the product developed, manufactured, sold, marketed, distributed and/or
used by the Company and/or Sublicensee or Further Sublicensee is a Product, such inspection to
be carried out by a representative of Yeda who is bound by an obligation of confidentiality.
The provisions of this clause 9 shall survive the termination of this Agreement for whatsoever
reason.






	10.	 	CONFIDENTIALITY






	10.1.	 	The Company shall maintain in confidence all information or data relating to the Patents,
the Licensed Information, this Agreement and the terms hereof (hereinafter, collectively
referred to as “the Confidential Information”), except and to the extent that the Company can
prove that any such information or data is in the public domain at the date of the signing
hereof or becomes part of the






 




			
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	 	 	public domain thereafter (other than through a violation by the Company or a
Sublicensee or Further Sublicensee of this obligation of confidentiality) and except
with regard to that portion, if any, of the Confidential Information expressly
released by Yeda from this obligation of confidentiality by notice in writing to the
Company to such effect. Notwithstanding the foregoing, the Company may disclose to
its personnel and Sublicensees the Confidential Information to the extent necessary
for the exercise by it of its rights hereunder or in the fulfilment of its obligations
hereunder, provided that it shall bind such personnel and such Sublicensees with a
similar undertaking of confidentiality in writing. The Company shall be responsible
and liable to Yeda for any breach by its personnel or any Sublicensee of such
undertakings of confidentiality as if such breach were a breach by the Company itself.






	10.2.	 	In addition to and without derogating from the aforegoing, the Company undertakes not to
make mention of the names of Yeda, the Inventors, the Institute or any scientists or other
employees of the Institute or any employee of Yeda in any manner or for any purpose whatsoever
in relation to this Agreement, its subject-matter and any matter arising from this Agreement
or otherwise, other than as set out in clause 10.3 below.
	 
	10.3.	 	Notwithstanding the provisions of clauses 10.1 and 10.2 above, the Company shall not be
prevented from mentioning the name of Yeda, the Inventors, the Institute and/or any scientists
or other employees of the Institute or any employee of Yeda or from disclosing any information
(i) if, and to the extent that, such mention or disclosure is to competent authorities for the
purposes of obtaining approval or permission for the exercise of the Licence, or in the
fulfilment of any legal duty owed to any competent authority (including a duty to make
regulatory filings); provided that any mention in a private placement memorandum or a public
offering registration statement shall not be deemed fulfilment of a legal duty to a competent
authority, and any such mention shall be subject to Yeda’s consent, which consent shall not be
withheld unreasonably, or (ii) provided that such disclosure is in the form attached hereto as
Appendix G.
	 
	10.4.	 	No termination of this Agreement, for whatever reason, shall release the Company from any of
its obligations under this clause 10 and such obligations shall survive any termination as
aforesaid.
	 
	10.5.	 	Yeda shall maintain in confidence all information received by Yeda from the Company which
has been designated by the Company in










 



- 33 -


	 	 	writing and in advance as confidential, except and to the extent that: (i) any such
information or data is in the public domain at the date of the signing hereof or
becomes part of the public domain thereafter (other than through a violation by Yeda
of this obligation of confidentiality) or is released by the Company from this
obligation of confidentiality by notice in writing; (ii) Yeda is required to disclose
such information in order to fulfil its obligations under this Agreement (including in
connection with the filing and prosecution of patent applications in accordance with
the provisions of clause 6 above); or (iii) Yeda is required to disclose such
information in fulfilment of any legal duty owed to any competent authority (the
Company hereby acknowledging that it is aware that such competent authority may not be
bound by any confidentiality obligations and may disclose or be required to disclose
such information to a third party, whether by order of court or by law or otherwise).
For the removal of doubt, the provisions of this clause 10.5 shall not apply in
respect of any information (not being Licensed Information) independently developed at
the Institute without reference to the confidential information received from the
Company.






	10.6.	 	In addition to but without derogating from the aforegoing, Yeda undertakes not to make
mention of the names of the Company or any employees thereof in any manner or for any purpose
whatsoever in relation to this Agreement, its subject-matter and any matter arising from this
Agreement or otherwise, unless the prior written approval of the Company thereto has been
obtained. The aforegoing notwithstanding, Yeda shall not be prevented from mentioning the
names of the Company or any employees thereof if and to the extent that such mention is to any
competent authority in the fulfilment of any duty owed to such authority or that such mention
is required for the purpose of fulfilling Yeda’s obligations hereunder.






	10.7.	 	For the removal of doubt, Yeda shall have the right to allow the scientists of the Institute
to publish articles relating to the Licensed Information in scientific journals or posters or
to give lectures or seminars to third parties relating to the Licensed Information, on the
condition that, to the extent that the information to be published or disclosed is Licensed
Information which is not in the public domain, a draft copy of the said contemplated
publication or disclosure shall have been furnished to the Company at least 45 (forty-five)
days before the making of any such publication or disclosure and the Company shall have failed
to notify Yeda in writing, within 21 (twenty one) days from receipt of the said draft
publication or disclosure, of its opposition to the making of the contemplated publication or










 



- 34 -


	 	 	disclosure. Should the Company notify Yeda in writing within 21 (twenty one) days
from the receipt of the draft contemplated publication or disclosure that it opposes
the making of such publication or disclosure because it includes material (which has
been specified in said notice) in respect of which there are reasonable grounds (which
have also been specified in said notice) requiring the postponement of such
publication or disclosure so as not adversely to affect the Company’s interests under
the Licence because such Licensed Information is patentable subject-matter for which
patent protection pursuant to clause 6.1 above should be sought, then Yeda shall not
permit such publication or disclosure unless and until there shall first have been
filed an appropriate patent application in respect of the material to be published or
disclosed as aforesaid. The Company acknowledges that it is aware of the importance
to the researchers of publishing their work and, accordingly, the Company will use its
best efforts not to oppose such publications.






	10.8.	 	Yeda’s obligations under this clause 10 (other than this clause 10.8) shall terminate upon
termination of this Agreement; provided, however, that any transfer by Yeda following such
termination of information received from the Company which it was previously required to keep
confidential pursuant to clause 10.5 above shall only be made following the signature by the
potential transferee thereof of a non-disclosure agreement with Yeda substantially in the form
of the specimen agreement attached hereto as Appendix H.






	11.	 	NO ASSIGNMENT






	11.1.	 	The Company shall not be entitled to assign or encumber all or any of its rights or
obligations under this Agreement or arising therefrom, unless it shall have received the prior
written consent of Yeda to such assignment or encumbrance, which consent shall not be
unreasonably withheld, and Yeda’s response to a request for consent as aforesaid shall not be
unreasonably delayed, and which consent, if given, may be conditioned by Yeda on, inter alia,
the payment of a fee or other consideration in relation thereto (including, if so conditioned
by Yeda, that any consideration received by the Company in respect of an assignment to which
Yeda consents as aforesaid shall be deemed to be Sublicensing Receipts and the provisions of
clause 9 above shall apply with respect thereto, mutatis mutandis). For the purposes of this
clause 11, the merger of the Company with another entity, in the event that the Company is not
the surviving entity, and the sale of all or substantially all of the










 



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	 	 	Company’s assets or business to a third party shall be deemed to be an assignment.






	11.2.	 	Notwithstanding the aforegoing, the merger of the Company with another entity as described
in clause 11.1 above or the sale of all or substantially all of the assets or the business of
the Company to a third party (collectively “the M&A”) will not require the written consent of
Yeda as aforesaid if all of the following conditions are met: (i) the Company
provides written notice of the M&A to Yeda at least 20 (twenty) days prior to the effective
date of the M&A; (ii) Yeda receives from the assignee (or purchaser or surviving entity in a
merger, as the case may be), in writing, at least 10 (ten) days prior to the effective date of
the M&A: (a) an undertaking to be bound by the terms of this Agreement; and (b) an undertaking
to perform the obligations of the Company under this Agreement; and (iii) that the Company is
not, as at the effective date of the M&A, in breach of any of its obligations hereunder.






	12.	 	EXCLUSION OF LIABILITY AND INDEMNIFICATION






	12.1.	 	Yeda, the Inventors, the Institute and the directors, officers and employees of Yeda and/or
of the Institute (hereinafter collectively “the Indemnitees”) shall not be liable for any
claims, demands, liabilities, costs, losses, damages or expenses (including legal costs and
attorneys’ fees) of whatever kind or nature (all of the aforegoing, collectively,
“Liabilities”) caused to or suffered by any person or entity (including the Company or any
Sublicensee or Further Sublicensee) that directly or indirectly arise out of or result from or
are encountered in connection with this Agreement, the exercise of the Licence or the conduct
of the Research, including directly or indirectly arising out of or resulting from or
encountered in connection with: (i) the development, manufacture, sale or use of any of the
Products by the Company, any Sublicensee or Further Sublicensee or any person acting in the
name of or on behalf of any of the aforegoing, or acquiring, directly or indirectly, any of
the Products from any of the aforegoing; or (ii) the exploitation or use by the Company or any
Sublicensee or Further Sublicensee of the Licensed Information or any part thereof, including
of any data or information given, if given, in accordance with this Agreement.
	 
	12.2.	 	In the event that any of the Indemnitees should incur or suffer any Liabilities that
directly or indirectly arise out of or result from or are encountered in connection with this
Agreement or the exercise of the Licence as aforesaid in clause 12.1 above, or shall be
requested or










 



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	 	 	obliged to pay to any person or entity any amount whatsoever as compensation for any
Liabilities as aforesaid in clause 12.1 above, then the Company shall indemnify and
hold harmless such Indemnitees from and against any and all such Liabilities. Without
limiting the generality of the aforegoing, the Company’s indemnification as aforesaid
and the exclusion of liability in clause 12.1 above shall extend to product liability
claims and to damages, claims, demands, liabilities, losses, costs and expenses
attributable to death, personal injury or property damage or to penalties imposed on
account of the violation of any law, regulation or governmental requirement.






	 	 	If an action as contemplated by this clause 12 is brought against any Indemnitee, Yeda
shall, or shall procure that such Indemnitee shall, notify the Company promptly in
writing of such claim. Yeda may, at its sole option, allow the Company, at the
Company’s expense, to assume control over defending such claim, in which case it will
provide the Company with reasonable assistance and any information reasonably required
for such defence, at the Company’s expense; provided that if the Company shall assume
control over the defence of such claim, no settlement, consent order, consent judgment
or other voluntary final disposition of such action may be entered into without the
prior written consent of Yeda.
	 
	12.3.	 	The Company shall at its own expense insure its liability pursuant to clause 12.2 above
during the period beginning not later than the date of the commencement of the first clinical
studies or clinical trials of any Product in humans and continuing during the entire period
that the Licence is in force in any country, plus an additional period of 7 (seven) years.
Such insurance shall be in reasonable amounts and on reasonable terms in the circumstances,
having regard, in particular, to the nature of the Products, and shall be subscribed for from
a reputable insurance company. The named insured under such insurances shall be the Company,
the Inventors, Yeda and the Institute and the beneficiaries thereof shall include also the
respective employees, officers and directors of Yeda and the Institute. The policy or
policies so issued shall include a “cross-liability” provision pursuant to which the insurance
is deemed to be separate insurance for each named insured (without right of subrogation as
against any of the insured under the policy, or any of their representatives, employees,
officers, directors or anyone in their name) and shall further provide that the insurer will
be obliged to notify each insured in writing at least 30 (thirty) days in advance of the
expiry or cancellation of the policy or policies. The Company










 



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	 	 	hereby undertakes to comply punctually with all obligations imposed upon it under such
policy or policies and in particular, without limiting the generality of the
aforegoing, to pay in full and punctually all premiums and other payments for which it
is liable pursuant to such policy or policies. The Company shall be obliged to submit
to Yeda copies of the aforesaid insurance policy or policies within 14 (fourteen) days
of the date of issue of each such policy.






	12.4.	 	The provisions of this clause 12 shall survive the termination of this Agreement for
whatsoever reason.






	13.	 	TERM AND TERMINATION






	13.1.	 	Unless otherwise agreed to in writing, this Agreement shall terminate upon the occurrence of
the later of the following:






	13.1.1.	 	the date of expiry of the last of the Patents; or
	 
	13.1.2.	 	the expiry of a continuous period of [***]during which there shall not have been a First
Commercial Sale of any Product in any country.






	13.2.	 	Notwithstanding anything to the contrary contained in this Agreement:






	13.2.1.	 	Yeda shall be entitled, at its option: (i) to modify the Licence hereunder so that it is
non-exclusive only, by written notice to the Company (any such amendment of this Agreement by
Yeda as aforesaid, being effective immediately, the Company’s consent thereto (written or
otherwise) not being required, notwithstanding the provisions of clause 17.2 below); or (ii)
to terminate this Agreement, including the Licence hereunder, with respect to any Product, by
written notice to the Company, if the Company shall fail to achieve any one of the following
milestones, in each case in respect of at least one Product, by the dates specified therefor:






	 	(1)	 	within [***] of the signature of this
Agreement, to have commenced required Good Laboratory Practice (GLP)
pre-clinical development;
	 
	 	(2)	 	within [***] of the signature of this
Agreement, to have commenced phase I clinical trials;







 




			
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	 	(3)	 	within [***] of the signature of this
Agreement, to have commenced phase II clinical trials;
	 
	 	(4)	 	within [***]of the signature of this
Agreement, to have commenced phase III clinical trials;
	 
	 	(5)	 	within [***] of the date of signature of
this Agreement, to have submitted a New Drug Application to the FDA
or a Marketing Authorisation Application (MAA) to the EMEA;
	 
	 	(6)	 	First Commercial Sale of at least one
Product shall not have commenced within [***] of the first Product
approval obtained as a result of an application submitted pursuant
to clause 13.2.1(a)(5); and
	 
	 	(7)	 	commercial sale of any Product having
commenced, there shall be a period of [***] or more during which no
sales of any Product shall take place (except as a result of force
majeure or other factors beyond the control of the Company)






and shall fail to cure such delay within [***] of receipt of notice from
Yeda; provided that Yeda shall not be entitled to exercise its rights
pursuant to this clause 13.2.1 if 1) the Company shall demonstrate to the
satisfaction of Yeda that it is making all necessary efforts to achieve
such milestone and that such delay is due to factors beyond the control
of the Company; and 2) the total delay in respect of any one milestone
shall not under any circumstances exceed or have exceeded twelve months
and the cumulative total delay in respect of all milestones shall not
under any circumstances exceed or have exceeded thirty months.




	13.2.2.	 	Without derogating from the aforegoing, Yeda shall be entitled to terminate this Agreement
(unless previously terminated in accordance with the provisions of this Agreement), by written
notice to the Company (effective immediately), if the Company contests the validity of any of
the Patents.






	13.3.	 	Without derogating from the parties’ rights hereunder or by law to any other or additional
remedy or relief, it is agreed that either Yeda or the Company may terminate this Agreement
and the Licence






 




			
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	 	 	hereunder by serving a written notice to that effect on the other upon or after: (i)
the commitment of a material breach hereof by the other party, which material breach
cannot be cured or, if curable, which has not been cured by the party in breach within
21 (twenty-one) days (or, in the case of failure by the Company to pay any amount due
from the Company to Yeda pursuant to or in connection with this Agreement on or before
the due date of payment, 10 (ten) days) after receipt of a written notice from the
other party in respect of such breach, or (ii) the granting of a winding-up order in
respect of the other party, or upon an order being granted against the other party for
the appointment of a receiver, or if such other party passes a resolution for its
voluntary winding-up, or if a temporary or permanent liquidator or receiver is
appointed in respect of such other party, or if a temporary or permanent attachment
order is granted on such other party’s assets, or a substantial portion thereof, or if
such other party shall seek protection under any laws or regulations, the effect of
which is to suspend or impair the rights of any or all of its creditors, or to impose
a moratorium on such creditors, or if anything analogous to any of the aforegoing in
this clause 13.3(ii) above under the laws of any jurisdiction occurs in respect of
such other party; provided that in the case that any such order or act is initiated by
any third party, the right of termination shall apply only if such order or act as
aforesaid is not cancelled within 60 (sixty) days of the grant of such order or the
performance of such act.






	13.4.	 	Any amount payable hereunder by one of the parties to the other, that has not been paid by
its due date of payment, shall bear interest from its due date of payment until the date of
actual payment, at the rate of [***]per month and pro rata for part of a month.
	 
	13.5.	 	Upon the termination of this Agreement for whatever reason (other than the passage of time),
all rights in and to the Licensed Information and the Patents shall revert to Yeda and the
Company shall not be entitled to make any further use thereof and the Company shall deliver to
Yeda all drawings, plans, diagrams, specifications, other documentation, models or any other
physical matter in the Company’s possession in any way containing, representing or embodying
the Licensed Information; and (ii) the Company shall grant to Yeda a non-exclusive,
irrevocable, perpetual, worldwide licence, with the right to sublicense (subject to the
provisions of clause 13.7 below), in respect of the Development Results. In this clause 13.5,
the term “the Development Results” shall mean any invention, product, material, method,
process, technique, know-how, data, information or other result which does






 




			
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	 	 	not form part of the Licensed Information, discovered or occurring in the course of or
arising from the performance by the Company of the development work pursuant to clause
8 above, including any regulatory filing or approval, filed or obtained by the Company
in respect of the Products, all communications with the regulatory authorities, the
drug master file and any data, information or document covered by data protection or
data exclusivity.






	13.6.	 	The termination of this Agreement for any reason shall not relieve the Company or Yeda of
any obligations which shall have accrued prior to such termination.
	 
	13.7.	 	In the event that this Agreement shall be terminated, other than by way of termination by
Yeda pursuant to clause 13.2.2 or 13.3 above, and that, subject to the Magneton Directive
and/or the directives of the OCS, at any time within 5 (five) years following such
termination, Yeda shall grant to a third party a licence in respect of the Development Results
or any part thereof (alone or together with any part of the Licensed Information) and Yeda
shall receive in respect of such licence consideration, then Yeda shall pay to the Company
[***]of the Net Proceeds actually received by Yeda in respect of such a licence, provided
however that Yeda shall be entitled to set off against such amounts sums owed or which become
owed by the Company to Yeda, until such time as the Company shall have received an amount
equal to [***] of the Company’s direct expenditure incurred in respect of the process of
obtaining the Development Results (excluding any Magneton or other OCS or other non-commercial
funding), as confirmed in writing by the Company’s independent accountants. Yeda shall pay to
the Company amounts, if any, payable under this clause 13.7 above, within 90 (ninety) days of
receipt of the relevant Net Proceeds.
	 
	 	 	For the purpose of this clause 13.7, “Net Proceeds” means royalties and all other
monetary consideration actually received by Yeda in respect of such licence (excluding
funds for research and/or development at the Institute or payments for the supply of
services) after deduction of all costs, fees and expenses incurred by Yeda in
connection with such licence (including, without limitation, patent related costs, and
all attorneys fees and expenses and other costs and expenses in connection with the
negotiation, conclusion and administration of such licence).
	 
	13.8	 	For the avoidance of doubt, it is hereby agreed that following the expiry of the Licence in
any country pursuant to clause 7.3 above,






 




			
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	 	 	the Company and its Sublicensees shall be entitled to continue to produce,
manufacture, use, market, distribute and/or sell Products in the said country without
having to pay royalties or any other consideration to Yeda in respect of such
activities subsequent to such expiry date.






	14.	 	NOTICES
	 
	 	 	Any notice or other communication required to be given by one party to the other under this
Agreement shall be in writing and shall be deemed to have been served: (i) if personally
delivered, when actually delivered; or (ii) if sent by facsimile, the next business day after
receipt of confirmation of transmission; or (iii) 10 (ten) days after being mailed by
certified or registered mail, postage prepaid (for the purposes of proving such service—it
being sufficient to prove that such notice was properly addressed and posted) to the
respective addresses of the parties set out below, or to such other address or addresses as
any of the parties hereto may from time to time in writing designate to the other party
hereto pursuant to this clause 14:





	 	 	 	 	 
	14.1.

	 	to Yeda at:
	 	P.O. Box 95
	 

	 	 	 	Rehovot 76100
	 

	 	 	 	Attention: the CEO
	 

	 	 	 	Facsimile: (08) 9470739
	 
	 	 	 	 
	14.2.

	 	to the Company at:
	 	2 Snunit St, Science Park
	 

	 	 	 	P.O. Box 455
	 

	 	 	 	Carmiel 20100
	 

	 	 	 	Attention: the CEO
	 

	 	 	 	Facsimile: (04) 988 9489







	15.	 	VALUE ADDED TAX
	 
	 	 	The Company shall pay to Yeda all amounts of Value Added Tax imposed on Yeda in connection
with the transactions under this Agreement. All amounts referred to in this Agreement shall
be exclusive of Value Added Tax.
	 
	16.	 	GOVERNING LAW AND JURISDICTION
	 
	 	 	This Agreement shall be governed in all respects by the laws of Israel and the parties hereby
submit to the exclusive jurisdiction of the competent Israeli courts, except that Yeda may
bring suit against the Company in any other jurisdiction outside Israel in which the Company
has assets or a place of business.











 



- 42 -



	17.	 	MISCELLANEOUS






	17.1.	 	The headings in this Agreement are intended solely for convenience or reference and shall be
given no effect in the interpretation of this Agreement.
	 
	17.2.	 	This Agreement constitutes the entire agreement between the parties hereto in respect of the
subject-matter hereof, and supersedes all prior agreements or understandings between the
parties relating to the subject-matter hereof (including the Memorandum of Understanding
between Yeda and the Company dated 29 November 2005) and, subject to clause 13.2.1(i) above,
this Agreement may be amended only by a written document signed by both parties hereto. No
party has, in entering into this Agreement, relied on any warranty, representation or
undertaking, except as may be expressly set out herein.
	 
	17.3.	 	This Agreement may be executed in any number of counterparts (including counterparts
transmitted by telecopier or fax), each of which shall be deemed to be an original, but all of
which taken together shall be deemed to constitute one and the same instrument.
	 
	17.4.	 	No waiver by any party hereto, whether express or implied, of its rights under any provision
of this Agreement shall constitute a waiver of such party’s rights under such provisions at
any other time or a waiver of such party’s rights under any other provision of this Agreement.
No failure by any party hereto to take any action against any breach of this Agreement or
default by another party hereto shall constitute a waiver of the former party’s rights to
enforce any provision of this Agreement or to take action against such breach or default or
any subsequent breach or default by such other party.
	 
	17.5.	 	If any provision of this Agreement is held to be unenforceable under applicable law, then
such provision shall be modified as set out below and the balance of this Agreement shall be
interpreted as if such provision were so modified and shall be enforceable in accordance with
its terms. The parties shall negotiate in good faith in order to agree on the terms of an
alternative provision which complies with applicable law and achieves, to the greatest extent
possible, the same effect as would have been achieved by the invalid or unenforceable
provision.











 



- 43 -



	17.6.	 	Nothing contained in this Agreement shall be construed to place the parties in a
relationship of partners or parties to a joint venture or to constitute either party an agent,
employee or a legal representative of the other party and neither party shall have power or
authority to act on behalf of the other party or to bind the other party in any manner
whatsoever.
	 
	17.7.	 	All payments to be made to Yeda hereunder shall be made in US Dollars (save that payments
received by the Company in New Israeli Sheqels may be made in that currency) by banker’s
cheque or by bank transfer to Yeda’s bank account, the details of which are as follows: Bank
Hapoalim B.M. Rehovot branch #615, account no. [***]; swift: [***].
	 
	17.8.	 	All payments to be made to Yeda hereunder shall be made free and clear of, and without any
deduction for or on account of, any set-off, counterclaim or tax (except any deductions that
the Company is required to make from the payments to be made to Yeda on account of income tax,
tax on profit or any other taxes of a similar nature imposed on Yeda by law, (“withholding
tax”), provided that: (a) the Company shall immediately notify Yeda of such requirement and
the Company shall deduct the withholding tax from the payments referred to above, as
prescribed by applicable law, and pay such withholding tax to the tax authorities, unless Yeda
provides the Company with evidence of an exemption from such tax; and (b) any such deduction
(if any) made by the Company does not exceed the minimum amount legally required and is
supported by an official receipt of the applicable taxation authority for all amounts deducted
as aforesaid).
	 
	17.9.	 	Each party agrees to execute, acknowledge and deliver such further documents and instruments
and do any other acts, from time to time, as may be reasonably necessary, to effectuate the
purposes of this Agreement.
	 
	17.10.	 	None of the provisions of this Agreement shall be for the benefit of, or enforceable by, any
person who is not a party to this Agreement, save for clauses 10 and 12 above.




IN WITNESS WHEREOF the parties hereto have set their signatures as of this 15 day of March 2006.




for      YEDA RESEARCH AND                    
for      PROTALIX






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



- 44 -


	 	 	 	 	 	 	 	 	 	 	 
	DEVELOPMENT COMPANY LIMITED
	 	 	 	BIOTHERAPEUTICS LIMITED
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	/s/ Illegible	 	 	 	Signature:	 	/s/ David Aviezer	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Name

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Title

	 	 	 	 	 	Title:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 












 



- 45 -


APPENDIX A




The Existing Patent Applications




[***]






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



- 46 -




APPENDIX B




The Know-How




[***]






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



- 47 -




APPENDIX C




The Research Program




[***]






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



- 48 -




APPENDIX D




The Research Budget




[***]






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



- 49 -




APPENDIX E




The Magneton Approval




[***]






 




			
	[***]	 	Omitted pursuant to a confidential treatment request. The confidential portion has been
filed separately with the Securities and Exchange Commission.







 



- 50 -




APPENDIX F




Specimen Material Transfer Agreement




Date:                    




   
         
         
           
                
            




      
                                                
      




      
                                                      




             
                                               




(the “RECIPIENT”)




Dear Sir/Madam,



Further to the RECIPIENT’s request to receive
                                        
               
     , (the Material and any
fragment, derivative, progeny and modifications thereof shall hereinafter be termed the “MATERIAL”)
from Professor                     , (the “SCIENTIST”) for the purpose of:
                                        
                                
         (the “RESEARCH”), as more fully described in Annex A attached
hereto, please be advised that as the rights and title in and to the Material vest in the Weizmann
Institute of Science (the “PROVIDER”) and thus constitute a valuable asset of the PROVIDER, the
PROVIDER requires that the Material shall be provided to you under the following terms:





	1.	 	The RECIPIENT agrees that the MATERIAL:
	 
	1.1.	 	is to be used solely for the purpose of the RESEARCH ;
	 
	1.2.	 	will not be used for any commercial purposes;
	 
	1.3.	 	will not be used in human subjects, in clinical trials, or for diagnostic purposes involving
human subjects.
	 
	1.4.	 	is to be used only at the RECIPIENT organization and only in.                    ’s laboratory (the
“RECIPIENT SCIENTIST”) under the direction of RECIPIENT SCIENTIST or others working under
his/her direct supervision; and
	 
	1.5.	 	will not be transferred to anyone else including within the RECIPIENT organization at
                    
(please complete address) without the prior written consent of the PROVIDER.
	 
	2.	 	The RECIPIENT acknowledges that the MATERIAL is or may be the subject of a patent
application. No expressed or implied licenses or other rights are provided to the RECIPIENT
under any patents, patent










 



- 51 -


	 	 	applications, trade secrets or other proprietary rights of the PROVIDER, including any
altered forms of the MATERIAL made by the PROVIDER. In particular, no expressed or implied
licenses or other rights are provided to use the MATERIAL, or any related patents of the
PROVIDER for COMMERCIAL PURPOSES.






	3.	 	Any MATERIAL delivered pursuant to this Agreement is understood to be experimental in nature
and may have hazardous properties. The PROVIDER MAKES NO REPRESENTATIONS AND EXTENDS NO
WARRANTIES OF ANY KIND, EITHER EXPRESSED OR IMPLIED. WITHOUT DEROGATING FROM THE
AFOREMENTIONED, THERE ARE NO EXPRESSED OR IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR
A PARTICULAR PURPOSE, OR THAT THE USE OF THE MATERIAL WILL NOT INFRINGE ANY PATENT, COPYRIGHT,
TRADEMARK, OR OTHER PROPRIETARY RIGHTS.
	 
	4.	 	The RECIPIENT assumes all liability for damages which may arise from its use, storage or
disposal of the MATERIAL. The Scientist, the PROVIDER and any of its employees will not be
liable to the RECIPIENT for any loss, claim or demand made by the RECIPIENT, or made against
the RECIPIENT by any other party, due to or arising from the use of the MATERIAL by the
RECIPIENT.
	 
	5.	 	The RECIPIENT agrees to use the MATERIAL in compliance with all applicable statutes, laws,
treaties, regulations and guidelines such as, for example, those relating to research
involving the use of animals or recombinant DNA.
	 
	6.	 	This Agreement will terminate on the earliest of the following dates: (a) on completion of
the RECIPIENT’s Research with the MATERIAL, or (b) on thirty (30) days written notice by
either party to the other.
	 
	6.1.	 	If termination should occur under clause 6 above, the RECIPIENT will discontinue its use of
the MATERIAL and will, upon direction of the PROVIDER, return or destroy any remaining
MATERIAL.
	 
	7.	 	The RECIPIENT obligates to treat in confidence any information related to the Material
including RESEARCH results, except for information the RECIPIENT can prove was previously
known to him or that is or becomes publicly available not as a result of a breach of this
Agreement. Any disclosure of such confidential information shall be presented for the
Scientist’s approval, at least 30 (thirty) days prior to the proposed disclosure.
	 
	8.	 	Paragraphs 2, 3, 4, 7, 10 and 11 shall survive termination.
	 
	9.	 	The RECIPIENT shall provide the PROVIDER with the results of the RESEARCH.











 



- 52 -



	10.	 	EITHER: [Should any useful invention, or application arise as a result of the performance of
the RESEARCH, RECIPIENT hereby agrees to inform the undersigned, and the right and title to
such invention or application shall vest in Yeda Research and Development Company Ltd.
(“YEDA”), the PROVIDER’s technology transfer office. The RECIPIENT undertakes, upon YEDA’s
request from time to time, to execute and deliver to YEDA all documents, including, without
limitation, instruments of conveyance, transfer, assignment and confirmation and to take such
other steps and render such assistance as YEDA may deem necessary, in order effectively to
transfer, assign, convey, vest and confirm in and to YEDA the ownership of such invention.]
	 
	 	 	OR: [The Weizmann Institute, or any of its designees, is hereby granted an
option to obtain a worldwide, exclusive, royalty-bearing license, with the right to
grant sublicenses, of any patentable invention arising from the Research outside the
scope of the Material. Such license shall include terms and conditions to be
negotiated in good faith between your institution and the Institute.]
	 
	11.	 	In the event that RECIPIENT conceives an invention related to the MATERIAL in the course of
activities that are in breach of RECIPIENT’s obligations under this Agreement, YEDA shall be
the sole and exclusive owner of such invention and all intellectual property rights therein,
and RECIPIENT shall execute and deliver any documents of assignment or conveyance to
effectuate the ownership rights of YEDA in such invention and related intellectual property
rights.
	 
	12.	 	The PROVIDER shall be given advance notice of any intent to publish any information relating
to the results of the RESEARCH, not being in the public domain, and shall be furnished with a
copy of the contemplated publication at least 30 days before making any such disclosure, in
order to allow YEDA to evaluate patent protection in respect thereof and implement a decision
to file a patent application. The RECIPIENT agrees to provide appropriate acknowledgment of
the source of the MATERIAL in all written and oral publications.
	 
	13.	 	RECIPIENT shall pay stamp duty as required by law.




Please indicate the RECIPIENT’s acceptance of the above terms by signing and returning one copy of
this letter to the undersigned.




Sincerely yours,




Prof.                     




	 	 	 
	Agreed and accepted:
	 	 
	 
	 	 
	Recipient Scientist’s Name:

	 	Recipient’s Name:












 



- 53 -


	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Authorized Person’s Name and Title:	 	 	 	 
	Signature:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	Signature and Date:	 	 	 	 
	Date:
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 





For queries, please contact: Ann Dvorin



e-mail: annie.dvorin@weizmann.ac.il

Tel: 972 8 9344093

Fax: 972 8 9470739



cc: Yeda Research and Development Co. Ltd. at the Weizmann Institute of Science.




ANNEX A




The Research










 



- 54 -


APPENDIX G




Approved Form of Disclosure










 



- 55 -




APPENDIX H




Specimen Non-Disclosure Agreement




Effective as of                     , 200




BETWEEN




 






 






(“Recipient”)




and




YEDA RESEARCH AND DEVELOPMENT CO. LTD.,

at the Weizmann Institute of Science, Rehovot, Israel

(“YEDA”).



Recipient is interested in obtaining information from YEDA relating to [Enter technology name]
(Yeda’s Ref.: [Enter technology Number]) including {patents [Enter connected patent title/s and
numbers]}, {patent applications [Enter connected patent title and application number)} (Yeda’s
docket/s no. [Enter Yeda patent code] (“the Confidential Information”), for the sole purpose of
studying the Confidential Information internally in order to [chose the relevant option:] [1.
evaluate a possible business transaction with Yeda] [2. consult Yeda regarding commercialization of
the technology] [3. other] ; and



YEDA is entitled and willing to make the Confidential Information available to Recipient solely for
the said purpose and under the terms and conditions hereinafter set forth:





	1.	 	“Confidential Information” shall include any documents, patent applications, materials,
models, marketing, financial and investment plans, contacts, advice, recommendations,
drawings, plans, diagrams, specifications, technical material, techniques, compounds,
compositions, substances, seeds or any other physical matter in any way containing,
representing or embodying any of the aforegoing or any other information given, whether
verbally, in written or other form, by or on behalf of YEDA to Recipient.
	 
	2.	 	Recipient undertakes to use the Confidential Information only for the purpose of this
Agreement.
	 
	3.	 	Recipient undertakes to treat and maintain in strict confidence and secrecy, the
Confidential Information including any aspect thereof that may have been disclosed prior to
the signature hereof, and to make such information available only to those of its employees
and/or consultants who need to have access to it for the purpose of this










 



- 56 -


	 	 	Agreement, provided that such employees and/or consultants are bound by a confidentiality
undertaking not less stringent than this Agreement.






	4.	 	Recipient’s undertakings and obligations under clause 3 above shall not apply to any part of
the Confidential Information for which the Recipient proves:






	 	4.1.	 	that it was known to Recipient prior to disclosure thereof by YEDA;
	 
	 	4.2.	 	that it was generally available to the public prior to disclosure by YEDA, or
becomes generally available to the public after such disclosure (other than as a result
of the breach by the Recipient of its obligations hereunder).






	5.	 	This Agreement shall not by implication or otherwise be construed as a grant of a license or
as an obligation to grant a license or any other right to the Recipient.
	 
	6.	 	No warranty of any kind is being provided with respect to the Confidential Information
including any warranty of accuracy, completeness and/or non-infringement.
	 
	7.	 	This Agreement shall be terminated upon the expiry of the earlier of:






	 	7.1.	 	12 months from the effective date of this Agreement; or
	 
	 	7.2.	 	Receipt of 14 days’ written notice by YEDA to Recipient, at any time.
	 
	 	 	 	Upon termination, Recipient will cease all study, evaluation or other
examination of YEDA’s Confidential Information and the Confidential Information
shall be returned to YEDA or destroyed upon YEDA’s request.






	8.	 	Notwithstanding termination of this Agreement Recipient’s confidentiality obligations under
this Agreement will continue for 5 years from the date of disclosure of the Confidential
Information.
	 
	9.	 	The rights of the parties shall inure to, and the obligations hereunder shall be binding on
the legal successors and assigns of the parties to this Agreement.
	 
	10.	 	The law of Israel shall govern this Agreement for all purposes excluding the choice of law
provisions.
	 
	11.	 	All notices or demands of any kind which either party may be required or desire to serve upon
the other shall be in writing and shall be delivered by (i) personal service, or (ii) by mail
at the address of the receiving party set forth above (or at such different address as may be
designated by such party by written notice to the other party) and by fax.
	 
	12.	 	This Agreement contains the entire agreement of the parties relating to its subject matter
and supersedes all prior or contemporaneous oral or written agreements.











 



- 57 -



	13.	 	This Agreement may not be amended except by mutual written agreement of the parties.





	 	 	 	 	 	 	 	 	 	 	 
	Protalix Biotherapeutics Ltd.	 	 	 	Yeda Research and Development Co. Ltd.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Signature:

	 	 	 	 	 	Signature:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Name:

	 	 	 	 	 	Name:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Position:

	 	 	 	 	 	Position:	 	 	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	Date:

	 	 	 	 	 	Date: