CONTRACT
RESEARCH AGREEMENT


 


This
Contract Research Agreement is entered into as of this __ day of _________, 2017 (the “Effective Date”), by and between
The Washington University, a corporation established by special act of the Missouri General Assembly approved February 22, 1853
and acts amendatory thereto, having its principal offices at One Brookings Drive, St. Louis, Missouri 63130 (“University”)
and Microbot Medical Ltd., a company formed under the laws of Israel, with offices at 5 Hamada Street, Yokneam, Israel (the “Company”).


 


WHEREAS,
in the course of their research at University, Drs. James P. (Pat) McAllister II and David D. Limbrick, Jr (hereinafter “the
Principal Investigators”) have developed a method for making Models (as defined below); and


 


WHEREAS,
the Company wishes to have the Principal Investigators and other members of their research teams at University perform certain
services, from time to time, for the Company using the Model (as further defined below, the “Services”); and


 


WHEREAS,
University is willing to perform the Services under the supervision of the Principal Investigators, in accordance with the Workplan
(as defined below), all in accordance with the terms and conditions of this Agreement.


 


NOW,
THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:


 


1.
       Definitions.


 


Whenever
used in this Agreement with an initial capital letter, the terms defined in this Section 1, whether used in the singular or the
plural, shall have the meanings specified below.


 


1.1.       “Company
Device” shall mean the Company’s proprietary device described in Exhibit A hereto, and any improvements, modifications
and derivatives thereof.


 


1.2.       “Company
Device Results” shall mean Service Results resulting from experiments using shunts containing the Company Device.


 


1.3       “Joint
Inventions” shall mean any and all patentable inventions, other than Model Improvements, obtained or arrived at in the
performance of the Services for which (a) one or more inventor(s) is a member of the University Team and (b) one or more inventor(s)
is an employee or consultant of Company.


 


1.4.       “Model”
shall mean any animal model in which hydrocephalus has been induced experimentally by the University Team. Most likely these
will include pigs, sheep or ferrets at any age.


 


1.5.       “Model
Improvements” shall mean any and all improvements or modifications of the Model generated by members of the University
Team in the performance of the Services, but specifically excluding any improvements or modifications attributable to the Company
Device.


 


1.6.       “Services”
shall mean the services to be performed by the University Team in accordance with the Workplan during the time period set
forth in the Workplan.


 




    	1



    	 



    

 


1.7.       “Services
Results” shall mean any and all data, information and results obtained or arrived at by members of the University Team
in the performance of the Services, other than University Inventions.


 


1.8.       “University
Inventions” shall mean any and all patentable inventions, other than Model Improvements and Joint Inventions, obtained
or arrived at by members of the University Team in the performance of the Services.


 


1.9.       “University
Team” shall mean the Principal Investigators and other members of their research team working under the Principal Investigators’
direction in the performance of the Services.


 


1.10.       “Workplan”
means the written workplan attached hereto as Exhibit B, as may be amended, expanded or supplemented, from time to time, in
accordance with Section 2.1 by the mutual written agreement of the parties.


 


2.       Services.


 


2.1.       Workplans.
From time to time during the term of this Agreement, the parties may decide to amend, expand or supplement the Workplan for
the performance of Services under this Agreement via written amendment. To the extent the terms in a Workplan shall at any time
conflict with the terms of this Agreement, the terms of this Agreement shall control, unless specifically stated otherwise in
the Workplan.


 


2.2.       Delivery
and Use of Company Device. Company shall deliver units of the Company Device to the Principal Investigators in the amounts
and in accordance with the procedures set forth in the Workplan. University shall use the units of the Company Device solely for
the purpose of performing the Services under the Workplan. University shall not reverse engineer the Company Device nor undertake
any additional analyses of the Company Device, including, without limitation, any attempt to determine the composition, design,
structure or properties of the Company Device (except as specifically set forth in the Workplan), without the advance express
written permission of Company. Units of the Company Device shall not be used in humans. University shall not sell or transfer
units of the Company Device to any person other than members of the University Team without Company’s prior written consent.
University shall comply with all applicable laws and regulations in the use of the units of the Company Device. Company’s
transfer of the units Company Device to University shall not constitute a sale thereof or a grant, option or license under any
patent or other rights owned or controlled by Company. Upon completion of the Services, University shall return to Company all
units of the Company Device in its possession or control.


 


2.3.       Performance
of Services. University shall cause the University Team to perform the Services in accordance with the Workplan and state-of-the-art
scientific standards and laboratory practices. The Services will be directed and supervised by the Principal Investigators, who
shall have primary responsibility for the performance of the Services.


 


3.       Fees.
In consideration for the performance of the Services, the Company shall pay University the amounts set forth in the Workplan
in accordance with the time schedule set forth in the Workplan.


 




    	2



    	 



    

 


4.       Reports.
The Principal Investigators shall provide the Company written reports setting forth the Services Results, including raw data
and analyses, in accordance with the schedule set forth in the Workplan.


 


5.       Title.


 


5.1       Service
Results and Joint Inventions. All rights, title and interest in and to the Service Results (other than the Model and Model
Improvements) and Joint Inventions will be jointly owned by the parties. Subject to Sections 5.4 and 6, Company and University
each shall have the full right to practice and to grant licenses under its interest in Joint Inventions (including with respect
to patent rights covering Joint Inventions) without any obligation to seek the consent of the other or to account for any profits
made as a result of any such license.


 


5.2.       Model
and all Model Improvements. All rights, title and interest in and to the Model and all Model Improvements shall be owned solely
and exclusively by University.


 


5.3.       University
Inventions. University grants to Company: (a) a non-exclusive, worldwide, royalty-free, fully paid-up, perpetual and irrevocable,
license (with the right to sublicense through multiple tiers of sublicenses in conjunction with the license of Company intellectual
property or sale of Company products) to use and practice University Inventions (including under any and all patent rights claiming
University Inventions) to develop, have developed, make, use, have made, market, sell, have sold and import the Company Device
or products for the prevention of occlusion and/or reduction of debris or tissue accumulation in shunts and/or shunts incorporating
such prevention devices that rely upon, make use of or are based on the Company Device; and (b) an exclusive option (the “Option”)
to obtain an exclusive, worldwide license, with the right to grant sublicenses, to make, use, sell, have made, have sold, offer
to sell, and import under University’s rights in University Inventions on terms to be negotiated in good faith between the
parties. Company may exercise the Option by sending written notice to University at any time within ninety (90) days following
the receipt of a written disclosure from University describing in detail such University Invention (the “Option Period”).
If, at the end of the Option Period, Company has not exercised the Option, or in the event the Parties fail to reach a mutually
acceptable licensing arrangement within six (6) months after the Option Period, University shall be entitled to negotiate with
a third party for a license to University’s rights in University Inventions.


 


6.       Confidential
Information. 


 


6.1.       Unless
agreed otherwise by the Company in writing, University shall not, during the term of this Agreement and for five (5) years thereafter,
disclose Company Confidential Information (as defined below) other than to members of the University Team or use Company Confidential
Information other than for the purpose of performing the Services. University shall ensure that all members of the University
Team are legally bound by obligations that impose confidentiality and non-use obligations comparable to those set forth in this
Section 6. University shall treat the Company Confidential Information with the same degree of confidentiality as it keeps its
own confidential information, but in all events no less than a reasonable degree of confidentiality. University shall safeguard
any and all copies of the Company Confidential Information against unauthorized disclosure, shall not tamper with, bypass or alter
its security features or attempt to do so, and shall take all reasonable steps to ensure that the provisions of this Agreement
are not violated by any person under University’s control or in University’s service.


 




    	3



    	 



    

 


6.2.       For
purposes of this Agreement, “Company Confidential Information” means proprietary or confidential information relating
to the Company’s scientific, technical, trade or business information relating to the subject matter of this Agreement (including,
without limitation, the technical attributes of Company Device which are not known to the public (“Company Device Information”))
disclosed by or on behalf of the Company to members of the University Team in connection with the Services. Both Parties agree
that in order for written information to be Confidential Information, it must be delivered in written form clearly marked as “Confidential.”
All information, other than Company Device Information, disclosed in oral or some other non-written form must be declared at the
time of delivery to be confidential and must be confirmed and summarized in writing and clearly marked as “Confidential”
within thirty (30) days of disclosure to be Company Confidential Information, provided , however, information that unintentionally
or inadvertently lacks such a legend, or that is disclosed orally or visually which is not subsequently documented, but, by its
nature, is reasonably understood to be Company Confidential Information shall be treated as such by University. Notwithstanding
the foregoing, information disclosed by Company to the University Team as set forth above shall not be deemed Company Confidential
Information to the extent such information: (i) was known to any member of the University Team at the time it was disclosed, as
evidenced by written records at the time of disclosure; (ii) is at the time of disclosure or later becomes publicly known under
circumstances involving no breach of this Agreement; (iii) is lawfully and in good faith made available to a member of the University
Team by a third party who is not subject to obligations of confidentiality to the Company with respect to such information; (iv)
is independently developed by a member of the University Team without the use of or reference to Company Confidential Information,
as demonstrated by documentary evidence; or (v) is required to be disclosed pursuant to a legal order or mandate. University agrees
to keep confidential all Company Device Results until such results are published in accordance with Section 9.


 


7.       Indemnity.


 


7.1       Notwithstanding
the rest of this agreement, Company shall indemnify, defend and hold harmless University, University personnel and representatives,
from and against any liability, cost, expense, damage, deficiency, loss or obligation or any kind or nature (including, without
limitation, reasonable attorney’s fees and other costs and expenses of litigation) resulting from a claim, suit or proceeding
brought by a third party against University to the extent resulting from the use or commercialization of the Services Results
or University Inventions by Company or a Company’s sublicensee (a “Claim”), except (in each case) to the extent
caused by the negligence or willful misconduct of University or anyone on its behalf.


 


7.2       If
University receives notice of any Claim, University shall, as promptly as is reasonably possible, give the Company notice of such
Claim; provided, however, that failure to give such notice promptly shall only relieve the Company of any indemnification obligation
it may have hereunder to the extent such failure diminishes the ability of the Company to respond to or to defend University against
such Claim. University and the Company shall consult and cooperate with each other regarding the response to and the defense of
any such Claim and the Company shall be entitled to assume sole control of the defense and/or represent the interests of University
in respect of such Claim, that shall include the right to select and direct legal counsel and other consultants to appear in proceedings
on behalf of University and propose, accept or reject offers of settlement, all at its sole cost provided that Company shall not
settle a claim which admits fault on behalf of University without University’s prior written consent. Nothing herein shall
prevent University from retaining its own counsel and participating in its own defense at its own cost and expense.


 




    	4



    	 



    

 


8.       Term
and Termination. 


 


8.1.
        The term of this Agreement shall commence on the date first written above and,
unless terminated earlier in accordance with this Section 8, shall continue for a period of two (2) years, unless extended by
the mutual written agreement of the parties.


 


8.2.
       In the event that either party commits a material breach of its obligations under
this Agreement and fails to cure that breach within thirty (30) days after receiving written notice thereof, the other party may
terminate this Agreement immediately upon written notice to the party in breach


 


8.3.       If
either Principal Investigator ceases to supervise the Services, the Company or University may terminate this Agreement upon written
notice to the other party.


 


8.4.       Upon
termination, the parties sole obligations to the other shall be to return all Company Confidential Information and pay any monies
due and owing up to the time of termination for work actually performed and all costs reasonably and properly incurred by the
parties as of the date that termination is effective, including all non-cancelable obligations reasonably and properly entered
into for the purposes of the Services, which may include any non-cancelable University Team salaries, fellowships or post-doctoral
stipends, and other non-cancelable executory obligations reasonably and properly incurred by the parties in furtherance of Services,
subject to the parties taking reasonable steps to mitigate and minimize such costs.


 


8.5.       The
parties’ respective rights, obligations and duties under Sections 4, 5, 6, 7, 8, 9, 10, 11, and 12 , as well as any rights,
obligations and duties which by their nature extend beyond the expiration or termination of this Agreement, shall survive any
expiration or termination of this Agreement.


 


9.
Publications.


 


9.1       Company
acknowledges that the Principal Investigators and University Team have the right and academic duty to publish the Service Results,
and agrees that the University Team will be permitted to present at symposia or professional meetings and to publish in books,
journals, and other media of their choosing, any and all Service Results, University Inventions, Models, and Model Improvements;
provided however, that University shall not disclose Company Confidential Information without the prior written consent of Company.
The University Team will at all times have the first opportunity to publish or present the Service Results, Models, and Model
Improvements subject to Section 9.2; provided however that Company shall be entitled to disclose Services Results and regulatory
and/or patent filings prior to any such publication.


 


9.2       If
University chooses to publish Service Results on its own (i.e. not publish jointly with Company), Company will be furnished a
copy of any proposed publication or a summary of a presentation containing Service Results in advance of submission in the case
of publication and rendering in the case of presentation. Company will have thirty (30) days after receipt to review the copy
or summary for specific matter which is Company Confidential Information and provide University with a written request for removal
or revision. If such a request is received within the thirty days, the Parties will have an additional thirty (30) days (a total
of sixty (60) days) to agree upon removal or revisions to protect the Company Confidential Information. Upon completion of this
publication process or, if applicable, confidentiality is specifically waived under Section 6, University may proceed with publication,
provided that University may not publish or otherwise disclose Company Confidential Information without Company’s express
prior written approval. Company shall not encumber publication by University other than to remove Company Confidential Information.


 




    	5



    	 



    

 


9.3       All
papers and presentations reporting Service Results will contain a dignified statement in a form that is customary and appropriate
in scholarly journals or presentations for acknowledging that financial support for such research was provided by Company.


 


9.4       Company
will not have an opportunity to change, alter or redact the contents of any student thesis, dissertation, or presentation thereof,
provided that no such thesis, dissertation or presentation may contain Company Confidential Information without Company’s
prior written consent.


 


10.       Disclaimer
and Limitation. NOTWITHSTANDING ANYTHING HEREIN TO THE CONTRARY, EVERYTHING PROVIDED BY EITHER PARTY UNDER THIS AGREEMENT
IS UNDERSTOOD TO BE EXPERIMENTAL IN NATURE, MAY HAVE HAZARDOUS PROPERTIES, AND IS PROVIDED WITHOUT ANY WARRANTY OF ANY KIND, EXPRESSED
OR IMPLIED, INCLUDING WITHOUT LIMITATION, WARRANTIES OF MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE, OR NON-INFRINGEMENT
OF ANY THIRD-PARTY PATENT, TRADEMARK, COPYRIGHT OR ANY OTHER THIRD-PARTY RIGHT. NEITHER PARTY MAKES ANY WARRANTIES REGARDING THE
QUALITY, ACCURACY, COMMERCIAL VIABILITY OR ANY OTHER ASPECT OF ITS PERFORMANCE PURSUANT TO THIS AGREEMENT OR REGARDING THE PERFORMANCE,
VALIDITY, SAFETY, EFFICACY OR COMMERCIAL VIABILITY OF ANYTHING PROVIDED BY IT UNDER THIS AGREEMENT. IN NO EVENT SHALL UNIVERSITY
OR COMPANY BE LIABLE FOR ANY INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS AGREEMENT,
WHETHER IN BREACH OF CONTRACT, TORT OR OTHERWISE, EVEN IF THE PARTY IS ADVISED OF THE POSSIBLITY OF SUCH DAMAGES. EXCEPT FOR THEIR
RESPECTIVE INDEMNITY OBLIGATIONS AND BREACH OF CONFIDENTIALITY OBLIGATIONS, EACH OF UNIVERSITY’S AND COMPANY’S AGGREGATE
LIABILITY TO THE OTHER UNDER THIS AGREEMENT SHALL NOT EXCEED THE PAYMENTS MADE OR PAYMENTS DUE UNDER THIS AGREEMENT, RESPECTIVELY.


 


11.       Insurance.
The parties shall obtain and maintain an adequate self-insurance or insurance program to protect against potential liabilities
and risk, including coverage for the indemnity obligations herein; provided that Company’s obligations under this Section
11 shall come into effect only if and when the Company commences clinical trials (a) based on Services Results or (b) with a product
developed under the license granted to Company pursuant to Section 5.3. Prior to the first clinical study in humans of a product
developed under the license granted to Company pursuant to Section 5.3, Company shall obtain and maintain product liability insurance
in the amount of $5,000,000 per occurrence and $10,000,000 in the aggregate.


 


12.       Miscellaneous.


 


12.1.       Entire
Agreement. This Agreement is the sole agreement with respect to the subject matter hereof and except as expressly set forth
herein, supersedes all other agreements and understandings between the parties with respect to same.


 




    	6



    	 



    

 


12.2.       Notices.
Unless otherwise specifically provided, all notices required or permitted by this Agreement shall be in writing and may be
delivered personally, or may be sent by facsimile or certified mail, return receipt requested, to the following addresses, unless
the parties are subsequently notified of any change of address in accordance with this Section 9.2:


 


If
to the Company:


 


Microbot
Ltd.


Attention:
Hezi Himelfarb, COO


5
Hamada Street


Yokneam


Israel


 


If
to University:


 


Joint
Research Office of Contracts


Attention:
Megan White


One
Brookings Dr., Campus Box 1054


St.
Louis, MO 63130


 


Copy
to:


 


James
P. McAllister


Department
of Neurosurgery


BJC
Institute of Health


425
S. Euclid, Campus Box 8057


St.
Louis, MO 63110


 


Any
notice shall be deemed to have been received as follows: (i) by personal delivery, upon receipt; (ii) by facsimile, one business
day after transmission or dispatch; (iii) by airmail, seven (7) business days after delivery to the postal authorities by the
party serving notice. If notice is sent by facsimile, a confirming copy of the same shall be sent by mail to the same address.


 


12.3.       Governing
Law and Jurisdiction. This Agreement will be governed by, and construed in accordance with, the substantive laws of the State
of New York, without giving effect to any choice or conflict of law provision, and sole jurisdiction is granted to the competent
court in the City of New York, NY.


 


12.4.       Amendment;
Waiver. This Agreement may be amended, modified, superseded or canceled, and any of the terms may be waived, only by a written
instrument executed by each party or, in the case of waiver, by the party waiving compliance. The delay or failure of any party
at any time or times to require performance of any provisions hereof shall in no manner affect the rights at a later time to enforce
the same. No waiver by either party of any condition or of the breach of any term contained in this Agreement, whether by conduct,
or otherwise, in any one or more instances, shall be deemed to be, or considered as, a further or continuing waiver of any such
condition or of the breach of such term or any other term of this Agreement.


 




    	7



    	 



    

 


12.5.       No
Agency or Partnership.  Nothing contained in this Agreement shall give any party the right to bind another, or be deemed to
constitute either parties as agents for each other or as partners with each other or any third party.


 


12.6.       Force
Majeure. Neither party will be responsible for delays resulting from causes beyond the reasonable control of such party, including
without limitation fire, explosion, flood, war, strike, or riot, provided that the nonperforming party uses commercially reasonable
efforts to avoid or remove such causes of nonperformance and continues performance under this Agreement with reasonable dispatch
whenever such causes are removed.


 


12.7.       Severability.
 If any provision of this Agreement is or becomes invalid or is ruled invalid by any court of competent jurisdiction or is
deemed unenforceable, it is the intention of the parties that the remainder of this Agreement shall not be affected.


 


12.8.       Names
and Marks. Neither Party may use the trademarks or name of the other Party or its employees for any commercial, advertisement,
or promotional purposes without the prior written consent of the other.


 


12.9.       Assignment.
This Agreement may not be assigned by either party without the consent of the other, which consent shall not be unreasonably
withheld, except that each party may, without such consent, assign this Agreement and the rights, obligations and interests of
such party to any of its affiliates, to any purchaser of all or substantially all of its assets to which the subject matter of
this Agreement relates, or to any successor corporation resulting from any merger or consolidation of such party with or into
such corporation; provided, in each case, that the assignee agrees in writing to be bound by the terms of this Agreement.


 


IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed by their duly authorized representatives as of the
date first written above.


 


	Microbot
    Medical Ltd.	 	The
    Washington University 	 
	 	     	 	 	            	 
	By:	/s/
    Harel Gadot	 	By:	/s/ Melanie
    Roewe	 
	Name:	Harel Gadot	 	Name:	Melanie
    Roewe, J.D.	 
	Title:	Chief
Executive Officer	 	Title:	Assistant Vice Chancellor 	 


 


I,
the undersigned, hereby confirm that I have read the Agreement, that its content is acceptable to me and that I will act in accordance
with its terms.


 


	/s/
    James P. McAllister II 	 	 January
    24, 2017	 
	James
    P. McAllister II, PhD	 	Date	 


 


	/s/
    David D. Limbrick 	 	January
    26, 2017	 
	David
    D. Limbrick, Jr, MD, PhD	 	Date	 


 




    	8



    	 



    

 


Exhibit
A


Company
Device


 


See
following pages


 




    	9



    	 



    

 


SCS
Product Description 


Head
Set Configuration


 


Approvals:


 


	 	 	Name	 	Title	 	Signature	 	Date
	 	 	 	 	 	 	 	 	 
	Author	 	Or
    Samocha	 	Project
    Leader	 	 	 	July
    1, 2016
	 	 	 	 	 	 	 	 	 
	Reviewed	 	Yossi
    Porat	 	S/W
    Engineer	 	 	 	July
    1, 2016
	 	 	 	 	 	 	 	 	 
	Approved
    By	 	Simon
    Sharon	 	COO	 	 	 	July
    1, 2016


 




    	10



    	 



    

 


The
Product


 


The
Microbot SCS device is designed to serve as the ventricular catheter portion of a Cerebrospinal Fluid shunt system. The Microbot
ventricular catheter can connect to valves that are currently on the market. The advantage of the Microbot SCS device is its ability
to maintain CSF flow through the ventricular catheter.


 


As
further described below, the Microbot SCS device incorporates an internal cleaning mechanism embedded in the lumen of the ventricular
catheter. The internal part is comprised of a central shaft with small protrusions (resembling a stalk of wheat), which prevents
cell ingrowth into the catheter perforations using minute vibrational movements. The vibrational action is externally operated
by the patient wearing of a specially designed headset for approximately 5 minute per day. When activated, the headset applies
a small magnetic field, which causes the internal part to vibrate and thereby mechanically keeps tissue from entering the catheter
perforations while maintaining the CSF flow in the ventricular catheter.


 


The
Microbot SCS ventricular catheter consists of a silicone tube with a perforated titanium tip, which connects to a standard shunt
valve at its distal end. The internal cleaning mechanism is embedded in the lumen of the titanium tip.


 


The
internal cleaning mechanism vibrates by means of an induced magnetic field that is externally generated by a user friendly headset
that transmits a magnetic field with a pre-determined frequency and operating sequence protocol. The magnetic field that is created
by the headset externally, is captured by the intermediate flat flexible coil and PCB that are placed just under the patient’s
scalp (in the same location where the valve is currently located). The actuated PCB assembly converts this power to an altering
current which flows through the wires to an internal coil located in the distal end of the catheter’s titanium tube. The
internal coil produces an electromagnetic field which induces small vibrational movement of the internal cleaning mechanism within
the proximal part of the ventricular catheter. The vibrational movement maintains CSF flow in the ventricular catheter by preventing
surrounding tissue from entering the catheter perforations, without interfering with the cerebrospinal fluid (CSF) drainage. The
vibrational movements of the internal part drive out the infiltrating tissue from the catheter perforations.


 


Global
view


 


The
Microbot SCS device is composed of the following main components:


 


	 	1.	Implanted
    Ventricular Catheter with vibrating internal part
	 	 	 
	 	2.	Implanted
    Intermediate Flexible Coil and PCB Assembly
	 	 	 
	 	3.	External
    Head Set Activation Unit


 


The
Microbot SCS device is shown in Figure 1 below.


 




    	11



    	 



    

 


 


Figure
1 - Microbot SCS Device


 


The
ventricular catheter is depicted in Figure 2 and contains:


 


	●	Silicone tube
    with the following components embedded within the silicone:  


 


	 	 	●	Small
    coil
	 	 	 	 
	 	 	●	wires


 


	●	Titanium
    Tip with the vibrating internal part contained within its lumen.


 




    	12



    	 



    

 





 


A
more detailed description of system’s main components is provided below.


 


Detailed
Component Description


 


Silicone
Tube


 


The
silicone tube is constructed from the same material as standard silicone shunts and has similar inner and outer diameters as standard
ventricular catheters. The silicone tube is connected to the titanium tip at the proximal end and to a conventional, commercially
available CSF valve at the distal end. Compatibility with different valve systems will be demonstrated as part of the performance
data. The internal small coil is embedded inside the silicone tube at the proximal end. Electrical wires are embedded in the wall
thickness of the silicone tube (as shown in Figure 2 above) connecting the small coil and the intermediate flat flexible coil
assembly that are implanted under the scalp.


 


Titanium
Tip


 


The
titanium tip is a perforated tube, similar to the standard silicone tips of ventricular catheters, only it is manufactured from
titanium instead of silicone. The titanium tip houses the vibrating internal cleaning mechanism and is designed to allow mobility
while protecting it during implantation of the ventricular catheter. The titanium tip is connected at the distal end to the silicone
tube. The tip may be made of other materials as well.


 




    	13



    	 



    

 





 


Internal
Part and Magnet


 


The
vibrating internal part (Figure 4) is located within the lumen of the titanium tip and maintains CSF flow by using vibrational
movements to prevent the tissue or other cells from entering and accumulating within the catheter perforations. The internal part
resembles a stalk of wheat with small arms or protrusions along a central shaft and has a small neodymium magnet at the end. The
internal part is also manufactured from titanium and the neodymium magnet will either be enclosed in a titanium housing or coated
with a biocompatible material (to be determined). The magnet is located in the internal small coil which is located in the silicone
tube, as shown in Figure 6.


 





 




    	14



    	 



    

 


Figure
5 shows the internal part within the titanium tip.


 





 


Internal
Actuator


 


Figure
6 shows the internal part inside the titanium tip, connected to the silicon tube.


 





 


The
vibration of the internal part is achieved by an altering magnetic field which is generated by an electromagnet (internal small
coil up’on actuating by the external headset). The magnetic field creates a moment on the magnet and causes it to rotate
around its axis. The minute magnet movement causes the internal part to vibrate slightly and mechanically drives out the tissue
or cells from the catheter perforations and thus prevents infiltration and lodging of the tissue in the catheter perforations.
The small coil is manufactured from gold/copper coated with biocompatible material and it is encapsulated inside the silicone
tube.


 




    	15



    	 



    

 





 


Intermediate
Flexible Coil and PCB Assembly


 


The
intermediate flat flexible coil and PCB assembly is implanted under the scalp near the implanted valve. This is a flexible printed
circuit board (PCB) that contains an intermediate coil made of thin gold\copper wires or other material. The entire flexible coil
assembly is encapsulated in silicone such that no internal component comes in contact with human tissue or fluids.


 


The
electromagnetic power that is generated by the external head set unit is induced on the intermediate flexible coil and pcb assembly.
The PCB circuitry converts the power from the headset and generates the power that controls the vibrating internal part. The PCB
also sends and receives sensory data and from, and to, the headset. The flexible coil, PCB assembly and the silicone section that
leads to the PCB are connected to the silicone tube using a miniature connector.


 


External
Head Set Activation Unit


 


The
external head set activation unit is the headset configuration schematically depicted in Figure 7. The headset is worm by the
patient once a day for a predetermined period of time. The head set contains an electromagnet that, when properly placed, is automatically
activated and transforms electromagnetic power on the intermediate flexible coil assembly to create vibration of the internal
part and initiates communication with the implant.


 




    	16



    	 



    

 


 





 


Figure
7 - External Head Set Activation Unit


 


The
head set is pre-adjusted for each patient such that when it is worn, the active area of the head set is positioned proximal to
the implanted flexible coil assembly and the electromagnetic energy is induced on the implanted coil.


 


The
head set contains a rechargeable battery. A charged battery will suffice for several days of operation. A microprocessor with
dedicated embedded software also resides in the headset. The vibration of the internal part is automatically initiated when the
patient places the external head set activation unit on his/her head. The head set activation unit contains a set of LED indicators
and auditory feedback, controlled by the embedded software which provides the patient and physician with treatment information.
The communication with the implant provides the means to receive sensory data from the implant regarding its state including malfunctions
it can experience. The headset has also the ability to upload SW updates to the implant.


 


 





 


Figure
8 – Communication and power scheme


 


The
following indications are provided by the headset:


 


	●	Device
    readiness, including battery state, charging indication, error indication (e.g. hardware failures).
	 	 
	●	Treatment
    start - this indicates proper placement of the headset over the flexible coil.
	 	 
	●	Device
    operation - “treatment in progress” indicates proper functioning of the vibrational movement of the internal part,
    while the headset is placed over the flexible coil.
	 	 
	●	Device
    compliance – indicates user compliance with the treatment regimen.
	 	 
	The
    following functions are enabled using the Headset via a USB port:
	 	 
	●	Charging
    the battery.
	 	 
	●	Retrieving
    treatment history by the physician.


 




    	17



    	 



    

 


Mode
of Operation


 





 


Upon
activation by the user, the external head set activation unit generates an alternating magnetic field, which is induced on the
intermediate implanted flat flexible coil. The magnetic field is induced on the intermediate flexible coil assembly which generates
power for the PCB circuitry within the intermediate flexible coil assembly. The PCB circuitry generates an alternating current
that flows through the electromagnet (small coil) in the proximal ventricular catheter, generating an alternating magnetic field
which in turn generates the moment of the neodymium (Nd) magnet and vibrates the internal part. The vibrations maintain the perforations
in the proximal ventricular catheter clear of cell ingrowth and enable the CSF to flow freely, thus preventing the buildup of
tissue that causes occlusion. The communication between the headset and the implant is based on amplitude modulation..


 




    	18



    	 



    

 


Exhibit
B


Workplan


 


Scope
of Work


 


IN
VIVO TESTS OF THE MICROBOT MEDICAL SCS DEVICE


 


Washington
University School of Medicine and the Saint Louis Children’s Hospital Investigators:


 


James
P. (Pat) McAllister, PhD; Professor


David
D. Limbrick, Jr., MD, PhD: Professor and Chief of Pediatric Neurosurgery


Leandro
Castaneyra Ruiz, PhD: Visiting Researcher and Postdoctoral Fellow


 


The
Microbot device seeks to prevent tissue obstructions from occluding cerebrospinal fluid (CSF) drainage catheters implanted into
the lateral ventricle. Therefore, the experiments will include implantation of these catheters into the lateral ventricle as part
of a CSF drainage system, or shunt. In animals that have developed hydrocephalus a ventricular catheter will be inserted into
the lateral ventricle and attached to a subcutaneous reservoir whose distal catheter will be subcutaneously placed into the peritoneal
cavity. This is the customary design for clinical shunts.


 


The
main objective of this study is to determine the effectiveness of the Microbot Medical SCS Device to prevent obstruction in cerebrospinal
fluid (CSF) catheters in a clinically relevant in vivo model of hydrocephalus. To meet this objective one initial Specific
Aim will be addressed:


 


Aim
1: Determine the effectiveness of a porcine model of hydrocephalus to test the Microbot Medical SCS Device.


 


This
short-term pilot study on 4-10 infant pigs is intended to solve any logistical issues and collect preliminary data before the
long-term efficacy testing begins in Aim 2. In particular, we will determine the extent of ventriculomegaly needed for implantation
of the SCS Device, the time needed prior to implantation, the time required for typical catheter obstruction to occur, the most
effective placement of the extracranial components subcutaneously and externally on the body of the pig, and how catheter obstruction
will be detected. This initial study will lead to a second Specific Aim that will be formulated once Aim 1 is complete; in other
words, once we have optimized the mechanics of catheter positioning (presumably in about 3 animals) we will begin testing different
device activation regimes.


 


Experimental
Design


 


All
of the animal procedures will be reviewed and approved by the Washington University Animal Studies Committee in compliance with
federal regulations.


 




    	19



    	 



    

 


Aim
1: Prior to testing the Microbot device, obstructive hydrocephalus will be induced in 4-10 infant pigs by intracisternal injection
of kaolin. These procedures have been conducted many times by the principal investigators (PIs) and have been shown to be reliable
and cost-effective methods for creating hydrocephalus in experimental animals. We will begin with the following age-based timeline,
with modifications applied as we learn more about the model and the mechanics of implanting the Microbot device:


 


	 	1.	2-weeks
    of age: Kaolin induction of hydrocephalus
	 	 	 
	 	2.	2-4
    weeks of age: 


 


	 	 	a.	Neuroimaging
    – ultrasound, CT or MRI – to determine the size of the cerebral ventricles.
	 	 	 	 
	 	 	b.	Implantation
    of a non-activated Microbot device, which includes


 


	 	 	 	i.	a
    1.5 cm ventricular catheter.
	 	 	 	 	 
	 	 	 	ii.	a
    drainage catheter 11-20 cm long implanted subcutaneously and inserted into the peritoneal cavity.
	 	 	 	 	 
	 	 	 	iii.	a
    10 cm silicone rod attached to a 2cm diameter coil both of which are implanted subcutaneously.


 


	 	 	c.	Attachment
    externally to the body wall of a 3-4 cm receiver coil connected by wires to a 5x5 cm data collection box. A jacket will be
    customized to fit snugly around the animal and hold the equipment in pockets.


 


	 	3.	4-10
    weeks of age: Practical testing of the data collection abilities of the Microbot device and the general effects of CSF drainage
    and obstruction on ventricular size and animal behavior. Most likely these tests will be conducted once a day or as needed
    to determine the feasibility of the animal model. The longer time points will be tested on animals that survived the 10 weeks
    period in order to identify any chronic complications that might affect Aim 2 experiments.
	 	 	 
	 	4.	At
    the termination of the experiment each animal will undergo neuroimaging and intracranial pressure (ICP) measurements


 


Each
animal will be monitored daily for neurological status and general health by Dr. McAllister and his trained personnel, as well
as the veterinary and animal care staff.


 


Aim
2: Following the pilot study to determine the optimal implantation parameters, the ability of the Microbot device to prevent
catheter obstruction will be tested in the groups described above. Initially each group will consist of 5-8 pigs; 5 animals will
be needed for routine statistical analyses so the higher number allows for complications that would remove an animal from the
study. The same estimated timeline and experimental design described in Aim 1 will be used with the exception that:


 


	 	1.	The
    time following implantation for all experimental groups will be extended to at least 12 weeks.
	 	 	 
	 	2.	In
    the Activated Group, the Microbot device will be turned on for the intervals that were determined in Aim 1. This frequency
    will also be determined initially by the in vitro experiments conducted in Dr. Harris’ lab at Wayne State University
    in Detroit.
	 	 	 
	 	3.	Quantitative
    assessments of neurological outcome (balance, motor coordination, irritability, lethargy and other signs that change with
    increased ICP) will be performed on a regular (at least weekly) basis.
	 	 	 
	 	4.	Quantitative
    assessments of catheter patency will be performed on a weekly basis.
	 	 	 
	 	5.	Ventricular
    catheters will be harvested at the end of the experiments and analyzed with routine histology for tissue obstruction.


 


Note
that future work may include autologous blood injections into the lateral ventricles to model post-hemorrhagic hydrocephalus and
test the efficacy of the Microbot device under these clinical conditions.


 




    	20



    	 



    

 


Study
Timeline: We will conduct these experiments as expeditiously as possible, but we anticipate that Aim 1 will be completed in
3-6 months and the comprehensive study will follow.


 


Roles
and Responsibilities:


 


Dr.
McAllister, as Principal Investigator, will oversee and supervise all aspects of this study. In addition, he will perform
all of the surgical procedures, monitor animals frequently, communicate frequently with the veterinary and support staff, supervise
the Research Associate/Postdoctoral Fellow, maintain protocols, and manage funding. He will participate in semi-weekly conference
calls with members of Microbot Medical. This effort will require 50% of his time for the 6-month study period.


 


Dr.
Limbrick, as a pediatric neurosurgeon who specializes in the surgical management of hydrocephalus and current Chief of Pediatric
Neurosurgery at the Washington University School of Medicine and the St. Louis Children’s Hospital, will be a clinical consultant
and co-investigator on this study. He will provide advice on all aspects of the study and occasionally participate in surgery.
This will constitute 5% effort but his salary and benefits will be cost shared by the Washington University School of Medicine.


 


Dr.
Leandro Castaneyra Ruiz, who is currently a postdoctoral fellow in the Limbrick/McAllister lab, will assist in all surgical
procedures and animal monitoring. In addition, he will perform all of the histology conducted on the ventricular catheters and
animal brains. This effort will require 75% of his time.


 




    	21



    	 



    

 


BUDGET
FOR AIM 1


January
1 to June 30, 2017


 


Personnel


 


Dr.
McAllister 50%


$24,384


 


Dr.
Castaneyra Ruiz 75%


$20,063


 


Dr.
Limbrick 5% cost-shared


$0


 


Total
Personnel for 6 months


$44,447


 


Animals


 


	1.	Purchase
    infant pigs @ $180 each x 10
	 	$1,800


 


	2.	Administrative
    fee $25 x 10
	 	$250


 


	3.	Shipping
    - $205/2-3 pigs
	 	$750


 


	4.	Per
    diem - $15.50/d for 10-days postop single housing x 10 =  $930;
	 	 
	 	11-70
    days = $18.19/d double housing x 5 x 60d = $5,457
	 	$6,387


 


	5.	Disposal
    fee = $85/pig x 10
	 	   $850


 


	6.	Veterinary
    consultation & support
	 	$1,000


 


Total
Animals for 6 months 


$11,037


 


Surgery



 


	1.	1st
    surgery (1 hr + 2 hr tech) = $550/pig x 10
	 	$5,500


 


	2.	2nd
    surgery (3 hr + tech) = $870/pig x 10
	 	$8,700


 




    	22



    	 



    

 


Total
Surgery for 6 months


$14,200


 


Neuroimaging


 


	1.	Transport
    $250/2 pigs x 5 x 2 studies
	 	$2,500


 


	2.	CT
    scans $180/h x 20 studies (2 per pig)
	 	$3,600


 


	3.	Veterinary/animal
    care technical support      $150/study x 20
	 	$3,000


 


	4.	Ultrasonography
    $50/study x 20
	 	$1,000


 


Total
Neuroimaging for 6 months


$10,100


 


Histology
and Immunohistochemistry


 


	1.	Reagents,
    fixatives, buffers
	 	$750


 


	2.	Stains
    and antibodies
	 	$3,000


 


	3.	Glass
    slides and coverslips
	 	$750


 


	4.	Digital
    microscopy @ $20/h
	 	$1,000


 


Total
Histology and Immunohistochemistry for 6 months


$5,500


 


	 	 	Total
    Direct Costs
	 	$85,284	 
	 	 	Total
    Indirect Costs @ 50%
	 	$42,642	 
	 	 	Grand
    Total for 6 months
	 	$127,926	 


 


BUDGET
JUSTIFICATION for AIM 1


 


Personnel
– described above in the Scope of Work, Roles and Responsibilities


 


Animals


 


Detailed
expenses are listed in the Budget Aim 1. A maximum of 10 animals has been requested but fewer pigs may be; every effort will be
made to use the minimal number of animals needed to satisfy the objectives.


 


Surgery


 


Two
surgeries will be needed on each animal: the first to induce hydrocephalus and the second to implant the Microbot device. Charges
are based on the current rate to use the operating room and the institutional (IACUC) requirement for a surgical assistant from
the Division of Comparative Medicine) to perform anesthesia and monitor each animal following surgery.


 






    	23



    	 



    

 


Neuroimaging


 


Two
assessments will be needed for each animal: the first just prior to implantation of the Microbot device to determine the extent
of ventriculomegaly and the second just prior to termination of the experiment to determine the effectiveness of the device. As
described under “Animals”, fewer studies may be conducted if the objectives have been met. Furthermore, if ultrasonography
can be shown to accurately determine the extent of ventriculomegaly then the CT scans will not be needed. However, if CT scans
are needed, then transportation and veterinary care expenses will be incurred as required by the IACUC protocol.


 


Histology
and Immunohistochemistry


 


Post-mortem
analyses of the brain will include routine histology and targeted immunohistochemistry to determine (1) the effects of the Microbot
device on the brain as well as (2) the effectiveness of the Microbot device to maintain patency in the catheter. As described
previously, these costs will be reduced if fewer animals are needed.


 


Indirect
Costs


 


These
costs (often termed “F&A”) are determined by the Washington University Joint Research Office for Contracts and
administered through the Office of Sponsored Research Services and Sponsored Projects Accounting. After extensive discussions
between Dr. McAllister and these offices, the rate of 50% of Direct Costs is non-negotiable. Therefore, $42,642 has been added
to the Direct Costs to provide a total budget of $127,926.


 




    	24



    	 



    

 


ACCOUNTING
AND PAYMENT


 


Microbot
will pay WU a total of $127,926 US (inclusive of all and any taxes. Such amount shall be paid on a fixed-price basis and CORPORATION
agrees that WU will retain residual funds, if any, upon completion of the Project. These payments shall be made as set out below:


 


Within
fifteen (15) days of the Effective Date, CORPORATION will pay to WU the sum of $63,963US.


 


Within
fifteen (15) days of after induction of Hydrocephalus in animal, CORPORATION will pay to WU the sum of $51,170.40US.


 


Microbot
will pay the remainder, $12,792.60US, within thirty (30) days of receipt of the Aim 1 Progress Report: Pilot Studies on the Porcine
Model of Hydrocephalus to Test the Microbot Medical SCS Device.


 


Invoices:


 


Invoices,
will be sent to:


Microbot
Medical


5
Hamada Street


Yokneam,
20692


Israel


 


Checks
shall reference WU Contract Number OTM10394 and will be made payable to Washington University in St. Louis and sent to:


 


Washington
University


Sponsored
Projects Accounting


Campus
Box 1034


700
Rosedale Avenue


St.
Louis, MO 63112-1408


FAX
314-935-4309


 


Where
payments are made via wire transfer, CORPORATION agrees to be responsible for fees related to the wire transfer. The wire transfer
information is:


 




    	25