Document:

Exhibit
      10.2

     

    CREDIT
      AGREEMENT

     

    THIS
      CREDIT AGREEMENT (this “Agreement”),
      dated
      as of March 25, 2008 (the “Initial
      Closing Date”),
      is
      entered into by and among Modigene Inc., a Nevada corporation (“Borrower”
or
      the
“Company”),
      and
      The Frost Group, LLC, a Florida limited liability company (the “Frost
      Group”).

     

    RECITALS

     

    WHEREAS,
      the
      Company desires to obtain a $10,000,000 (the “Available
      Amount”)
      line
      of credit to Borrower for general business purposes (the “Line
      of Credit”),
      and the
      Frost Group is willing to make available to the Company the Line of Credit,
      all
      on the terms and conditions set forth herein. 

     

    NOW,
      THEREFORE,
      in
      consideration of the covenants, promises and representations set forth herein,
      and other good and valuable consideration, the receipt and sufficiency of which
      are hereby expressly and mutually acknowledged, and intending to be legally
      bound hereby, the parties hereto agree as follows:

     

    ARTICLE
      I

    LINE
      OF CREDIT

     

    Section
      1.1. The
      Line of Credit.
      From
      time to time prior to the Maturity Date (as defined in the Note (as hereafter
      defined)), subject to the provisions below, the Frost Group shall make Advances
      (as hereafter defined) to Borrower, which Borrower shall pay and may reborrow,
      so long as the aggregate amount of Advances outstanding at any one time shall
      not exceed the Available Amount. 

     

    Section
      1.2. Note.
      The
      indebtedness of Borrower to the Frost Group will be evidenced by a note
      and
      security agreement in substantially the form of Exhibit
      A
      (the
“Note”).
      The
      original principal amount of the Note will be $10,000,000; provided,
      however,
      that
      notwithstanding the face amount of the Note, Borrower’s liability under the Note
      shall be limited at all times to its actual indebtedness, principal, interest,
      fees, charges, expenses and reasonable attorneys’ fees and costs owing by
      Borrower to the Frost Group (or any permitted assignee) pursuant to or evidenced
      by the Note or this Agreement, whether direct or indirect, absolute or
      contingent, due or to become due, now existing or hereafter arising, including
      Lender’s Expenses (collectively, the “Obligations”),
      in
      each case as then outstanding hereunder and under the Note. As used herein,
      “Lender’s
      Expenses”
means
      all reasonable attorneys’ fees, costs and expenses incurred in amending,
      enforcing or defending the Note (including fees and expenses of appeal or
      review), including the exercise of any rights or remedies afforded under the
      Note or under applicable law, whether or not suit is brought, whether before
      or
      after bankruptcy or insolvency, including without limitation all fees and costs
      incurred by the Frost Group in connection with the Frost Group’s enforcement of
      its rights in a bankruptcy or insolvency proceeding filed by or against Borrower
      or its property.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Section
      1.3. Use
      of
      Proceeds.
      Funds
      advanced under the Line of Credit shall be used for working capital or general
      corporate purposes of Borrower, as approved by the Company’s Board of
      Directors.

     

    Section
      1.4. Payment
      of Outstanding Amount.
      The
      aggregate Obligations outstanding on the Maturity Date shall be due and payable
      in arrears on the Maturity Date in accordance with the terms of the
      Note.

     

    Section
      1.5. Interest.
      Interest on the outstanding principal amount of the Line of Credit shall accrue
      at a rate equal to ten percent (10%) per
      annum, compounded quarterly (the “Interest
      Rate”),
      and
      shall be payable on the last day of each calendar month until the repayment
      in
      full of all Obligations, the termination of this Agreement and cancellation
      of
      the Note.

     

    Section
      1.6. Default
      Rate.
      Upon
      the Maturity Date, whether by acceleration, demand or otherwise, and at the
      Frost Group’s option upon the occurrence of any Event of Default (as defined in
      the Note) and during the continuance thereof, the Note shall bear interest
      at a
      rate that shall be five
      percent (5.0%) in excess of the Interest Rate but not more than the maximum
      rate
      allowed by law (the “Default
      Rate”).
      The
      Default Rate shall continue to apply whether or not judgment shall be entered
      on
      the Note. The Default Rate is imposed as liquidated damages for the purpose
      of
      defraying the Frost Group’s expenses incident to the handling of delinquent
      payments, but are in addition to, and not in lieu of, the Frost Group’s exercise
      of any rights and remedies hereunder or under applicable law, and any fees
      and
      expenses of any agents or attorneys which the Frost Group may employ. In
      addition, the Default Rate reflects the increased credit risk to the Frost
      Group
      of carrying a loan that is in default. Borrower agrees that the Default Rate
      is
      a reasonable forecast of just compensation for anticipated and actual harm
      incurred by the Frost Group, and that the actual harm incurred by the Frost
      Group cannot be estimated with certainty and without difficulty.

     

    Section
      1.7. Advances.
      Borrower shall give the Frost Group prior written notice not later than 3:00
      p.m., Eastern Time, on the third business day prior to the date of any advance
      of credit pursuant to the Line of Credit hereunder (an “Advance”).
      Any
      such notice shall be in the form of the Borrowing Notice set forth as
Exhibit
      B
      (the
“Borrowing
      Notice”),
      shall
      be certified by the president of Borrower, and shall set forth the aggregate
      amount of the requested Advance.
      Upon
      receiving a request for an Advance to which Borrower is entitled hereunder
      and
      under the Note, and provided there is no Event of Default, the Frost Group
      shall
      make available to Borrower the amount of the requested Advance by wire transfer
      of immediately available funds to a bank account designated by Borrower on
      the
      third business day after receipt of such Borrowing Notice.

     

    Section
      1.8. Prepayment.
      Borrower may prepay the outstanding Obligations under the Line of Credit at
      any
      time without premium or penalty. Prepayments of all or any portion of the
      Obligations shall not reduce the Available Amount, and funds may be reborrowed
      hereunder up to the Available Amount, subject to the provision hereof and the
      Note.

     

    Section
      1.9. Payment
      Application.
      Any and
      all payments on account of the Obligations will be applied first to accrued
      and
      unpaid interest and second to outstanding principal and other sums due
      hereunder. If Borrower makes a payment or payments and such payment or payments,
      or any part thereof, are subsequently invalidated, declared to be fraudulent
      or
      preferential, set aside or are required to be repaid to a trustee, receiver,
      or
      any other person under any bankruptcy act, state, provincial or federal law,
      common law or equitable cause, then to the extent of such payment or payments,
      the Obligations or part thereof hereunder intended to be satisfied shall be
      revived and continued in full force and effect as if said payment or payments
      had not been made.

    
      
        
        

      

      
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    Section
      1.10. Conditions
      to First Advance.
      The
      obligation of the Frost Group to make the first Advance shall be subject to
      the
      Frost Group’s receipt of the following documents, each in form and substance
      reasonably satisfactory to the Frost Group:

     

    (a) This
      Agreement.
      This
      Agreement duly executed by Borrower.

     

    (b) Secured
      Promissory Note.
      The
      Note duly executed by Borrower.

     

    (c) Borrowing
      Notice.
      A
      completed Borrowing Notice required under Section 1.7 hereof.

     

    (d) Borrower
      Secretary’s Certificate.
      The
      duly authorized Secretary of Borrower shall have delivered a certified copy
      of
      Borrower’s Certificate of Incorporation, and a certificate as to its Bylaws and
      resolutions adopted by its board of directors authorizing this Agreement and
      the
      transactions contemplated hereby.

     

    (e) Third-Party
      Consents.
      Borrower shall have procured all of the third-party consents specified in the
      schedules to the Stock Purchase Agreement which are required to be procured
      by
      Borrower before it can incur the indebtedness evidenced by the Note and
      otherwise commit itself to its obligations hereunder.

     

    (f) Warrant
      Certificate.
      A
      Warrant Certificate duly executed by Borrower representing the Warrants issuable
      upon the first Advance in accordance with Section 1.12 below.

     

    (g) Other
      Documents.
      Such
      additional documents as the Frost Group reasonably may request.

     

    Section
      1.11. Subsequent
      Advances.
      The
      obligation of the Frost Group to make additional Advances shall be subject
      to
      the Frost Group’s receipt of a completed Borrowing Notice and such additional
      documents as the Frost Group reasonably may request and the absence of any
      Event
      of Default.

     

    Section
      1.12. Warrants.
      In
      consideration of the extension of credit hereunder, upon the first Advance,
      Borrower will grant to the Frost Group Warrants (the“Warrants”),
      which
      warrants will be issued substantially in the form attached hereto as
      Exhibit C
      (the
“Warrant
      Certificate”),
      with
      an exercise price equal to $0.99 per share and will provide such parties the
      right to buy One Million Five Hundred Thousand (1,500,000) shares of Common
      Stock (as hereafter defined).

    
      
        
        

      

      
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    ARTICLE
      II

    CLOSINGS

     

    Section
      2.1. Initial
      Closing.
      The
      closing of this Agreement (the “Initial
      Closing”)
      shall
      take place at the offices of The Frost Group, in Miami, Florida, or at such
      other location(s) as the parties may agree commencing at 2:00 p.m. local time
      on
      the Closing Date (as defined in the Stock Purchase Agreement (as hereafter
      defined)). At the Initial Closing:

     

    (a) Borrower
      shall deliver to the Frost Group a fully executed copy of this Agreement, the
      Note and the other documents described in Section 1.10.

     

    (b) The
      Frost
      Group shall deliver to Borrower a fully executed copy of this
      Agreement.

     

    Section
      2.2. Subsequent
      Closings.
      The
      closing of any subsequent advance under this Agreement shall take place at
      the
      offices of The Frost Group, in Miami, Florida, or at such other location(s)
      as
      the parties may agree commencing at 2:00 p.m. local time on the date set forth
      in the Borrowing Notice. At each such subsequent closing, the Frost Group shall
      have timely received a completed Borrowing Notice and such additional documents
      as the Frost Group reasonably may request. 

     

    ARTICLE
      III

    REPRESENTATIONS
      AND WARRANTIES OF BORROWER

     

    Borrower
      represents and warrants to the Frost Group as of the date of this Agreement
      as
      follows:

     

    Section
      3.1. Organization.
      The
      Company is a corporation duly organized, validly existing and in good standing
      under the laws of the State of Nevada, and duly authorized to carry on
      the
      business presently conducted by it. The Company is qualified to do business
      in
      every other jurisdiction in which the nature of its business or location of
      its
      properties requires such qualification, except where the failure to so qualify
      could not reasonably be expected to have a material adverse effect upon the
      business, operations, assets, liabilities or condition (financial or otherwise)
      of the Company taken as a whole (“Material
      Adverse Effect”).
      The
      copies of the Company’s articles of incorporation and by-laws, which have been
      furnished to the Frost Group are correct and complete and reflect all amendments
      made thereto at any time prior to the date of this Agreement. The Company has
      one wholly-owned subsidiary, Modigene Inc., a Delaware corporation
      (“Modigene
      DE”),
      and
      Modigene DE has one wholly-owned subsidiary, Modigene Ltd., an Israeli
      corporation (“Modigene
      Ltd.”).

     

    Section
      3.2. Capitalization.

     

    (a) As
      of the
      date of this Agreement, the authorized capital stock of the Company consists
      of:

     

    (i) Three
      Hundred Million (300,000,000) shares of common stock, $0.0001 par value per
      share (“Common
      Stock”),
      of
      which Thirty-five Million, Five Hundred Forty-nine Thousand and Twenty-eight
      (35,549,028) shares are issued and outstanding; and

    
      
        
        

      

      
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    (ii) Ten
      Million (10,000,000) shares of preferred stock, $0.0001 par value per share
      (“Preferred
      Stock”),
      Eight
      Hundred Thousand (800,000) of which have been designated Series A Preferred
      Stock (the “Series
      A Preferred”),
      all
      of which are issued and outstanding.

     

    (b) As
      of the
      date of this Agreement, the Company has reserved: 

     

    (i) the
      Series A Preferred for issuance pursuant to that certain Series A Preferred
      Stock Purchase Agreement between Frost Gamma Investments Trust, Jane Hsiao,
      Subbarao Uppaluri and Steven D. Rubin (collectively, “Purchasers”)
      and
      the Company (the “Stock
      Purchase Agreement”);

     

    (ii) sufficient
      shares of Common Stock for issuance upon conversion of the Series A Preferred;
      

     

    (iii) One
      Million Nine Hundred Forty-nine Thousand Six Hundred Seventy-Five (1,949,675)
      shares of Common Stock issuable to employees, consultants and directors upon
      the
      exercise of options (“Options”)
      to
      purchase Common Stock originally granted pursuant to the Modigene Inc. Stock
      Incentive Plan as adopted by Modigene DE on December 15, 2005 (the “2005
      Stock Plan”)
      and
      assumed by the Company, all of which Options have been granted as of the date
      of
      this Agreement; 

     

    (iv) Three
      Million (3,000,000) shares of Common Stock issuable to employees, consultants
      and directors upon the exercise of Options to Purchase Common Stock granted
      pursuant to the Modigene Inc. Equity Incentive Plan (the “2007
      Stock Plan”),
      of
      which Options to purchase an aggregate of Two Million Five Hundred and Ninety
      Thousand (2,590,000) shares of Common Stock have been granted as of the date
      of
      this Agreement; and 

     

    (v) Three
      Million Four Hundred Ninety-Five Thousand Four Hundred and Twelve (3,495,412)
      shares of Common Stock issuable upon the exercise of warrants that are issued
      and outstanding as of the date of this Agreement.

     

    (vi) One
      Million Five Hundred Thousand (1,500,000) shares of Common Stock issuable upon
      the exercise of the maximum number of Warrants issuable pursuant to the terms
      of
      Section 1.12 and the Note. 

     

    (c) Except
      as
      set forth in this Section
      3.2 and
      in any registration statements, reports, schedules, forms, statements and other
      documents (including exhibits and all other information incorporated by
      reference) required to be filed by the Company under the Securities Exchange
      Act
      of 1934, as amended (the “Exchange
      Act”)
      since
      May 9, 2007 (the foregoing materials, together with any other materials filed
      by
      the Company under the Exchange Act, whether or not required, being collectively
      referred to herein as the “SEC
      Reports”),
      there
      are no outstanding options, warrants, agreements, conversion rights, preemptive
      rights, or other rights issued by the Company which may permit or require any
      individual, corporation, partnership, trust, incorporated or unincorporated
      association, joint venture, limited liability company, joint stock company,
      Governmental Authority (as defined below), or other entity of any kind
      (“Person”),
      now
      or in the future to subscribe for, purchase or otherwise acquire any other
      securities of the Company.
      

    
      
        
        

      

      
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    Section
      3.3. Authorization
      and
      Enforceability. The
      Company has all necessary corporate power and authority to execute and deliver
      this Agreement, to perform its obligations hereunder and to consummate the
      transactions contemplated hereby. The execution and delivery of this
Agreement
      by the Company, the performance of its obligations hereunder, and the
      consummation by the Company of the transactions contemplated hereby have been
      duly authorized by all requisite corporate action on the part of the
      Company.
      This
      Agreement has been duly executed and delivered by the Company, and (assuming
      due
      authorization, execution and delivery by the Frost Group) constitutes a
legal,
      valid and binding obligation of the Company, enforceable against the Company
      in
      accordance with its terms, except as such enforceability may be limited by
      applicable bankruptcy, insolvency, reorganization, moratorium, liquidation
      or
      similar laws relating to, or affecting
      generally the enforcement of, creditors’ rights and remedies or by other
      equitable principles of general application.
      The
      Warrants, when and if issued pursuant to the terms of the Note, have been duly
      issued and authorized and any share of Common Stock issued upon the exercise
      thereof according to their respective terms, as applicable, will be duly and
      validly issued, fully paid and non-assessable, free and clear of all Liens
      and
      shall not be subject to preemptive or similar rights of
      stockholders.

     

    Section
      3.4. No
      Conflict.
      The
      execution, delivery and performance of this Agreement by the Company and the
      consummation by the Company of the transactions contemplated hereby do not
      and
      will not (i) conflict with or violate any provisions of its articles
      of incorporation or by-laws, (ii) conflict with, or constitute a default
      (or an event which
      with notice or lapse of time or both would become a default) under, or give to
      any other Person any rights of termination, amendment, acceleration or
      cancellation of, any agreement, indenture or instrument to which the Company
      is
      a party, or by which any property or asset of the Company is bound, or
      (iii) result in a violation of any law, rule, regulation, order, judgment,
      injunction, decree or other restriction of any Governmental Authority to which
      the Company is subject, or by which any property or asset of the Company is
      bound, except in the case of each of clauses (ii) and (iii), such conflicts,
      defaults, terminations, amendments, accelerations, cancellations and violations
      as could not reasonably be expected to have, individually or in the aggregate,
      a
      Material Adverse Effect.

     

    Section
      3.5. Consents
      and Approvals.
      Except
      as set forth on Schedule 3.5,
      and
      such other consents, authorizations, filings, approvals, notifications and
      registrations which, if not obtained or made, could not reasonably be expected
      to have a Material Adverse Effect, the execution, delivery and performance
      of
      this Agreement by the Company does not require any consent, authorization,
      filing with, approval, notification or registration to or with any Person by
      the
      Company.

     

    Section
      3.6. Financial
      Information.
      Each
      of
      the financial statements of the Company set forth in the SEC Reports
      (collectively, the “Financial
      Statements”)
      is
      accurate and complete in all material respects and is consistent with the books
      and records of the Company. Such financial statements present
      fairly in all material respects the financial condition and results of
      operations of the Company as of the dates thereof or for the periods covered
      thereby.

    
      
        
        

      

      
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    Section
      3.7. Absence
      of Changes.
      Except
      as set forth in Schedule 3.7
      or as
      otherwise expressly provided by this Agreement and the Stock Purchase Agreement
      or the SEC Reports, since December 31, 2007, there has not been:

     

    (a) any
      declaration, setting aside or payment of any dividend on, or other distribution
      (whether in cash, stock or property) in respect of, any of the capital stock
      of
      the Company, or any purchase, redemption or other acquisition by the Company
      of
      any of the Company’s capital stock or any other securities of the Company, or
      any issuance of any options, warrants, calls or rights to acquire any such
      shares or other securities, except for the issuance of shares pursuant to the
      exercise of Options;

     

    (b) any
      split, combination or reclassification of any of the capital stock of the
      Company;

     

    (c) any
      material change or alteration in the policy of the Company relating to the
      granting of stock options to its employees, directors and
      consultants;

     

    (d) any
      purchase or sale or other disposition, or any agreement or other legally binding
      arrangement for the purchase, sale or other disposition, of any of the material
      properties or assets of the Company, other than in the ordinary course of
      business;

     

    (e) any
      change by the Company in its accounting methods, principles or
      practices;

     

    (f) any
      damage, destruction or loss, not covered by insurance, which could reasonably
      be
      expected to have a Material Adverse Effect; or 

     

    (g) any
      agreement or understanding whether in writing or otherwise, by the Company
      to
      take any of the actions specified in subparagraphs (a) through (e)
      above.

     

    Section
      3.8. Employment
      Contracts.
      The
      SEC
      Reports contain an accurate description in all material respects of all
      employment and consulting agreements with the Company’s executive
      officers.

     

    Section
      3.9. Sales
      Representatives, Dealers and Distributors.
      Except
      as set forth in Schedule 3.9,
      the
      Company is not a party to any contract or agreement with any Person under which
      such other Person is a sales agent, representative, dealer or distributor of
      any
      of the products or services of the Company which by its terms cannot be
      terminated on less than ninety (90) days prior notice without requiring an
      additional payment as a result of termination.

     

    Section
      3.10. Brokers.
      No
      broker, finder or investment bank is entitled to any brokerage, finder’s or
      other fee or commission in connection with the transactions contemplated by
      this
      Agreement based upon arrangements made by or on behalf of the
      Company.

     

    Section
      3.11. Litigation.
      There
      is
      no action, suit, notice of violation, proceeding or investigation pending or,
      to
      the knowledge of the Company, threatened against the Company before or by any
      United States federal, state or local or any foreign government, governmental,
      regulatory or administrative authority, agency or commission, or any court,
      tribunal, or judicial or arbitral body (“Governmental
      Authority”).
      As of
      the date hereof, the Company is not subject to any outstanding governmental
      order which has not been disclosed to the Frost Group.

    
      
        
        

      

      
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    Section
      3.12. Title
      to Properties.
      Except
      as set forth on Schedule
      3.12,
      the
      Company has good and marketable title, free and clear of all Liens, to its
      respective personal property and assets (other than the real property and Leases
      which are addressed in Section 3.26)
      shown
      on the most recent balance sheet included in the Financial Statements (the
      “Recent
      Balance Sheet”)
      or
      acquired after the date of the Recent Balance Sheet, except for (i) assets
      that have been disposed of since the date of the Recent Balance
      Sheet in
      the
      ordinary course of business, and (ii) Liens reflected in the Recent Balance
      Sheet.
      For
      purposes of this Agreement, “Lien”
means
      any encumbrance, hypothecation, infringement, lien, mortgage, pledge,
      restriction, security interest, title retention or other security arrangement,
      or any other adverse right or interest, charge or claim of a similar nature
      of
      or on any asset, property or property interest; provided,
      however,
      that
      such term shall not include (a) liens for Taxes or assessments which are not
      delinquent or being contested in good faith and for which adequate reserves
      have
      been established on the Recent Balance Sheet; (b) mechanics’, warehousemen’s,
      materialmen’s, contractors’, workmen’s, repairmen’s and carriers’ liens, and
      other similar liens arising or incurred in the ordinary course of business;
      (c)
      the rights of third-party suppliers or other vendors having possession of
      manufacturing equipment; (d) rights of lessees, licensees and other third
      parties having a right to possess or use assets in the ordinary course of
      business; (e) rights of lessors, licensors and other third parties in property
      owned by them which is leased to another Person or which another Person has
      a
      right to use or possess; (f) with respect to real property, easements,
      rights-of-way, restrictions, minor defects, encroachments or irregularities
      in
      title and other similar charges or encumbrances not interfering in any material
      respect with the use of such real property in the ordinary course of business;
      (g) liens in favor of customs and revenue authorities arising as a matter
      of law to secure payment of customs duties in connection with the importation
      of
      goods in the ordinary course of business; and (h) liens for water and sewer
      charges.

     

    Section
      3.13. Personal
      Property Leases.
      Except
      as set forth in Schedule 3.13,
      all of
      the personal property leased to the Company
      is subject to leases which, to the knowledge of the Company, are valid and
      in
      full force and effect, and to the knowledge of the Company no event has occurred
      which, with notice or lapse of time or both, would constitute a material default
      under any of these leases.

     

    Section
      3.14. Intentionally
      Omitted.

     

    Section
      3.15. Intentionally
      Omitted.

     

    Section
      3.16. Contracts. 

     

    (a) The
      SEC
      Reports contain an accurate list of all material contracts, agreements and
      arrangements to which the Company is a party and required to be disclosed
      therein (“Material
      Contracts”).

     

    (b) Other
      than as set forth on Schedule 3.16,
      the
      Company is not in violation or in default of, in any material respect, or has
      failed to perform any material obligation under, any Material Contract, and
      nothing has occurred that with lapse of time or the giving of notice or both
      would constitute a material breach or default of a Material Contract by the
      Company.

    
      
        
        

      

      
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    (c) The
      Company has no powers of attorney outstanding (other than those issued in the
      ordinary course of business with respect to tax matters and securities
      filings).

     

    Section
      3.17. Permits.
      All
      material permits, authorizations, variances, notices, approvals, registrations,
      certificates of completion or legal status, certificates of occupancy, orders
      or
      other approvals or licenses granted by any Governmental Authority (“Permits”)
      required as of the date hereof for the Company to
      conduct its business as currently conducted have been issued to the Company
      and
      are in effect. There
      are
      no material defaults existing under such Permits and the
      Company
      has not received any notice and the Company has no knowledge that the issuer
      of
      any such Permit intends to suspend,
      withdraw, limit in any form or terminate any such Permit.

     

    Section
      3.18. Intentionally
      Omitted.

     

    Section
      3.19. Environmental
      Matters. To
      the
      knowledge of the Company, and except as set forth in Schedule 3.19:

     

    (a) the
      properties, facilities and assets owned and leased by the Company, respectively,
      and the operations conducted thereon by
      the
      Company and the use, maintenance, or operation of such properties, facilities
      and assets: 

     

    (i) have
      been
      and are in compliance in all material respects with any applicable federal,
      state, local or foreign laws, regulations and ordinances concerning health
      and
      safety, pollution or protection of the environment, including by way of
      illustration and not by way of limitation, if applicable, the Clean Air Act,
      42
      U.S.C. § 7401
      et seq.
      the
      Federal Water Pollution Control Act of 1972, 33  U.S.C. § 1251 et seq.
      (the
“Clean
      Water Act”);
      the
      Resource Conservation and Recovery Act of 1976, as amended,
      42 U.S.C. § 6901 et seq.
      (“RCRA”);
      the
      Comprehensive Environmental Response Compensation and Liability Act of 1980,
      as
      amended, 42 U.S.C.
      § 9601 et seq.
      (“CERCLA”);
      the
      Toxic Substances Control Act, 15 U.S.C. §2601 et seq.;
      the Oil
      Pollution Act of 1990, 33 U.S.C. §2701 et seq.;
      the
      Emergency Planning and Community Right- to-Know Act, 42 U.S.C. § 11001
      et seq.;
      the
      Pollution Prevention Act of 1990, 42 U.S.C. § 1301 et seq.;
      the
      Federal Hazardous Materials Transportation Law, 49 U.S.C. §5101 et seq.;
      and the
      Safe Drinking Water Act, 42 U.S.C. §§ 300(f) through 300(j); the
      Occupational Safety and Health Act of 1970, 29 U.S.C. § 651 et seq.
      (including any
      amendments or extensions thereof, and rules, regulations,
      standards
      or guidelines pursuant to any
      of
      the foregoing) (each hereinafter an “Environmental
      Law”);
      and

     

    (ii) are
      not
      subject to any existing,
      pending or threatened, investigation, inquiry or proceeding by any Governmental
      Authority
      for any material liability (absolute, contingent or otherwise) or obligations
      under any Environmental
      Law.

     

    (b) no
      toxic,
      hazardous or noxious substance, material or waste, the treatment, handling,
      storage, transportation or Release (as defined below) of which is regulated
      by
      any Governmental Authority, including, but not limited to, petroleum or
      constituents thereof, asbestos or any asbestos-containing material of any kind
      or character which is now or may become friable and polychlorinated biphenyls,
      or any other materials or substances designated as “hazardous substances”
pursuant to Section 311 of the Clean Water Act, defined as “hazardous
      waste” pursuant to Section 1004 of RCRA, or defined as “hazardous
      substances” pursuant to Section 101 of CERCLA (“Hazardous
      Substances”)
      have
      been disposed of or otherwise Released by the Company except
      in
      compliance in all material respects with Environmental Laws and in a
manner
      which
      has
      not and is not reasonably likely to give rise to any material liability
      (absolute, contingent or otherwise) under
      Environmental Law; 

    
      
        
        

      

      
        -
          9 -

        
          

        

      

      
        
        

      

    

    (c) the
      Company has
      no
      material liability (absolute, contingent
      or otherwise) in connection with any
      Release of any Hazardous Substances into the environment or arising under
      Environmental Law;

     

    (d) (i)
      no
      request for information or notice of any liability, potential liability or
      obligation under any violation of any Environmental Law has been received by
      the
      Company, and (ii) the Company has not been named as a “potentially responsible
      party” or received a request for information in connection with any litigation,
      investigation or similar matter arising under Environmental Laws.
      The
      term “Released”
      hereunder means any spilling, leaking, pumping, pouring, emitting, emptying,
      discharging, injecting, escaping, leaching, dumping or disposing into the
      environment of Hazardous Substances (including without limitation, the
      abandonment or disposal of barrels, containers or other receptacles containing
      any Hazardous Substances).

     

    Section
      3.20. Intellectual
      Property.

     

    (a) The
      Company owns or licenses or, to the knowledge of the Company, otherwise
      possesses legally enforceable rights to use, all patents, trademarks, trade
      names, service marks, copyrights, and any applications therefor, technology,
      know-how, trade secrets, ideas, algorithms, processes, computer software
      programs or applications, and tangible or intangible proprietary information
      or
      material (collectively the “Intellectual
      Property”)
      that
      are used by the Company in and are material to its business as currently
      conducted.

     

    (b) Except
      as
      set forth in Schedule
      3.20,
      to the
      knowledge of the Company, all grants, registrations and applications for
      Intellectual Property owned by the Company that are used in and are material
      to
      the conduct of its business as currently conducted (i) are valid,
      subsisting, in proper form and enforceable, and have been duly maintained,
      including the submission of all necessary filings and fees in accordance with
      the legal and administrative requirements of the appropriate jurisdictions,
      and
      (ii) have not lapsed, expired or been abandoned, and no application or
      registration therefor is the subject of any legal or administrative proceeding
      before any Governmental Authority in any jurisdiction.

     

    (c) To
      the
      knowledge of the Company, the Intellectual Property owned by the Company is
      not
      being infringed by any third party. To the knowledge of the Company, the conduct
      of its business as currently conducted does not conflict with or infringe in
      any
      way on any proprietary right of any third party. There is no claim, suit, action
      or proceeding pending or, to the knowledge of the Company, threatened against
      the Company (i) alleging any such conflict or infringement with any third
      party’s proprietary rights, or (ii) challenging the ownership, use,
      validity or enforceability of the Intellectual Property. 

    
      
        
        

      

      
        -
          10 -

        
          

        

      

      
        
        

      

    

    (d) To
      the
      knowledge of the Company, the Company is not, nor will it be as a result of
      the
      execution and delivery of this Agreement or the performance of its obligations
      under this Agreement, in breach of any license, sublicense or other agreement
      relating to the Intellectual Property.

     

    Section
      3.21. Tax
      Matters.
      Except
      as set forth in Schedule 3.21:

     

    (a) The
      Company has timely filed with the Internal Revenue Service and any other
      domestic or foreign Governmental Authority responsible for the administration
      of
      any Taxes (“Tax
      Authority”),
      as
      appropriate, all material returns, declarations, reports, claims for refund,
      or
      information returns or statements relating to Taxes, including any schedule
      or
      attachment thereto, and including any amendments thereof (“Tax
      Returns”)
      that
      it was required to file, and such Tax Returns are true, correct and complete
      in
      all material respects. All material federal, state, local, or foreign income,
      gross receipts, license, payroll, employment, excise, severance, stamp,
      occupation, premium, windfall profits, environmental (including taxes under
      Code
§59A), customs duties, capital stock, franchise, profits, withholding, social
      security, unemployment, disability, real property, personal property, sales,
      use, transfer, registration, value added, alternative or add-on minimum,
      estimated, or other tax of any kind whatsoever, including any interest, penalty,
      or addition thereto, whether disputed or not (“Taxes”)
      due
      and owing by the Company have
      been
      paid.

     

    (b) The
      Company has not been, and is not now subject to, any audits with regard to
      any
      Taxes or Tax Returns of the Company and there are no outstanding deficiencies
      or
      assessments asserted in writing by any Tax Authority.

     

    (c) There
      are
      no outstanding agreements, consents or waivers extending the statutory period
      of
      limitations applicable to the assessment of any Taxes or deficiencies against
      the Company, and the Company is not a party to any agreement providing for
      the
      allocation or sharing of Taxes.

     

    (d) The
      Company has not filed a consent to the application of Section 341(f) of the
      Internal Revenue Code of 1986, as amended through the date hereof, and the
      rulings and regulations promulgated thereunder (“Code”). 

     

    (e) The
      Company is not nor has it been a United States real property holding company
      (as
      defined in Section 897(c)(2) of the Code) during the applicable period
      specified in Section 897(c)(1)(ii) of the Code.

     

    (f) The
      unpaid (but not yet due) Taxes of the Company did not, as of the Recent Balance
      Sheet, exceed the reserve for tax liability set forth on the face of the Recent
      Balance Sheet.

     

    (g) There
      are
      no Liens for Taxes upon any of the assets of the Company, except for Liens
      for
      Taxes not yet due and payable (or for Taxes that the Company is contesting
      in
      good faith through appropriate proceedings) for which adequate reserves have
      been established on the Recent Balance Sheet.

    
      
        
        

      

      
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          11 -

        
          

        

      

      
        
        

      

    

    Section
      3.22. Employment
      Matters.
      The
      Company has not experienced any material strikes, collective labor grievances
      or
      other collective bargaining disputes in the last five (5) years.
      The
      Company is not and has not been a party to any collective bargaining agreements.
      To the Company’s knowledge, there is no organizational effort presently being
      made or threatened by or on behalf of any labor union with respect to employees
      of the Company. The Company has complied with all applicable laws relating
      to
      employment, employment discrimination and employment practices, except where
      the
      failure to so comply could not reasonably be expected to have a Material Adverse
      Effect.

     

    Section
      3.23. Employee
      Benefit Matters.

     

    (a) Schedule 3.23
      lists
      all employee benefit plans (as defined in Section 3(3) of the Employee
      Retirement Income Security Act of 1974, as amended through the date hereof,
      and
      the rulings and regulations promulgated thereunder (“ERISA”))
      and
      all bonus, stock option, stock purchase, profit sharing, savings, disability,
      incentive, deferred compensation, retirement, severance or other employee
      benefit plans, programs or arrangements, and all employment or compensation
      agreements, in each case for the benefit of, or relating to, current employees
      and former employees of the Company (collectively, the “Plans”).

     

    (b) With
      respect to each Plan, the Company has made available to the Frost Group true
      and
      complete copies of (i) all plan documents, as in effect on the date hereof,
      (ii) the latest Internal Revenue Service determination letter, if
      applicable, (iii) the last filed Form 5500, if applicable, and
      (iv) summary plan descriptions, if any, and all modifications thereto
      communicated to employees.

     

    (c) To
      the
      knowledge of the Company, all Plans are in compliance in all material respects
      with the requirements prescribed by applicable statutes, orders or governmental
      rules or regulations currently in effect with respect thereto, and the Company
      has performed all material obligations required to be performed by them under,
      and are not in any material respect in default under or in violation of, any
      of
      the Plans.

     

    (d) To
      the
      knowledge of the Company, neither the Company nor any of its directors,
      officers, employees or agents has, with respect to any Plan, engaged in or
      been
      a party to any “prohibited transaction”, as such term is defined in
      Section 4975 of the Code or Section 406 of ERISA, which could result
      in the imposition of either a penalty assessed pursuant to Section 502(i)
      of ERISA or a Tax imposed by Section 4975 of the Code, in each case
      applicable to the Company or any Plan.

     

    (e) There
      are
      no pending or, to the knowledge of the Company, threatened claims, lawsuits
      or
      arbitrations (other than routine claims for benefits), relating to any of the
      Plans, which have been asserted or instituted against the Company, any Plan
      or
      the assets of any trust for any Plan. No Plan is a “multiemployer plan” (as
      defined in Section 3(37) of ERISA) or is subject to Title IV of ERISA. The
      Company has complied in all material respects with the provisions of
      Section 4980B of the Code and Part 6 of Title I of ERISA,
      if
      applicable.

     

    Section
      3.24. Insurance.
      Set
      forth on Schedule 3.24
      is a
      true and complete list of all
      policies of fire, liability, workmen’s compensation and other similar forms of
      insurance owned or held by the Company, which policies are in full force and
      effect, and no notice of cancellation or termination has been received with
      respect to any such policy.

    
      
        
        

      

      
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          12 -

        
          

        

      

      
        
        

      

    

    Section
      3.25. Compliance
      with Laws.
      Except
      as set forth in Schedule 3.25,
      the
      Company has complied and remains in compliance with all applicable laws,
      regulations and zoning ordinances of any Governmental Authority, except for
      those instances of non-compliance that could not reasonably be expected to
      have
      a Material Adverse Effect, and the
      Company has no knowledge of and has not received any notice alleging any such
      violation of any such laws, regulations or zoning ordinances.

     

    Section
      3.26. Real
      Estate.

     

    (a) Owned
      Properties.
      The
      Company does not own any real property.

     

    (b) Leased
      Properties.
      Schedule 3.26
      sets
      forth a list of all of the leases and subleases for real property and all
      amendments, modifications and supplements thereto, if any (“Leases”),
      in
      which the Company has a leasehold or subleasehold interest. The Company has
      delivered, or caused to be delivered, to the Frost Group true and complete
      copies of each of the Leases described in Schedule 3.26.
      With
      respect to each Lease listed in Schedule 3.26
      and
      except as set forth in Schedule 3.26,
      (i) to the knowledge of the Company, each Lease is legal, valid,
      binding, and enforceable, and in full force and effect; (ii)  the Company
      is not in violation or in default of, in any material respect, or has failed
      to
      perform any material obligation under, any Lease, and nothing has occurred
      that
      with lapse of time or the giving of notice or both would constitute a material
      breach or default of any Lease by the Company; and (iii)  the Company has
      not assigned, transferred, conveyed, mortgaged, deeded in trust or encumbered
      any interest in any Lease. 

     

    Section
      3.27. Disclosure.
      The
      Company has provided the Frost Group with all information requested by Frost
      Group in connection with its decision to enter into this Agreement. To the
      Company’s knowledge, neither this Agreement, the exhibits and schedules hereto
      nor any other document delivered by the Company to Frost Group or their
      attorneys or agents in connection herewith or therewith or with the transactions
      contemplated hereby or thereby, contain any untrue statement of a material
      fact
      nor, to the best of the Company’s knowledge, omit to state a material fact
      necessary in order to make the statements contained herein or therein not
      misleading. The Company does not represent or warrant that it will achieve
      any
      financial projections provided to Frost Group.

     

    ARTICLE
      IV

    REPRESENTATIONS
      AND WARRANTIES OF FROST GROUP

     

    The
      Frost
      Group represents and warrants to Borrower as of the date of this Agreement,
      and
      as of the date of the issuance of the Warrants, if any, as follows:

     

    Section
      4.1. Capacity;
      Execution of Agreement.
      The
      Frost Group has all requisite power, authority, and capacity to enter into
      this
      Agreement and to perform the transactions and obligations to be performed by
      it
      hereunder. The execution and delivery of this Agreement, and the performance
      by
      the Frost Group of the transactions and obligations contemplated hereby have
      been duly authorized by all requisite corporate action of the Frost Group.
      This
      Agreement has been duly executed and delivered by the Frost Group and
      constitutes a valid and legally binding agreement of the Frost Group,
      enforceable in accordance with its terms, except as enforcement thereof may
      be
      limited by bankruptcy, insolvency, reorganization, moratorium or other similar
      laws, both state and federal, affecting the enforcement of creditors’ rights or
      remedies in general from time to time in effect and the exercise by courts
      of
      equity powers or their application of principles of public
      policy.

    
      
        
        

      

      
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          13 -

        
          

        

      

      
        
        

      

    

    Section
      4.2. Formation
      and Standing.
      The
      Frost Group is a limited liability company duly formed, validly existing and
      in
      good standing under the laws of the State of Florida. The Frost Group has the
      requisite power and authority to own and operate its properties and assets,
      and
      to carry on its business as currently conducted.

     

    Section
      4.3. Power
      and Authority.
      The
      Frost Group has all requisite legal and other power and authority to execute
      and
      deliver this Agreement and to carry out and perform its other obligations
      hereunder.

     

    Section
      4.4. Brokers
      or Finders.
      The
      Frost Group has not engaged any brokers, finders or agents, or incurred,
      directly or indirectly, any liability for brokerage or finders’ fees or agents’
commissions or any similar charges in connection with this Agreement and the
      transactions contemplated hereby.

     

    Section
      4.5. Knowledge
      of Investment and its Risks.
      The
      Frost Group has such knowledge and experience in financial and business matters
      so as to be capable of evaluating the merits and risks of an investment in
      the
      Warrants and in the Common Stock underlying the Warrants (the “Underlying
      Common Stock”).
      The
      Frost Group understands that an investment in Borrower represents a high degree
      of risk and there is no assurance that the Borrower’s business or operations
      will be successful. 

     

    Section
      4.6. Investment
      Intent.
      The
      Frost Group hereby represents and warrants that (i) the Warrants and the
      Underlying Common Stock are being acquired for investment for the Frost Group’s
      own account, and not as a nominee or agent and not with a view to the resale
      or
      distribution of all or any part of the Warrants or the Underlying Common Stock,
      and the Frost Group has no present intention of selling, granting any
      participation in, or otherwise distributing any of the Warrants and the
      Underlying Common Stock within the meaning of the Securities Act of 1933 (as
      amended, the “1933
      Act”),
      (ii)
      the Warrants and the Underlying Common Stock are being acquired in the ordinary
      course of the Frost Group’s business, and (iii) the Frost Group does not have
      any contracts, understandings, agreements, or arrangements, directly or
      indirectly, with any person and/or entity to distribute, sell, transfer, or
      grant participations to such person and/or entity with respect to, any of the
      Warrants and the Underlying Common Stock. The Frost Group is not purchasing
      the
      Warrants and the Underlying Common Stock as a result of any advertisement,
      article, notice or other communication regarding the Warrants and the Underlying
      Common Stock published in any newspaper, magazine or similar media or broadcast
      over television or radio or presented at any seminar or any other general
      solicitation or general advertisement.

    
      
        
        

      

      
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          14 -

        
          

        

      

      
        
        

      

    

    Section
      4.7. Frost
      Group Status.
      The
      Frost Group is an “accredited investor” as that term is defined by Rule 501 of
      Regulation D promulgated under the 1933 Act. The Frost Group is not registered
      as a broker-dealer under Section 15 of the Exchange Act or an affiliate of
      such
      broker-dealer.

     

    Section
      4.8. Disclosure.
      The
      Frost Group has reviewed the information provided to the Frost Group by Borrower
      in connection with the Frost Group’s decision to purchase the Warrants and the
      Underlying Common Stock, including but not limited to, Borrower’s publicly
      available filings with the SEC and the information contained therein. Borrower
      has provided the Frost Group with all the information that the Frost Group
      has
      requested in connection with the decision to purchase the Warrants and the
      Underlying Common Stock. The Frost Group further represents that the Frost
      Group
      has had an opportunity to ask questions and receive answers from Borrower
      regarding the business, properties, prospects, and financial condition of
      Borrower. All such questions have been answered to the full satisfaction of
      the
      Frost Group. Neither such inquiries nor any other investigation conducted by
      or
      on behalf of the Frost Group or its representatives or counsel shall modify,
      amend, or affect the Frost Group’s right to rely on the truth, accuracy, and
      completeness of the disclosure materials and Borrower’s representations and
      warranties contained herein.

     

    Section
      4.9. No
      Registration.
      The
      Frost Group further understands that (i) neither the offering nor the sale
      of the Warrants or the Underlying Common Stock has been registered under the
      1933 Act or any applicable state securities laws in reliance upon exemptions
      from the registration requirements of such laws, (ii) the Warrants and the
      Underlying Common Stock must be held by the Buyer indefinitely unless the sale
      or transfer thereof is subsequently registered under the 1933 Act and any
      applicable state securities laws, or an exemption from such registration
      requirements is available, (iii) Borrower is under no obligation to register
      any
      of the Warrants or any share of the Underlying Common Stock on the Frost Group’s
      behalf or to assist the Frost Group in complying with any exemption from
      registration, and (iv) Borrower will rely upon the representations and
      warranties made by the Frost Group in this Agreement in order to establish
      such
      exemptions from the registration requirements of the 1933 Act and any applicable
      state securities laws. 

     

    Section
      4.10. Transfer
      Restrictions.
      The
      Frost Group will not transfer any of the Warrants unless such transfer is
      permitted under the Warrant Certificate and will not transfer any of the
      Underlying Common Stock unless such transfer is registered or exempt from
      registration under the 1933 Act and such state securities laws, and, if
      requested by Borrower in the case of an exempt transaction, the Frost Group
      has
      furnished an opinion of counsel reasonably satisfactory to Borrower that such
      transfer is so exempt. The Frost Group understands and agrees that (i) the
      certificates evidencing the Warrants and the Underlying Common Stock will bear
      appropriate legends indicating such transfer restrictions placed upon such
      securities, (ii) Borrower shall have no obligation to honor transfers of any
      of
      the Warrants or the Underlying Common Stock in violation of such transfer
      restrictions, and (iii) Borrower shall be entitled to instruct any transfer
      agent or agents for the securities of Borrower to refuse to honor such
      transfers.

     

    Section
      4.11. No
      Solicitation.
      The
      Frost Group (i) did not receive or review any advertisement, article, notice
      or
      other communication published in a newspaper or magazine or similar media or
      broadcast over television or radio, whether closed circuit, or generally
      available, with respect to the Warrants or the Underlying Common Stock or (ii)
      was not solicited by any person, other than by representatives of Borrower,
      with
      respect to a purchase of the Warrants or the Underlying Common
      Stock.

    
      
        
        

      

      
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          15 -

        
          

        

      

      
        
        

      

    

    Section
      4.12. Principal
      Address.
      The
      Frost Group’s principal executive office is set forth in Section 5.6
      below.

     

    ARTICLE
      V

    MISCELLANEOUS

     

    Section
      5.1. Survival
      of Representations and Warranties; Indemnification.

     

    (a) The
      representations and warranties of Borrower
      and the Frost
      Group contained
      in or made pursuant to this Agreement
      will
      survive the execution and delivery of this Agreement
      and the
      Initial Closing, and for an additional 12 months subsequent to the Initial
      Closing, and with respect to the representations and warranties of Borrower
      only, for the longer of an additional 12 months subsequent to any subsequent
      Advance
      and the time period during which any Obligations are outstanding, and with
      respect to the representations and warranties of the Frost Group, for an
      additional 12 months subsequent to any issuance of Warrants.

     

    (b) Borrower
      hereby
      agrees to indemnify and hold harmless the
      Frost
      Group and,
      as
      applicable, its officers, directors, stockholders, agents and representatives
      from and against any and all claims, demands, losses, damages, expenses or
      liabilities (including reasonable attorneys’ fees) due to or arising out of a
      material breach of any representation, warranty or covenant provided, made
      or
      agreed to by Borrower hereunder or under the Note.

     

    (c) The
      Frost
      Group hereby
      agrees to indemnify and hold harmless Borrower and, as applicable, its officers,
      managers, directors, stockholders, members, agents and representatives from
      and
      against any and all claims, demands, losses, damages, expenses or liabilities
      (including reasonable attorneys’ fees) due to or arising out of a material
      breach of any representation, warranty or covenant provided, made or agreed
      to
      by the Frost Group hereunder.
      

     

    Section
      5.2. Successors
      and Assigns.
      This
Agreement
      is
      binding upon and inures to the benefit of the parties and their successors
      and
      assigns. Borrower may not assign this Agreement
      or any
      rights or obligations hereunder without the prior written consent of the Frost
      Group. The
      Frost
      Group may assign its rights and obligations hereunder to an entity directly
      or
      indirectly controlled by or under common control with the Frost
      Group.

     

    Section
      5.3. Counterparts.
      This
      Agreement may be executed in any number of counterparts, each of which shall
      be
      deemed an original, and all of which together shall constitute one
      instrument.

     

    Section
      5.4. Facsimile.
      A
      facsimile copy of an original written signature shall be deemed to have the
      same
      effect as an original written signature.

    
      
        
        

      

      
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          16 -

        
          

        

      

      
        
        

      

    

    Section
      5.5. Captions
      and Headings.
      The
      captions and headings used in this Agreement
      are used
      for convenience only and are not to be considered in construing or interpreting
      this Agreement.

     

    Section
      5.6. Notices.
      Unless
      otherwise provided herein, all notices, requests, waivers and other
      communications made pursuant to this Agreement
      will be
      in writing and will be conclusively deemed to have been duly given (i) when
      hand delivered to the other party; (ii) upon receipt, when sent by
      facsimile to the number set forth below or email to the address set forth below;
      (iii) five business days after deposit in the U.S. mail, postage prepaid
      and addressed to the other party at the address set forth below; or
      (iv) the next business day after deposit with a national overnight delivery
      service, postage prepaid, addressed to the parties as set forth below with
      next
      business day delivery guaranteed. Each person making a communication hereunder
      by facsimile or email will promptly confirm by telephone to the person to whom
      such communication was addressed each communication made by it by facsimile
      or
      email pursuant hereto but the absence of such confirmation will not affect
      the
      validity of any such communication. A party may change or supplement the
      addresses given below, or designate additional addresses for purposes of this
      Section 5.6, by giving the other party written notice of the new address in
      the
      manner set forth above.

     

    If
      to
      Borrower:

     

    Modigene
      Inc.

    3
      Sapir
      Street

    Weizmann
      Science Park

    Nes-Ziona,
      Israel 74170

    Attention:
      Chief Executive Officer

    Phone:
      (972) 8 930-0051

    Facsimile:
      (972) 8 930-0091

     

    with
      a
      copy to:

     

    Barack
      Ferrazzano Kirschbaum & Nagelberg LLP

    200
      West
      Madison, Suite 3900

    Chicago,
      Illinois 60606

    Attention:
      Gretchen Anne Trofa, Esq.

    Phone:
      312-984-3100

    Facsimile:
      312-984-3150

     

    If
      to the
Frost
      Group:

     

    The
      Frost
      Group, LLC

    4400
      Biscayne Blvd.

    15th
      Floor

    Miami,
      FL
      33137

    Attention:
      Steven D. Rubin

    Phone:
      305-575-6015

    Facsimile:
      305-575-6444

    
      
        
        

      

      
        -
          17 -

        
          

        

      

      
        
        

      

    

    Section
      5.7. Amendments
      and Waivers.
      Any
      term of this Agreement
      may be
      amended and the observance of any term of this Agreement
      may be
      waived (either generally or in a particular instance and either retroactively
      or
      prospectively), only with the written consent of Borrower and the Frost
      Group.

     

    Section
      5.8. Enforceability;
      Severability.
      The
      parties hereto agree that each provision of this Agreement
      will be
      interpreted in such a manner as to be effective and valid under applicable
      law.
      If one or more provisions of this Agreement are nevertheless held to be
      prohibited, invalid or unenforceable under applicable law, such provision will
      be effective to the fullest extent possible excluding the terms affected by
      such
      prohibition, invalidity or unenforceability, without invalidating the remainder
      of such provision or the remaining provisions of this Agreement. If the
      prohibition, invalidity or unenforceability referred to in the prior sentence
      requires such provision to be excluded from this Agreement in its entirety,
      the
      balance of the Agreement will be interpreted as if such provision were so
      excluded and will be enforceable in accordance with its terms.

     

    Section
      5.9. Governing
      Law.
      This
Agreement
      shall be
      construed in accordance with, and governed in all respects by, the laws of
      the
      State of Florida.

     

    Section
      5.10. Waiver
      of Jury Trial. EACH
      OF
      THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES ITS RIGHT TO A JURY TRIAL OF ANY
      CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY
      DEALINGS BETWEEN THE PARTIES HERETO RELATING TO THE SUBJECT MATTER HEREOF.
      EACH
      OF THE PARTIES HERETO ALSO WAIVES ANY BOND OR SURETY OR SECURITY UPON SUCH
      BOND
      THAT MIGHT, BUT FOR THIS WAIVER, BE REQUIRED OF THE OTHER PARTY. THE SCOPE
      OF
      THIS WAIVER IS INTENDED TO BE ALL-ENCOMPASSING OF ANY AND ALL DISPUTES THAT
      MAY
      BE FILED IN ANY COURT AND THAT RELATE TO THE SUBJECT MATTER OF THIS AGREEMENT,
      INCLUDING, BUT NOT LIMITED TO, CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
      CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH OF THE PARTIES HERETO
      ACKNOWLEDGES THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO THIS
      AGREEMENT. EACH OF THE PARTIES HERETO HEREBY FURTHER ACKNOWLEDGES AND AGREES
      THAT EACH HAS REVIEWED OR HAD THE OPPORTUNITY TO REVIEW THIS WAIVER WITH ITS
      RESPECTIVE LEGAL COUNSEL, AND THAT IT KNOWINGLY AND VOLUNTARILY WAIVES ITS
      JURY
      TRIAL RIGHTS FOLLOWING CONSULTATION WITH SUCH LEGAL COUNSEL. IN THE EVENT OF
      LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A
      TRIAL
      BY THE COURT.

     

    Section
      5.11. Further
      Assurances;
      Access.
      The
      Frost
      Group and Borrower will from time to time and at all times hereafter make,
      do,
      execute, or cause or procure to be made, done and executed such further acts,
      deeds, conveyances, consents and assurances without further consideration,
      which
      may reasonably be required to effect the transactions contemplated by this
      Agreement.
      Upon
      reasonable written notice, Borrower shall afford the officers, employees and
      authorized agents and representatives of the Frost Group reasonable access,
      during normal business hours, to the offices, properties, books, records and
      such additional financial and operating data and other information regarding
      the
      assets, goodwill and business of the Borrower as the Frost Group may from time
      to time reasonably request.

    
      
        
        

      

      
        -
          18 -

        
          

        

      

      
        
        

      

    

    Section
      5.12. Entire
      Agreement.
      This
      Agreement and all exhibits hereto and thereto constitute the entire agreement
      among the parties with respect to the subject matter hereof and thereof and
      no
      party will be liable or bound to any other party in any manner by any
      warranties, representations or covenants except as specifically set forth herein
      or therein.

     

    Section
      5.13. Delays
      or Omissions.
      No delay
      or omission to exercise any right power or remedy accruing to any party under
      this Agreement, or upon any breach or default of any other party under this
      Agreement, will impair any such right, power or remedy of such non-breaching
      or
      non-defaulting party nor will it be construed to be a waiver of any such breach
      or default, or an acquiescence therein, or of or in any similar breach or
      default thereafter occurring; nor will any waiver of any single breach or
      default be deemed a waiver of any other breach or default theretofore or
      thereafter occurring. Any waiver, permit, consent or approval of any kind or
      character on the part of any party of any provisions or conditions of this
      Agreement, must be in writing and will be effective only to the extent
      specifically set forth in such writing. Except as otherwise set forth herein,
      all remedies, either under this Agreement or by law or otherwise afforded to
      any
      party, will be cumulative and not alternative.

     

    Section
      5.14. Third
      Party Beneficiaries.
      This
      Agreement is intended for the benefit of the parties hereto and their respective
      permitted successors and assigns, and is not for the benefit of, nor may any
      provision hereof be enforced by, any other person or entity.

     

    Section
      5.15. Equitable
      Relief.
      The
      parties hereto recognize that, if such party fails to perform or discharge
      any
      of its obligations under this Agreement, any remedy at law may prove to be
      inadequate relief to the other parties. Each party hereto therefore agrees
      that
      the other parties are entitled to seek temporary and permanent injunctive relief
      and any other equitable remedy a court of competent jurisdiction may deem
      appropriate in any such case.

     

    Section
      5.16. No
      Strict Construction.
      The
      language used in this Agreement is deemed to be the language chosen by the
      parties to express their mutual intent, and no rules of strict construction
      will
      be applied against any party.

     

    Section
      5.17. Public
      Announcements.
      No
      public announcements shall be made by any party hereto relating to the
      transactions contemplated by this Agreement without the prior written consent
      of
      Borrower and the Frost Group, such consent not to be unreasonably
      withheld,
      except
      where required by applicable law; provided,
      however,
      that in
      the event of such a legally required disclosure, the disclosing party will
      consult with the other consenting party with respect to the text of such
      disclosure and will provide the other consenting party with a copy of the
      disclosure prior to its publication.

     

    Section
      5.18. Expenses.
      Each
      party shall bear its own costs and expenses in connection with the transactions
      contemplated hereby,
      except
      to the extent that Lender’s Expenses shall be Obligations subject to the
      provisions hereof.

    
      
        
        

      

      
        -
          19 -

        
          

        

      

      
        
        

      

    

    Section
      5.19. Exhibits
      and Schedules.
      All
      exhibits, annexes and schedules annexed hereto or referred to herein are hereby
      incorporated in and made a part of this Agreement as if set forth in full
      herein. A disclosure in any particular Schedule to this Agreement or otherwise
      in this Agreement shall be deemed a disclosure for each and every other Schedule
      where such disclosure is relevant.

     

    [Signatures
      begin on next page.]

    
      
        
        

      

      
        -
          20 -

        
          

        

      

      
        
        

      

    

    IN
      WITNESS THEREOF, this Agreement
      has been
      executed by the undersigned as of the day, month and year first above
      written.

     

    
      	
              Modigene
                Inc. 

            
	 
	
              By:

            	
              /s/
                Shai Novik

            
	 	
              Name:
                Shai Novik

              Title:
                President

            
	 
	
              The
                Frost Group, LLC 

            
	 
	
              By:

            	
              /s/
                Phillip Frost  

            
	 	
              Name: Phillip
                Frost, M.D.

              Title:
                President

            

    

    
      
        
        

      

      
        -
          21-Exhibit
      10.3

     

    NOTE
      AND SECURITY AGREEMENT

     

    
      	
              $10,000,000

            	
              Dated
                as of __________, 2008

            

    

     

    FOR
      VALUE
      RECEIVED, Modigene Inc., a Nevada corporation with offices at 3 Sapir Street,
      Weizmann Science Park, Nes-Ziona, Israel 74140 ("Borrower"),
      pursuant to this secured note (this "Note"),
      hereby promises to pay to The Frost Group, LLC, a Florida limited liability
      company ("Lender"),
      at
      such place as Lender may designate from time to time in writing, in lawful
      money
      of the United States of America, the principal amount of $10,000,000, or such
      lesser amount as shall equal the outstanding principal balance of the loan
      (the
      "Loan")
      made
      to Borrower by Lender pursuant to the Credit Agreement, dated as of March 25,
      2008, by and among Borrower and Lender (the "Credit
      Agreement"),
      and
      to pay all other amounts due with respect to the Loan on the dates and in the
      amounts set forth in the Credit Agreement and this Note.

     

    1. Definitions.
      All
      terms used, but not defined herein, shall have the meanings ascribed to them
      in
      the Credit Agreement. In addition, the terms set forth below shall have the
      following meanings:

     

    (a) "Affiliate"
      means
      any Person that owns or controls directly or indirectly ten percent (10%) or
      more of the stock of another entity, any Person that controls or is controlled
      by or is under common control with such Persons or any Affiliate of such Persons
      and each of such Person's officers, directors, joint venturers or
      partners.

     

    (b) "Code"
      means
      the Uniform Commercial Code as adopted and in effect in the State of Florida,
      as
      amended from time to time; provided that
      if by
      reason of mandatory provisions of law, the creation and/or perfection or the
      effect of perfection or non-perfection of the security interest in any
      Collateral is governed by the Uniform Commercial Code as in effect in a
      jurisdiction other than Florida, the term "Code"
      shall
      also mean the Uniform Commercial Code as in effect from time to time in such
      jurisdiction for purposes of the provisions hereof relating to such creation,
      perfection or effect of perfection or non-perfection.

     

    (c) "Equity
      Securities"
      of
      Borrower means (1) all common stock, preferred stock, participations, shares,
      partnership interests, membership interests or other equity interests in and
      of
      Borrower (regardless of how designated and whether or not voting or non-voting)
      and (2) all warrants, options and other rights to acquire any of the
      foregoing.

     

    (d) "Event
      of Default"
      shall
      mean the occurrence of one or more of the following events:

     

    (1) Borrower
      shall fail to make any payment due to Lender under this Note when the same
      shall
      become due and payable, whether at maturity, by acceleration or otherwise,
      within five (5) days after receipt of written notice from Lender that such
      payment is due and unpaid.

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    (2) Borrower
      materially violates any of the material covenants contained in Sections 6 and
      7
      of this Note and fails to remedy such violation within thirty (30) days after
      receipt of written notice from Lender that such a violation has
      occurred.

     

    (3) Any
      material portion of Borrower's assets is attached, seized, subjected to a writ
      or distress warrant, or is levied upon, or comes into the possession of any
      trustee, receiver or person acting in a similar capacity and such attachment,
      seizure, writ or distress warrant or levy has not been removed, discharged
      or
      rescinded within ten (10) days, or if Borrower is enjoined, restrained, or
      in
      any way prevented by court order from continuing to conduct all or any material
      part of its business affairs, or if a judgment or other claim becomes a lien
      or
      encumbrance upon any material portion of Borrower's assets, or if a notice
      of
      lien, levy, or assessment is filed of record with respect to any of Borrower's
      assets by the United States Government, or any department, agency, or
      instrumentality thereof, or by any state, county, municipal, or governmental
      agency, and the same is not paid within ten (10) days after Borrower receives
      notice thereof; provided that none of the foregoing shall constitute an Event
      of
      Default where such action or event is stayed or an adequate bond has been posted
      pending a good faith contest by Borrower.

     

    (4) One
      or
      more defaults shall exist under any agreement with any third party or parties
      which consists of the failure to pay any Indebtedness at maturity or which
      results in a right by such third party or parties, whether or not exercised,
      to
      accelerate the maturity of Indebtedness in an aggregate amount in excess of
      Two
      Hundred Fifty Thousand Dollars ($250,000).

     

    (5) A
      judgment or judgments for the payment of money in an amount, individually or
      in
      the aggregate, of at least One Hundred Fifty Thousand Dollars ($150,000) shall
      be rendered against Borrower and shall remain unsatisfied and unstayed for
      a
      period of ten (10) days or more beyond the date such payment is due.

     

    (6) Any
      material representation or material statement that exists now or hereafter
      in
      any warranty, representation, statement, certification, or report made to Lender
      by Borrower pursuant to the Credit Agreement shall prove to have been false
      or
      misleading in any material respect when made or furnished.

     

    (7) Any
      material document executed in connection with the Loan ceases to be, or Borrower
      asserts that such document is not, in any material respect, a legal, valid
      and
      binding obligation of Borrower enforceable in accordance with its
      terms.

     

    (8) A
      proceeding shall have been instituted in a court having jurisdiction in the
      premises seeking a decree or order for relief in respect of Borrower in an
      involuntary case under any applicable bankruptcy, insolvency or other similar
      law now or hereafter in effect, or for the appointment of a receiver,
      liquidator, assignee, custodian, trustee (or similar official) of Borrower
      or
      for any substantial part of its property, or for the winding-up or liquidation
      of its affairs, and such proceeding shall remain undismissed or unstayed and
      in
      effect for a period of sixty (60) consecutive days or such court shall enter
      a
      decree or order granting the relief sought in such proceeding.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

     

    (9) Borrower
      commences a voluntary case under any applicable bankruptcy, insolvency or other
      similar law now or hereafter in effect, consents to the entry of an order for
      relief in an involuntary case under any such law, or consents to the appointment
      of or taking possession by a receiver, liquidator, assignee, trustee, custodian
      (or other similar official) of Borrower or for any substantial part of its
      property, or shall make a general assignment for the benefit of creditors,
      or
      shall fail generally to pay its debts as they become due, or shall take any
      corporate action in furtherance of any of the foregoing.

     

    (e) "Indebtedness"
      means,
      with respect to Borrower, the aggregate amount of, without duplication, (a)
      all
      obligations of Borrower for borrowed money, (b) all obligations of Borrower
      evidenced by bonds, debentures, notes or other similar instruments, (c) all
      obligations of Borrower to pay the deferred purchase price of property or
      services (excluding trade payables aged less than one hundred eighty (180)
      days), (d) all capital lease obligations of Borrower, (e) all obligations or
      liabilities of others secured by a Lien on any asset of Borrower, whether or
      not
      such obligation or liability is assumed, (f) all obligations or liabilities
      of
      others guaranteed by Borrower, and (g) any other obligations or liabilities
      which are required by U.S. generally accepted accounting principles
      (“GAAP”)
      to be
      shown as debt on the balance sheet of Borrower.

     

    (f) "Intellectual
      Property"
      means
      all of Borrower's right, title and interest in and to patents, patent rights
      (and applications and registrations therefor), trademarks and service marks
      (and
      applications and registrations therefor), inventions, copyrights, mask works
      (and applications and registrations therefor), trade names, trade styles,
      software and computer programs, source code, object code, trade secrets,
      methods, processes, know how, drawings, specifications, descriptions, and all
      memoranda, notes, and records with respect to any research and development,
      all
      whether now owned or subsequently acquired or developed by Borrower and whether
      in tangible or intangible form or contained on magnetic media readable by
      machine together with all such magnetic media (but not including embedded
      computer programs and supporting information included within the definition
      of
      "goods" under the Code).

     

    (g) "Lien"
      means
      any voluntary or involuntary security interest, pledge, bailment, lease,
      mortgage, hypothecation, conditional sales and title retention agreement,
      encumbrance or other lien with respect to any property of the Borrower in favor
      of any person.

     

    (h) "Permitted
      Indebtedness"
      means
      and includes:

     

    (1) Indebtedness
      of Borrower to Lender;

     

    (2) Indebtedness
      arising from the endorsement of instruments in the ordinary course of business;
      

     

    (3) Indebtedness
      existing on the date hereof and disclosed in the Schedules to the Credit
      Agreement;

     

    (4) Indebtedness
      of Borrower in an aggregate original principal amount not to exceed $250,000
      which is secured by Liens permitted under clause (5) of the definition of
      Permitted Liens;

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

    (5) Other
      Indebtedness in an aggregate amount not exceeding $500,000 at any time;
      and

     

    (6) Extensions,
      refinancings, modifications, amendments and restatements of any items of
      Permitted Indebtedness above, provided that the principal amount thereof is
      not
      increased or the terms thereof are not modified to impose materially more
      burdensome terms upon Borrower.

     

    (i) "Permitted
      Investments"
      means
      and includes any of the following investments:

     

    (1) Deposits
      and deposit accounts with commercial banks organized under the laws of the
      United States or a state thereof to the extent: (i) the deposit accounts of
      each
      such institution are insured by the Federal Deposit Insurance Corporation up
      to
      the legal limit; and (ii) each such institution has an aggregate capital and
      surplus of not less than One Hundred Million Dollars
      ($100,000,000).

     

    (2) Investments
      in marketable obligations issued or fully guaranteed by the United States and
      maturing not more than one (1) year from the date of issuance.

     

    (3) Investments
      in open market commercial paper rated at least "A1" or "P1" or higher by a
      national credit rating agency and maturing not more than one (1) year from
      the
      creation thereof.

     

    (4) Investments
      pursuant to or arising under currency agreements or interest rate agreements
      entered into in the ordinary course of business.

     

    (5) Investments,
      not requiring the use of cash or the assumption of liabilities, in joint
      ventures, partnerships or similar business arrangements entered into in the
      ordinary course of business in substantially the same industry and growth stage
      as Borrower.

     

    (6) Other
      investments aggregating not in excess of Five Hundred Thousand Dollars
      ($500,000) at any time.

     

    (j) "Permitted
      Liens"
      means:

     

    (1) The
      Lien
      created by this Agreement.

     

    (2) Liens
      for
      fees, taxes, levies, imposts, duties or other governmental charges of any kind
      which are not yet delinquent or which are being contested in good faith by
      appropriate proceedings which suspend the collection thereof (provided that
      such
      appropriate proceedings do not involve any substantial danger of the sale,
      forfeiture or loss of any material item of Collateral or Collateral which in
      the
      aggregate is material to Borrower).

     

    (3) Liens
      existing as of the date of this Note and identified in the Schedules to the
      Credit Agreement.

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

    

    (4) carriers',
      warehousemen's, mechanics', materialmen's, repairmen's or other similar Liens
      arising in the ordinary course of business and which are not delinquent or
      remain payable without penalty or which are being contested in good faith and
      by
      appropriate proceedings (provided that
      such
      appropriate proceedings do not involve any substantial danger of the sale,
      forfeiture or loss of any material item of Collateral or Collateral which in
      the
      aggregate is material to Borrower).

     

    (5) Liens
      upon any equipment or other personal property acquired by Borrower after the
      date hereof to secure (i) the purchase price of such equipment or other personal
      property, or (ii) lease obligations or indebtedness incurred solely for the
      purpose of financing the acquisition of such equipment or other personal
      property; provided that such Liens are confined solely to the equipment or
      other
      personal property so acquired and the proceeds thereof and the amount secured
      does not exceed the acquisition price thereof.

     

    (6) licenses
      of Intellectual Property entered into in the ordinary course of business
      (whether as licensor or licensee);

     

    (7) bankers'
      liens, rights of setoff and similar Liens incurred on deposits made in the
      ordinary course of business and Liens in favor of financial institutions arising
      in connection with Borrower's deposit accounts or securities accounts held
      at
      such institutions to secure customary fees and charges;

     

    (8) any
      judgment, attachment or similar Lien not resulting in an Event of Default
      hereunder; 

     

    (9) the
      rights of third-party suppliers or other vendors having possession of
      manufacturing equipment;

     

    (10) the
      rights of lessees, licensees and other third parties (a) having a right to
      possess or use assets in the ordinary course of business and (b) in property
      owned by them which is leased to another Person or which another Person has
      a
      right to use or possess;

     

    (11) with
      respect to real property, easements, rights-of-way, restrictions, minor defects,
      encroachments or irregularities in title and other similar charges or
      encumbrances not interfering in any material respect with the use of such real
      property in the ordinary course of business; and

     

    (12) Liens
      incurred in the extension, renewal or refinancing of the indebtedness secured
      by
      Liens described above but any extension, renewal or replacement Lien must be
      limited to the property encumbered by the existing Lien and the principal amount
      of the indebtedness may not increase.

     

    (k) "Person"
      means
      and includes any individual, any partnership, any corporation, any business
      trust, any joint stock company, any limited liability company, any
      unincorporated association or any other entity and any domestic or foreign
      national, state or local government, any political subdivision thereof, and
      any
      department, agency, authority or bureau of any of the
      foregoing.

    
      
        
        

      

      
        -5-

        
          

        

      

      
        
        

      

    

    (l) "Subsidiary"
      means
      any corporation or other entity of which a majority of the outstanding equity
      securities entitled to vote for the election of directors or other governing
      body (otherwise than as the result of a default) is owned by Borrower directly
      or indirectly through Subsidiaries.

     

    2. Payments
      of Principal, Interest, Etc.
      The
      principal amount of the Loan evidenced hereby, together with any accrued and
      unpaid interest, and any and all unpaid costs, fees and expenses accrued, shall
      be due and payable on the earlier of (x) subject to the following sentence,
      March 25, 2009 (the “One-Year
      Anniversary”),
      in
      the event that no Advance has been made prior to such date, (y) March 25, 2013
      (the “Five-Year
      Anniversary”),
      in
      the event that an Advance has been made prior to the One-Year Anniversary,
      and
      (z) the consummation of a merger, stock exchange or other similar corporate
      transaction involving the Company that results in the shareholders of the
      Company immediately prior to such transaction owing less than 50% of the
      outstanding voting securities of the Company (or the surviving company in a
      merger) immediately after such transaction (the "Maturity
      Date").
      In
      the event that the Maturity Date would occur on the One Year Anniversary because
      no Advance had been made, Borrower shall have the option to extend the Maturity
      Date to the Five-Year Anniversary by issuing to Lender on the One-Year
      Anniversary the Warrants described in Section 1.12 of the Credit Agreement.
      

     

    3. Interest.
      All
      amounts outstanding from time to time hereunder shall bear interest until such
      amounts are paid, at the Interest Rate (as defined in the Credit Agreement).
      Following any Event of Default (including before or after any judgment is
      entered) and after the Maturity Date, the principal balance outstanding
      hereunder, together with all such other amounts outstanding hereunder, shall
      bear interest at a rate per annum equal to the Default Rate (as defined in
      the
      Credit Agreement).

     

    4. Prepayments.
      Borrower may prepay in cash, at any time or from time to time, all or any
      portion of the amounts due hereunder, without penalty or premium; provided,
      however,
      that
      any prepayment (whether voluntary or involuntary) shall be applied first to
      accrued and unpaid interest and second to outstanding principal and other sums
      due hereunder.

     

    5. Security
      Interest.

     

    (a) Grant
      of Security Interest.
      Borrower grants to Lender a valid and continuing security interest in all
      presently existing and hereafter acquired or arising Collateral in order to
      secure prompt, full and complete payment of the amounts due hereunder and in
      order to secure prompt, full and complete performance by Borrower of each of
      its
      covenants and duties under the Credit Agreement and this Note. The "Collateral"
      shall
      mean and include all right, title, interest, claims and demands of Borrower
      in
      and to all personal property of Borrower, including without limitation, all
      of
      the following:

     

    (1) All
      goods
      (and embedded computer programs and supporting information included within
      the
      definition of "goods" under the Code) and equipment now owned or hereafter
      acquired, including, without limitation, all laboratory equipment, computer
      equipment, office equipment, machinery, fixtures, vehicles (including motor
      vehicles and trailers), and any interest in any of the foregoing, and all
      attachments, accessories, accessions, replacements, substitutions, additions,
      and improvements to any of the foregoing, wherever located.

    
      
        
        

      

      
        -6-

        
          

        

      

      
        
        

      

    

    (2) All
      inventory now owned or hereafter acquired, including, without limitation, all
      merchandise, raw materials, parts, supplies, packing and shipping materials,
      work in process and finished products including such inventory as is temporarily
      out of Borrower's custody or possession or in transit and including any returns
      upon any accounts or other proceeds, including insurance proceeds, resulting
      from the sale or disposition of any of the foregoing and any documents of title
      representing any of the above, and Borrower's books relating to any of the
      foregoing.

     

    (3) All
      contract rights and general intangibles (except to the extent included within
      the definition of Intellectual Property), now owned or hereafter acquired,
      including, without limitation, goodwill, license agreements, franchise
      agreements, blueprints, drawings, purchase orders, customer lists, route lists,
      infringements, claims, software, computer programs, computer disks, computer
      tapes, literature, reports, catalogs, design rights, income tax refunds, payment
      intangibles, commercial tort claims, payments of insurance and rights to payment
      of any kind.

     

    (4) All
      now
      existing and hereafter arising accounts, contract rights, royalties, license
      rights, license fees and all other forms of obligations owing to Borrower
      arising out of the sale or lease of goods, the licensing of technology or the
      rendering of services by Borrower (subject, in each case, to the contractual
      rights of third parties to require funds received by Borrower to be expended
      in
      a particular manner), whether or not earned by performance, and any and all
      credit insurance, guaranties, and other security therefor, as well as all
      merchandise returned to or reclaimed by Borrower and Borrower's books relating
      to any of the foregoing.

     

    (5) All
      documents, cash, deposit accounts, letters of credit (whether or not the letter
      of credit is evidenced by a writing), certificates of deposit, instruments,
      promissory notes, chattel paper (whether tangible or electronic) and investment
      property, including, without limitation, all securities, whether certificated
      or
      uncertificated, security entitlements, securities accounts, commodity contracts
      and commodity accounts, and all financial assets held in any securities account
      or otherwise, wherever located, now owned or hereafter acquired and Borrower's
      books relating to the foregoing.

     

    (6) Any
      and
      all claims, rights and interests in any of the above and all substitutions
      for,
      additions and accessions to and proceeds thereof, including, without limitation,
      insurance, condemnation, requisition or similar payments and proceeds of the
      sale or licensing of Intellectual Property to the extent such proceeds no longer
      constitute Intellectual Property.

     

    (7) Notwithstanding
      the foregoing, the Collateral shall not include any Intellectual Property;
      provided,
      however,
      that
      the Collateral shall include all accounts receivables, accounts, and general
      intangibles that consist of rights to payment and proceeds from the sale,
      licensing or disposition of all or any part, or rights in, the foregoing (the
      "Rights
      to Payment").
      

    
      
        
        

      

      
        -7-

        
          

        

      

      
        
        

      

    

    (b) After-Acquired
      Property.
      If
      Borrower shall at any time acquire a commercial tort claim, as defined in the
      Code, Borrower shall immediately notify Lender in writing signed by Borrower
      of
      the brief details thereof and grant to Lender in such writing a security
      interest therein and in the proceeds thereof, all upon the terms of this Note,
      with such writing to be in form and substance satisfactory to
      Lender.

     

    (c) Duration
      of Security Interest.
      Lender's security interest in the Collateral shall continue until the payment
      in
      full and the satisfaction of all obligations of Borrower under this Note, and
      the termination of any commitment to fund any Loan, whereupon such security
      interest shall terminate. Lender shall, at Borrower's sole cost and expense,
      execute such further documents and take such further actions as may be
      reasonably necessary to make effective the release contemplated by this Section
      5(c). including duly executing and delivering termination statements for filing
      in all relevant jurisdictions under the Code.

     

    (d) Location
      and Possession of Collateral.
      The
      Collateral is and shall remain in the possession of Borrower at its location(s)
      at 3 Sapir Street, Weizmann Science Park, Nes-Ziona, Israel 74140. Borrower
      shall remain in full possession, enjoyment and control of the Collateral (except
      only as may be otherwise required by Lender for perfection of its security
      interest therein) and so long as no Event of Default has occurred and is
      continuing, shall be entitled to manage, operate and use the same and each
      part
      thereof with the rights and franchises appertaining thereto; provided that
      the
      possession, enjoyment, control and use of the Collateral shall at all time
      be
      subject to the observance and performance of the terms of this
      Note.

     

    (e) Delivery
      of Additional Documentation Required.
      Borrower shall from time to time execute and deliver to Lender, at the request
      of Lender, all financing statements and other documents Lender may reasonably
      request, in form reasonably satisfactory to Lender, to perfect and continue
      Lender's perfected security interests in the Collateral and in order to
      consummate fully all of the transactions contemplated under this Note and the
      Credit Agreement.

     

    (f) Right
      to Inspect.
      Lender
      (through any of its officers, employees, or agents) shall have the right, upon
      reasonable prior notice, from time to time during Borrower's usual business
      hours, to inspect Borrower's books and records and to make copies thereof and
      to
      inspect, test, and appraise the Collateral in order to verify Borrower’s
      financial condition or the amount, condition of, or any other matter relating
      to, the Collateral.

     

    (g) Protection
      of Intellectual Property.
      Borrower shall use its commercially reasonable efforts to (i) protect, defend
      and maintain the validity and enforceability of its material Intellectual
      Property and promptly advise Lender in writing of material infringements which
      become known to Borrower, and (ii) not allow any Intellectual Property material
      to Borrower's business to be abandoned, forfeited or dedicated to the public
      except in the ordinary course of Borrower's business.

    
      
        
        

      

      
        -8-

        
          

        

      

      
        
        

      

    

    (h) Other
      Lien Subordination.
      Lender
      agrees that the Liens granted to it hereunder in equipment and other personal
      property acquired by Borrower after the date hereof ("Third
      Party Equipment")
      which
      secure Indebtedness constituting Permitted Indebtedness under Subclause (4)
      of
      the definition of Permitted Indebtedness shall be subordinate to the Liens
      of
      existing or future lenders providing equipment financing and equipment lessors
      for Third Party Equipment or if such lenders prohibit the granting of Liens
      to
      other lenders, Lender shall release its Lien on such Third Party Equipment
      and
      the proceeds thereof; provided that such Liens are confined solely to the
      equipment so financed and the proceeds thereof and are Permitted Liens. Upon
      the
      expiration of the Liens of such other lenders or the termination of their
      prohibition of Liens in favor of other lenders, the Third Party Equipment shall
      automatically become part of the Collateral, and Lender is authorized at that
      time to amend any filed financing statement(s) to reflect that change.
      Notwithstanding the foregoing, except as set forth in this Section 5(h), the
      obligations hereunder shall not be subordinate in right of payment to any
      obligations to other lenders, equipment lenders or equipment lessors, and
      Lender's rights and remedies hereunder shall not in any way be subordinate
      to
      the rights and remedies of any such lenders or equipment lessors.

     

    6. Affirmative
      Covenants.
      Borrower covenants that, so long as any amounts are due and payable hereunder
      to
      Lender or any commitment to make any Loan still exists, Borrower
      shall:

     

    (a) Maintain
      its corporate existence and its good standing in its jurisdiction of
      incorporation and maintain qualification in each jurisdiction in which the
      failure to so qualify could reasonably be expected to have a Material Adverse
      Effect. Borrower shall maintain in force all licenses, approvals and agreements,
      the loss of which could reasonably be expected to have a Material Adverse
      Effect.

     

    (b) Comply
      with all statutes, laws, ordinances and government rules and regulations to
      which it is subject, noncompliance with which could reasonably be expected
      to
      have a Material Adverse Effect.

     

    (c) Deliver
      to Lender: (i) as soon as available, but in any event within ninety (90)
      days after the end of Borrower's fiscal year or the date of Borrower's board
      of
      directors' adoption, Borrower's operating budget and plan for the next fiscal
      year; (ii) at the time of filing of Borrower's Form 10-K with the Securities
      and
      Exchange Commission after the end of each fiscal year of Borrower, the financial
      statements of Borrower filed with such Form 10-K; (iii) at the time of filing
      of
      Borrower's Form 10-Q with the Securities and Exchange Commission after the
      end
      of each of the first three fiscal quarters of Borrower, the financial statements
      of Borrower filed with such Form 10-Q; and (iv) such other financial information
      as Lender may reasonably request from time to time. In addition, Borrower shall
      deliver to Lender (x) promptly upon becoming available, copies of all
      statements, reports and notices sent or made available generally by Borrower
      to
      its security holders; and (y) promptly upon receipt of notice thereof, a report
      of any material legal actions pending or threatened against Borrower or the
      commencement of any action, proceeding or governmental investigation involving
      Borrower is commenced that is reasonably expected to result in damages or costs
      to Borrower of One Hundred Fifty Thousand Dollars ($150,000).

     

    (d) Each
      time
      financial statements are furnished pursuant to Section 6(c)
      above,
      deliver to Lender an Officer's Certificate signed by Borrower’s chief executive
      officer, president, treasurer or chief financial officer (each a “Responsible
      Officer”)
      in
      form reasonably satisfactory to Lender, certifying such financial statements,
      Borrower's compliance with the terms of this Note and that no Event of Default
      has occurred under this Note. 

    
      
        
        

      

      
        -9-

        
          

        

      

      
        
        

      

    

    (e) As
      soon
      as possible, and in any event within five (5) business days after the discovery
      of an Event of Default, provide Lender with an Officer's Certificate signed
      by a
      Responsible Officer setting forth the facts relating to or giving rise to such
      Event of Default and the action which Borrower proposes to take with respect
      thereto.

     

    (f) Make
      due
      and timely payment or deposit of all Taxes required of it by applicable law
      or
      imposed upon any property belonging to it, and will execute and deliver to
      Lender, on demand, appropriate certificates attesting to the payment or deposit
      thereof; provided that Borrower need not make any payment if the amount or
      validity of such payment is contested in good faith by appropriate proceedings
      which suspend the collection thereof; provided that such proceedings do not
      involve any substantial danger of the sale, forfeiture or loss of any material
      item of Collateral or Collateral which in the aggregate is material to
      Borrower.

     

    (g) Keep
      and
      maintain all items of equipment and other similar types of personal property
      that form any significant portion or portions of the Collateral in good
      operating condition and repair. Borrower shall not permit any such material
      item
      of Collateral to become a fixture to real estate or an accession to other
      personal property, without the prior written consent of Lender. With respect
      to
      items of leased equipment (to the extent Lender has any security interest in
      any
      residual Borrower's interest in such equipment under the lease), Borrower shall
      keep, maintain, repair, replace and operate such leased equipment in accordance
      with the terms of the applicable lease.

     

    (h) Insure
      its business and the Collateral with policies in a form, with companies, and
      in
      amounts determined by the Board of Directors of the Borrower and appropriate
      for
      companies of Borrower’s size in Borrower’s industry. All property policies shall
      have a lender's loss payable endorsement showing Lender as an additional loss
      payee and all liability policies shall show Lender as an additional insured
      and
      all policies shall provide that the insurer must give Lender at least thirty
      (30) days notice before canceling its policy. At Lender's request, Borrower
      shall deliver certified copies of policies and evidence of all premium payments.
      Proceeds payable under any policy shall, at Lender's option, be payable to
      Lender on account of the Obligations. Notwithstanding the foregoing, so long
      as
      no Event of Default has occurred and is continuing, Borrower shall have the
      option of applying the proceeds of any casualty policy, toward the replacement
      or repair of destroyed or damaged property; provided that (i) any such replaced
      or repaired property (a) shall be of equal or like value as the replaced or
      repaired Collateral and (b) shall be deemed Collateral in which Lender has
      been
      granted a security interest and (ii) after the occurrence and during the
      continuation of an Event of Default all proceeds payable under such casualty
      policy shall, at the option of Lender, be payable to Lender, on account of
      the
      Indebtedness evidenced by this Note and the Credit Agreement. If Borrower fails
      to obtain insurance as required under Section
      6(h)
      or to
      pay any amount or furnish any required proof of payment to third persons and
      Lender, Lender may make all or part of such payment or obtain such insurance
      policies required in Section
      6(h),
      and
      take any action under the policies Lender deems prudent. On or prior to the
      Initial Closing Date and prior to each policy renewal, Borrower shall furnish
      to
      Lender certificates of insurance or other evidence satisfactory to Lender that
      insurance complying with all of the above requirements is in
      effect.

    
      
        
        

      

      
        -10-

        
          

        

      

      
        
        

      

    

    (i) Assuming
      the proper filing of one or more financing statement(s) identifying the
      Collateral with the proper state and/or local authorities, to the extent
      perfection may be achieved under the uniform commercial code by filing, the
      security interests in the Collateral granted to Lender pursuant to this
      Agreement (i) constitute and will continue to constitute first priority security
      interests (except to the extent any Permitted Liens may have a superior priority
      to Lender's Lien under this Agreement) and (ii) are and will continue to be
      superior and prior to the rights of all other creditors of Borrower (except
      to
      the extent of such Permitted Liens).

     

    (j) At
      any
      time and from time to time Borrower shall execute and deliver such further
      instruments and take such further action as may reasonably be requested by
      Lender to make effective the purposes of this Note, including without
      limitation, the continued perfection and priority of Lender's security interest
      in the Collateral.

     

    7. Negative
      Covenants.
      Borrower covenants that, so long as any amounts are due and payable hereunder
      to
      Lender or any commitment to make any Loan still exists, without the prior
      approval of Lender (which shall not be unreasonably withheld or delayed),
      Borrower shall not:

     

    (a) Change
      its name, jurisdiction of incorporation, or principal place of business without
      thirty (30) days prior written notice to Lender.

     

    (b) Subject
      to its rights under Section
      7(d)
      and
      except in the ordinary course of business, remove any items of Collateral from
      the Collateral location(s) specified in this Note.

     

    (c) Create,
      incur, assume or suffer to exist any Lien of any kind upon any of the
      Collateral, whether now owned or hereafter acquired, except Permitted
      Liens.

     

    (d) Convey,
      sell, lease or otherwise dispose of all or any part of the Collateral to any
      Person (collectively, a "Transfer"),
      except for: (i) Transfers of inventory in the ordinary course of business;
      or
      (ii) Transfers of worn-out or obsolete equipment.

     

    (e) Except
      as
      set forth in the Schedules to the Credit Agreement delivered by Borrower as
      of
      the date hereof or except in an amount as would not be material, (i) pay
      any dividends or make any distributions on its Equity Securities; (ii) purchase,
      redeem, retire, defease or otherwise acquire for value any of its Equity
      Securities (other than repurchases pursuant to the terms of employee stock
      purchase plans, employee restricted stock agreements or similar arrangements
      in
      an aggregate amount not to exceed One Hundred Thousand Dollars ($100,000));
      (iii) return any capital to any holder of its Equity Securities as such; (iv)
      make any distribution of assets, Equity Securities, obligations or securities
      to
      any holder of its Equity Securities as such; or (v) reserve any sum for any
      purpose listed in clauses (i) through (iv) of this paragraph; provided,
      however,
      Borrower may pay dividends payable solely in Common Stock.

     

    (f) Engage
      in
      or permit any of its Subsidiaries to engage in any business other than the
      businesses currently engaged in by Borrower or reasonably related
      thereto.

    
      
        
        

      

      
        -11-

        
          

        

      

      
        
        

      

    

    (g) Enter
      into any contractual obligation with any Affiliate or engage in any other
      transaction with any Affiliate except upon terms at least as favorable to
      Borrower as an arms-length transaction with persons who are not Affiliates
      of
      Borrower.

     

    (h) (i)
      Except in an amount as would not be material, prepay, redeem, purchase, defease
      or otherwise satisfy in any manner prior to the scheduled repayment thereof
      any
      Indebtedness for borrowed money (other than amounts due or permitted to be
      prepaid under this Note and the Credit Agreement) or lease obligations, (ii)
      amend, modify or otherwise change the terms of any Indebtedness for borrowed
      money or lease obligations so as to accelerate the scheduled repayment thereof
      or (iii) repay any notes to officers, directors or shareholders except as
      provided for in this Note.

     

    (i) Create,
      incur, assume or permit to exist any Indebtedness except Permitted
      Indebtedness.

     

    (j) Make
      any
      investment except for Permitted Investments.

     

    (k) Become
      an
      "investment company" or a company controlled by an "investment company" under
      the Investment Company Act of 1940 or undertake as one of its important
      activities extending credit to purchase or carry margin stock, or use the
      proceeds of any Loan for that purpose; fail to meet the minimum funding
      requirements of ERISA; permit a Reportable Event or Prohibited Transaction,
      as
      defined in ERISA, to occur; fail to comply with the Federal Fair Labor Standards
      Act or violate any other law or regulation, if the violation could reasonably
      be
      expected to have a material adverse effect on Borrower's business or operations
      or could reasonably be expected to cause a material adverse change, or permit
      any of its Subsidiaries to do so.

     

    (l) Except
      as
      currently exists as of the date hereof or as provided under that certain
      Exclusive License Agreement by Washington University, as licensor, and Modigene
      Inc., a Delaware corporation and a wholly-owned subsidiary of the Borrower,
      dated as of February 15, 2007, create, incur, assume or suffer to exist any
      Lien
      of any kind upon any Intellectual Property or Transfer any Intellectual
      Property, whether now owned or hereafter acquired, other than licenses of
      Intellectual Property entered into in the ordinary course of
      business.

     

    8. Lender's
      Rights and Remedies.

     

    (a) Rights
      and Remedies.
      Upon
      the occurrence of an Event of Default, while such Event of Default is continuing
      (provided that an Event of Default shall be continuing at all times after any
      cure period therefor expires), Lender shall not have any further obligation
      to
      advance money or extend credit to or for the benefit of Borrower. In addition,
      upon the occurrence and during the continuance of an Event of Default, the
      entire unpaid principal sum hereunder, plus any and all interest accrued
      thereon, plus all other sums due and payable to Lender hereunder shall, at
      the
      option of Lender, become due and payable immediately without presentment,
      demand, notice of nonpayment, protest, notice of protest, or other notice of
      dishonor, all of which are hereby expressly waived by Borrower. Lender shall
      have the rights, options, duties and remedies of a secured party as permitted
      by
      law and, in addition to and without limitation of the foregoing, Lender may,
      at
      its election, without notice of election and without demand, do any one or
      more
      of the following, all of which are authorized by Borrower: 

    
      
        
        

      

      
        -12-

        
          

        

      

      
        
        

      

    

    (1) Make
      such
      payments and do such acts as Lender considers necessary or reasonable to protect
      Lender's security interest in the Collateral. Borrower agrees to assemble the
      Collateral if Lender so requires and to make the Collateral available to Lender
      as Lender may designate. Borrower authorizes Lender and its designees and agents
      to enter the premises where the Collateral is located, to take and maintain
      possession of the Collateral, or any part of it, and to pay, purchase, contest,
      or compromise any Lien which in Lender's determination appears or is claimed
      to
      be prior or superior to its security interest and to pay all expenses incurred
      in connection therewith. With respect to any of Borrower's owned premises,
      Borrower hereby grants Lender a license to enter into possession of such
      premises and to occupy the same, without charge, for up to one hundred twenty
      (120) days in order to exercise any of Lender's rights or remedies provided
      herein, at law, in equity, or otherwise;

     

    (2) Ship,
      reclaim, recover, store, finish, maintain, repair, prepare for sale, advertise
      for sale, and sell (in the manner provided for herein) the Collateral. Lender
      and its agents and any purchasers at or after foreclosure are hereby granted
      a
      non-exclusive, irrevocable, perpetual, fully paid, royalty-free license or
      other
      right, solely pursuant to the provisions of this Section
      8,
      to use,
      without charge, Borrower's Intellectual Property, including without limitation,
      labels, patents, copyrights, rights of use of any name, trade secrets, trade
      names, trademarks, service marks, and advertising matter, or any property of
      a
      similar nature, now or at any time hereafter owned or acquired by Borrower
      or in
      which Borrower now or at any time hereafter has any rights; provided that
      such
      license shall only be exercisable in connection with the disposition of
      Collateral upon Lender's exercise of its remedies hereunder;

     

    (3) Sell
      the
      Collateral at either a public or private sale, or both, by way of one or more
      contracts or transactions, for cash or on terms, in such manner and at such
      places (including Borrower's premises) as Lender determines are commercially
      reasonable; and

     

    (4) Credit
      bid and purchase all or any portion of the Collateral at any public
      sale.

     

    Any
      deficiency that exists after disposition of the Collateral as provided above
      will be paid immediately by Borrower.

     

    (b) Effect
      of Sale.
      Upon
      the occurrence of an Event of Default and during the continuation thereof,
      to
      the extent permitted by law, Borrower covenants that it will not at any time
      insist upon or plead, or in any manner whatsoever claim or take any benefit
      or
      advantage of, any stay or extension law now or at any time hereafter in force,
      nor claim, take nor insist upon any benefit or advantage of or from any law
      now
      or hereafter in force providing for the valuation or appraisement of the
      Collateral or any part thereof prior to any sale or sales thereof to be made
      pursuant to any provision herein contained, or to the decree, judgment or order
      of any court of competent jurisdiction; nor, after such sale or sales, claim
      or
      exercise any right under any statute now or hereafter made or enacted by any
      state or otherwise to redeem the property so sold or any part thereof, and,
      to
      the full extent legally permitted, except as to rights expressly provided
      herein, hereby expressly waives for itself and on behalf of each and every
      Person, except decree or judgment creditors of Borrower, acquiring any interest
      in or title to the Collateral or any part thereof subsequent to the date of
      this
      Note, all benefit and advantage of any such law or laws, and covenants that
      it
      will not invoke or utilize any such law or laws or otherwise hinder, delay
      or
      impede the execution of any power herein granted and delegated to Lender, but
      will suffer and permit the execution of every such power as though no such
      power, law or laws had been made or enacted. Any sale, whether under any power
      of sale hereby given or by virtue of judicial proceedings, shall operate to
      divest all right, title, interest, claim and demand whatsoever, either at law
      or
      in equity, of Borrower in and to the property sold, and shall be a perpetual
      bar, both at law and in equity, against Borrower, its successors and assigns,
      and against any and all Persons claiming the property sold or any part thereof
      under, by or through Borrower, its successors or assigns.

    
      
        
        

      

      
        -13-

        
          

        

      

      
        
        

      

    

    (c) Power
      of Attorney in Respect of the Collateral.
      Borrower does hereby irrevocably appoint Lender (which appointment is coupled
      with an interest), the true and lawful attorney in fact of Borrower with full
      power of substitution, for it and in its name to file any notices of security
      interests, financing statements and continuations and amendments thereof
      pursuant to the Code or federal law, as may be necessary to perfect, or to
      continue the perfection of Lender's security interests in the Collateral.
      Borrower does hereby irrevocably appoint Lender (which appointment is coupled
      with an interest) on the occurrence of an Event of Default and during the
      continuation thereof, the true and lawful attorney in fact of Borrower with
      full
      power of substitution, for it and in its name: (a) to ask, demand, collect,
      receive, receipt for, sue for, compound and give acquittance for any and all
      rents, issues, profits, avails, distributions, income, payment draws and other
      sums in which a security interest is granted under Section
      5
      with
      full power to settle, adjust or compromise any claim thereunder as fully as
      if
      Lender were Borrower itself; (b) to receive payment of and to endorse the name
      of Borrower to any items of Collateral (including checks, drafts and other
      orders for the payment of money) that come into Lender's possession or under
      Lender's control; (c) to make all demands, consents and waivers, or take any
      other action with respect to, the Collateral; (d) in Lender's discretion to
      file
      any claim or take any other action or proceedings, either in its own name or
      in
      the name of Borrower or otherwise, which Lender may reasonably deem necessary
      or
      appropriate to protect and preserve the right, title and interest of Lender
      in
      and to the Collateral; (e) endorse Borrower's name on any checks or other forms
      of payment or security; (f) sign Borrower's name on any invoice or bill of
      lading for any account or drafts against account debtors; (g) make, settle,
      and
      adjust all claims under Borrower's insurance policies; (h) settle and adjust
      disputes and claims about the accounts directly with account debtors, for
      amounts and on terms Lender determines reasonable; (i) transfer the Collateral
      into the name of Lender or a third party as the Code permits; and (j) to
      otherwise act with respect thereto as though Lender were the outright owner
      of
      the Collateral.

     

    9. Remedies
      Cumulative, Etc.

     

    (a) No
      right
      or remedy conferred upon or reserved to Lender hereunder or now or hereafter
      existing at law or in equity is intended to be exclusive of any other right
      or
      remedy, and each and every such right or remedy shall be cumulative and
      concurrent, and in addition to every other such right or remedy, and may be
      pursued singly, concurrently, successively or otherwise, at the sole discretion
      of Lender, and shall not be exhausted by any one exercise thereof but may be
      exercised as often as occasion therefor shall occur.

    
      
        
        

      

      
        -14-

        
          

        

      

      
        
        

      

    

    (b) Borrower
      hereby waives presentment, demand, notice of nonpayment, protest, notice of
      protest, notice of dishonor and any and all other notices in connection with
      any
      default in the payment of, or any enforcement of the payment of, all amounts
      due
      under this Note. To the extent permitted by law, Borrower waives the right
      to
      any stay of execution and the benefit of all exemption laws now or hereafter
      in
      effect.

     

    10. Costs
      and Expenses.
      Following the occurrence of any Event of Default, Borrower shall pay upon demand
      all reasonable costs and expenses (including reasonable attorneys' fees and
      expenses) incurred by Lender in the exercise of any of its rights, remedies
      or
      powers under this Note and any amount thereof not paid promptly following demand
      therefor shall be added to the principal sum hereunder and shall bear interest
      at the Default Rate from the date of such demand until paid in
      full.

     

    11. Indemnification
      and Waiver.
      

     

    (a) General
      Indemnity.
      Borrower agrees upon demand to pay or reimburse Lender for all liabilities,
      obligations and out-of-pocket expenses, including Lender's Expenses and
      reasonable fees and expenses of counsel for Lender from time to time arising
      in
      connection with the enforcement or collection of sums due under this Note or
      the
      Credit Agreement, and in connection with any amendment or modification of such
      documents or any "work-out" in connection with such documents. Borrower shall
      indemnify, reimburse and hold Lender, and each of its respective successors,
      assigns, agents, attorneys, officers, directors, shareholders, servants, agents
      and employees (each an "Indemnified
      Person")
      harmless from and against all liabilities, losses, damages, actions, suits,
      demands, claims of any kind and nature (including claims relating to
      environmental discharge, cleanup or compliance), all costs and expenses
      whatsoever to the extent they may be incurred or suffered by such Indemnified
      Person in connection therewith (including reasonable attorneys' fees and
      expenses), fines, penalties (and other charges of any applicable governmental
      authority), licensing fees relating to any item of Collateral, damage to or
      loss
      of use of property (including consequential or special damages to third parties
      or damages to Borrower's property), or bodily injury to or death of any person
      (including any agent or employee of Borrower) (each, a "Claim"),
      directly or indirectly relating to or arising out of the use of the proceeds
      of
      the Loans or otherwise, the falsity of any representation or warranty of
      Borrower or Borrower's failure to comply with the terms of this Note or the
      Credit Agreement. The foregoing indemnity shall cover, without limitation,
      (i)
      any Claim in connection with a design or other defect (latent or patent) in
      any
      item of equipment or product included in the Collateral, (ii) any Claim for
      infringement of any patent, copyright, trademark or other intellectual property
      right, (iii) any Claim resulting from the presence on or under or the escape,
      seepage, leakage, spillage, discharge, emission or release of any Hazardous
      Substances on the premises owned, occupied or leased by Borrower, including
      any
      Claims asserted or arising under any environmental law, or (iv) any Claim for
      negligence or strict or absolute liability in tort; provided,
      however,
      Borrower shall not indemnify Lender for any liability incurred by Lender to
      the
      extent it is the result of Lender's gross negligence or willful misconduct.
      Such
      indemnities shall continue in full force and effect, notwithstanding the
      expiration or termination of this Note. Upon Lender's written demand, Borrower
      shall assume and diligently conduct, at its sole cost and expense, the entire
      defense of Lender, each of its partners, and each of their respective, agents,
      employees, directors, officers, shareholders, successors and assigns against
      any
      indemnified Claim described in this Section
      11.
      Borrower shall not settle or compromise any Claim against or involving Lender
      without first obtaining Lender's written consent thereto, which consent shall
      not be unreasonably withheld.

    
      
        
        

      

      
        -15-

        
          

        

      

      
        
        

      

    

    12. Notices.
      All
      notices required to be given to any of the parties hereunder shall be in writing
      and shall be deemed to have been sufficiently given for all purposes when
      presented personally to such party or sent by hand delivery, facsimile, courier
      service guaranteeing next business day delivery, or overnight U.S. express
      mail,
      return receipt requested, to such party at its address set forth in the Credit
      Agreement with copies to the parties designated to receive copies in the Credit
      Agreement. Such notice shall be deemed to be given when received. Any notice
      of
      any change in such address shall also be given in the manner set forth above.
      Whenever the giving of notice is required, the giving of such notice may be
      waived in writing by the party entitled to receive such notice.

     

    13. Severability.
      In the
      event that any provision of this Note is held to be invalid, illegal or
      unenforceable in any respect or to any extent, such provision shall nevertheless
      remain valid, legal and enforceable in all such other respects and to such
      extent as may be permissible. Any such invalidity, illegality or
      unenforceability shall not affect any other provisions of this Note, but this
      Note shall be construed as if such invalid, illegal or unenforceable provision
      had never been contained herein.

     

    14. Successors
      and Assigns.
      This
      Note inures to the benefit of Lender and binds Borrower, and their respective
      successors and assigns, and the words "Borrower"
      and
      "Lender"
      whenever occurring herein shall be deemed and construed to include such
      respective permitted successors and assigns as provided in the Credit Agreement;
      provided,
      however,
      neither
      this Note nor any rights hereunder may be assigned by Borrower without Lender's
      prior written consent, which consent may be granted or withheld in Lender's
      sole
      discretion. 

     

    15. Governing
      Law.
      This
      Note shall be governed by and construed in accordance with the laws of the
      State
      of Florida. Borrower agrees that any action or proceeding against it to enforce
      the Note may be commenced in state or federal court in any county in the State
      of Florida, and Borrower waives personal service or process and agrees that
      a
      summons and complaint commencing an action or proceeding in any such court
      shall
      be properly served and shall confer personal jurisdiction if serviced by
      registered or certified mail in accordance with the notice provisions set forth
      herein.

     

    16. Entire
      Agreement; Construction; Amendments and Waivers.

     

    (a) Entire
      Agreement.
      This
      Note and the Credit Agreement taken together, constitute and contain the entire
      agreement between Borrower and Lender with respect to the subject matter hereof
      and supersede any and all prior agreements, negotiations, correspondence,
      understandings and communications between the parties, whether written or oral,
      with respect to such subject matter. Borrower acknowledges that it is not
      relying on any representation or agreement made by Lender or any employee,
      attorney or agent thereof, other than the specific agreements set forth in
      this
      Note and the Credit Agreement. Lender acknowledges that it is not relying on
      any
      representation or agreement made by Borrower or any employee, attorney or agent
      thereof, other than the specific agreements set forth in this Note and Credit
      Agreement.

    
      
        
        

      

      
        -16-

        
          

        

      

      
        
        

      

    

    (b) Construction.
      This
      Note is the result of negotiations between and has been reviewed by each of
      Borrower and Lender as of the date hereof and their respective counsel;
      accordingly, this Note shall be deemed to be the product of the parties hereto,
      and no ambiguity shall be construed in favor of or against Borrower or Lender.
      Borrower and Lender agree that they intend the literal words of this Note and
      the Credit Agreement and that no parol evidence shall be necessary or
      appropriate to establish Borrower's or Lender's actual intentions.

     

    (c) Amendments
      and Waivers.
      Any and
      all amendments, modifications, discharges or waivers of, or consents to any
      departures from any provision of this Note or of the Credit Agreement shall
      not
      be effective without the written consent of Lender and Borrower. Any waiver
      or
      consent with respect to any provision of such loan documents shall be effective
      only in the specific instance and for the specific purpose for which it was
      given. No notice to or demand on Borrower in any case shall entitle Borrower
      to
      any other or further notice or demand in similar or other circumstances. Any
      amendment, modification, waiver or consent affected in accordance with this
      Section
      16(c)
      shall be
      binding upon Lender and on Borrower.

     

    17. No
      Set-Offs by Borrower.
      All
      sums payable by Borrower pursuant to this Note or the Credit Agreement shall
      be
      payable without notice or demand and shall be payable in United States Dollars
      without set-off or reduction of any manner whatsoever.

     

    18. Survival.
      All
      covenants, representations and warranties made in this Agreement shall continue
      in full force and effect so long as any obligations
      hereunder or commitment to fund remain outstanding. The obligations of Borrower
      to indemnify Lender with respect to the expenses, damages, losses, costs and
      liabilities described in Section
      11
      shall
      survive until all applicable statute of limitations periods with respect to
      actions that may be brought against Lender with respect to this Note have
      run.

     

    19. WAIVER
      OF TRIAL BY JURY. EACH
      OF THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED
      BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO TRIAL BY JURY.

     

    SIGNATURE
      PAGE FOLLOWS

    
      
        
        

      

      
        -17-

        
          

        

      

      
        
        

      

    

    IN
      WITNESS WHEREOF, Borrower has duly executed this Note as of the day and year
      first above written.

     

    
      	
              MODIGENE
                INC.

            
	 	 	 
	
              By:

            	 
	 	
              Name:
                

            	 
	 	
              Title:

            	
              Chief
                Executive Officer

            

    

    

    
      
        
        

      

      
        -18-

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