Document:

Unassociated Document

    

      CONFIDENTIAL

    

     

    Non-Exclusive
      License Agreement

    

    This
      agreement (the “Agreement”)
      is by
      and between Max-Planck-Innovation GmbH, a German corporation having a principal
      place of business at Marstallstr. 8, 80539 Muenchen, Germany (“MI”),
      and
Rosetta
      Genomics Ltd., an
      Israeli corporation having a principal place of business at 10
      Plaut
      Street, Science Park, Rehovot 76706, Israel (“COMPANY”).
      This
      Agreement will become effective on December 22, 2006 (the “Effective Date”).

    

    BACKGROUND

    

    Max-Planck-Gesellschaft
      zur Foerderung der Wissenschaften e.V. ("MPG"),
      a
      German non-profit research organisation, has rights to certain intellectual
      property developed by Dr. Thomas Tuschl during his employment with MPG relating
      to microRNA sequences (internal file No. GI 2916 ZJE). MPG has filed certain
      MPG
      Patent Rights (as later defined herein) relating to such microRNA sequences.
      MPG
      has authorized MI, its technology transfer agency, to act as its sole agent
      for
      patenting and licensing the MPG Patent Rights, and to sign this Agreement in
      MI's own name. 

    

    COMPANY
      desires to obtain a non-exclusive license under the MPG Patent Rights to
      manufacture and sell research products for research purposes to its customers,
      and to use such research products in COMPANY's services provided for its
      customers. Furthermore, COMPANY intends to grant sublicenses under the MPG
      Patent Rights to third parties, as part of COMPANY's licensing package relating
      to microRNA technology.

    

    In
      consideration of the mutual obligations contained in this Agreement, and
      intending to be legally bound, the parties agree as follows:

    

    
      	1.	
              LICENSE

            

    

    

    
      	1.1	
              Definitions.
                

            

    

     

    The
      term
“MPG
      Patent Rights”
means
      all patent rights filed by MPG represented by or issuing from: (a) national
      or
      regional patent applications claiming priority from and directed to the same
      subject matter as the patent applications listed in Exhibit A; (b) any
      continuation, divisional and re-issue applications of (a); and (c) any foreign
      counterparts and extensions of (a) or (b).

    

    The
      term
“Field
      Of Use”
means
      the sale and use of Licensed Products as research products for research
      purposes, including use of such products in the provision of research services
      to third parties. Specifically excluded from the Field of Use is any use for
      diagnostic or therapeutic purposes, whether said use is in vivo or in vitro,
      and
      any use in humans, for whatever purpose. Further,
      specifically excluded from the Field of Use is any sale and use of Licensed
      Products, or performance and sale of Licensed Services, that contain or use
      locked nucleic acids (LNAs).
      For the
      purpose of this definition, the term "use for diagnostic purposes" shall
      include, without limitation, (i) clinical research where the medical management
      of a human is involved; (ii) products or services that are designated and
      regulated by
      the
      FDA as in vitro diagnostic tests or analyte specific reagents, and (iii) human
      samples tracking, testing or quality controlling in a clinical laboratory,
      the
      results of which are sent to medical institutions or other laboratory labs,
      and
      are not used as part of research and development of products.

    

    The
      term
“Valid
      Claim”
shall
      mean a claim in an issued patent within the MPG Patent Rights (a) that has
      not
      lapsed, or (b) that has not been held to be invalid by a final judgment of
      a
      court of competent jurisdiction from which no appeal can be or is taken, or
      (c)
      that has not been abandoned.

     

    
      
        Portions of this Exhibit were omitted
          and
          have been filed separately with the Secretary of the Commission pursuant
          to the
          Company’s application requesting confidential treatment under Rule 406 of the
          Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 1 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    The
      term
“Pending
      Claim”
shall
      mean a claim in a patent application within the MPG Patent Rights that has
      not
      been pending for more than 8 years after the Effective Date and that has not
      been (a) abandoned and not continued; or (b) finally rejected by an appropriate
      administrative agency or court of competent jurisdiction from which no appeal
      can be or is taken.

    

    The
      term
“Licensed
      Products”
means
      any product (i) that, or the manufacture, use or sale of which, in the absence
      of this Agreement, would infringe at least one Valid Claim or Pending Claim
      of
      the MPG Patent Rights, or (ii) that uses a process or machine covered by a
      Valid
      Claim or Pending Claim of the MPG Patent Rights.

    

    The
      term
“Licensed
      Services”
shall
      mean any service, the performance or sale of which (i) in the absence of this
      Agreement, would infringe at least one Valid Claim or Pending Claim of the
      MPG
      Patent Rights, or (ii) uses a Licensed Product or a process or machine covered
      by a Valid Claim or Pending Claim of MPG Patent Rights.

    

    The
      term
“Sale”
means
      any bona fide first commercial sale at arms length transaction between COMPANY
      (or its Sales Partners or Sublicensees) and an independent third party (end
      user
      or distributors that are not Sales Partners) for which consideration is received
      by COMPANY (or its Sales Partners or Sublicensees) for the sale, use, lease,
      transfer or other disposition of a Licensed Product or a Licensed Service,
      and
      a
      Sale is deemed completed at the time that COMPANY (or
      its
      Sales Partners or Sublicensees) sends
      its
      invoice for a Licensed Product or Licensed
      Service.
      

    

    The
      term
“Net
      Sales”
means
      the gross amounts invoiced by COMPANY (or its Sales Partners or Sublicensees)
      as
      consideration for, or fair market value attributable to, each Sale, less
      Qualifying Costs directly attributable to a Sale and actually borne by COMPANY
      (or its Sales Partners or Sublicensees). For purposes of determining Net Sales,
      the term “fair market value” means the cash consideration that COMPANY (or its
      Sales Partners or Sublicensees) would realize from an unrelated buyer in an
      arms
      length sale of an identical item sold in the same quantity and at the time
      and
      place of the transaction. Specifically, regarding Licensed Services, Net Sales
      shall mean any Licensed Products used in Licensed Services, where such Licensed
      Products should be valued at fair market value. Net Sales shall not include
      transfers or other distributions or dispositions of Products at no charge for
      academic research.
      For the
      avoidance of doubt, in the event of a Sale between COMPANY (or
      its
      Sales Partners or Sublicensees) and
      distributors (that are not Sales Partners), the
      amount invoiced by COMPANY (or its Sales Partners or Sublicensees) to such
      distributors upon Sale (and not the amount invoiced by such distributors to
      an
      independent third party upon further resale) shall be regarded as Net Sales
      of
      such Licensed
      Products
      or
      Licensed Services.

    

    The
      term
      "Sales
      Partners"
      means
      any third party authorized
      by COMPANY (or its Sublicensees) by any kind of agreement to market, promote,
      distribute or sell, or otherwise dispose of, Licensed Products
      or
      Licensed Services, if such Sales
      Partner does not purchase Licensed Products or Licensed Services from COMPANY
      (or its Sublicensees) in
      a Sale
      transaction, i.e. if the relation between COMPANY (or
      its
      Sublicensees) and
      the
      Sales Partner is not a pure seller-buyer relationship, e.g. if the agreement
      between COMPANY (or
      its
      Sublicensees) and
      the
      Sales Partner provides for an obligation to share costs or revenues, or a
      reporting obligation, or responsibility for sales and/or marketing efforts
      in a
      country.

    

    The
      term
      "Sublicensees"
      means
any
      third
      party
      that is
      granted a sublicense to the MPG Patent Rights by COMPANY in accordance with
      Section 1.3 below.

    

    The
      term
“Qualifying
      Costs”
means:
      (a) customary discounts in the trade for quantity purchased, prompt payment
      or
      wholesalers and distributors to the extent actually allowed and taken (b)
      recalls, credits or refunds for claims or returns that do not exceed the
      original invoice amount; (c) to the extent separately stated on the document
      of
      sale, prepaid outbound transportation expenses and transportation insurance
      premiums; (d) to the extent separately stated on the document of sale, custom
      duties, sales and use taxes and other fees imposed by a governmental agency;
      and
      (e) amounts that, despite best efforts of COMPANY, are finally and actually
      uncollectible.

    

    The
      term
”6-months
      period”
means
      each six-months period beginning on January 1st,
      and
      July 1st.
      

     

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 2 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

    
      	1.2	
              License
                Grant.
                

            

    

    

    MI
      grants
      to COMPANY, and COMPANY hereby accepts, a worldwide non-exclusive license under
      the MPG Patent Rights to make, have made, use, import, sell, have sold and
      offer
      for sale Licensed Products and Licensed Services in the Field of Use during
      the
      Term (as defined in Section 5.1). 

    

    
      	1.3	
              Sublicenses

            

    

    

    COMPANY
      shall have the right to grant sublicenses to the rights granted to it under
      Section 1.2 to
      third
      parties only if the intended sublicense also includes a license to substantial
      intellectual property rights (e.g. patents that cover other microRNAs) owned
      by
      COMPANY in the field of "microRNAs".

    

    Each
      sublicense granted under this Agreement shall be subject and subordinate to,
      and
      be consistent with, the terms and conditions of this Agreement.
      

    

    Within
      [***] after the signature of each sublicense granted under this
      Agreement, COMPANY
      shall provide MI with a copy
      of
      the signed sublicense agreement.

    

    
      	1.4	
              Most
                Favored Licensee

            

    

    

    If,
      before or after the Effective Date, MI grants other licenses under the MPG
      Patents to third parties in the Field of Use (as applicable, the “Other Research
      Licenses” or the "Other Research Licensees") under substantially more favorable
      economic terms as a whole than those in this Agreement, then MI will notify
      COMPANY of such Other Research Licenses granted. The notice will include all
      material terms and conditions of such Other Research Licenses, including
      duration, field, territory, audit rights, right to sublicense, right to
      administer, prosecute and enforce patents, and all license fees (e.g. initial
      payment, maintenance fees, royalty rates, sublicense fees). Whether the economic
      terms of the Other Research Licenses are substantially more favorable or not
      shall be mutually determined by COMPANY and MI. In the event that COMPANY elects
      to take all fees and royalty rates, and all material terms and conditions of
      such Other Research License, all fees and royalty rates, and all material terms
      and conditions of such Other Research License shall apply as a whole to COMPANY
      upon the date COMPANY provides MI with its written notice of such
      election.

    

    COMPANY
      acknowledges and agrees that MI may provide a copy of this Agreement to any
      Other Research Licensee upon request of such Other Research
      Licensee.

    

    This
      Section 1.4 shall not apply to (i) the settlement of a lawsuit or other dispute
      between MI and a third party (including Other Research Licensees) with respect
      to past infringements of the MPG Patent Rights, and (ii) any license granted
      by
      MI to any scientific or other non-profit research organizations.

    

    
      	2	
              FEES
                AND ROYALTIES

            

    

    

    
      	2.1	
              License
                Initiation Fee.
                

            

    

    

    COMPANY
      shall pay to MI, within [***] after the Effective Date, a license initiation
      fee
      of [***] Euro (EUR [***]). 

    

    
      	2.2	
              Annual
                Maintenance Fees.
                

            

    

    

    COMPANY
      shall pay to MI, commencing on January 1st,
      2007,
      and on each Jannuary 1st
      thereafter, an annual maintenance fee of [***] Euro (EUR [***]). COMPANY’s
      actual earned royalties payable to MI under Section 2.3 may be credited against
      this annual maintenance fee for the same calendar year. In the event of
      expiration or termination of this Agreement, COMPANY shall pay to MI the balance
      due to MI of the pro-rata
      (determined
      monthly) share of such annual maintenance fee for the calendar year in which
      this Agreement expires or is terminated.

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 3 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    
      	2.3	
              Earned
                Royalties.
                

            

    

    

    COMPANY
      shall pay to MI the following royalties on Net Sales of Licensed Products and
      Licensed Services:

    

    (a)
      in
      the event of a Sale by COMPANY (or its Sales Partners) to end users:

    [***]%
      ([***] percent); and

    

    b)
      in the
      event of a Sale by COMPANY (or its Sales Partners) to distributors (that are
      not
Sales
      Partners): [***]% ([***] percent). 

    

    There
      shall be no royalties or imputed revenues from promotional free samples, free
      goods, or other marketing programs whereby Licensed Products and/or Licensed
      Services are provided free of charge to induce sales.

    

    In
      the
      event of an overpayment of earned royalties, COMPANY may credit the overpaid
      amount with future earned royalties.

    

    
      	2.4	
              Sublicense
                Revenues; Management Fee

            

    

    

    If
      COMPANY grants a sublicense, the financial terms of Sections 2.1, 2.2 and 2.3
      will be reached through to the Sublicensee, which means that:

    

    (i)
      COMPANY shall pay to MI, within [***] days after the effective date of the
      sublicense agreement, a license initiation fee of [***] Euro (EUR [***]),
      and

    

    (ii)
      COMPANY shall pay to MI, commencing on the first January 1st
      following the effective date of the sublicense agreement, and on each Jannuary
      1st
      thereafter, an annual maintenance fee of [***] Euro (EUR [***]). Sublicensee’s
      actual earned royalties payable by COMPANY to MI under subsection (iii) below
      may be credited against this annual maintenance fee for the same calendar year,
      and

    

    (iii)
      COMPANY shall pay to MI the following royalties on Net Sales of Licensed
      Products and Licensed Services:

    

    (a)
      in
      the event of a Sale by Sublicensee (or its Sales Partners) to end users:
[***]%
      ([***] percent),; and

    

    (b)
      in
      the event of a Sale by Sublicensee (or its Sales Partners) to distributors
      (that
      are
      not Sales Partners): [***]% ([***] percent). 

    

    If
      the
      Sublicensee sells Combination Products (as defined in Section 2.6), then Section
      2.6 below shall apply accordingly.

    

    COMPANY
      may deduct, prior to the remittance of royalties due and payable to MI under
      this subsection (iii), a service fee of [***]% ([***] percent) from such
      royalties.

    

    
      	2.5	
              Stacking
                Protection.
                

            

    

    

    If
      COMPANY is a party to a license agreement with any third party, which license
      is
      employed in connection with the MPG Patent Rights for the manufacture, use
      and/or sale of a Licensed Product, or the performance and/or sale of a Licensed
      Service, COMPANY may reduce, on a product-by-product, service-by-service and
      country-by-country basis, the royalty rate in Section 2.3 by [***]% for each
      [***]% of royalty rate actually paid to such third party; provided, however,
      that in no event will the royalty rate otherwise due to MI be reduced by the
      application of this Section 2.5 to less than [***]%. If such other license
      includes a royalty stacking provision of like intent to this Section 2.5, the
      royalty rate reduction provided for in this Section 2.5 will be calculated
      on a
      pro-rata basis.

    

    
      	2.6	
              Payments
                Related to Combination Products.
                

            

    

    

    In
      the
      event that a Licensed Product is sold by COMPANY in a combination product form
      with one or more other biologically active product components (validated other
      microRNAs) which are not Licensed Products (the "Combination
      Product"),
      then
      Net Sales, for purposes of determining royalty payments on the Combination
      Product, shall be calculated by multiplying the Net Sales of the Combination
      Product by the Royalty Base Factor. The term “Royalty
      Base Factor”
means,
      in any given Combination Product, [***].

    

    
      	2.7	
              Minimum
                Royalty Floors

            

    

    

    MI
      and
      COMPANY agree that the royalty rate due to MI shall not be reduced -by the
      application of Section 2.6 or by the application of Section 2.6 together with
      Section 2.5- to less than a minimum royalty rate of [***]% of the Net Sales
      of
      any Combination Product. 

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 4 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    In
      the
      event that after the Effective Date, COMPANY becomes a party to license
      agreements with one or more third parties, which licenses contribute certain
      biologically validated microRNAs to the Combination Product, and such third
      party license agreements also include minimum royalty floors of [***]% or more
      for combination products, and the application of the [***]% minimum royalty
      floor owed to MI, together with the minimum royalty floors of [***]% or more
      owed to the third party licensors, would exeed an aggregate minimum royalty
      floor of [***]%
      for a
      certain Combination Product,
      then
      the minimum royalty rate payable to MI for such Combination Product will be
      reduced pro rata, together with all third party minimum royalty rates of [***]%
      or more, in order to reduce the maximum aggregate minimum royalty rate to [***]%
      for that certain Combination Product. No minimum royalty reduction for a certain
      Combination Product will apply unless all third party licensors for that certain
      Combination Product agree to their respective pro rata minimum royalty
      reductions. (Example: a Combination Product contains microRNAs covered by the
      MPG Patent Rights, and microRNAs of a third party. The minimum royalty floor
      applicable to such third party microRNAs amounts to [***]%, which leads to
      an
      aggregate minimum royalty floor of [***]%. In order not to exceed the maximum
      aggregate minimum royalty rate of [***]%, the respective pro rata reduction
      will
      be [***]%, which leads to a minimum royalty floor owed to MI of [***]%, and
      owed
      to such third party of [***]%). 

    

    Notwithstanding
      the foregoing, in no event shall the minimum royalty rate due to MI under this
      Agreement for any Combination Product be reduced to less than [***]% of the
      Net
      Sales of any such Combination Product.

    

    
      	3	
              REPORTS
                AND PAYMENTS

            

    

    

    
      	3.1	
              Progress
                Report

            

    

    

    COMPANY
      shall use all commercial reasonable efforts, including appropriate
      advertisement, to commercialize Licensed Products and Licensed Services, by
      itself and by granting sublicenses, at the earliest commercially practicable
      date. COMPANY shall provide MI, on each January 1st
      following the Effective Date, with a written report showing in sufficient
      detail, on a product-by-product, service-by-service and country-by-country
      basis, if and to what extent COMPANY and its Sublicensees have been able to
      develop and to commercialize Licensed Products and Licensed Services during
      the
      immediately preceding calendar year. The report shall also contain a discussion
      of intended development and commercialisation and sublicensing efforts for
      the
      calendar year
      in which
      the report is submitted. Provided however that such any discussion of intended
      activities shall be a predicted estimate of the Company only, and shall not
      bind
      the Company to act according to such report by any means
      whatsoever.

    

    
      	3.2	
              Royalty
                Reports.
                

            

    

    

    Commencing
      with the first Sale of a Licensed Product or Licensed Service, COMPANY shall,
      within sixty (60) days after the end of each 6-months period, deliver to MI
      a
      report, certified by the chief financial officer of COMPANY, detailing on a
      country-by-country, product-by-product and service-by-service basis, and
      distinguishing between COMPANY and its Sublicensees, the calculation of all
      royalties and fees due to MI for such 6-months period. The report will include,
      at a minimum: (a) the number of Licensed Products involved in Sales of Licensed
      Products and used in Licensed Services; (b) gross consideration invoiced or
      billed in the 6-months period; (c) Qualifying Costs, listed by category of
      cost;
      (d) the resulting Net Sales; (e) royalties and fees owed to MI; and (f) any
      applicable credits resulting from royalty credits.

    

    
      	3.3	
              Payments.
                

            

    

    

    COMPANY
      shall pay all royalties due to MI under Section 2.3 and 2.4 (iii) within sixty
      (60) days after the end of the 6-months period in which the royalties or fees
      accrue.

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 5 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    
      	3.4	
              Records.
                

            

    

    

    COMPANY
      shall maintain, and shall cause its Sublicensees to maintain, complete and
      accurate books and records to verify Sales, Net Sales, and all of the royalties,
      fees, and other payments payable under this Agreement. The records for each
      6-months period will be maintained for at least [***] after submission of the
      applicable report required under Section 3.2. 

    

    
      	3.5	
              Audit
                Rights.
                

            

    

    

    Upon
      reasonable prior written notice to COMPANY, COMPANY will provide access to
      accountants appointed by MI, to all of the books and records required by Section
      3.4 to conduct a review or audit of Sales, Net Sales, and all of the royalties,
      fees, and other payments payable under this Agreement. Access will be made
      available: (a) during normal business hours; (b) in a manner reasonably designed
      to facilitate MI’s review or audit without unreasonable disruption to COMPANY’s
      business; and (c) no more than once each calendar year during the Term
      and
      for a
      period of [***] years thereafter. COMPANY will promptly pay to MI the
      amount of any underpayment determined by the review or audit plus accrued
      interest. If the review or audit determines that COMPANY has underpaid any
      royalty payment by five percent ([***]%) or more, then COMPANY will also
      promptly pay any reasonable costs and expenses of MI appointed accountants
      in
      connection with the review or audit.

    

    
      	3.6	
              Currency.
                

            

    

    

    All
      amounts referred to in this Agreement are expressed in Euro. All payments will
      be made in Euro. If COMPANY receives payment from a third party in a currency
      other than Euro for which a royalty or fee is owed under this Agreement, then
      (a) the payment will be converted into Euro at the conversion rate for the
      foreign currency as published in the eastern edition of the Wall Street Journal
      as of the last business day of the 6-months-period in which the payment was
      received by COMPANY, and (b) the conversion computation will be documented
      by
      COMPANY in the applicable report delivered to MI under Section 3.2.

    

    
      	3.7	
              Place
                of Payment.
                

            

    

    

    All
      payments by COMPANY are payable to "Max-Planck-Innovation GmbH" and will be
      made
      to the following address:

    

    [***]

    [***]

    [***]

    

    [***]

    [***]

    [***]

    [***]

    

    
      	3.8	
              Interest.
                

            

    

    

    All
      amounts that are not paid by COMPANY when due will accrue interest from the
      date
      due until paid at a rate equal to [***] percent ([***]%) per month (or the
      maximum allowed by law, if less). 

    

    
      	3.9	
              No
                Refund.  

            

    

    

    All
      payments made by COMPANY under this Agreement are non-refundable and, except
      as
      set forth in Section 2.2 and 2.3, non-creditable against each other. This
      Section 3.9 shall apply, without limitation, in the event this Agreement is
      terminated prematurely in accordance with the termination provisions of this
      Agreement.

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 6 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    
      	3.10	
              Taxes

            

    

    

    MI
      alone
      shall be responsible for paying any and all taxes (other than withholding taxes
      or deduction of tax at source or value added tax required by applicable law
      to
      be paid by COMPANY) levied on it by applicable law with respect to any payments
      it receives from COMPANY under this Agreement. The Parties shall use all
      reasonable and legal effort to reduce tax withholding on payments made to MI
      hereunder. Notwithstanding such efforts, if COMPANY concludes that tax
      withholdings under the laws of any country are required with respect to payments
      to MI, COMPANY shall withhold the required amount and pay it to the appropriate
      governmental authority. In such a case COMPANY will promptly provide MI with
      the
      original receipts or other evidence reasonably desirable and sufficient to
      all
      MI to document such tax withholding adequately for purposes of claiming foreign
      tax credits and similar benefits. 

    

    
      	4	
              CONFIDENTIALITY
                

            

    

    

    
      	4.1	
              MI’s
                Confidential Information.
                

            

    

    

    The
      term
“Confidential
      Information”
      includes the terms and conditions of this Agreement, and all technical
      information, inventions, developments, discoveries, software, know-how, methods,
      techniques, formulae, data, processes, and other proprietary ideas, whether
      or
      not patentable, that MI identifies as confidential or proprietary at the time
      it
      is delivered or communicated to COMPANY under this Agreement.

    

    
      	4.2	
              COMPANY’s
                Obligation.
                

            

    

    

    COMPANY
      will maintain in confidence and not disclose to any third party any Confidential
      Information. COMPANY will use the Confidential Information only for the purposes
      of this Agreement. COMPANY will ensure that COMPANY’s employees have access to
      Confidential Information only on a need to know basis and are obligated in
      writing to abide by COMPANY’s obligations under this Agreement. The obligations
      under this Section 4.2 will not apply to: (a) information that is known to
      COMPANY or independently developed by COMPANY prior to the time of disclosure,
      in each case, to the extent evidenced by written records promptly disclosed
      by
      COMPANY to MI upon receipt of the Confidential Information; (b) information
      that
      is disclosed to COMPANY by a third party that has the right to make such
      disclosure; (c) information that becomes patented, published or otherwise part
      of the public domain as a result of acts by MI or a third party obtaining such
      information as a matter of right; or (d) information that is required to be
      disclosed by law, order of relevant governmental authority or a court of
      competent jurisdiction, provided that COMPANY must use its best efforts to
      obtain confidential treatment of such information by such agency or
      court.

    

    
      	4.3	
              Disclaimer.
                

            

    

    

    MI
      is not
      obligated to accept any confidential information from COMPANY, except for the
      reports required by Sections 3.1 and 3.2, and sublicense agreements provided
      to
      MI pursuant to Section 1.3. MI will use its best efforts not to disclose to
      any
      third party outside of MI , the terms of this agreement, the terms of any
      sublicense agreement provided to MI pursuant to section 1.3, and any
      Confidential Information of COMPANY contained in those reports, subject to
      exceptions analogous to those contained in Section 4.2 (a) - (d) above. MI
      bears
      no institutional responsibility for maintaining the confidentiality of any
      other
      information of COMPANY. COMPANY may elect to enter into confidentiality
      agreements with individual scientists at MPG that comply with MI’s internal
      policies.

    

    
      	5	
              TERM
                AND TERMINATION

            

    

    

    
      	5.1	
              Term.
                

            

    

    

    This
      Agreement will commence on the Effective Date. It will terminate upon the later
      of (i) expiration or abandonment of the last patent to expire or become
      abandoned of the MPG Patent Rights; or (ii) if no patent ever issues from the
      MPG Patent Rights, ten (10) years after the first commercial sale of the first
      Licensed Product, unless earlier terminated according to the provisions of
      this
      Agreement (as the case may be, the “Term”).

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 7 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    
      	5.2	
              Early
                Termination by COMPANY.
                

            

    

    

    COMPANY
      may terminate this Agreement at any time upon sixty (60) days prior written
      notice to MI after paying all amounts owed to MI under this Agreement through
      the date of termination.

    

    
      	5.3	
              Early
                Termination by MI.
                

            

    

    

    MI
      may
      terminate this Agreement immediately upon written notice to COMPANY if (a)
      COMPANY fails to pay to MI any amounts owed under this Agreement, and fails
      to
      make such payments within [***] after receiving written notice of such failure;
      or (b) COMPANY materially breaches this Agreement and does not cure the breach
      within [***] after written notice of the breach.

    

    
      	5.4	
              Effect
                of Termination.
                

            

    

    

    Upon
      the
      termination of this Agreement for any reason (a) the licenses granted to COMPANY
      terminate; (b) COMPANY will pay to MI all amounts owed to MI through the date
      of
      termination under this Agreement; (c) COMPANY will, at MI’s request, return to
      MI all Confidential Information and provide to MI copies of all non-confidential
      data generated by COMPANY during the Term that will facilitate the further
      development of the technology licensed under this Agreement; and (d) in the
      case
      of termination under Section 5.3, all duties of MI and all rights (but not
      duties) of COMPANY under this Agreement immediately terminate without further
      action required by either MI or COMPANY.

    

    
      	5.5	
              Survival.
                

            

    

    

    COMPANY’s
      obligation to pay all amounts owed to MI under this Agreement will survive
      the
      termination of this Agreement for any reason. Articles 4, 5, 8, 9 and Section
      11.10 will survive the termination of this Agreement for any reason in
      accordance with their respective terms. Articles 3 and 6 will survive the
      termination of this Agreement for any reason for a period of 6
      months.

     

    
      	6	
              PATENT
                MAINTENANCE 

            

    

    

    
      	6.1	
              Patent
                Maintenance.
                

            

    

    

    MI
      shall,
      in its sole discretion and at its own cost and expense, control the filing,
      prosecution, maintenance and abandonment of any and all patents and patent
      applications within the MPG Patent Rights. MI shall use reasonable efforts
      to
      apply for and seek issuance of patents in the following countries: United States
      of America, Canada, Germany, United Kingdom, France, Switzerland, Australia,
      and
      Japan. Upon COMPANY’s request, COMPANY will be copied on, and allowed to comment
      upon, all substantive issues in the course of the patent prosecution.

    

    
      	7	
              PATENT
                INFRINGEMENT

            

    

    

    
      	7.1	
              Prosecution.
                

            

    

    

    If
      during
      the term of this Agreement COMPANY learns of facts which may constitute a third
      party infringement of the MPG Patent Rights, COMPANY shall promptly notify
      MI in
      writing. In such event, MI may elect, in its sole discretion, but is not
      obligated, to pursue the third party infringer at its sole cost and
      expense.

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 8 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

    

    
      	8	
              DISCLAIMER
                OF WARRANTIES; LIMITATION OF LIABILITIES;
                

            

    

    

    
      	8.1	
              Warranty
                of the Parties

            

    

    

    MI
      and
      COMPANY each represent that as of the Effective Date, they have the legal right
      and authority to enter into this Agreement, and to perform all obligations
      hereunder. MI further represents that, to the best of its knowledge as of the
      Effective Date, (i) MI is the exclusive licensor of the entire right, title
      and
      interest in and to the MPG Patent Rights, and (ii) MI has the full right to
      grant to COMPANY rights under the MPG Patent Rights as set forth in this
      Agreement. 

    

    
      	8.2	
              No
                Further MI Warranties.

            

    

    

    Except
      as
      set forth in Section 8.1, MI AND MPG MAKE NO REPRESENTATIONS OR WARRANTIES
      OF
      ANY KIND CONCERNING THE MPG PATENT RIGHTS, EXPRESS OR IMPLIED, AND THE ABSENCE
      OF ANY LEGAL OR ACTUAL DEFECTS, WHETHER OR NOT DISCOVERABLE. Specifically,
      and
      not to limit the foregoing, MI and MPG make no warranty or representation (i)
      regarding the merchantability or fitness for a particular purpose of the MPG
      Patent Rights, the Licensed Services and Licensed Products, (ii) regarding
      the
      patentability, validity or scope of the MPG Patent Rights, (iii) that the use
      and commercialization of the MPG Patent Rights, the Licensed Services and
      Licensed Products will not infringe any patents or other intellectual property
      rights of a third party, and (iv) that the use and commercialization of the
      MPG
      Patent Rights, the Licensed Services and Licensed Products will not cause any
      damages of any kind to COMPANY or to any third party.

    

    
      	8.3	
              Limitation
                of Liability.
                

            

    

    

    EXCEPT
      WITH RESPECT TO A BREACH OF ARTICLE 4, IN NO EVENT SHALL EITHER PARTY BE LIABLE
      HEREUNDER TO THE OTHER PARTY, OR ANY OTHER PERSON OR ENTITY
      FOR
      SPECIAL, INCIDENTAL, CONSEQUENTIAL, EXEMPLARY OR OTHER INDIRECT DAMAGES
      (INCLUDING, BUT NOT LIMITED TO, LOSS OF PROFITS OR LOSS OF USE DAMAGES) ARISING
      FROM THIS AGREEMENT, EVEN IF SUCH PARTY HAS BEEN ADVISED OF THE POSSIBILITY
      OF
      SUCH DAMAGES OR LOSSES. 

    

    
      	
              9

            	
              INDEMNIFICATION

            

    

    

    
      	9.1	
              By
                COMPANY.
                

            

    

    

    COMPANY
      shall indemnify, defend, and hold harmless MI, MPG and their trustees, officers,
      faculty, students, employees, and agents and their respective successors, heirs
      and assigns (collectively the “Indemnitees”), against any and all claims, suits,
      actions (including, without limitation, actions in the form of tort, warranty,
      or strict liability and regardless of whether such actions has any factual
      basis), demands, judgments, liabilities losses, damages, costs, fees or expenses
      (collectively, the “Claims”) incurred by or imposed upon any of the Indemnitees
      by a third party resulting from or arising out of (i) any use of MPG Patent
      Rights by COMPANY or (ii) any development, manufacture, performance, use or
      sale
      of Licensed Products or COMPANY Licenses Services by COMPANY, or (iii) any
      third
      party use of any such Licensed Products or Licensed Services. 

    

    
      	9.2	
              Non-use
                of Names.
                

            

    

    

    Unless
      required to do so by law, order of relevant governmental authority or a court
      of
      competent jurisdiction, COMPANY is not allowed to use the name “Max Planck
      Institute”, “Max Planck Society”, “Max-Planck-Innovation” or any variation,
      adaptation, or abbreviation thereof, or of any of its trustees, officers,
      faculty, students, employees, or agents in any promotional material or other
      public announcement or disclosure without the prior written consent of MI or,
      in
      the case of an individual, the consent of that individual. 

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 9 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    
      	9.3	
              Procedure.
                

            

    

    

    All
      indemnification obligations under this Article 9 shall be subject to the
      following requirements: (a) the indemnified party shall provide the indemnifying
      party with prompt written notice of any claim; (b) the indemnified party shall
      permit the indemnifying party to assume and control the defense of any
      action
      provided, however,
      that the
      indemnified party shall have the right to retain its own counsel, at the expense
      of the indemnifying party, if representation of such indemnified party by the
      counsel retained by the indemnifying party would be inappropriate because of
      an
      actual conflict of interest between the indemnified party and such
      counsel;
      and (c)
      the indemnified party shall not make any admissions, or enter into any
      settlement or compromise of any claim without the indemnifying party’s prior
      written consent. In addition, the indemnified party may, at its own expense,
      participate in its defense of any claim.

    

    
      	9.4	
              Other
                Provisions.
                

            

    

    

    COMPANY
      will not settle or compromise any Claims that imposes any restrictions on MI,
      or
      grants any rights to the MPG Patent Rights or the Licensed Products, without
      MI’s prior written consent. The indemnification rights of the indemnified party
      under this Article 9 are in addition to all other rights that an indemnified
      party may have at law, in equity or otherwise.

    

    
      	10	
              INSURANCE

            

    

    

    
      	10.1	
              Coverages.
                

            

    

    

    COMPANY
      will procure and maintain insurance policies for the following coverages with
      respect to personal injury, bodily injury and property damage arising out of
      COMPANY’s performance during the Term under this Agreement: Comprehensive
      general liability, including broad form and contractual and product liability,
      in a minimum amount of EUR [***] per incident. MI may review periodically the
      adequacy of the minimum amounts of insurance for each coverage required by
      this
      Section 10.1, and MI reserves the right to require COMPANY to adjust the limits
      accordingly. The required minimum amounts of insurance do not constitute a
      limitation on COMPANY’s liability or indemnification obligations to MI under
      this Agreement.

    

    
      	11	
              ADDITIONAL
                PROVISIONS

            

    

    

    
      	11.1	
              Independent
                Contractors.
                

            

    

    

    The
      parties are independent contractors. Nothing contained in this Agreement is
      intended to create an agency, partnership or joint venture between the parties.
      At no time will either party make commitments or incur any charges or expenses
      for or on behalf of the other party.

    

    
      	11.2	
              Compliance
                with Laws.
                

            

    

    

    COMPANY
      must comply with all prevailing laws, rules and regulations that apply to its
      activities or obligations under this Agreement.

    

    
      	11.3	
              Modification,
                Waiver and Remedies.
                

            

    

    

    This
      Agreement may only be modified by a written amendment that is executed by an
      authorized representative of each party. Any waiver must be express and in
      writing. No waiver by either party of a breach by the other party will
      constitute a waiver of any different or succeeding breach. Unless otherwise
      specified, all remedies are cumulative.

    

    
      	11.4	
              Assignment.
                

            

    

    

    Neither
      party may assign this Agreement in whole or in part to a third party without
      the
      prior written consent of the other party, except that each party may assign
      the
      Agreement to a successor in connection with the merger, consolidation, or sale
      of all or substantially all of its assets or that part of its business interest
      to which this Agreement applies, provided that such assignee assumes in writing
      all of the obligations governing the assignor herein.

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 10 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

       

    

    
      	11.5	
              Notices.
                

            

    

    

    Any
      notice or other required communication (each, a "Notice")
      must
      be in writing, addressed to the party’s respective Notice Address listed on the
      signature page, and delivered: (a) personally; (b) by certified mail, postage
      prepaid, return receipt requested; (c) by recognized overnight courier service,
      charges prepaid; or (d) by facsimile. A Notice will be deemed received: if
      delivered personally, on the date of delivery; if mailed, five (5) days after
      deposit in the United States mail; if sent via courier, one (1) business day
      after deposit with the courier service; or if sent via facsimile, upon receipt
      of confirmation of transmission.

    

    
      	11.6	
              Severability
                and Reformation.
                

            

    

    

    If
      any
      provision of this Agreement is held to be invalid or unenforceable by a court
      of
      competent jurisdiction, then the remaining provisions of this Agreement will
      remain in full force and effect. Such invalid or unenforceable provision will
      be
      automatically revised to be a valid or enforceable provision that comes as
      close
      as permitted by law to the parties' original intent.

    

    
      	11.7	
              Headings
                and Counterparts.
                

            

    

    

    The
      headings of the articles and sections included in this Agreement are inserted
      for convenience only and are not intended to affect the meaning or
      interpretation of this Agreement. This Agreement may be executed in several
      counterparts, all of which taken together will constitute the same
      instrument.

    

    
      	11.8	
              Governing
                Law.
                

            

    

    

    This
      Agreement will be governed in accordance with the laws of Germany and the
      proceedings shall be conducted in English.

    

    
      	11.9	
              Dispute
                Resolution.
                

            

    

    

    If
      a
      dispute arises between the parties concerning any right or duty under this
      Agreement, then the parties will confer, as soon as practicable, in an attempt
      to resolve the dispute by good faith negotiations within [***] after one party
      has informed the other party in writing of such dispute. If the parties are
      unable to resolve the dispute amicably, then the parties will submit to the
      exclusive jurisdiction of, and venue in, Germany, with respect to all disputes
      arising under this Agreement. 

    

    
      	11.10	
              Integration.
                

            

    

    

    This
      Agreement, together with all attached Exhibits, contain the entire agreement
      between the parties with respect to the MPG Patent Rights and the license
      granted, and supersede all other oral or written representations, statements,
      or
      agreements with respect to such subject matter.

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 11 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

    

    In
      witness whereof, each party has caused this Agreement to be executed by its
      duly
      authorized representative.

    

    

      
        	
                Max-Planck-Innovation
                  GmbH

              	
                Rosetta
                  Genomics Ltd.

              
	 	 	 	 
	 	 	 	 
	
                By:

              	
                _______________________

              	
                By:

              	
                _______________________

              
	
                Name:

              	
                Dr.
                  Joern Erselius

              	
                Name:

              	
                Amir
                  Avniel

              
	
                Title:

              	
                Managing
                  Director

              	
                Title:

              	
                Chief
                  Executive Officer

              
	 	 	 	 
	
                Date:

              	
                _______________________

              	
                Date:

              	
                _______________________

              
	 	 	 	 
	 	 	 	 
	 	 	 	 
	
                Notice
                  Address:

              	
                Notice
                  Address:

              
	 	 	 	 
	
                Max-Planck-Innovation
                  GmbH

                Marstallstrasse
                  8

                80539
                  Muenchen

                Germany

                Phone:
                  + 49 / 89 / 29 09 19-0

                Fax: 
                  +
                  49 / 89 / 29 09 19-99

                E-mail:
                  info@max-planck-innovation.de

              	
                Rosetta
                  Genomics Ltd.

                10
                  Plaut Street, Science Park, Rehovot 76706

                Israel

                Phone:
                  

                Fax:
                  +97289484766

                E-mail:

              

      

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 12 of 13

        
          

        

      

      
        
        

        CONFIDENTIAL

      

    

    EXHIBIT
      A

    

    (MPG
      Patent Rights)

    

    MPG
      Patent Rights shall comprise of the following patents and patent applications
      filed by MPG entitled "Small expressed RNA molecules (MicroRNA
      molecules)":

    

    
      	
            	·	
              [***],

            

    

    
      	
            	·	
              [***],
                

            

    

    
      	
            	·	
              [***]

            

    

    
      	
            	·	
              [***].

            

    

    

    

    
      
        Portions
          of this Exhibit were omitted and have been filed separately with the Secretary
          of the Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

        
          Rosetta

          Research
            License GI2916ZJE

        

      

      
        Dec.
          19,
          2006; page 13 of 13COOPERATION
      AND PROJECT FUNDING AGREEMENT

     

    PREAMBLE

     

    Agreement
      made this _____ day
      of
      ________ 2006,
      by
      and

     

    BETWEEN

     

    The
      ISRAEL-UNITED STATES BINATIONAL INDUSTRIAL RESEARCH AND DEVELOPMENT FOUNDATION,
      a legal entity created by Agreement between the Government of the State of
      Israel
      and the Government of the United States of America (hereinafter referred to
      as
      the "Foundation"),

     

    AND
      

     

    Rosetta
      Genomics, Ltd.

     

    AND
      

     

    Isis
      Pharmaceuticals, Inc.

     

    severally
      and jointly (hereinafter collectively referred to as the "Proposer" and
      separately as the "Participants").

     

    WHEREAS
      the Foundation has been established under an Agreement between the Government
      of the State of Israel and the Government of the United States of America to
      promote
      and support joint non-defense industrial research and development activities
      of
      mutual benefit
      to Israel and the United States, and

     

    WHEREAS
      the Proposer has heretofore submitted to the Foundation a proposal (hereinafter
      the "Proposal"),
      entitled "Design and testing of antisense inhibitors for the development of
      treatment to HCC" and on the basis of the Proposal has applied to the Foundation
      for certain funding assistance for the development of the Product therein
      described; and

     

    WHEREAS
      the Foundation has examined and duly approved the Proposal and is willing to
      provide
      certain funding for the implementation of the Proposal on the terms and
      conditions hereinafter set forth;

    

      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

       

    

    
      
        
        

      

      
        1

        
          

        

      

       

    

    Now
      therefore the parties hereto agree as follows:

     

    
      	A.	
              GENERAL

            

    

     

    
      	A.1.	
              The
                preamble to this Agreement shall be deemed an integral part
                hereof.

            

    

     

    
      	A.2.	
              The
                Participants shall be bound and obliged jointly and severally, as
                herein
                provided.

            

    

     

    
      	A.3.	
              The
                Foundation represents that the Executive Director of the Foundation
                is
                empowered by
                its Board of Governors to execute this Agreement and to perform and
                cause
                to be performed
                all acts under the terms hereof on behalf of the
                Foundation

            

    

     

    
      	A.4.	
              The
                following documents are incorporated by reference and made a part
                of this
                Agreement:

            

    

     

    
      	A.4.1.	
              The
                Proposal, dated the 7th day of May, 2006, as stamped with the Foundation's
                approval
                of the 8th day of June, 2006. Nonetheless, should any provision of
                the
                Proposal
                be inconsistent with any provision of this Agreement, the provisions
                of
                this Agreement shall control.

            

    

     

    
      	A.4.2.	
              BIRD
                Foundation Procedures Handbook. 

            

    

     

    
      	A.5.	
              The following definitions shall
                apply:

            

    

     

    "Affiliate" –
      is an entity
      under common control, controlled by or controlling either of the
      Participants

     

    "Agreement"
–
this
      Cooperation and Project Funding Agreement

     

    "Approved
      Project Budget"
–
the
      schedule of expenses contemplated to be spent by a Participant as set out in
      Annex A

     

    "BIRD
      Foundation Procedures Handbook"
–
the
      most recent version available as of the date
      of
      this Agreement or its copy on the Foundation's website

     

    "Calculation
      Date"
–
a
      point in time at which the calculation of the then current balance due by the
      Proposer is made

     

    "Conditional
      Grant"
–
funds
      provided by the Foundation for the implementation of the Proposal

     

    "Foundation"
–
The
      Israel-United States Binational Industrial Research and Development
      Foundation, as referred to in the first paragraph of this Agreement

     

    "Foundation's
      pro rata
      share"
–
the
      percentage of the actual expenditures which the Foundation
      provides

     

    "Full
      Repayment to the Foundation"
–
the
      repayment to the Foundation by the Proposer of
      its
      entire obligation pursuant to this Agreement as determined in accordance with
      Annex
      C

     

    "Grant
      Base Index"
–
the
      index last published prior to the date of payment of each increment
      of the grant

     

    "Index"–
the
      U.S. Consumer Price Index, CPI-U

    

      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

    
      
        
        

      

      
        2

        
          

        

      

       

    

    

    "Indexed
      Payments"
–
      the result of
      multiplying each grant payment received by the Proposer by the last known Index
      on the Calculation Date and dividing by the Grant Base
      Index

     

    "Indexed
      Repayment"
–
the
      result of multiplying the Repayment received by the Foundation
      by the last known Index on the Calculation Date and dividing by the Repayment
      Base Index

     

    "Intellectual
      Property"
–
      patents, copyrights, trademarks, inventions, trade secrets, confidential
      information, product design, engineering specifications and drawings,
technical
      information and all types of computer programs

     

    "Interim
      Reporting Segment"
–
an
      interim period of time for which technical and fiscal reports need to be
      submitted

     

    "Late
      Payment Interest Rate"
–
4%
      more than the average prime rate prevailing at the JP
      Morgan
      Chase Bank, N.Y.C. (or any successor bank to that bank), during the period
      from
      the
      date payment was due until payment is actually made

     

    "License
      Agreement"
–
an
      agreement between the Proposer, or either Participant, or any Affiliate of
      either Participant and a third party, whereby such third party receives the
      right to use the Product in exchange for a payment. "License Agreements" shall
      not
      include any license agreements, which Proposer, or either Participant, or any
      Affiliate
      of either Participant enters into as a necessary, common or convenient means
      by
      which products are sold to end-users in the ordinary course of
      business

     

    "Participants"
–
the
      term used for the Israeli Company and the U.S. Company signing this
      Cooperation and Project Funding agreement

     

    "Product"
–
the
      outcome of the development work or any derivative thereof carried out
by
      the
      Proposer pursuant to the terms of this Agreement, including patented
      inventions

     

    "Program
      Plan"
–
      schedule of program activities as described in the Proposal and as presented
      in
      graphical form (GANTT chart) in Annex D

     

    "Project"
–
the
      process for the development of the Product with the funding assistance
of
      the
      Foundation

     

    "Proposal"
–
the
      documents submitted by the Participants to the Foundation describing the
      technical and business aspects of the proposed program

     

    "Proposer"
–
as
      defined in the preamble

     

    "Repayment"
–
the
      grant repayment due by the Proposer to the Foundation in the event
      of
      the continuation of the development work beyond the IND stage, and from proceeds
      derived from the outright sale of any portion of the Product to a third party
      or
      the licensing of any portion of the Product to a third party

     

    "Repayment
      Base Index"
–
the
      Index last published prior to the date on which a Repayment
      is received by the Foundation from Proposer

     

    "Termination
      of Product Development"
–
the
      conclusion of the development of the Product
      pursuant to and in accordance with the Proposal

     

    "Termination
      of this Agreement"
–
      termination deriving from the payment by the Proposer
      of any and all of its obligations pursuant to Section B, termination resulting
      from
      revocation by the Foundation of the Agreement, or termination of the Agreement
      by
      the
      Proposer with the consent of the Foundation, the effective date in each instance
      being
      the
      earlier of notice from the Foundation that the examination contemplated by
      Section
      K.3. has been completed, or the expiration of one (1) year after the specific
      termination event as aforesaid.

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

       

    

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

     

    "Total
      Indexed Grant"
–
the
      result of multiplying the total of the Indexed Payments by the
      appropriate percentage level from the table shown in Section B.3.1

     

    "Total
      Indexed Repayments"
–
the
      total of the Indexed Repayments.

     

    
      	B.	
              PROJECT
                FINANCING

            

    

     

    
      	B.1.	
              The
                Foundation hereby agrees to fund, by Conditional Grant, the implementation
                of the Proposal in the maximum sum of $1,000,000 or 50% of the actual
                expenditures on the Project,
                as contemplated in the Approved Project Budget, whichever is less,
                and at
                the times
                and as may otherwise be set forth in Annex B
                hereto.

            

    

     

    
      	B.2.	
              The
                Proposer shall provide in timely fashion all budgetary funds in excess
                of
                those provided
                hereunder by the Foundation.

            

    

     

    
      	B.3.	
              Proposer
                shall make Repayments to the Foundation in the event of the continuation
                of the
                development work beyond the IND stage. Such Repayments shall be based
                on
                the conditions as set out in Section B.3.1., Section B.5. and Section
                B.6.

            

    

     

    
      	B.3.1.	
              The
                Repayments by the Proposer shall be made on the following basis if
                the
                development
                work being carried out by Proposer continues beyond the IND stage,
                the
                Conditional
                Grant provided by the Foundation shall be repayable in accordance
                with
                Sub
                Section B.3.1a. unless the provisions of Section B.5 or Section B.6.
                apply, in which event
                repayment shall be made pursuant to either or both of those Sections,
                as
                applicable.

            

    

     

    
      
        	
              	a)	
                In
                  the event that Proposer or either Participant decides to continue
                  further
                  development of
                  the Product either by Proposer, either Participant or together
                  with any
                  other third party,
                  beyond the IND stage, the Conditional Grant and Other Sums provided
                  to the
                  Proposer
                  by the Foundation shall be repayable by the Proposer. Such repayment
                  will
                  be
                  due within [***] months following the Project completion (i.e.
                  since the
                  Project duration
                  is for a period of 36 months, repayment will be due by no later
                  than [***]
                  months from
                  the effective date stated in Section O) in an amount equal to the
                  total
                  grant paid to Proposer
                  linked to the U.S. Consumer Price Index. Should the Proposer request
                  the
                  Foundation
                  to extend the due date of the repayment for up to [***] months,
                  the
                  Proposer will
                  then repay to the Foundation on this new due date [***]% of the
                  total
                  Conditional Grant
                  paid linked to the U.S. Consumer Price Index, and so on, pursuant
                  to the
                  timeframe
                  and the maximum percentages set forth in the table set out in Section
                  B.3.1
                  .b., and to the extent of the monetary obligation described in
                  Section
                  B.3. 

              

      

       

      
        	
              	b)	
                When
                  the Proposer shall have repaid the following maximum percentages
                  in
                  equivalent dollars
                  valued at the time of Repayment (as determined in accordance with
                  Section
                  B.3.(a)
                  and Annex C) of the Conditional Grant in any of the following years
                  following the
                  first Commercial Transaction, no additional payments to the Foundation
                  on
                  account of the Conditional Grant shall be
                  required.

              

      

    

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

     

    
      	
              Years
                Following Original

              Date
                of Termination of 

              Project
                Development

            	 	
              Maximum
                Percentage of

              Conditional
                Grant to be

              Repaid
                (indexed according to

              Annex
                C of this Agreement)

            
	
              1

            	 	
              100%

            
	
              2

            	 	
              113%

            
	
              3

            	 	
              125%

            
	
              4

            	 	
              138%

            
	
              5
                or more

            	 	
              150%

            

    

     

    
      	B.4.	
              All
                Repayments due the Foundation shall be calculated on a semi-annual
                calendar basis,
                and statements, certified by each Participant's chief financial officer
                (or other senior financial officer acceptable to the Foundation),
                rendered
                with payment in and within
                90 calendar days following the end of each semi-annual period. All
                late
                Repayments
                shall bear interest at the Late Payment Interest
                Rate.

            

    

     

    
      	B.5.	
              The
                Proposer shall not sell outright to a third party any portion of
                the
                Product without the
                prior written consent of the
                Foundation.

            

    

     

    
      	B.5.1.	
              The
                Proposer shall furnish to the Foundation reasonable prior notice
                with
                respect to any
                proposed sale as referred to in Section B.5., the notice to include
                the
                name of the prospective
                purchaser, the price and the other terms of the proposed sale, and
                all
                other relevant
                information concerning the proposed
                sale.

            

    

     

    
      	B.5.2.	
              The
                Foundation shall promptly provide consent to a sale as referred to
                in
                Section B.5, after
                receipt and review of the notice referred to above, provided that
                its
                rights pursuant to
                this Agreement are fully guaranteed to the Foundation's satisfaction,
                and
                that the Foundation
                is satisfied that the proposed sale is at a price and upon terms
                no less
                than the
                actual market value of the portion of the Product. The Foundation
                shall be
                entitled in
                its sole discretion to designate a representative or representatives
                to
                review the terms
                of the proposed sale and to seek to determine the actual market value
                of
                the Product,
                and the Proposer shall cooperate with, and furnish all pertinent
                information, to any
                such representative or
                representatives.

            

    

     

    
      	B.5.3.	
              Should
                any portion of the Product be sold outright to a third party by the
                Proposer, by either
                Participant, or by any Affiliate of either Participant, one-half
                of all
                proceeds of the sale
                shall be applied as received until there has been full repayment
                to the
                Foundation of
                amounts due to the Foundation hereunder. If any such sale is (i)
                in
                exchange for a non-cash
                asset or (ii) part of the sale of a group of assets, and no separate
                value
                is assigned
                by the parties to the portion of the Product sold, the Proposer and
                the
                Foundation
                shall seek to agree: as to clause (i) the value of the asset received;
                and
                as to
                clause (ii) the portion of the consideration reasonably allocatable
                to the
                sale. If no such agreement is reached within a reasonable time, or
                if any
                value assigned by the parties is in the view of the Foundation not
                reasonable under all of the circumstances, the
                matter shall be resolved pursuant to Section M.4. Payments due and
                not
                made following
                receipt of proceeds by the Proposer shall bear interest at the Late
                Payment Interest
                Rate.

            

    

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

    
      	B.5.4.	
              The
                Proposer shall provide notice to the Foundation, either prior to,
                or
                immediately after,
                of any transfer of control of either Participant as a result of the
                sale
                of shares, or a
                merger or an amalgamation of either of the Participants with any
                other
                company.

            

    

     

    
      	B.5.5.	
              In
                the case of any transfer of control of a Participant as referred
                to in
                Section B.5.4., if that
                Participant, or in the case of a merger or amalgamation if the merged
                or
                amalgamated
                company, terminates the Project prior to the Termination of Product
                Development, or if after the Termination of Product Development fails
                to
                continue the development of the Product beyond the IND stage, any
                such
                event shall be deemed to constitute
                an outright sale of the Product to a third party pursuant to Section
                B.5.3, notwithstanding
                any other provision of this
                Agreement.

            

    

     

    
      	B.6.	
              License
                agreements involving the Product developed in whole or in part during
                this
                Foundation-supported
                project shall be subject to Annex
                E.

            

    

     

    
      	C.	
              CONDUCT
                OF THE PROJECT

            

    

     

    
      	C.1.	
              The
                Proposer agrees to do the work set out in the Proposal in accordance
                with
                good standards
                relevant to such undertakings, and shall expend funds received hereunder
                only
                in accordance with such Proposal and the requirements of this
                Agreement.

            

    

     

    
      	C.2.	
              The
                Proposer agrees to comply with the Program Plan as set forth in Annex
                D.

            

    

     

    
      	C.3.	
              The
                Proposer hereby appoints [***] as Israel project manager and Dr.
                C.
                Frank
                Bennett as U.S. project manager for the implementation of the project
                during the period
                of this Agreement and in accordance with the Program
                Plan.

            

    

     

    
      	C.4.	
              The
                Proposer shall not make substantial transfers of funds from one budget
                item to another,
                change key personnel or their duties and responsibilities, or diminish
                their time allocated
                to the proposed work hereunder without prior written approval by
                the
                Foundation,
                which approval shall not be unreasonably
                withheld.

            

    

     

    
      	C.4.1.	
              Should
                any key person be absent from work, or should such absence be expected,
                for 90 days or more, or should there be any significant reduction
                in the
                total personnel force
                assigned the project under the Proposal, the Proposer shall forthwith
                notify the Foundation.

            

    

     

    
      	D.	
              REPORTING
                REQUIREMENTS

            

    

     

    
      	D.1.	
              The
                Proposer shall submit to the Foundation, in writing, the following
                reports:

            

    

     

    
      	
            	a)	
              interim
                fiscal and technical reports to be submitted simultaneously within
                30 days
                following
                the expiration of the first 6-month
                period;

            

    

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

     

    
      	b)	
              interim
                fiscal and technical reports to be submitted simultaneously within
                30 days
                following
                the expiration of the second 6-month
                period;

            

    

    

    
      	c)	
              interim
                fiscal and technical reports to be submitted simultaneously within
                30 days
                following
                the expiration of the third 6-month
                period;

            

    

    

    
      	d)	
              interim
                fiscal and technical reports to be submitted simultaneously within
                30 days
                following
                the expiration of the fourth 6-month
                period;

            

    

    

    
      	e)	
              interim
                fiscal and technical reports to be submitted simultaneously within
                30 days
                following
                the expiration of the fifth 6-month
                period;

            

    

     

    
      	f)	
              final
                fiscal and technical reports to be submitted simultaneously within
                60 days
                following
                Termination of Product Development.

            

    

     

    
      	D.1.1.	
              Any
                failure to submit reports in a timely fashion pursuant to Section
                D.1
                shall be deemed
                a fundamental breach and a breach for cause pursuant to this
                Agreement.

            

    

     

    
      	D.1.2.	
              The
                reports to be submitted pursuant to this Section D shall be in form
                and
                substance in
                accordance with the most recent Formats for Technical and Fiscal
                Reports,
                as shown
                on the Foundation's web site.

            

    

     

    
      	D.2.	
              Proposer
                shall provide to the Foundation at its expense, briefings on the
                progress
                of the
                work hereunder, within 45 days following any request from time to
                time by
                the Foundation.
                Such briefings shall be in accordance with such form and detail as
                the
                Foundation may reasonably request.

            

    

     

    
      	E.	
              PUBLICATIONS

            

    

    

    
      
        	E.1.	
                In
                  any publication in scientific or technical journals of data or
                  other
                  information derived from the work hereunder, or any publication
                  related to
                  the work, but not including product
                  literature or manuals, the support of the Foundation shall be
                  acknowledged.

              

      

    

     

    
      	E.2.	
              To
                the extent so required to permit the Foundation free dissemination
                of such
                publications
                or information, which the Foundation is privileged to disseminate,
                subject
                to
                the limitations of Section F, the Proposer shall be deemed hereby
                to waive
                any claim with respect to such dissemination for infringement of
                any
                copyright it may have or may obtain.

            

    

     

    
      	E.3.	
              The
                Proposer shall furnish to the Foundation two (2) copies of all
                publications resulting from
                Foundation-supported work as soon as possible after
                publication.

            

    

     

    
      	F.	
              PROPRIETARY
                INFORMATION, INTELLECTUAL
                PROPERTY

            

    

    

    
      
        	F.1.	
                Proprietary
                  information, clearly identified as such, submitted to the Foundation
                  in
                  the Proposal,
                  in any report or verbally, or obtained by Foundation personnel
                  observation
                  pursuant to any request or briefing, shall be treated by the Foundation
                  as
                  confidential. At
                  the request of Proposer or either Participant, a confidential disclosure
                  agreement may
                  be entered into separately by the parties. Nothing contained in
                  the
                  foregoing shall restrict
                  the right of the Foundation to make public the fact of the Foundation's
                  support for
                  the Project, and the identification of the Participants therein.
                  The
                  details of any such
                  publication, except for those permitted by the immediately preceding
                  sentence of this Section F.1, shall be subject to prior approval
                  by the
                  Participants.

              

      

    

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

     

    
      	F.2.	
              The
                Proposer represents and warrants that, to the best of its knowledge,
                information and
                belief, the Proposer has good, valid and enforceable title to all
                of the
                Intellectual Property necessary for purposes of implementation of
                the
                Proposal, free and clear of all
                third party interests, or otherwise possesses adequate rights to
                use the
                Intellectual Property
                (subject to the fact that no patent may have been obtained). To the
                best
                of the
                Proposer's knowledge, information and belief, no Intellectual Property
                used or proposed
                to be used with respect to the Proposal infringes upon any Intellectual
                Property
                rights of others, and the use of such Intellectual Property with
                respect
                to the Proposal
                does not constitute an infringement, misappropriation or misuse of
                any
                intellectual
                property rights of any third party.

            

    

     

    
      	G.	
              PATENTS
                AND ROYALTIES

            

    

    

    
      	G.1.	
              If
                Proposer or either of the Participants elects to apply for letters
                patent
                on any Product developed in whole or in part from performance of
                Foundation-supported activity, such applicant shall, at his own expense,
                so apply in the United States and in Israel, and in such
                other countries and at such times as the Proposer or either of the
                Participants may
                deem appropriate.

            

    

     

    
      	H.	
              RIGHTS
                OF THE GOVERNMENTS OF ISRAEL AND THE UNITED
                STATES

            

    

    

    
      	H.1.	
              Regardless
                of the patent rights acquired by Participants by mutual agreement
                or
                pursuant
                to Section G.1., the Governments of Israel and of the United States
                shall
                each have a non-exclusive, irrevocable, royalty-free license to make
                or
                have made, to use or have
                used, and to sell or have sold any such Product specified, throughout
                the
                world for all governmental purposes: provided, however, that in any
                contracting situation involving
                a Product made under this Agreement, the Government of Israel shall
                give
                preference
                to the Participant retaining the entire right, title, and interest
                in the
                Product in
                Israel, and provided that "governmental purposes" shall not include
                manufacture of such Product where it is commercially available at
                reasonable prices. Notwithstanding the foregoing, except for military
                purposes or in emergency situations, neither the Government
                of Israel nor the Government of the United States, nor the Foundation,
                shall have the right to sell or otherwise dispose of in any third
                country
                any product incorporating
                the Product or part of the Product without the prior written permission
                of
                the
                Participant which has acquired the entire right and interest in the
                Product in that third
                country. Such Participant shall not withhold permission where appropriate
                royalties
                are paid by the Foundation or government(s)
                concerned.

            

    

     

    
      	H.2.	
              In
                addition to the patent rights specified in Section H.1., the Foundation
                reserves for itself
                and the Governments of Israel and the United States the right to
                use the
                Product, technical
                information, data, know-how and Intellectual Property arising out
                of, or
                developed
                under, this Agreement for any noncommercial purpose, and without
                charge.

            

    

     

    
      	H.3.	
              In
                order that the rights of the Foundation and the Governments of Israel
                and
                the United States
                described herein shall be exercisable, the Participants agree that
                any
                component,
                element or other part of the system described as the Product in the
                Preamble
                to this Agreement, whose use is necessary to the full enjoyment of
                the
                Product,
                will be made available, at reasonable prices, by the Participants
                either
                as a commercially
                purchasable item, or by special arrangement, and will be sold to
                the
                Foundation
                and/or the Government of Israel and/or the Government of the United
                States,
                also at reasonable prices.

            

    

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      
        	H.4.	
                Notwithstanding
                  the foregoing provisions of this Section H., it is understood and
                  agreed
                  that,
                  so long as any Intellectual Property that comprises part or all
                  of the
                  Product is marketed by Proposer, by either Participant, or by others
                  with
                  the rights to market such Intellectual
                  Property, neither the Government of Israel nor the Government of
                  the
                  United
                  States shall have the right to obtain a license to use such Intellectual
                  Property unless the license fee normally imposed in the ordinary
                  course of
                  business by either of the
                  Participants or by others with the rights to market such Intellectual
                  Property is paid, and
                  the standard license agreement is
                  executed.

              

      

    

     

    
      	I.	
              TERMINATION
                OF THE AWARD

            

    

     

    
      	I.1.	
              The
                Foundation may revoke the Conditional Grant, in whole or in part,
                for
                cause as defined
                in the laws of the State of
                Delaware.

            

    

     

    
      	I.2.	
              Upon
                receipt of notice of revocation for a default, which constitutes
                cause,
                the Proposer
                may cure the default in and within thirty (30) calendar days after
                the
                date of receipt
                of the notice

            

    

     

    
      	I.3.	
              Notwithstanding
                any other provision in this Agreement to the contrary, the Foundation
                shall
                not be obliged to provide any further funding after notice of revocation
                until and unless the said default is cured and so demonstrated to
                the
                reasonable satisfaction of the
                Foundation.

            

    

     

    
      	I.4.	
              Should
                the Conditional Grant be revoked for reason of cause, in addition
                to the
                Foundation's
                rights under Section 1.5., the Foundation and the Governments of
                Israel
                and
                the United States shall continue to be entitled to all of their rights
                pursuant to Section
                H.

            

    

     

    
      	I.5.	
              If
                the Foundation shall revoke the Conditional Grant as aforesaid, all
                funds
                given to Proposer
                in accordance with Section B.1. shall become due immediately, without
                need
                for demand. Such funds shall be repaid with interest at the Late
                Payment
                Interest Rate from the date of notice of the
                revocation.

            

    

     

    
      	I.6.	
              The
                Proposer may not terminate this Agreement or abandon the Project
                without
                the prior
                written consent of the Foundation, which consent shall not be unreasonably
                withheld.
                The Foundation declares that it will furnish such a consent if it
                is
                satisfied that,
                despite good faith efforts, the Proposer has not succeeded in developing
                the Product, or if the Product has been developed the Proposer has
                not
                succeeded in effecting
                any sales or other commercial exploitation of the Product, except
                in the
                cases referred
                to in Section B.5.5.

            

    

     

    
      	I.7.	
              If
                upon termination of the Project development work for any reason,
                the
                entire budgeted
                sum has not been expended, the Proposer shall forthwith return to
                the
                Foundation
                its pro
                rata share
                of such unexpended portion. If not repaid forthwith, such sum
                shall bear interest in accordance with Section
                1.5.

            

    

    
       

    

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

         

      

    

    
      	J.	
              SURVIVAL
                OF PROVISIONS

            

    

     

    
      
        Notwithstanding
          revocation
          or other termination of this Agreement, the following provisions
          shall survive such revocation or other termination of this Agreement;
Sections
          B., D., E., F., G., H., I.3, I.4., I.5., I.7., K., L., M., N., Annex C
          and Annex
          E If, however,
          the termination of this Agreement derives from the payment by the Proposer
          of
          all of
          its obligations to the Foundation pursuant to Section B, the following
          provisions only
          shall survive the termination of this Agreement; Sections E., F., H., K.,
          L. and
          M.

      

    

     

    
      	K.	
              FINANCIAL
                RECORDS

            

    

     

    
      	K.1.	
              The
                Proposer shall maintain business and financial records and books
                of
                account for the
                work hereunder identifiable within the framework of the business
                and
                financial records
                of the Proposer. Such books and records shall be in usual and accepted
                form.

            

    

     

    
      	K.2.	
              Books
                and records of the work hereunder shall show Proposer's contribution.
                Upon
                request
                by the Foundation, the Proposer shall provide evidence of its compliance
                herewith.

            

    

     

    
      	K.3.	
              The
                Foundation may examine, or cause to be examined, the financial books,
                vouchers, records
                and any other documents of the Proposer relating to this Agreement
                at
                reasonable
                times and intervals and upon reasonable notice during the term of
                this
                Agreement.

            

    

     

    
      	L.	
              SUITS
                AGAINST THE FOUNDATION

            

    

     

    
      	L.1.	
              The
                Proposer shall defend all suits brought against the Foundation, its
                officers or personnel,
                indemnify them for all liabilities and costs and otherwise hold them
                harmless on
                account of any and all claims, actions, suits, proceedings and the
                like
                arising out of, or
                connected with or resulting from the performance of this Agreement
                by the
                Proposer, or
                from the manufacture, sales, distribution or use by the Proposer
                of the
                Product, whether
                brought by Proposer or its personnel or by third
                parties.

            

    

     

    
      	L.2.	
              The
                Proposer agrees that persons employed by it, or otherwise retained
                by the
                Proposer,
                in connection with the Project, shall be deemed to be solely its
                own
                employees
                or agents, and that no relationship of employer and employee or principal
                and agent shall be created between such employees or agents and the
                Foundation, either
                for purposes of tort liability, social benefits, or for any other
                purpose.
                The Proposer
                shall indemnify the Foundation and hold it harmless from court costs
                and
                legal
                fees, and for any payment, which the Foundation may be obliged to
                make as
                a result of a cause of action based upon an employee-employer or
                principal-agent relationship
                as aforesaid.

            

    

     

    
      	M.	
              MISCELLANEOUS
                CONDITIONS

            

    

     

    
      	M.1.	
              The
                Foundation makes no representation, by virtue of its funding the
                work
                hereunder, or
                receiving any payments or royalties as a result of this Agreement,
                as to
                the safety, value
                or utility of the Product or the work undertaken, nor shall the fact
                of
                participation of
                the Foundation, its funding or exercise of its rights hereunder be
                deemed
                an endorsement
                of the Product or of the Proposer, nor shall the name of the Foundation
                be
                used for any commercial purpose or be publicized in any way by the
                Proposer except
                within the strict limits of this
                Agreement.

            

    

     

    
      
        Portions
          of
          this
          Exhibit were omitted and have been filed separately with the Secretary
          of the
          Commission pursuant to the Company’s application requesting confidential
          treatment under Rule 406 of the Securities Act.

      

    

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

     

    
      	M.2.	
              The
                Proposer may not assign this Agreement or any of the work undertaken
                pursuant to
                it without the prior written consent of the Foundation, which consent
                shall not be unreasonably
                withheld.

            

    

     

    
      	M.3.	
              This
                Agreement shall be construed under the laws of the State of Delaware.
                The
                exclusive
                forums for the resolution of any dispute arising from this Agreement
                shall
                be the
                State of Israel or Washington, D.C. in the U.S., as the moving party
                may
                elect. Execution
                of this Agreement shall be taken as submission to the forum selected
                pursuant
                to this Section.

            

    

     

    
      	M.4.	
              Any
                dispute concerning the subject matter of this Agreement shall be
                resolved
                through arbitration,
                unless the Foundation and the other parties to such dispute agree
                otherwise,
                in writing. If the forum is in Israel, the arbitration will be conducted
                pursuant to
                the rules of the Israeli Institute for Commercial Arbitration. If
                the
                forum is in the United
                States, the arbitration will be conducted pursuant to the rules of
                the
                American Arbitration Association.

            

    

     

    
      	M.5.	
              Proposer
                undertakes to comply with all applicable laws, rules and regulations
                of
                the State
                of Israel and the United States of America and any applicable State
                or
                Commonwealth,
                and will apply for and obtain all necessary licenses and permits
                for the
                carrying
                out of its obligations hereunder.

            

    

     

    
      	M.6.	
              Under
                Israeli law, no stamp duty is required on BIRD Foundation Cooperation
                and
                Project
                Funding Agreements.

            

    

     

    
      	M.7.	
              Notices,
                communications and reports shall be hand-delivered or mailed by prepaid
                first-class
                mail (airmail if transmitted internationally) addressed
                to:

            

    

     

    
      	
            	a.	
              The
                Israel-U.S. Binational Industrial Research and Development
                Foundation

            

    

     

    
      	
              Office
                Address:

            	
              Mailing
                Address:

            
	
              Kiryat
                Atidim, Building 4

            	
              P.O.
                Box 58054

            
	
              Tel
                Aviv 61581

            	
              Tel
                Aviv 61580

            
	
              Israel

            	
              Israel

            

    

    

    
      	
            	b.
              	
              
                Rosetta
                  Genomics, Ltd.

              

            

    

     

    
      	
              Office
                Address:

            	
              Mailing
                Address:

            
	
              10
                Plaut Street

            	
              P.O.
                Box 4059

            
	
              Science
                Park

            	
              Science
                Park

            
	
              Rehovot
                76706

            	
              Rehovot
                74140

            
	
              Israel

            	
              Israel

            

    

    

    
      	
            	c. 	
              
                
                  Isis
                    Pharmaceuticals, Inc.

                

              

            

    

     

    
      	
              Office
                Address:

            	
              Mailing
                Address:

            
	
              1896
                Rutherford Road

            	
              1896
                Rutherford Road

            
	
              Carlsbad,
                CA 92008

            	
              Carlsbad,
                CA 92008

            
	
              U.S.A.

            	
              U.S.A.

            

    

    

      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	N.	
              LIMITATION
                ON PAYMENTS

            

    

     

    Notwithstanding
      any contrary interpretation of this Agreement or the Annexes hereto, Proposer's
      total obligation hereunder for payments to the Foundation shall not exceed
      the
      amount calculated in accordance with the applicable percentage provided in
      Sections
      B.3.1(a) and (b) in equivalent dollars valued at time of repayment as
determined
      in accordance with Annex C.

     

    
      	0.	
              EFFECTIVE
                DATE

            

    

     

    The
      effective date of this Agreement shall be the 1st day of May, 2006. The
development
      work shall commence on the aforementioned date and, unless sooner terminated
      by the Foundation in accordance with Section. I., the development work
shall
      terminate 36 months following the effective date.

     

    Signed
      the day and date above first given

     

    
      	 	
              Printed
                Name: 

            	
              Eitan
                Yudilevich, Ph.D.

            
	 	 	 
	 	
              Signature:

            	_____________________________
	 	 	 
	 	
              Title:

            	
              Executive
                Director

            
	 	 	 
	 	
              (for
                the BIRD Foundation)

            

    

    
 

    
      	 	
              Printed
                Name:

            	_____________________________
	 	 	 
	 	
              Signature:

            	_____________________________
	 	 	 
	 	
              Title:

            	_____________________________
	 	 	 
	 	
              (for
                Rosetta Genomics, Ltd.)

            

    

     

    

    
      	 	
              Printed
                Name:

            	_____________________________
	 	 	 
	 	
              Signature:

            	_____________________________
	 	 	 
	 	
              Title:

            	_____________________________
	 	 	 
	 	
              (for
                Isis Pharmaceuticals, Inc.)

            

    

     

    

      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

     

    ANNEX
      B

    PAYMENT
      OF CONDITIONAL GRANT

    
      

        
          	
                  1.

                	
                  First
                    Payment
                    -
                    On signing —

                	
                  Israeli
                    Company:

                	 	$	
                  71,429

                
	 	 	
                  U.S.
                    Company:

                	 	$	
                  42,857

                

        

      

    

     

    
      	2.	
              Second
                Payment —

            

    

     

    After
      receipt and approval of the first interim technical and fiscal reports for
      the
      first 6-month
      period, or after actual expenditures on the project have equaled or exceeded
      the
required
      expenditure, whichever is later.

    

    
      	 	 	
              Required

            	
               

            	
            	
               

            
	
               

            	
               

            	
              Expenditure

            	
               

            	
              
                Payment

              

            	 
	
              Israeli
                Company:

            	 	
              $

            	
              166,667

            	 	
              $

            	
              71,429

            	 
	
              U.S.
                Company:

            	 	
              $

            	
              100,000

            	 	
              $

            	
              100,000

            	 

    

     

    However,
      if at the required time of submission of the first interim technical and fiscal
      reports, work on the project or expenditures thereon prove to be materially
      behind plan, in accordance with Annex D and Annex A, respectively, the
      Foundation will review the project with Proposer and determine a suitable course
      of action with respect to further payments against the Conditional Grant, if
      any.

     

    
      	3.	
              Third
                Payment —

            

    

     

    After
      receipt and approval of the second interim technical and fiscal reports for
      the
second
      6-month period, or after actual expenditures on the project have equaled or
      exceeded the required expenditure, whichever is later.

    

    
      	 	 	
              Required

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Expenditure

            	
               

            	
              Payment

            	 
	
              Israeli
                Company:

            	 	
              $

            	
              333,334

            	 	
              $

            	
              71,429

            	 
	
              U.S.
                Company:

            	 	
              $

            	
              333,332

            	 	
              $

            	
              71,428

            	 

    

     

    However,
      if at the required time of submission of the second interim technical and fiscal
      reports,
      work on the project or expenditures thereon prove to be materially behind plan,
      in accordance with Annex D and Annex A, respectively, the Foundation will review
      the project with Proposer and determine a suitable course of action with respect
      to further payments against the Conditional Grant, if any.

    

      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

     

    
      	4.	
              Fourth
                Payment—

            

    

     

    After
      receipt and approval of the third interim technical and fiscal reports for
      the
      third 6-month period, or after actual expenditures on the project have equaled
      or exceeded the required
      expenditure, whichever is later.

    

    
      	 	 	
              Required

            	
               

            	
               

            	
               

            
	
               

            	
               

            	
              Expenditure

            	
               

            	
              
                Payment

              

            	 
	
              Israeli
                Company:

            	 	
              $

            	
              500,002

            	 	
              $

            	
              71,429

            	 
	
              U.S.
                Company:

            	 	
              $

            	
              499,999

            	 	
              $

            	
              71,428

            	 

    

     

    However,
      if at the required time of submission of the third interim technical and fiscal
      reports,
      work on the project or expenditures thereon prove to be materially behind plan,
      in accordance with Annex D and Annex A, respectively, the Foundation will review
      the project with Proposer and determine a suitable course of action with respect
      to further payments against the Conditional Grant, if any.

     

    
      	5.	
              Fifth
                Payment—

            

    

     

    After
      receipt and approval of the fourth interim technical and fiscal reports for
      the
      fourth 6-month
      period, or after actual expenditures on the project have equaled or exceeded
      the
      required expenditure, whichever is later.

    

    
      	 	 	
              Required

            	
               

            	
            	
               

            
	
               

            	
               

            	
              Expenditure

            	
               

            	
              
                Payment

              

            	 
	
              Israeli
                Company:

            	 	
              $

            	
              666,669

            	 	
              $

            	
              71,429

            	 
	
              U.S.
                Company:

            	 	
              $

            	
              666,665

            	 	
              $

            	
              71,428

            	 

    

     

    However,
      if at the required time of submission of the fourth interim technical and fiscal
      reports, work on the project or expenditures thereon prove to be materially
      behind plan, in accordance with Annex D and Annex A, respectively, the
      Foundation will review the project with Proposer and determine a suitable course
      of action with respect to further payments against the Conditional Grant, if
      any.

     

    
      	6.	
              Final
                Payment —
                After receipt and approval of the final technical and fiscal reports
                - the
                balance
                due Proposer up to the total sum of the Conditional Grant in accordance
                with Section
                B.1.

            

    

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

     

    ANNEX
      C

    LINKAGE
      OF CONDITIONAL GRANT REPAYMENTS

     

    The
      monies given as a Conditional Grant shall be linked in value, until full
      Repayment, to the Index. As each increment of the grant is given, it shall
      thereafter be linked to the Grant Base Index.
      Upon Repayment of any portion of Proposer's obligations under Section B.3,
      Section B.5,
      Section B.6, or Annex E, such Repayment shall be linked to the Repayment Base
      Index.

     

    At
      any
      Calculation Date, Proposer's obligations shall be calculated according to the
      following formula:

     

    The
      Total
      Indexed Grant multiplied by the appropriate percent from the table in Section
      B.3.1b showing
      the maximum percentage of Conditional Grant to be repaid, less the Total Indexed
      Repayment.

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

    ANNEX
      D

    APPROVED
      PROGRAM PLAN

    

    
      	
              Tasks

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            
	
              Task
                1: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                2: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                3: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                4: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                5: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                6:
                [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

    

     

     

    
      	
              Tasks

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            	 	
              [***]

            
	
              Task
                1: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                2: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                3: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                4: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                5: [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	
              Task
                6:
                [***]

            	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 

    

     

    
      
        	
                [***]

              	
                 

              	
                 

              
	
                [***]

              	
                 

              	
                 

              
	
                [***]

              	
                 

              	
                 

              
	
                [***]

              	
                 

              	
                 

              

      

    

     

    
      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

    

    ANNEX
      E 

    LICENSE
      AGREEMENTS

     

    If
      the
      Product becomes the subject of any license agreement between Proposer, either
      Participant,
      or an Affiliate of either Participant and a third party, the licensor shall
      pay
      to the Foundation 30% of all payments received by it under such license
      agreement. Payments under this
      Annex E shall be deemed payments against Proposer’s
      obligations under Section B.3. In no event
      shall this Annex E be construed as requiring payments of any amount greater
      than
      those indicated in Section B.3.

    

      Portions
        of this Exhibit were omitted and have been filed separately with the Secretary
        of the Commission pursuant to the Company’s application requesting confidential
        treatment under Rule 406 of the Securities Act.

    

     

    
      
        
        

      

      
        17

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