Document:

Exhibit 10.4

 

AGREEMENT

 

Made and entered into on this ___
day of ________, 2002 (“Effective Date”)

 

By and Between:

 

GALMED INTERNATIONAL LIMITED

 

a company duly incorporated in Malta,
of 35

 Mannarino Road, B’Kara, BKR 08, Malta

(hereinafter “Galmed”)

of the one part;

and

 

AVENTIS PHARMA DEUTSCHLAND GmbH

a company duly incorporated in the
Federal Republic

 of Germany, of Industriepark Höchst, K 801 65926

 Frankfurt am Main , Germany

(hereinafter “Aventis GmbH”)

of the other part.

 

 

		WHEREAS:	Professor Tuvia Gilat (hereinafter “Prof. Gilat”) and Galmed have filed
Originating Motion 552/01 in the Tel-Aviv-Yafo District Court against Aventis (“the Pending Proceedings”) in
connection with the Invention (as that term is hereinafter defined); and

 

		WHEREAS:	the parties have agreed to settle the dispute which is the subject of the Pending Proceedings in
the manner hereinafter provided,

 

    	 

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NOW, THEREFORE, THE PARTIES HERETO HEREBY
AGREE AS FOLLOWS:

 

		1.	DEFINITIONS

 

			In this Agreement, the following terms shall have the meanings assigned thereto below:

 

		1.1.	“Prof. Gilat”, “Galmed”, “Aventis GmbH”
and “the Pending Proceedings” shall have the meanings assigned thereto in the preamble to this Agreement;

 

		1.2.	“Affiliate” of a party shall mean a person, company, corporation or other entity
(hereinafter collectively, “entity”) which, directly or indirectly, is controlled by, or controls, or is under
common control with, that party. For the purposes of this definition, “control” means the ability, directly
or indirectly, to direct the activities of the relevant entity (save for an ability flowing solely from the fulfilment of the office
of director or another office) and includes, without limitation, the holding, directly or indirectly, of 50% (fifty percent) or
more of the issued share capital (or other beneficial interest) or the voting power of the relevant entity or the holding, directly
or indirectly, of a right to appoint 50% (fifty percent) or more of the directors of such entity or of a right to appoint the chief
executive officer of such entity;

 

		1.3.	“Agreed Term” shall mean the period beginning on signature hereof and ending
when there is no longer any Patent in force and no Patent Application is pending;

 

		1.4.	“Aventis” shall mean Aventis GmbH and its Affiliates;

 

		1.5.	“Commercialization Proceeds” shall mean Net Sales and Net Licensing Receipts;

 

		1.6.	“Dominant Patents” shall mean: (a) European patent no. 0614908 and
US patent 5,462,933 and their respective counterparts worldwide; and (b) any patents in any jurisdiction which at any time
are owned by Aventis GmbH and/or its Affiliates or any of them and which are necessarily infringed by any Field Product;

 

		1.7.	“Field Products” shall mean any products, manufactured or sold anywhere in the
world, for use for the prevention and treatment of gallstones which or the manufacture of which falls within any claim(s) of the
pending PCT Application included in the Patent Applications, provided that upon grant of a Patent issued: (a) in the
USA; or (b) by the European Patent Office and validated in any of the United Kingdom, France or Germany; or (c) in the
United Kingdom, France or Germany, “Field Products” shall thereafter mean any products, manufactured or sold
anywhere in the world, for use for the prevention and treatment of gallstones which or the manufacture of which falls within any
claim(s) of a Patent issued or validated in the USA, the United Kingdom, France or Germany and not subsequently invalidated;

 

    	 

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		1.8.	“Galmed Licensee(s)” shall mean any third party(ies) authorised by Galmed to
use, develop, make, sell and/or otherwise commercialise Field Products;

 

		1.9.	“Invention” with respect to any jurisdiction shall mean the inventions claimed
in the pending PCT Application included in the Patent Applications, provided that upon grant of a Patent issued: (a) in
the USA; or (b) by the European Patent Office and validated in any of the United Kingdom, France or Germany; or (c) in
the United Kingdom, France or Germany, “Invention”, with respect to any jurisdiction, shall thereafter mean
the inventions covered by any claim(s) of a Patent issued or validated in the USA, the United Kingdom, France or Germany and not
subsequently invalidated; For the removal of doubt, it is repeated that the definition of Invention above shall apply in all jurisdictions
worldwide.

 

		1.10.	“Net Licensing Receipts” shall mean all consideration of any kind received by
Galmed from a Galmed Licensee for the grant of authority to use, develop, make, sell and/or otherwise commercialise the Field Products
and/or pursuant to licenses or other agreements granting such authority, but: (1) excluding: (a) funds in reimbursement
of or to finance reasonable research and development costs incurred prior to the date hereof in the amount of US $900,000
(Nine Hundred Thousand United States Dollars) or incurred thereafter by Galmed or by subcontractors of Galmed who conduct research
and development activities for Galmed, provided that Galmed Licensees and their Affiliates shall not be deemed subcontractors for
the purposes of this paragraph (a); and (b) funds in reimbursement of or to finance costs incurred prior to the date
hereof or thereafter by Galmed in payment of official fees, reasonable costs and reasonable attorneys’ fees in the prosecution
of the Patent Applications and/or the maintenance of the Patents and/or in the performance of the recordals of inventorship and
the assignments referred to in clauses 2(a) and 3(b) below, respectively, provided that the amount of any deduction, pursuant
to this paragraph (b) together with all such deductions previously made, shall in no event exceed 50% (fifty percent) of the
total accumulated costs so incurred by Galmed at the time such deduction is made; and (2) after deduction of: (c) income
taxes deducted or withheld by the paying third party on such consideration; (d) value-added and/or sales tax and any other
similar tax or levy imposed and payable by Galmed on such consideration; and (e) any part of such consideration which Galmed
shall have returned to such third parties because of overpayment to Galmed;

 

    	 

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		1.11.	“Net Sales” shall mean any and all amounts which Galmed receives in respect
of the sale of Field Products to any person or entity, provided that as to sales which are not at arm’s length, the term
“Net Sales” shall mean the total amount that would have been due in an arm’s length sale, in all cases
after deduction of:

 

		(a)	sales taxes (including value added taxes) imposed
on Galmed to the extent applicable to such sale; and

 

		(b)	credits, allowances, rebates or reimbursements, if
any, actually granted or paid on account of price adjustments, recalls, rejections or return of Field Products previously sold;
and

 

		(c)	freight and insurance charges in CIF sales,

 

			and, provided further, as to sales of Field Products by Galmed to any Affiliate of Galmed, the
term, “Net Sales” shall mean the higher of: (i) ”Net Sales”, as defined above, with respect
to sales which are not at arm’s length; and (ii) the total amount actually received by such Affiliate on resale to an
independent third party purchaser after the deductions specified in subparagraphs (a), (b) and (c) above, to the extent applicable;

 

		1.12.	“Patent Activities” shall mean the prosecution of the Patent Applications and
the maintenance and enforcement of the Patents;

 

		1.13.	“Patent Applications” shall mean:

 

    	 

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		(a)	the patent applications listed in Appendix A
hereto;

 

		(b)	any counterparts of such patent applications worldwide;
and

 

		(c)	any divisional application, continuation application
and continuation-in-part application based on the applications referred to in subparagraphs (a) and (b) above;

 

		1.14.	“Patents” shall mean the patents listed in Appendix A hereto and
all patents issuing on the Patent Applications and shall include any reissues, re-examinations and extensions thereof.

 

		2.	JOINT INVENTORSHIP

 

		(a)	The parties hereby agree, unconditionally and irrevocably, that Prof. Gilat and Prof. Werner
Kramer, an employee of Aventis (“Prof. Kramer”), are joint inventors of the Invention and that to the extent
required by any local law and/or reasonably feasible without prejudicing the chances of acceptance of any of the Patent Applications,
an application will be made to the relevant patent offices to reflect such joint inventorship in connection with the Patent Applications.
All costs payable to third parties (such as patent attorneys and patent offices) in connection with such applications shall be
borne by Galmed exclusively.

 

		(b)	If there shall be a dispute between the parties whether such application is required under local
law and/or as to the feasibility of such application and/or as to the manner in which it should be filed or as to the actions required
by the parties or the inventors in connection with such application or whether its filing may prejudice the acceptance of any of
the Patent Applications, the dispute shall be resolved by leading patent counsel versed in the patent law of the jurisdiction or
jurisdictions as to which such dispute shall have arisen (“the Patent Counsel”) appointed by consent of the
parties or, in the absence of consent, within 30 (thirty) days of one party first proposing a candidate for such appointment to
the other, by the Chairman, for the time being, of the English Chapter of the A.I.P.P.I., at the request of either party and the
decision of the Patent Counsel, who shall act as an expert and not as an arbitrator, shall be binding on the parties. The fees
of the Patent Counsel shall be borne by the parties in equal shares.

 

    	 

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		3.	OWNERSHIP OF THE INVENTION

 

		(a)	Without derogating from the provisions of clause 4 below and subject to the following provisions
of this clause 3(a) and to the provisions of clause 3(b) below, the parties hereby agree, unconditionally and irrevocably,
that the Invention is owned jointly by Galmed and Aventis GmbH. Aventis hereby agrees, irrevocably and unconditionally, that: (i) all
title in the Patent Applications and in the Patents shall vest exclusively in Galmed (together with all rights of ownership in
the Invention necessary to vest such title in Galmed); (ii) all filings and registrations of the Patent Applications and the
Patents shall be in the name of Galmed; (iii) Galmed shall have exclusive control over the prosecution and maintenance of
the Patent Applications and the Patents; (iv) Aventis’ rights and interests in the Invention are as expressly defined
herein and Aventis shall have no further rights of any kind in the Invention; and (v) Aventis shall not assign any right it
holds in the Invention, except to Galmed as herein provided.

 

		(b)	Simultaneously with signature hereof and without charge to Galmed: (i) Aventis shall execute
an irrevocable notarial power of attorney in the form attached as Appendix B hereto and hereby irrevocably and unconditionally
authorises the exercise of the powers and authorities under the power of attorney solely for the purpose of the realisation and
implementation of Galmed’s rights under this Agreement, it being expressly agreed that in the event of any conflict between
the terms of this Agreement and the terms of the said power of attorney, the terms of this Agreement shall govern; (ii) Aventis
shall cause Prof. Kramer to execute all documents that shall be necessary to assign all title held by Prof. Kramer in
the Invention, any Patent Application and any Patent to Aventis; and (iii) Aventis shall execute all documents that shall
be necessary to assign to and vest in Galmed all title in the Invention, any Patent Application and any Patent as shall be necessary
to give full effect to the provisions of the second sentence of clause 3(a) above. Galmed hereby undertakes that it shall
promptly notify Aventis in the event of any use of the above-mentioned power of attorney. At Galmed’s request from time to
time and without charge to Galmed, Aventis shall execute and shall cause Prof. Kramer to execute any such additional documents
as shall be necessary to achieve the purposes stated in the previous provisions of this clause 3(b). All costs paid to third
parties (such as patent attorneys and patent offices) in recording the assignment of Patent Applications and Patents to Aventis
and to Galmed shall be borne by Galmed exclusively. It is expressly agreed for the removal of doubt and notwithstanding anything
to the contrary in the other provisions of this Agreement or the Appendices thereto, that the form and contents of the documents
to be signed pursuant to the provisions of this clause 3(b) above shall be those necessary under the laws of the relevant
jurisdictions to ensure (I) the validity of the assignments and enable the full and proper performance and recordal thereof and
(ii) that the validity of the Patent Applications and the Patents shall not be impaired or rendered questionable because of any
insufficiency or other defect in the form or contents (including the scope) of such documents. If there shall be a dispute between
the parties and/or the inventors or any of them as to the performance of the provisions of this clause 3 above including,
without limitation, a dispute as to the necessary form and contents of documents to be signed, the provisions of clause 2(b)
above shall apply, mutatis mutandis.

 

    	 

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		4.	EXCLUSIVE COMMERCIALISATION RIGHTS

 

		(a)	Aventis hereby agrees, unconditionally and irrevocably,
that Galmed shall have the exclusive and unrestricted right worldwide, to exercise, use and commercialise and allow third parties
to exercise, use and commercialise the Invention during the Agreed Term, in such manner and for such uses and indications as Galmed
shall deem fit in its absolute discretion. Without derogating from the generality of the foregoing, Aventis undertakes, unconditionally
and irrevocably, that during the Agreed Term, it will not exercise, use or commercialise or allow third parties to exercise, use
or commercialise the Invention.

 

		(b)	Aventis further undertakes, unconditionally and irrevocably,
that it shall not sue or demand payment of a royalty or any other payment or remedy from Galmed or any Galmed Licensee during
the Agreed Term on the grounds that Field Products infringe any Dominant Patents and, to the extent that such undertaking shall
not be sufficient under the law of any jurisdiction or jurisdictions to prevent the making of such suit or demand, Aventis hereby
grants Galmed and any Galmed Licensee a non-transferable, non-exclusive royalty-free license under the Dominant Patents, solely
for the purpose of the exercise, use and commercialization of the Invention with respect to Field Products. Notwithstanding the
above, Aventis obligations under this subparagraph (b) shall extend beyond the Agreed Term for Field Products that have received
a marketing approval during the Agreed Term, provided, however, that after the Agreed Term, Galmed shall pay royalties to Aventis
on Field Products covered by a Dominant Patent issued in the country of manufacture or sale which have received a marketing approval
during the Agreed Term as aforesaid at a rate half the rate specified in clause 8 below, on condition that before the end
of the agreed Term, Aventis shall have advised Galmed in writing of the existence of the Dominant Patent covering the said Field
Products.

 

    	 

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		(c)	Aventis undertakes that the assignment or other transfer
of Dominant Patents to any third party shall be made subject to the acceptance by such third party of the undertakings accepted
by Aventis under subparagraph (b) above and this subparagraph (c).

 

		5.	WARRANTIES AND REPRESENTATIONS

 

 (a) Galmed warrants and represents:

 

		(i)	that all right, title and interest in the Invention,
the Patent Applications and the Patents otherwise vesting in Prof. Gilat or any member of Prof. Gilat’s research
teams vest and shall vest in Galmed exclusively; and

 

		(ii)	that it is entitled and permitted to enter into this
Agreement and to perform all its obligations thereunder and, without derogating from the generality of the aforegoing, that all
corporate action and all approvals necessary for it to enter into and perform this Agreement have been duly taken and obtained.

 

(b)Aventis
warrants and represents:

 

		(i)	without derogating from the provisions of clauses 2
and 3 above and subject thereto, that all right, title and interest in the Invention, the Patent Applications and the Patents
otherwise vesting in Prof. Kramer vest in Aventis exclusively;

 

		(ii)	that it is entitled and permitted to enter into this
Agreement and to perform all its obligations thereunder and, without derogating from the generality of the aforegoing, that all
corporate action and all approvals necessary for it to enter into and perform this Agreement have been duly taken and obtained.

 

    	 

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		6.	DISCLAIMER

 

			Neither Galmed nor Aventis make any representation or warranty to one another as to the commercial
potential of the Invention, as to the possibility of obtaining patent protection for the Invention in all or any jurisdictions
and/or that the exercise of the Invention will not infringe the rights of third parties or any Aventis patent.

 

		7.	PATENTS

 

		7.1.	It is expressly agreed, for the removal of doubt, that all costs related to Patent Activities shall
be borne by Galmed or a Galmed Licensee, provided that Galmed shall be entitled, in its discretion, to determine or to authorise
a Galmed Licensee to determine, whether or not to continue with any Patent Activities. Should Galmed decide or instruct a Galmed
Licensee to cease prosecution of a Patent Application or maintenance of a Patent in any jurisdiction listed in Appendix C,
Galmed shall give Aventis at least 30 (thirty) days’ prior written notice of such intention and Aventis shall have the right,
but not the obligation, to continue such prosecution or maintenance in such jurisdiction at Aventis’ expense. Should Aventis
elect to continue such prosecution or maintenance, Galmed will assign all title in the respective Patent or Patent Application
to Aventis; provided that: (a) any such Patent or any Patent granted on any such Patent Application shall thereafter be deemed
a Dominant Patent for the purpose of this Agreement; (b) the assignment of all and any title in such Patent Applications and/or
Patents to Aventis shall not derogate from the provisions of clause 4 above or clause 8 below, which shall continue to
apply as if such assignment had not taken place; and (c) any such Patent or Patent Application assigned to Aventis shall continue
to constitute a “Patent” or “Patent Application” for the purpose of the definition of “Agreed Term”
in clause 1.3 above.

 

		7.2.	Aventis agrees that Galmed shall be entitled to receive the broadest possible protection for the
Invention available on the basis of the pending Patent Applications and Aventis agrees to provide Galmed, at Galmed’s expense,
with reasonable assistance in defending any opposition to acceptance of the Patent Applications and any applications for revocation
of any Patents.

 

    	 

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		8.	ROYALTIES

 

		(a)	In consideration of Aventis’ undertakings hereunder,
Galmed shall pay to Aventis 10% (ten percent) of all Commercialization Proceeds received by Galmed during the Agreed Term. It
is expressly stated for the removal of any doubt, that Galmed shall have no obligation to pay Aventis and Aventis shall have no
right to receive from Galmed a royalty or any other amount in respect of any exercise, use and commercialization of the Invention
by Galmed or a Galmed Licensee, except for the amount payable in respect of such exercise, use and commercialization regarding
the Field Products as hereinbefore provided, i.e., the said 10% of Commercialization Proceeds.

 

		(b)	Amounts payable to Aventis under clause 8(a)
above shall be paid to Aventis in US Dollars within 30 (thirty) days of the end of each calendar half year during the Agreed
Term, commencing with the first calendar half year in which Galmed receives Commercialization Proceeds. If any Commercialization
Proceeds are received in any currency other than US Dollars, then, for the purposes of paying any amounts hereunder in respect
of the same, such amount will be converted into Dollars in the manner provided in clause 8(c) below.

 

		(c)	Galmed shall, within a period of 30 (thirty) days
from the end of each calendar half year during the Agreed Term commencing with the first calendar half year in which any Commercialization
Proceeds are received, submit to Aventis a report, setting out the amount of Commercialization Proceeds received by Galmed in
respect of the period to which the report refers, with a breakdown between Net Sales and Net Licensing Receipts and specifying
the currency and date of receipt of all such payments and the rate of exchange used to convert such Net Sales or Net Licensing
Receipts into US Dollars from the currency in which the Net Sales or Net Licensing Receipts were received. The above mentioned
report shall also include a breakdown of all the amounts excluded or deducted from Net Licensing Receipts (or Net Sales) pursuant
to clauses 1.10 or 1.11 above. The rate of exchange to be used in any such conversion shall be the rate reported in the Wall
Street Journal for the purchase of US Dollars with such currency on the last business day of the half calendar year for
which such report has been prepared.

 

		(d)	Galmed shall keep complete and correct books of account
and records consistent with sound and accepted business and accounting principles and practices and in such form and in such detail
as to enable the determination of the amounts due to Aventis in terms hereof. Galmed shall supply Aventis at the end of each calendar
year during the Agreed Term, commencing with the first calendar year in which any amount is payable under this clause 8,
a report certified by Galmed’s Chief Financial Officer in respect of the amounts due to Aventis pursuant to this clause 8
in respect of the calendar year covered by said report.

 

    	 

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		(e)	(i)A certified public accountant appointed by
Aventis shall have the right, during normal business hours to inspect Galmed’s books of account, records and other documentation
to the extent relevant or necessary in or for the ascertaining or verification of the amounts due to Aventis under this clause 8.
In the event that any inspection as aforesaid reveals any underpayment by Galmed to Aventis in respect of any year of the term
of this Agreement in an amount exceeding 5% (five percent) of the amount actually paid by Galmed to Aventis in respect of such
year, then Galmed shall (in addition to paying Aventis the shortfall or amounts due (as appropriate) together with interest thereon
in accordance with clause 8(f) below) bear the costs of such inspection (which shall otherwise be borne by Aventis). Such
right of inspection with respect to any year of the term of this Agreement shall expire at the end of 3 (three) years from the
end of the said year.

 

		(ii)	The accountant appointed by Aventis to carry out such
inspection shall not be entitled to disclose to Aventis or any third party any information obtained by him in carrying out such
inspection, except only that he shall be entitled to disclose to Aventis the total amount of Commercialization Proceeds discovered
by him as being received by Galmed in any calendar half-year and the breakdown of such amount between Net Sales and Net Licensing
Receipts. Any such inspection by such accountant shall be subject to signature of an undertaking of confidentiality by such accountant
in favour of Galmed, in form reflecting the aforegoing and reasonably satisfactory to Galmed.

 

		(f)	Any amount payable hereunder by Galmed which has not
been paid by its due date of payment, shall bear interest from its due date of payment until the date of actual payment, at the
rate of 3% (three percent) per annum in excess of the average LIBOR rate for US Dollar deposits for a period of 3 (three)
months prevailing from time to time during the period of arrears; provided that, if an arbitrator appointed pursuant to clause 14
below shall find that Galmed has deliberately and without justification, withheld any payment due to Aventis hereunder, Galmed
shall pay Aventis, in addition to the amount withheld and interest thereon as aforesaid, a further amount constituting agreed
liquidated damages, equal to 50% of the amount withheld as aforesaid.

 

    	 

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		(g)	If Aventis shall commit a material breach of its obligations
hereunder and shall not remedy such breach within 45 (forty five) days of receipt of written notice from Galmed calling upon Aventis
to do so, Galmed shall be entitled, following passage of 120 (one hundred and twenty) days from receipt by Aventis of the said
written notice from Galmed and unless and until an arbitrator appointed pursuant to clause 14 below shall direct otherwise,
to deposit amounts due to Aventis hereunder in an interest-bearing bank account in the name of Galmed’s accountant, as trustee,
and, if and to the extent the arbitrator shall so direct, to receive from any amounts so deposited, damages caused to Galmed as
a result of such breach, any balance remaining to be paid to Aventis, at such time as the arbitrator shall direct.

 

		9.	CONFIDENTIALITY

 

			Aventis shall maintain in full confidence the Invention, the contents of the Patent Applications
and all information provided to it or received by it pursuant to clause 8 above or otherwise provided to it or received by
it pursuant to this Agreement, except and to the extent that: (a) it is in the public domain at the date of this Agreement
or becomes part of the public domain thereafter (other than through a violation by Aventis of this obligation of confidentiality);
or (b) was already known to Aventis prior to disclosure by Galmed or Prof. Gilat, as proved by contemporaneous documentation;
or (c) has been approved in writing by Galmed for release. The termination of Aventis’ obligation of confidentiality
as aforesaid with respect to any information shall not vest any licence or rights of use in Aventis with respect to such information.
Aventis’ obligation of confidentiality as aforesaid shall survive termination of this Agreement, but shall terminate finally
at the end of 2 (two) years from the date of such termination.

 

    	 

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		10.	NO ASSIGNMENT

 

			Except as otherwise expressly provided herein, neither party may assign all or any of its rights
or obligations under this Agreement or arising therefrom without the express prior written consent of the other party, such consent
not to be unreasonably withheld, except that Galmed may assign all or any of its rights and obligations hereunder to a third party
or parties, which undertakes the commercialization of the Invention and the Patents, provided: (i) that written notice of
such assignment shall be given by Galmed to Aventis, (ii) that any such assignment shall be subject to Aventis’ rights
hereunder and the assignee(s) shall so confirm to Aventis in writing, (iii) any amount paid to Galmed in respect of such assignment
in relation to Field Products shall be deemed Net Licensing Proceeds and (iv) Galmed shall remain guarantor of the obligations
of the assignee(s) towards Aventis.

 

		11.	TERM AND REMEDIES

 

		(a)	This Agreement shall terminate at the end of the Agreed
Term, provided that the agreements and undertakings of the parties or either of them herein made or given irrevocably and unconditionally,
the obligations of the parties accrued until the date of termination and the provisions of clauses 1 (to the extent the definitions
therein are relevant to the other provisions of this Agreement surviving termination), 4(b), 4(c),, 8 (subject to the limitations
expressly stated therein), 9, 10, 11, 14, 15 and 17 of this Agreement, shall survive the Agreed Term and the termination of this
Agreement.

 

		(b)	The parties shall have the right to seek specific
performance of this Agreement and/or damages for the breach thereof and any other remedies available under law, except termination
or cancellation of this Agreement.

 

		12.	DISPOSAL OF PENDING PROCEEDINGS

 

			Simultaneously with signature hereof, the parties hereto shall cause their respective attorneys
to sign and file with the Tel-Aviv-Yafo District Court, the notice attached hereto and marked Appendix D, requesting
the Court to strike out the originating motion filed in the Pending Proceedings, with no order for costs.

 

    	 

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		13.	ENTIRE AGREEMENT

 

			This Agreement constitutes the entire agreement between the parties with respect to the subject
matter hereof and supersedes and replaces any prior written or oral agreement, representations or undertakings between them relating
to such subject matter. The parties confirm that they have not entered into this Agreement on the basis of any representation or
any other warranty that is not expressly given in this Agreement. Any addition or amendment to this agreement shall not be effective
unless in writing signed by the authorized signatories of both parties.

 

		14.	GOVERNING LAW; ARBITRATION

 

		(a)	This Agreement shall be governed in all respects by the laws of the State of Israel.

 

		(b)	Except as otherwise expressly provided hereto, all disputes relating to this Agreement shall be
resolved by arbitration in London to be conducted in English before a single arbitrator according to the Rules of the London Court
of International Arbitration. With a view to expediting the arbitration, the parties agree that any party may apply, pursuant to
Article 9 of the said Rules, for expedited formation of the Arbitral Tribunal, in the event such formation is requested in
connection with the provisions of clause 8(g) of this Agreement and the other party shall be deemed, by its signature hereto,
to have given its consent to such expedited formation.

 

		15.	NOTICES

 

		15.1.	Any notice or other communication required to be given by one party to the other under this Agreement,
including without derogation from the generality of the above, any notice with respect to Galmed’s use of the power of attorney
provided in Section 3(b) above, shall be in writing and shall be deemed to have been served: (i) if personally delivered,
when actually delivered; or (ii) if sent by facsimile, the next business day after receipt of confirmation of transmission;
or (iii) 10 (ten) days after being mailed by certified or registered mail, postage prepaid (for the purposes of proving such
service—it being sufficient to prove that such notice was properly addressed and posted) to the respective addresses of the
parties set out below, or to such other address or addresses as any of the parties hereto may from time to time in writing designate
to the other party hereto pursuant to this clause 15:

 

    	 

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	(a)	to Galmed at:	35 Mannarino Road
	 	 	B’Kara,
	 	 	BKR 08,
	 	 	Malta
	 	 	Attention:   Mr. George Mangion
	:	 	Facsimile:  356 484 375
	 	 	 
	 	with a copy to:	Hugh Kowarsky, Adv. and
	 	 	Tal Band, Adv.
	 	 	S. Horowitz & Co.
	 	 	31 Ahad Ha’am Street
	 	 	Tel Aviv
	 	 	Israel
	 	 	 
	(b)	to Aventis GmbH at:	Industriepark Höchst, K 801
	 	 	Frankfurt am Main
	 	 	65926
	 	 	Germany
	 	Attention:	Dr. Steffen Rupp
	 	 	Facsimile: 49 69 357175
	 	 	 
	 	with a copy to:	Zeev Pearl, Adv.
	 	 	Eitan Pearl, Latzer & Cohen Zedek
	 	 	2 Gav Yam Center
	 	 	7 Shenkar Street
	 	 	Herzlia 46733
	 	 	Israel

 

		15.2.	The provisions of clause 15.1 above shall apply, mutatis mutandis, to any notice given
in connection with the power of attorney referred to in clause 3(b) above.

 

		16.	FURTHER ACTION

 

			Each of the parties agrees that it shall, at any time and from time to time, on the written request
of the other party execute and deliver promptly and duly to the other party any and all such further documents and instruments
and shall do or procure to be done, all such further acts and things the other party may, from time to time, reasonably require
for the purpose of giving full effect to the provisions of this Agreement.

 

		17.	TAX DEDUCTIONS

 

			All payments to be made to either party hereunder shall be made subject to deduction of income
tax at source, provided that a certificate proving payment of the amount deducted to the tax authorities shall be provided to the
other party.

 

    	 

    	- 16 -

    

 

			

		18.	NO WAIVER

 

			No waiver by any party hereto, whether express or implied, of its rights under any provision of
this Agreement shall constitute a waiver of such party's rights under such provisions at any other time or a waiver of such party's
rights under any other provision of this Agreement. No failure by any party hereto to take any action against any breach of this
Agreement or default by another party hereto shall constitute a waiver of the former party's rights to enforce any provision of
this Agreement or to take action against such breach or default or any subsequent breach or default by such other party.

 

 

 

 

 

 

 

IN WITNESS WHEREOF the parties hereto
have set their signatures as of the date first mentioned above.

 

	for	GALMED INTERNATIONAL LIMITED	 
	 	 	 
	By:	/s/ Prof.
    Tuvia Gilat	 
	 	 	 
	Title:	 	 
	 	 	 
	for	AVENTIS PHARMA DEUTSCHLAND GmbH	 
	 	 	 
	By:	/s/ Prof. Werner Kramer	 
	 	 	 
	Title:	Head of DG Metabolic Diseases Manager	 

 

    	 

    	 

    

 

APPENDIX A

 

PATENTS/PATENT APPLICATIONS

 

Israel Patent Application 123998 (which
is priority document for all patents/patent applications listed below)

 

PCT/IL99/00173 (all patents/patent applications
listed below via this application).

 

	Europe

 

European Patent Application EP 1071702 B1

covering:

 

Austria

Belgium

Cyprus

Denmark

Finland

France

Germany

Greece

	Eurasia

 

Eurasian Application No. 200000888 covering:

 

Armenia

Azerbaijan

Belarus

Kazakhstan

Kirgizstan

Moldova

Russia

Tajikistan

Turkmenistan

	Ireland	 
	Italy	
	Latvia	Americas
	Lithuania	 	
	Luxembourg	Brazil	9909908-0
	Monaco	Canada 	2,325,933
	Netherlands	Mexico 	009863
	Portugal	United States 	6,395,722(granted),
	Romania	 	6,384,024(granted),
	Slovenia	 	10/078,671
	Spain 	 	 
	Sweden	Others	 
	Switzerland (+Liechtenstein)	 	 
	United Kingdom	Australia 	30515/99 (granted)
		China 	99804903.4
	Other European Applications:	Indonesia 	W2000 1998
	Czech Republic 	PV 2000-3625	Japan 	2000-543488
	Hungary 	P 01 01653	New Zealand 	507309
	Norway 	20004998	South Korea 	10-2000-7010903
	Poland 	P 343 360	Turkey 	84564
	Ukraine 	20000095546	 	 

 

    	 

    	 

    

 

IRREVOCABLE POWER OF ATTORNEY

 

 

We, the undersigned,

 

 

AVENTIS PHARMA DEUTSCHLAND GmbH,
a company incorporated in the Federal Republic of Germany, under registration no. _______, of ________________________ (“Aventis”),

 

 

hereby appoint:

 

TAL BAND, ADVOCATE
and/or HUGH KOWARSKY, ADVOCATE and/or SHAY NAHUM, ADVOCATE, all three of S. Horowitz & Co., Advocates,
of 31 Ahad Ha’am Street, Tel-Aviv, Israel and/or any other lawyer or lawyers, wherever licensed to practise, designated
by GALMED LTD., a company incorporated in Malta, under Registration No. C 26924, (“Galmed”),
from time to time, by notice in writing to Aventis referring to this power of attorney,

 

 

to be our attorneys and attorney and to
act in our name, in all matters relating to the invention which is the subject of Israel patent application no. 123998 and/or
of PCT application no. IL/99/00173 and/or of any counterparts of any such patent applications and/or of any patent applications,
including divisional applications, continuation applications, continuation-in-part applications and national phase applications,
based on or claiming priority from any such patent applications and/or of any patents issued on any such patent applications, including
the patents and patent applications listed in Appendix A hereto (hereinafter “the Invention”, “the
Patent Applications” and “the Patents”) and/or relating to the Patent Applications and/or the Patents
and without derogating from the generality of the aforegoing, our said attorneys and attorney shall be authorised to take all or
any of the following acts in our name and on our behalf:

 

		1.	To do all or any acts and things, including the signature of all and any documents as shall be
necessary to vest in Galmed all title in all or any of the Patent Applications and/or in all or any of the Patents;

 

		2.	To grant a licence to any third party or parties with respect to and/or under any rights held by
us in the Invention and/or all or any of the Patent Applications and/or all or any of the Patents;

 

    	 

    	 

    

 

		3.	To sign all and any documents, to appear before any person or body and to do all and any other
acts and things as our attorneys or attorney shall deem necessary or appropriate in the exercise of their or his powers and authorities
under this power and/or in the performance, enforcement, realisation and/or exercise of Galmed’s rights under the Agreement
dated _______ between Aventis and Galmed.

 

Our said attorneys and attorney shall be
entitled, from time to time, to delegate all or any of their or his powers and authorities hereunder and to cancel any such delegation.

 

This power of attorney shall be binding
on our legal successors.

 

This power of attorney is irrevocable since
the rights of Galmed and/or third parties, including, inter alia, any licensee of rights to the Invention, the Patent Applications
and/or the Patents, are and/or will be dependent thereon.

 

 

IN WITNESS WHEREOF, WE HAVE HEREUNTO
SET OUR SIGNATURES THIS ___ DAY OF _________ 2002.

 

 

______________________________________

AVENTIS PHARMA DEUTSCHLAND GmbH

 

 

(To be notarised with apostille or legalised)

 

    	 

    	 

    

 

APPENDIX C

 

(Clause 7.1)

 

 

Denmark

 

Finland

 

France

 

Germany

 

Italy

 

Japan

 

Norway

 

Spain

 

Sweden

 

Switzerland

 

United
Kingdom

 

United
States of America

 

    	 

    	 

    

 

Translation from Hebrew 

for convenience purposes only

 

Appendix D

 

	District Court	Originating Summons 552/01
	Tel Aviv-Jaffa	Scheduled for _______________
	 	Before the Honorable Judge___ 

 

In the matter of:

1. Prof. Tuvia Gilat

2. Galmed International Ltd.

    a company incorporated under the laws of Malta

 

All represented by S. Horowitz &
Co., Advocates

whose address for service of process
purposes is:

31 Ehad Ha'am Street, Tel Aviv, 65202

Tel: 03-5670666; Fax: 03-5660974

The Petitioner

Against

 

Aventis Pharma Ltd.

(Company registration no. 51-264505-2)

 

Represented by Eitan, Perel, Cohen-Zedek,
Advocates

Whose address for service of process
purposes is:

7 Shenkar Street, Herzelia 46725

Tel: 09-9709000; Fax: 09-9709001

 

The Respondent

 

Joint Motion for Dismissal of the
Originating Summons 

 

The parties hereby notify the
Court that they have reached a settlement outside of Court and request that the Court order the dismissal of the 522/01 Originating
Summons, without an expenses decree.

 

	 	 	 
	Tal Band, Adv.	 	M. Barzem, Adv.
	S. Horowitz & Co.,	 	Eitan, Perel, Cohen-Zedek,
	Petitioner's Representative	 	Respondents' Representative

 

Today, September __ 2002.Exhibit 10.5

 

 

 

 

 

CONFIDENTIAL

 

 

Memorandum of Understanding

between

Enterome Bioscience and Galmed Medical Research

 

 

 

 

Dear Dr Baharaff,

 

Pursuant to discussions recently held between our companies,
Enterome Bioscience (hereinafter “Enterome”) and Galmed Medical Research (hereinafter “Galmed”) agree
to explore opportunities to collaborate in the field of gut microbiota and metabolic disorders area by joining their efforts and
respective expertise for the development of biomarkers and patients stratification tools. 

 

Galmed develops innovative, proprietary drugs (fatty acid bile-acid
conjugates) for the treatment of cholesterol and liver diseases. The most advanced compound in the series is Aramchol (arachidyl
amido cholanoic acid), which is currently in clinical studies. Enterome develops gut microbiota biomarkers based on quantitative
metagenomic analysis, for metabolic disorders and immune mediated diseases.

 

Therefore, this letter aims at setting forth the general terms
and conditions upon which Enterome and Galmed are prepared to enter into further collaboration agreement.

 

-Scope of the study :

		o	Galmed intends to initiate an international phase IIb study aiming to evaluate efficacy and safety of Aramchol in the treatment
of patients with Non-Alcoholic SteatoHepatitis (“NASH”)

		o	From patients screened and enrolled in Galmed’s study, Enterome will be in charge of organizing stool samples collection
at baseline, 6 months and at the end of the phase II study. Enterome will perform gut microbiota metagenomic analysis from fecal
samples taken at baseline or concomitantly to the baseline liver biopsy.

-Contribution of parties:

		o	Galmed will provide access to collecting stool samples from the phase II patients (patients screened and enrolled to the study)
and will provide paitent’s clinical data (including liver biopsy results and MRl results).

		o	Enterome will provide sampling systems and storage, and will peform whole analysis process to generate gut microbiota metagenomic
data (“metagenomic data”).

		o	No cross financial contributions or payments are expected from any party to an other.

 

    	 

    	 

    

 

 

 

 

 

- Expected results/outcomes :

		o	From metagenomic data generated throughout the collaboration, 1. Enterome expects a) to evaluate the performance its proprietary
metagenomic profiles for stratifying patients according to the outcome of the liver biopsy and MRI results b) to generate metagenomic
profiles correlated with disease progression of patients. 2. a) GalMed expects to evaluate the correlation between Aramchol’s
dose response data and patient’s metagenomic profiles in order to be able to stratify potential patients in its next clinical
trials. b) to identify NAFLD patients that are at risk of progression to NASH.

 

- Exploitation of data and results

		o	Each parties remains sole owner of their background IP.

		o	Enterome will be sole owner of gut micrabiota metagenomic data generated throughout the collaboration. Galmed will be sole
owner of clinical data generated throughout the collaboration.

		o	Galmed will grant Enterome a free
                                         license for using clinical data associated to patients in the frame only of developing
                                         biomarkers and related diagnostic in in stratifying NAFLD patients according to the risk
                                         of developing NASH This license includes rights for using the clinical data associated
                                         with metagenomic data for medical and regulatory development as well as commercial development
                                         of the above-mentioned diagnostic application.

		o	Enterome will grant Galmed for a free license to use metagenomic data generated throughout the study for scientific, clinical
and regulatory purposes of developing Aramchol but not commercial use for developing of promoting a diagnostic.

		o	Upon achievement of the phase II study, Enterome will grant Galmed for a right of first refusal to enter business transaction
regarding commercial exploitation of Enterome’s proprietary metagenomic profiles and metagenomic data generated during the
collaboration.

 

The principles of the projects and detailed arrangements will
be set forth in a definitive agreement between the Parties.

 

The existence of this letter, the contents, execution and acceptance
hereof, and any information obtained from the other party by virtue of this letter shall be treated as confidential subject matter
and governed by the provisions of the confidentiality agreement signed between the parties on May 11th 2012:

 

Endorsed on October 30th 2012,

 

	Rodolphe Clerval	Allen Baharaff
	Chief Business Officer	Chief Executive Officer
	Enterome Bioscience	Galmed Medical Research
	/s/ Rodolphe Clerval	/s/ Allen Baharaff

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