Exhibit 10.2
LICENSE AGREEMENT
This License Agreement (this "AGREEMENT") is made and entered into on 2nd day of
February, 2012 (the "EFFECTIVE DATE"), by and between TEL HASHOMER - MEDICAL
RESEARCH, INFRASTRUCTURE AND SERVICES LTD., a private company duly incorporated
under the laws of the State of Israel having its registered office at Tel
Hashomer, 52621, Israel ("THM" or the "LICENSOR"); and ORGENESIS LTD. (or any
other name as may be agreed and approved by the Companies Registrar), a private
company to be incorporated under the laws of the State of Israel, to have its
registered office at __________________, Israel (the "COMPANY" or "LICENSEE")
represented by __________________. Each of the Licensor and the Company is a
"PARTY" and together they are the "PARTIES" hereunder.
WHEREAS: THM was established for the purpose of promoting the welfare of the
Sheba Medical Center (the "HOSPITAL"); AND
WHEREAS: Upon the request of the Hospital and the Fund, as defined below, THM
undertook to act as the operational body of the Hospital and the Fund,
with respect to promotion, development and commercialization of
intellectual property deriving from inventions of the Hospital's and/or
the Fund's employees; AND
WHEREAS: The Company was established by the Parent Company (as defined below),
and shall engage in the design, development and commercialization of
the Licensed Information, as defined below, in accordance with this
Agreement; AND
WHEREAS: ▇▇. ▇▇▇▇ ▇▇▇▇▇▇, ID No. 67278234 ("▇▇▇▇▇▇"), has conceived, during the
period, and as a result, of her employment with the Hospital and/or the
Fund, the Invention, as defined below, and as fully described in the
Patents applications attached to this Agreement as APPENDIX A and
constituting an integral part hereof; AND
WHEREAS: The Patents, as defined below, were filed in ▇▇▇▇▇▇'▇ name as the sole
owner, even though THM has full ownership rights in and to the Licensed
Information as the trustee of the Hospital and/or the Fund, all as
specified in ▇▇▇▇▇▇'▇ Agreement, as defined below and attached as
APPENDIX B; AND
WHEREAS: At the date of execution hereof, ▇▇▇▇▇▇ has transferred and assigned,
in accordance with ▇▇▇▇▇▇'▇ Agreement, all rights, title and interest
in and to the Patents to THM, and for such purpose undertook to execute
any and all documents including assignment documents as required to
register the ownership in and to the Patents in the name of THM in any
patent registry or other regulatory authority in the world; AND
WHEREAS: THM affirms that: (i) according to the ▇▇▇▇▇▇'▇ Agreement, as such term
is defined below, THM has been assigned with full ownership rights in
and to the Licensed Information, as the trustee of the Hospital and/or
the Fund and as a result thereof THM received full ownership rights in
and to the Licensed Information; (ii) it has not sold, transferred
and/or assigned any rights to the Licensed Information to any third
party; and (iii) it has not disclosed any Confidential Information
regarding any of the Licensed Information to any third party save for
as specified in APPENDIX C attached hereto; AND
WHEREAS: Based on the foregoing, the Company desires to obtain from the
Licensor, and the Licensor agrees to grant to the Company, an exclusive
worldwide license in respect of the Licensed Information, for the
purpose of developing, selling and distributing the Products, as
defined below, all subject to and in accordance with the provisions
hereof.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL COVENANTS AND UNDERTAKINGS HEREIN
CONTAINED, THE PARTIES HEREBY AGREE AND STIPULATE AS FOLLOWS:
1. PREAMBLE AND DEFINITIONS:
1.1 The Preamble to this Agreement as well as all the Agreement's
appendices constitutes an integral part thereof. The terms specified
in the Preamble, which are defined hereinafter, shall be interpreted
according to the meaning ascribed to them hereinafter.
1.2 The descriptive headings of this Agreement are inserted for
convenience only and shall not be considered a part or affect the
interpretation of this Agreement.
1.3 In addition to terms defined elsewhere in this Agreement, its Preamble
and its appendices, the following terms shall have the meaning
ascribed to them hereinafter:
1.3.1"AFFILIATE" shall mean, with respect to a party, any person,
organization or entity controlling, controlled by or under common
control with, such party. For purposes of this definition only,
"control" of another person, organization or entity shall mean
when a person, organization or entity: (i) owns or directly
controls more than fifty percent (50%) of the outstanding voting
stock or other ownership interest of the other organization or
entity; or (ii) possesses, directly or indirectly, the power to
elect or appoint more than fifty percent (50%) of the members of
the governing body of the organization or other entity.
1.3.2"CONFIDENTIAL INFORMATION": all information, data and results,
whether verbal, written or electronic, obtained and/or generated
by a Party in connection with this Agreement or the Licensed
Information, as well as all confidential business information of
the Parties, and all information, data, discussions, and events
related to or arising from the Company's Board of Directors (the
"BOARD") meetings.
1.3.3"▇▇▇▇▇▇'▇ AGREEMENT" - the agreement attached hereto as APPENDIX
B, between Ferber and THM, according to which ▇▇▇▇▇▇ has
transferred and assigned any and all rights, title and interest
in and to the Patents to THM.
1.3.4"FIRST COMMERCIAL SALE": with respect to any Product in any
country, the first commercial sale of a Product in such country
after FDA Approval for marketing, or the equivalent approval in
such country, has been obtained, provided that the term "FIRST
COMMERCIAL SALE" shall not include a reasonable amount of samples
distributed for free for demonstration purposes provided however
that Licensor shall be furnished with a detailed report relating
to such distribution and such report shall be include all the
details specified in Section 5.6.1, with respect to reports on
Net Sales.
1.3.5"FUND": "Medical Research Infrastructure Development and Health
Services Fund by the Sheba Medical Center", a non-profit
organization incorporated under the laws of the State of Israel.
1.3.6"INVENTION": drawings, specifications, samples, models,
processes, procedures, instructions, technology, applied
development engineering data, reports, inventions, manufacturing
files, know-how and trade secrets and all other technical or
commercial information, data and documents, as fully specified in
the Patents , all as developed by or under the supervision of
▇▇▇▇▇▇, and owned by the Licensor pursuant to the assignment to
the Licensor as specified in the ▇▇▇▇▇▇ Agreement including any
intellectual property rights thereto.
1.3.7"LICENSED INFORMATION": the Invention, whether or not protected
by patent or patent applications and the Licensed Patents.
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1.3.8"NET SALES": the total amount actually invoiced by the Company
and by each Sublicensee, in connection with the sale of Products
on a country-by-country basis, after deduction of: (i) value
added taxes and any other sales taxes applicable to such sale;
(ii) amounts credited by a credit note; provided that: (a) with
respect to sales which are not at arms-length and/or are not
according to the current market conditions for such a sale, the
term "NET SALES" shall mean the total amount that would have been
paid in an arms-length sale made according to the current market
conditions for such sale or according to market conditions for
sale of products similar to the Products, after deduction of the
deductions listed in (i) through (ii) above; and (b) with respect
to sales by the Company and/or a Sublicensee, as applicable, to
any affiliated entity, the term, "NET SALES" shall mean the
higher of: (i) "Net Sales", as defined above in paragraph (a) and
(ii) the total amount invoiced by such affiliated entity on
resale to an independent third party purchaser, after deduction
of the deductions listed in (i) through (ii) above.
1.3.9 "NEW INVENTIONS": shall mean (i) the results of activities
carried out by the Company or by third parties at the direction
of the Company (including any invention, patent or patent
application, product, material, method, process, technique,
know-how, data, information or other result which does not form
part of the Licensed Information, discovered in the course of or
arising from such activities carried out by the Company or by
third parties at the direction of the Company, including any
regulatory filing filed, or approval obtained, by the Company or
a Sublicensee) in respect of the Products, as well as any
information, material, results, devices and know-how arising
therefrom; and (ii) any inventions, improvement, development or
enhancement based upon, consists of, comprises, contains or
incorporates the Licensed Information made by the Company,
▇▇▇▇▇▇ or any other employee or agent of Sheba on behalf of the
Company following the Effective Date ,provided however that with
respect to ▇▇▇▇▇▇ and Sheba's employees such invention shall be
deemed a "New Invention" only as long as they are Sheba's
employees or where under the laws, regulations, and/or
guidelines or directives of any regulatory authority, such
invention belongs to Sheba.
1.3.10"PATENTS" or "LICENSED PATENTS": the U.S., foreign or
international patent or patent applications set forth on
APPENDIX A attached hereto and relating to the Invention: (i)
all improvements, updates, modifications and enhancements
thereto made by the Licensor or ▇▇▇▇▇▇ until the Effective Date
(if any); (ii) all provisional applications, continuations,
continuations-in-part, divisions, reissues, renewals, and
patents granted thereon, all patents-of-addition, reissue
patents, re-examinations and extensions or restorations by
existing or future extension or restoration mechanisms,
including, without limitation, supplementary protection
certificates or the equivalent thereof, all related to the
foregoing. Subject to the provisions of this Agreement, APPENDIX
A shall include and shall be updated from time to time to
reflect inclusion of new Licensed Patents.
1.3.11"PRODUCTS": any (i) product, proceSs or service using cell
therapy for diabetes treatment (including any composition, any
services, any procedure and protocols), that incorporates and/or
makes any use of the Licensed Information, and (ii) any such
product process or service developed, manufactured, produced,
marketed, distributed and/or licensed by an Affiliate, again
provided that it incorporates and/or makes any use of the
Licensed Information.
1.3.12"SHEBA": the Fund and/or the Hospital, and their employees,
representatives, agents and contractors.
1.3.13"SUBLICENSE": shall mean the grant of any right or license and
any agreement executed, by the Company to or with any entity,
permitting any use of the Licensed Information and/or the
Products (or any part thereof) including for the development
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and/or manufacture AND/or marketing and/or distribution and/or
sale of Licensed Information or the Products and the term
"SUBLICENSEE" shall be construed accordingly.
1.3.14"SUBLICENSE FEE": consideration of any type or nature, received
(for the removal of doubt, whether received before or after the
First Commercial Sale in any country) by the Company in return
for or in connection with the grant of Sublicenses or the grant
of an option for a Sublicense, and excluding amounts received by
the Company which are included under the definition of "NET
SALES" based on sales of the Products by Sublicensees, in
respect of which the Company has paid royalties to the Licensor
according to this Agreement; Sublicense Fee shall include any
lump sums, revenues from Licensing Fees, milestone payments,
etc. For the sake of clarity, it is hereby acknowledged and
agreed that "SUBLICENSE FEE" shall not be payable on any
consideration if the Sublicense Fee: (a) is paid for research
and development according to the Company's reasonable work plan
("R&D CONSIDERATION"), provided however that such research and
development shall be reasonably performed by the Company, its
Affiliate, and/or a third party, on behalf of the Company as a
contractor. The Licensor shall be entitled to verify such
performance by the Company, an Affiliate or a third party, at
the end of such research and development according to the
Company's work plan, by written records to be provided by the
Company to the Licensor, at the Licensor's reasonable request;
it is hereby clarified that the Company shall pay Sublicensing
Consideration, as defined below, with respect to such R&D
Consideration only if the R&D Consideration shall exceed the
reasonable consideration for such research and development by
more than 15% (fifteen percent); or (b) is an actual injection
of funds into the Company in the manner of equity funding,
provision of loans, including from a financial institution, by
means of provision of a bank loan, a credit facility and
debentures.
2. GRANT OF LICENSE AND SUBLICENSING:
2.1 Subject to the terms and conditions set forth herein, the Licensor
hereby grants to the Company, a worldwide royalty bearing, exclusive
license to the Licensed Information, with the right to sublicense
(subject to the provisions of this Agreement), and to make commercial
use of the Licensed Information and any other intellectual property
rights related thereto, all in order to develop, manufacture, produce,
use, market, commercialize, lease, sell, distribute, export, import
and otherwise utilize the Products (the "LICENSE").
2.2 The License shall remain in force, during the term of this Agreement
as specified in Section 8.1 hereunder, unless previously terminated
according to the terms hereunder.
2.3 The Company shall be entitled to grant a Sublicense subject to the
following terms:
2.3.1 The Sublicense is granted according to a written appropriate and
binding Sublicensing agreement that: (i) is as protective of
Licensor's rights as the terms and conditions of this Agreement;
(ii) is consistent with the terms of the License and this
Agreement; and (iii) includes, INTER ALIA, the following terms:
(a) the Sublicense shall expire automatically upon termination
of the License for any reason, or shall be converted to a
license directly with the Licensor, at the option of Licensor,
if this Agreement terminates; (b) provisions relating to
Confidentiality similar to those specified herein; (c) the
Sublicensee shall have no claims and/or demands of whatever type
and nature against the Licensor, including in the event of
termination of the License by the Licensor; (d) provisions
entitling the Company to terminate the Sublicense according to
the terms entitling THM to terminate the License; and (e) all
terms required in order to enable the Company to perform its
obligations hereunder.
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2.3.2 In the event the consideration shall be non-monetary, THM and
the Company shall agree upon the value of such non-monetary
consideration (the "VALUE") and THM shall be entitled to its
share of the Value according to the rates specified in Section
5.1.2 below, which shall be paid to it within 60 (sixty) days of
the completion of such transaction. Should THM and the Company
not reach agreement as to the Value, then the Value shall be
decided upon by an external assessor acceptable to both THM and
the Company.
2.3.3 The draft of the Sublicense Agreement, in substantially the
final form, shall be furnished to THM, for informational
purposes only, prior to the execution of a Sublicense Agreement.
The Sublicensing Agreement shall be provided to THM in the final
form immediately following execution thereof.
2.3.4 The Sublicense is being granted in a bona fide arms-length
commercial transaction.
2.4 For the removal of doubt, and without derogating from any of the
Licensor's rights, it is hereby agreed by the Parties that
notwithstanding anything to the contrary in this Agreement, the
Licensor and/or the Fund and/or the Hospital shall be entitled to use
the Licensed Information for academic and/or scholarly purposes,
provided that the Licensor: (a) continues to hold full ownership
rights to the Invention and the Licensed Information; (b) does not
sell, transfer or assign any of its rights to the Invention and/or the
Licensed Information to any third party; (c) does not disclose any
Confidential Information regarding the Invention to any third party,
except that Confidential Information disclosed to the employees of the
Fund, the Hospital and/or THM; (d) continues to be able to make the
representations it makes in Section 3 below; (e) is able to continue
to fulfill all of its obligations pursuant to this Agreement; (f) the
Licensor shall own any and all new intellectual property resulting
from such academic and/or scholarly purposes;.
3. LICENSOR'S WARRANTIES, PROPRIETARY RIGHTS AND DISCLAIMERS:
3.1 THM represents and warrants that:
3.1.1 (i) It has been assigned, as the trustee of the Hospital and the
Fund, with any and all rights, title and interest in and to the
Licensed Information, including any and all copyright, patent
and patent applications, and all rights and interest in and to
any and all drawings, plans, diagrams, tables, specifications,
all as specified in the ▇▇▇▇▇▇ Agreement; (ii) it has not
received a written notice that the use of the Licensed
Information infringes any patents, copyrights and/or other
intellectual property rights of any third party, save for as
specified in ▇▇▇▇▇▇'▇ Agreement; and (iii) it has not received a
written notice that any third party is currently infringing of
its intellectual property rights with regard to the amount of
the Licensed Information, save for as specified in ▇▇▇▇▇▇'▇
Agreement.
3.1.2 It has the authority to enter into this Agreement;
3.1.3 It was solely empowered by the Hospital and the Fund to license
the Licensed Information hereunder;
3.1.4 No representation or warranty by it in this Agreement, or in any
written statement or certificate or other instrument furnished
to the Company by the Licensor pursuant to this Agreement or in
connection with the transactions contemplated by this Agreement
contains, or will contain, any untrue statement and/or omission
of a material fact; and
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3.1.5 Other than the licenses granted herein, THM has not granted any
licenses or other rights, nor has any obligation to grant
licenses, or other rights in relation to the Licensed
Information.
3.2 It is agreed by the Parties that THM is and shall remain the sole
owner of the Licensed Information.
3.3 NOTWITHSTANDING ANYTHING TO THE CONTRARY HEREIN, NOTHING CONTAINED IN
THIS AGREEMENT SHALL BE CONSTRUED AS A REPRESENTATION OR WARRANTY OF
THE LICENSOR THAT: (I) ANY PATENT APPLICATION RELATING TO THE LICENSED
INFORMATION, SHALL BE GRANTED OR THAT ANY PATENT OBTAINED RELATING TO
THE LICENSED INFORMATION SHALL BE VALID OR AFFORD PROPER PROTECTION
AND (II) THAT ANY USE OF ANY LICENSED INFORMATION OR ANY PATENT
APPLICATION RELATING TO THE LICENSED INFORMATION, INCLUDING THE
PATENTS, WILL NOT INFRINGE THE RIGHTS OF ANY THIRD PARTY.
3.4 Ownership of New Inventions shall be as follows:
3.4.1 New Inventions made exclusively by the Company and/or an
employee or agent of the Company, other than ▇▇▇▇▇▇ and/or other
than any other employee of Sheba, shall be exclusively owned by
the Company.
3.4.2 New Inventions made exclusively by Ferber or any other employee
or agent of Sheba, or made jointly by Ferber, or any other
employee or agent of Sheba and by the Company shall be jointly
owned by the Company and by THM, in trust for the Hospital
and/or the Fund, in proportion to the respective parties
contribution to the New Invention, and the THM's share in such
jointly owned New Invention shall constitute part of the
Licensed Information and/or the Licensed Patents and shall be
exclusively licensed to the Licensee pursuant to the terms of
this Agreement.
4. CONFIDENTIALITY AND NON-USE:
4.1 Each of the Parties shall: (i) not disclose and/or transfer
and/or reveal the Confidential Information to any third Party;
(ii) not use and/or copy and/or reproduce the Confidential
Information in any fashion except as reasonably necessary to
perform and exercise its rights and obligations under this
Agreement; (iii) take all necessary actions, consistent with its
protection of its own confidential and proprietary information
(but in no event exercise less than reasonable care) to prevent
unauthorized disclosure of the Confidential Information; and (iv)
disclose the Confidential Information to any of its Sublicensees,
personnel, employees, representatives, officers, shareholders of
THM, the management of the Hospital and/or the management of the
Fund and advisors (the "PERMITTED PERSONNEL") on a need-to-know
basis, provided that each of the above is bound by a written
undertaking of confidentiality and non-use with terms which are
at least as restricting as those specified herein, all during the
period of this Agreement and for a term of seven (7) years
following its term or termination. For the removal of doubt, it
is hereby clarified that the receiving Party shall be responsible
and liable to the disclosing Party for any breach of the above
obligation of confidentiality being committed by the Permitted
Personnel as if such breach was committed by the receiving Party
itself. This above restriction of confidentiality shall not apply
to Confidential Information which: (i) is or becomes public
domain through no act or omission of the receiving Party; and/or
(ii) was lawfully obtained by the receiving Party from another
source; and/or (iii) was already known to the receiving Party,
other than under an obligation of confidentiality, at the time of
disclosure by the disclosing Party, as evidenced in written
records; and/or (iv) was independently discovered or developed by
the receiving Party without the use of Confidential Information
of the disclosing Party; and/or (v) is required to be disclosed
pursuant to any statute, regulation, order, subpoena or document
discovery request, provided that prior written notice of such
disclosure is furnished to the disclosing Party as soon as
practicable in order to afford the disclosing Party an
opportunity to seek a protective order (it being agreed that if
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the disclosing Party is unable to obtain or does not seek a
protective order and the receiving Party is legally compelled to
disclose such information, disclosure of such information may be
made without liability provided however in such event the
receiving Party shall furnish only that portion of the
Confidential Information which is legally required, and shall
exercise all efforts required to obtain confidential treatment
for such information).
4.2 The Company undertakes to avoid using the name of the Fund, the
Hospital, the Licensor and/or their employees, representatives
and agents in its commercial publications or in connection with
the Licensed Information and/or the Products, without THM's prior
written consent. Notwithstanding the aforesaid, the Company may
disclose such details to the OCS, potential investors, purchasers
and/or merger or acquisition partners, provided that such
parties, to the extent commercially reasonable, are bound by
confidentiality and non-use obligations no less favorable than
those set forth herein. Furthermore, the Company may disclose
such details when required to do so by relevant law or
regulation.
4.3 Injunctive Relief. Each Party acknowledges that any breach of
this Section 4 by it or further unauthorized use of the
Confidential Information may cause irreparable harm to the other
Party and that each Party is entitled to seek injunctive relief
and any other remedy available at law or in equity without the
necessity, to the extent legally permissible, of posting any bond
or undertaking in connection therewith. This remedy is separate
and apart from any other remedy the disclosing Party may have.
5. CONSIDERATION (ROYALTIES AND SUBLICENSE FEES) AND REPORTS:
5.1 In return for the grant of the License, the Company shall pay THM all
the following amounts:
5.1.1 Royalties of 3.5% (three and a half of a percent) of Net Sales
(the "ROYALTIES").
5.1.2 16% (sixteen percent) of all Sublicensing Fees (the
"SUBLICENSING CONSIDERATION").
5.1.3 An annual fee of fifteen thousand ($15,000) USD. Payment of the
annual fee shall commence on 1 January 2012 and shall be paid
once every year thereafter (the "ANNUAL FEE"). The Annual Fee is
non-refundable, but it shall be credited each year due, against
the Royalties, to the extent that such are payable, during that
year.
5.1.4 Milestone payments as follows ("MILESTONE PAYMENTS"):
5.1.4.1 Fifty thousand ($50,000) USD on the date of initiation
of phase I clinical trials in human subjects.
5.1.4.2 Fifty thousand ($50,000) USD on the date of initiation
of phase II clinical trials in human subjects.
5.1.4.3 One hundred and fifty thousand ($150,000) USD on the
date of initiation of phase III clinical trials in
human subjects.
5.1.4.4 Seven hundred and fifty thousand ($750,000) USD on the
date of initiation of issuance of an approval for
marketing of the first Product by the FDA or any other
equivalent authority.
5.1.4.5 Two million ($2,000,000) USD, when worldwide Net Sales
of Products have reached the amount of one hundred and
fifty million ($150,000,000) USD for the first time
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(the "SALES MILESTONE"). THM shall be entitled to
receive the aforesaid Sales Milestone only once during
the term of this Agreement.
5.1.5 CONSIDERATION FROM EXIT. In the event of an Exit, as defined
below, the Licensor shall be entitled to choose, according to
its sole discretion, whether to receive from the Company a one
time payment, based, as applicable, on the value of either
5,563,809 shares of Common Stock the Company's parent company,
Orgenesis Inc. (the "PARENT COMPANY") at the time of the Exit
(these 5,563,809 shares of Common Stock being equivalent to 10%
(ten percent) of the outstanding share capital of the Parent
Company on a fully diluted basis immediately following the
closing of that certain Private Placement Subscription Agreement
between the Parent Company and certain investors dated as of
January 27, 2012 and the Warrents dated (the "SUBSCRIPTION
Agreement") and as fully disclosed in the Cap table attached
hereto as APPENDIX D, ---------- or the value of 1,000 common
shares of the Company at the time of Exit, such 1000 common
shares constitute, at the date of execution hereof, 10% of the
Company's outstanding share capital on a fully diluted basis.
For the avoidance of any doubt, this number of shares shall not
be subject to any anti-dilution protection. "EXIT" shall mean
the closing of an acquisition of all or substantially all of the
issued and outstanding share capital of the Company or the
Parent Company and/or consolidation of the Company or the Parent
Company into or with another corporation; provided that if THM
chooses to receive the above Consideration from Exit, then
following the Exit event, the payment of Royalties, as provided
for herein, shall cease. If, however, THM chooses not to receive
the Consideration from Exit, as a result of an Exit event as
specified above, THM shall be entitled to continue to receive
all the rights and consideration it is entitled to hereunder
(including, without limitation, the exercise of the rights
pursuant to this Section 5.1.5 in future Exit events), and any
agreement relating to an Exit event shall be subject to the
surviving entity's and/or the purchaser's undertaking towards
THM to perform all of the Company's obligations hereunder. In
addition, it is hereby agreed that the Company, which was
established to engage in research and development activities,
shall receive from the Parent Company during the three years
period following the date hereof an amount of not less then
seven hundred and fifty thousand ($750,000) USD, or, if the
entire Warrants (as defined in the Subscription Agreements) are
exercised within said period, an aggregate amount (including the
above $750,000) of not less than one million and one hundred
thousand ($1,100,000) USD.
5.2 In the event the consideration from sales of Products shall be
non-monetary, THM and the Company shall agree upon the value of such
non-monetary consideration and THM shall be entitled to 3.5% (three
and a half percent) of such value as a Royalty Payment, which shall be
paid to it within 90 (ninety) days of the completion of the quarter in
which such transaction took place. Should the Parties not reach
agreement as to the value of such non-monetary consideration, then the
value of such non-monetary consideration shall be decided upon by an
external assessor acceptable to both the Parties.
5.3 The amounts payable to THM under this Section 5 shall be paid as
follows:
5.3.1 The Royalties due on Net Sales of the Company, as specified in
Section 5.1.1, shall be paid on a quarterly basis, within ninety
(90) days after the end of each quarter, commencing on the first
quarter where the First Commercial Sale took place.
The Royalties due on Net Sales of the Sublicensee, as specified
in Section 5.1.1, shall be paid on a quarterly basis, within
ninety (90) days after the end of each quarter, commencing on the
first quarter where the First Commercial Sale took place.
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5.3.2 The Sublicensing Consideration, as specified in Section 5.1.2
shall be paid within sixty (60) business days from receipt of
any Sublicensing Fee by the Company.
5.3.3 The Milestone Payments as specified in Section 5.1.4 shall be
paid within sixty (60) days from the occurrence of any
milestone.
5.3.4 The Consideration from an Exit event as specified in Section
5.1.5 shall be paid upon the closing of an Exit event.
5.4 The Company shall report in writing to THM promptly upon execution of
an agreement relating to the First Commercial Sale, but in any event
no later than thirty (30) days after signature thereof. The Company
shall specify in such report the date of execution of such agreement
and the date of the First Commercial Sale according to the agreement.
5.5 In calculating Net Sales and Sublicensing Fee, all amounts shall be
expressed in US Dollars and any amount received or invoiced in a
currency other than US Dollars shall be translated into US Dollars,
for the purposes of calculation, in accordance with the applicable
representative rate of exchange between the US Dollar and such
currency on the date of such receipt or invoice, as the case may be.
5.6 The Company shall provide THM with the following written reports:
5.6.1 a detailed quarterly report, commencing with the first calendar
quarter in which any Net Sales are made, or Sublicensing Fee
received, in a form reasonably acceptable to THM, signed by the
chief financial officer of the Company, specifying all amounts
payable to THM under this Section 5 in respect of the previous
quarter to which the report refers.
Such report shall include:
(i) the sales made by the Company and Sublicensees with a
breakdown of Net Sales according to country, identity of
seller, currency of sales, dates of invoices, number and
type of Products sold;
(ii) Sublicensee Fee with a breakdown according to identity of
Sublicensees, countries, the currency of the payment and
date of receipt thereof;
(iii)deductions applicable, as provided in the definition of
"Net Sales"; and
(iv) any other matter reasonably required by THM in order to
calculate and/or verify the amounts payable hereunder.
5.6.2 Within six (6) months after the end of each fiscal year, the
Company will provide THM with a detailed report, approved by the
Board and by the Company's independent auditor, stating all
amounts due to THM pursuant to this Section 5 in the reported
year including relevant Invoices issued and all invoices and all
payments received by the Company with respect to its Net Sales
and to the Sublicensing Fee as detailed in the quarterly
reports;
5.6.3 A detailed report within twenty-one (21) days of an Exit event
specifying the nature of the Exit event, the consideration to be
received by the Company or its shareholders in connection with
such Exit event and all other substantial terms and details of
such Exit event and enclose to the report any agreement executed
in connection with such Exit event immediately following the
execution thereof. The Company shall provide THM with
substantially the final draft of the agreements relating to the
Exit event before the Exit event occurs; and
9
5.6.4 A report on the occurrence of any milestone specified in
Sections 5.1.4.1 - 5.1.4.5 above, to be submitted to THM within
fourteen (14) days from the occurrence of any such milestone
enclosing any written records or documents relating to the
occurrence of the milestone.
5.7 The Company shall keep and shall cause Sublicensees to keep complete,
accurate and correct books of account and records consistent with
sound business and accounting principles and practices.
5.8 THM shall be entitled to appoint an independent auditor selected by it
to inspect, during the Company's regular business hours, all
equipment, records, and documents of the Company as may contain
information bearing upon the amounts payable to THM under this Section
5. The auditor shall be bound in writing by obligations of
confidentiality no less strict than those contained in this Agreement
provided that such obligation of confidentially shall not apply on
disclosure to Sheba. The Company shall take all steps necessary so
that all such books of account, records and other documentation of the
Company and its Sublicensees are available for inspection as aforesaid
for each of the Company and its Sublicensees. The cost of such
auditing shall be borne by the Company if the audit uncovers an
underreporting of the corresponding amounts owed to THM by more than
five percent (5%). Otherwise, such costs and expenses shall be borne
by THM. The Company shall remedy any such discrepancy and pay: (i) the
shortfall within thirty (30) days of the date of discovery; and (ii)
interest thereon from the date such amounts were due and payable to
Licensor hereunder at the rate of 4% above the London Interbank
Offered Rate (LIBOR) applicable to a 12 month USD deposit, as such
rate shall be in effect on the date that the payment is actually made.
The Interest shall be compounded annually and computed on the basis of
a 365 day year.
5.9 Upon THM's request but not more than once every six (6) months, the
Company shall provide THM with a progress report specifying the
following details, as updated from the last report: (i) the activities
the Company conducted for the development of Products; (ii) the
progress and results of the development, Sublicensing,
commercialization and sales of products; and (iii) projected sales and
marketing efforts. It is hereby agreed that for the purpose of this
Section 5.9, the Company may submit the plan it submitted to the OCS
as the required progress report and THM shall have no further claim or
demand in this regard. During periods where such reports to the OCS
are not submitted, for any reason whatsoever, the Company shall
provide THM with the progress reports as specified at the beginning of
this Section 5.9
6. LIABILITY, INDEMNITY AND INSURANCE:
6.1 The Company shall bear sole responsibility and bear any payment and/or
compensation and/or liability for any damage whatsoever caused,
directly or indirectly, as a result of or encountered in connection
with this Agreement and/or the exercise of the License, including
without limitation, (i) the use and/or exploitation by the Company or
any Sublicensee of the Licensed Information (ii) the development,
manufacture, sale, use and/or application of the Products.
6.2 The Company shall indemnify and hold ▇▇▇▇▇▇, ▇▇▇▇▇ and/or Licensor and
their employees, agents and representatives (the "BENEFICIARIES")
harmless from and against any and all loss, liability, claims, damages
and expenses (including legal costs and attorneys' fees) of whatever
kind or nature, to the extent that such liability is found by a
non-appealable judgment rendered by a court of competent jurisdiction
to directly or indirectly arise out of and/or result from and/or are
encountered in connection with this Agreement and/or the exercise of
the License, including without limitation: (a) the use and/or
exploitation of the Licensed Information by the Company or any
Sublicensee; (b) the development, manufacture, sale, use and/or
application of the Products; and (c) to the extent that it is based on
a claim that the Licensed Information, the Products or other material
produced by the Company infringes any third party's intellectual
property rights including copyright, trade secret, patent, trademark;
(collectively, the "LIABILITIES").
10
The Parties shall consult and cooperate with each other regarding the
response to and the defense of any such Liabilities and the Company
shall be obligated to assume the defense and represent the interests
of the Beneficiaries in respect of such Liabilities, that shall
include the right to select and direct legal counsel and other
consultants to appear in proceedings on behalf of the Beneficiaries
and to propose, accept or reject offers of settlement, all at its sole
expense and discretion. Nothing herein shall prevent the Beneficiaries
from retaining their own counsel ("SEPARATE COUNSEL") and
participating in their own defense at their own expense, provided that
the Licensor shall ensure that the Separate Counsel shall coordinate
their actions with, and shall act only upon the prior approval of, the
Company's counsel.
6.3 The Company shall purchase and maintain, at its own expense, insurance
which covers its liability pursuant to this Agreement, including
Sections 6.1 - 6.3 above, for the term of this Agreement, plus an
additional period of 7 (seven) years. Such insurance shall be in
reasonable amounts and on reasonable terms in the circumstances,
subscribed for from a reputable insurance company. The named insured
under such insurance shall be the Company and the Beneficiaries.
Should such insurance made by the Company not be acceptable to THM, on
reasonable grounds, then the content of such insurance shall be
decided by an insurance consultant acceptable to both THM and the
Company.
7. COMPANY'S UNDERTAKING; DEVELOPMENT AND COMMERCIALIZATION; BOARD OBSERVER:
7.1 The Company shall submit to THM a commercially reasonable Development
Plan, as defined below, approved by its board of directors, within 18
months from the date of execution hereof. The Company shall develop,
manufacture, sell and market the Products pursuant to the milestones
and time schedule specified in the Development Plan. The compliance
with the Development Plan is a substantial term of this Agreement. In
the event the Company fails to fulfill the terms of the Development
Plan, the Licensor shall be entitled to terminate this Agreement with
a one year prior written notice, provided that during such year the
Company did not cure the breach of the Development Plan.
The "DEVELOPMENT PLAN": a plan which shall include all research and
development activities as required for the development and manufacture
of the Products, including preclinical and clinical activities until
an FDA or any other equivalent regulatory authority's approval for
marketing and including all REGULATORY PROCedures required to obtain
such approval for each Product
7.2 THM shall be entitled to appoint an observer (the "OBSERVER") to the
Board. The Observer shall be appointed and substituted by THM
according to its sole discretion by a written notice to the Company,
subject to signature by the Observer on a non-disclosure agreement in
the form acceptable to the Company and provided that the Observer is
not associated with a competitor of the Company. The Observer shall be
invited by the Company in writing and in advance to all the Board's
meetings and conferences and shall have the right to be present in
(without voting) all such meetings and conferences and report back to
THM.
8. TERM AND TERMINATION:
8.1 Term. The term of this Agreement shall commence on the Effective Date
and, unless earlier terminated as provided in this section, shall
continue in full force and effect on a Product-by-Product and
country-by-country basis until the later of and as applicable: (i) the
date of expiry of the last of the Licensed Patents in such country; or
(ii) the expiry of a period of fifteen (15) years from the date of
First Commercial Sale in such country.
8.2 Without derogating from THM's rights under any applicable law, THM
shall be entitled to terminate this Agreement and/or the License
hereunder in each of the following events:
11
8.2.1 The Company materially changed its business.
8.2.2The Company breaches any of its material obligations hereunder,
provided that THM has provided the Company with written notice of
such material breach and THM's intention to terminate, and the
Company has not cured such breach within one hundred and eighty
(180) days of receiving such written notice from THM. For
purposes of this Agreement, the failure of the Company to: (i)
comply with Section 2 above, relating to the grant of
Sublicenses; (ii) comply with the confidentiality provisions in
accordance with the terms of Section 4 above; (iii) perform
payments to THM in accordance with the terms of Section 5 above;
and (iv) provide indemnity and insurance in accordance with the
terms of Section 6 above; (v) compliance with the Development
Plan, shall be deemed to be a material breach of the Company's
obligations hereunder. Notwithstanding the above, the provisions
of this Section 8.2.2 shall not apply in the event of breach by
the Company of the Development Plan and, in such event, the
termination rights of THM will be as further set forth in Section
7.1.
8.2.3The Company breaches any of its obligations hereunder, and such
breach remains uncured for forty five (45) days after written
notice from THM.
8.2.4The Company: (i) becomes insolvent; and/or (ii) files a petition
or has a petition filed against it, under any laws relating to
insolvency; and/or (iii) enters into any voluntary arrangement
for the benefit of its creditors; and/or (iv) appoints or has
appointed on its behalf a receiver, liquidator or trustee of any
of the Company's property or assets, under any laws relating to
insolvency; and such petition, arrangement or appointment is not
dismissed or vacated within ninety (90) days.
8.2.5The Company has ceased to carry on its business for a period of
more than 60 days.
8.2.6The Company has challenged, challenges, or causes any third
party to challenge, the intellectual property rights or other
rights of the Licensor to the Licensed Information anywhere in
the world.
8.3 Without derogating from the Company's rights under any applicable law,
the Company shall be entitled, at its sole discretion, to terminate
this Agreement and the License hereunder and return the Licensed
Information to the Licensor only in the following events: (i) the
development and/or manufacture of the Licensed Information is not
successful according to the scientific criteria acceptable in the
relevant field of the Invention; and/or (ii) if the registration
and/or defense of a Patent is not successful, in any country for
reasons not dependant upon the Company; and/or (iii) the development
and/or manufacture of the Licensed Information is not approved by the
proper regulation procedures as mandated under the relevant laws for
reasons not dependant upon the Company; and/or (iv) a external
specialist in the field of the Product(s) determined in a reasoned and
explained written opinion that there is insufficient market demand for
the Products and such written opinion was provided to THM. For the
removal of doubt, such external specialist shall not be an employee,
consultant or contractor of the Company, nor have any business
relationship with the Company.
8.4 Upon termination or expiration of this Agreement and/or the License
hereunder, for any reason whatsoever, all rights granted to the
Company hereunder shall immediately and without further action by THM
revert to THM, and the Company: (i) shall not be entitled to make any
further use in the Licensed Information; (ii) shall forthwith return
to THM all Licensed Information, subject to all applicable legal and
regulatory requirements, all Confidential Information, including any
documentation, electronic media, instructions and all related
materials furnished to the Company hereunder and shall not retain any
copies for its use or for any purpose, save for one copy retained by
the Company for archival purposes.
12
8.5 For the removal of doubt, upon termination or expiration of this
Agreement, for any reason whatsoever, the rights and License granted
to the Company hereunder shall be terminated immediately without
further action by Licensor.
8.6 For the avoidance of any doubt, upon termination or expiration of this
Agreement and/or the License hereunder, for any reason whatsoever: (i)
THMs right to receive reports (according to Section 7.1); and (ii)
THM's right to appoint an Observer (according to Section 7.4); shall
terminate immediately, as of the date of termination or expiration of
this Agreement, without any action by the Company.
8.7 The rights and obligations of each of the Parties hereto under any
provision of this Agreement, which is expressly or by implication
intended to survive beyond the term of this Agreement, including but
not limited to those provisions relating to Licensor's Warranties,
Proprietary Rights and Disclaimers (Section 3), Confidentiality and
Non-Use (Section 4), Liability, Indemnity and Insurance (Section 6),
Survival of Provisions (Section 8.7), Early Termination (Section 8.8),
Limitation of Liability and Disclaimers (Section 9) and Governing Law
and Venue (Section 12.2), shall remain in force notwithstanding the
expiration or termination of this Agreement for any reason.
8.8 In the event of early termination of this Agreement by THM for the
reasons specified in Section 8.2 above, the following terms shall
apply, (in addition to other terms specified herein for the event of
early termination):
8.8.1All rights in and to the Licensed Information as contained in
the License shall revert to THM and the Company shall not be
entitled to make any further use thereof.
8.8.2Upon the early termination of this Agreement by THM pursuant to
Section 8.2 above, the Company hereby grants THM an irrevocable
exclusive worldwide license, to extend until the later of and as
applicable: (i) the date of expiry of the last of the Licensed
Patents in such country, or (ii) the expiry of a period of 15
(fifteen) years from the date of First Commercial Sale in each
country, to use the Company's Information, as defined below, for
any purpose whatsoever, such license shall come into effect
immediately and automatically, without any further act of the
Company, subject to, and unless limited by applicable law,
including the Law for the Encouragement of Industrial Research
and Development, 5744-1984 and relevant provisions of the
Directives of the Director General of the Ministry of Trade and
Industry. "COMPANY'S INFORMATION": any and all New Inventions,
discoveries, technical and business information, knowledge, know
how, protocols, databases, improvements, conceptions, ideas,
techniques, designs, products, developments, specifications,
methods, materials, drawings, diagrams, models, software
programs, data, data analysis, data interpretation, written
reports, algorithms, clinical data, procedures and other
information of whatsoever nature, whether or not protected by
patents or patent application, developed, discovered, conceived
or accruing by the Company in the course of or in connection with
the research and development of the Licensed Information and/or
the Products.
8.8.3Should THM: (i) grant a license to any third party with respect
to the Company's Information pursuant to Section 8.8.2 above; and
(ii) receive consideration in return to such license, then the
Licensor shall pay the Company from THM's Profits as defined
below, subject to the Company's performance of all its
obligations hereunder which survive termination of this
Agreement: (a) 25% (twenty five percent) of any such
consideration until the Company is reimbursed for the full amount
of the research and development expenses, including business
development expenses, expanded by the Company for the purpose of
obtaining the Company's Information, (the "COMPANY'S DEVELOPMENT
EXPENSES"). The Company's Development Expenses shall be evidenced
13
in written records and confirmed by a report of the Company's
external auditor; and (b) in addition, following the
reimbursement of all the Company's Development Expenses, the
Company shall, for an unlimited period of time, be entitled to
receive 5% of THM's Profits.
THM shall pay to the Company amounts, if any, payable under this
Section 8.8.3, within forty five (45) days of its receipt of the
relevant consideration
For the purpose of this Agreement, "THM'S PROFITS": any
consideration actually received by THM in return for a license to
a third party as specified in this Section 8.8.3 above, after
reimbursement of any and all of THM's expenses born in connection
with the Licensed Information and the Company's Information
including for the purpose of commercializing or developing such
Licensed Information. In the event the consideration shall be
non-monetary, THM and the Company shall agree upon the value of
such non-monetary consideration, provided that should THM and the
Company not reach agreement as to the value of such non-monetary
consideration, then such value shall be decided upon by an
external assessor acceptable to both THM and the Company.
9. LIMITATIONS OF LIABILITY AND DISCLAIMERS:
9.1 UNDER NO CIRCUMSTANCES WILL THE LICENSOR BE LIABLE FOR ANY
CONSEQUENTIAL, INDIRECT, SPECIAL, PUNITIVE OR INCIDENTAL DAMAGES,
INCLUDING FOR LOST PROFITS, WHETHER FORESEEABLE OR NOT, EVEN IF
ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF BREACH OR
FAILURE OF EXPRESS OR IMPLIED WARRANTY OR CONDITION, BREACH OF
CONTRACT, MISREPRESENTATION, NEGLIGENCE OR OTHERWISE.
9.2 UNDER NO CIRCUMSTANCES THE LIABILITY OF THE LICENSOR TO THE COMPANY
UNDER OR ARISING OUT OF THIS AGREEMENT, WHETHER FOR BREACH OF
CONTRACT, IN TORT (INCLUDING BUT NOT LIMITED TO NEGLIGENCE) OR
OTHERWISE SHALL EXCEED IN AGGREGATE AN AMOUNT OF $500,000 (FIVE
HUNDRED THOUSAND) USD.
9.3 IN NO EVENT SHALL THE LICENSOR BE LIABLE FOR ANY ACTIONS, CLAIMS OR
THE LIKE BY THE COMPANY OR ANY THIRD PARTY THAT THE LICENSED
INFORMATION RESULTS OR MAY RESULT IN ANY INFRINGEMENT, DEPRIVATION OR
VIOLATION OF THE INTELLECTUAL PROPERTY OR OTHER RIGHTS OF ANY PERSON
OR ENTITY.
9.4 THE COMPANY ACKNOWLEDGES AND DECLARES, AS OF THE EFFECTIVE DATE, THAT
IT EXAMINED THE LICENSED INFORMATION AND FOUND IT SUITABLE AND
APPROPRIATE FOR ITS CURRENT NEEDS AND REQUIREMENTS.
9.5 THE LICENSED INFORMATION IS PROVIDED "AS-IS" AND "AS-AVAILABLE". THE
LICENSOR MAKES NO AND HEREBY SPECIFICALLY DISCLAIMS ANY REPRESENTATION
AND WARRANTY CONCERNING THE LICENSED INFORMATION INCLUDING ANY
WARRANTY OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE,
COMPLETENESS, USE, ACCURACY OR THAT THE LICENSED INFORMATION SHALL BE
USEFUL IN ANY MANNER OR COMMERCIALLY EXPLOITABLE.
10. PATENTS AND PATENT INFRINGEMENTS:
10.1 As of the Effective Date, the Company will, at its own costs and
expense, be responsible for the preparation, filing, prosecution and
maintenance of all patent applications and patents for the Licensed
14
Information, including the Patents in Canada, US and Europe . The
Company will instruct its patent counsel to copy both the Company and
the Licensor on any patent application for the Licensed Information,
or notice of each official action of any patent office concerning
patent applications for the Licensed Information (including but not
limited to office actions, payment of fees, abandonment of
applications etc.). For the purpose of appointing the Company's patent
counsel, the Company shall notify the Licensor in writing of its
intended patent counsel, subject to the Licensor's written approval
within fifteen (15) days of receipt of said notice, which approval may
not be unreasonably withheld. If the Licensor does not reply within
the said fifteen (15) day timeframe, it shall be deemed as the
Licensor's approval to the appointment of the Company's patent
counsel. The Licensor will have the right, but not the obligation, to
propose changes to any such filing and responses, which the Company
will consider (and the Company will direct the patent counsel to
consider) prior to submitting the patent application or the response
to office action.
10.2 All patent applications to be filed with respect to New Inventions
shall be filed in the name of Company and/or THM in accordance with
the provisions of Section 3.4 above.
10.3 Notwithstanding the aforesaid and for the avoidance of any doubt, the
Company shall have full and sole discretion as to the preparation,
filing, prosecution and maintenance of such patent applications and
patents with respect to New Inventions, at its own costs and expense,
where such application shall be filed in the name of the Company, or
both in the names of the Company and THM, all in accordance with the
provisions of Section 3.4 above.
10.4 Each Party will promptly notify the other Party in writing of any
alleged or threatened infringement by a product or process of any
Licensed Information (a "THIRD PARTY IP INFRINGEMENT") of which such
Party becomes aware, together with any available written evidence of
such alleged infringement. In the event that of a Third Party IP
Infringement, the Company shall have the right but not the obligation,
at its expense, to institute, prosecute and control any action or
proceeding with respect to such Third Party IP Infringement, including
any declaratory judgment action arising from such infringement.
However, upon the Company's decision not to enforce its aforesaid
right within ninety (90) days of learning of the said Third Party IP
Infringement, or if the Company notifies the Licensor that it shall
not be prosecuting such Third Party IP Infringement, the Licensor
shall have the right to institute such action or proceeding, at its
(the Licensor's) expense. To the extent applicable, the Company shall
file the above legal proceedings on behalf of itself and the Licensor,
and VICE VERSA.
Any recovery obtained in an action brought under this Section 10.4
shall be distributed as follows:
(i) each Party shall be reimbursed for any expenses incurred in the
action; and
(ii) if the Company prosecutes and controls the proceeding at its
expense, the Company shall pay the Licensor a percentage of the
remainder of the judgment awarded to the Licensor equal to 16%
(sixteen percent) after deduction of expenses and legal fees,
except only for recoveries in the form of Royalties from Net
Sales in respect of which Royalties are payable by the Company to
the Licensor according to Section 5.1.1, and thereafter, all the
other amounts awarded in such event shall be paid to the Company.
OR, ALTERNATIVELY:
if the Licensor prosecutes and controls the proceeding at its
expense, the Licensor shall pay the Company a percentage of the
remainder of the judgment awarded equal to 16% (sixteen percent)
after deduction of expenses and legal fees, except only for
recoveries in the form of Royalties from Net Sales in respect of
which the Company shall be entitled to 3.5% (three and a half
percent) of such recoveries, and thereafter, all the other
amounts awarded in such event shall be paid to the Licensor.
15
10.5 Should the Company not wish to file and/or continue to prosecute a
patent application and/or maintain a patent in any country with
respect to any part of the Licensed Information, then THM may,
according to its sole discretion, file and/or continue to prosecute
such patent application and/or maintain such patent in such country at
THM's expense. THM shall give the Company fifteen (15) days prior
written notice before filing or and/or continuing to prosecute such
patent application and/or maintaining such patent in such country. The
Company shall be entitled to elect to file and/or continue to
prosecute a patent application and/or maintain a patent in any such
country, at the Company's own cost and expense by giving THM a written
notice of its intention to do so within seven (7) days from receipt of
THM's notice. Should the Company fail to provide THM with such notice
according to which the Company undertakes to pay all costs and
expenses as aforesaid, then THM shall be entitled to terminate the
License hereunder, with an immediate effect, only with respect to such
country and such part of the Licensed Information, and to take
whatever action and proceedings THM deems fit (in its sole discretion)
and at THM's expense with respect to such patent application and/or
patent and/or with respect to the use and/or license and/or
commercialization of such part of the Licensed Information in such
country.
11. PUBLICATION RIGHTS:
In the event that Licensor, Sheba, their officers, medical and professional
staff, employees and/or agents, wish to publish material with respect to
the Licensed Information, such publication shall be subject to the
provisions as set out herein:
11.1 Licensor shall ensure that no publications in writing, in scientific
journals or orally at scientific conventions relating to the Licensed
Information, the Invention or a product or process based or
incorporating the Licensed Information, which are subject to the terms
and conditions of this Agreement, are published by it, Sheba, or their
officers, medical and professional staff, employees and/or agents,
without first obtaining the written consent of the Company.
11.2 The Company undertakes to reply to any such request for publication by
the Licensor within ninety (90) days of its receipt of a request in
connection with the publication of articles in scientific journals,
and within thirty (30) days of its receipt of a request in connection
with presentations at scientific conventions and article abstracts.
The Company may only decline such an application upon reasonable
grounds, which shall be fully detailed in writing.
11.3 Should the Company decide to object to publication and/or presentation
as provided in Section 11.2 above, publication shall be postponed for
a period of not more than one hundred and twenty (120) days from the
date the publication was sent to the Company to enable the filing of
patent applications or the removal of the Company's Confidential
Information.
12. MISCELLANEOUS:
12.1 No Restriction. No provision of this Agreement shall be construed so
as to restrict THM from acquiring an interest in or develop technology
that may compete with all or any part of the Licensed Information, and
THM may freely endeavor to commercialize such competitive
technologies.
12.2 Governing Law and Venue. This Agreement shall be interpreted by the
laws of the State of Israel. Any dispute between the Parties to this
Agreement, including regarding its breach and/or its implementation
and/or its termination, shall be decided exclusively by the competent
court of law in Tel-Aviv, Israel which shall have exclusive
jurisdiction.
12.3 Independent Parties. The relationship of the Company and the Licensor
is that of independent contractors. Neither Party nor their employees,
consultants, contractors or agents are or shall be considered as
agents, employees, partners, representatives or joint ventures of the
other Party, nor do they have any authority to bind the other Party by
16
contract or otherwise to any obligation. Each Party shall ensure that
the foregoing persons shall not represent to the contrary, either
expressly, implicitly, by appearance or otherwise.
12.4 No Hiring. Each Party shall not, directly or indirectly, recruit or
hire or engage any personnel of the other Party and/or of the Hospital
and/or of the Fund, or induce such personnel to quit employment with
the other Party and/or with the Hospital and/or with the Fund, during
the term of this Agreement and for a period of two (2) years following
the termination of this Agreement, without the other Party's prior
written consent. Notwithstanding the aforesaid, it is agreed that the
Company shall be entitled to enter into an agreement with ▇▇▇▇▇▇, for
as long as ▇▇▇▇▇▇ is an employee and/or consultant of the Hospital
and/or the Fund and/or Sheba, and/or any other employee and/or agent
of Sheba and/or with Sheba, where such agreement shall be subject to
the approval of THM in accordance with the then applicable laws rules
regulations and policy of Sheba, which approval may not be
unreasonably withheld.
For the avoidance of any doubt, after the termination of ▇▇▇▇▇▇'▇
engagement with the Hospital and/or the Fund and/or Sheba, then the
Company shall be entitled to enter into an agreement with ▇▇▇▇▇▇,
whether as an employee and/or consultant, at the Company's sole
discretion, without requiring the approval of THM.
12.5 Due Authorization and No Impediment. Each Party hereby warrants that:
(i) it has taken all internal actions necessary to authorize it to
enter into and perform this Agreement and its representative(s) whose
signature(s) is/are affixed hereto is/are fully authorized to sign
this Agreement and to bind such Party thereby; (ii) upon the execution
of this Agreement, this Agreement shall be legally binding on such
Party; and (iii) neither the signature of this Agreement nor the
performance of its obligations hereunder will conflict with, or result
in a breach of, or constitute a default under, any provision of the
articles of association or by-laws of such Party, or of any law,
contract or agreement, to which such Party is a party or subject.
12.6 Good Faith. Both Parties shall be under a duty to act in good faith in
the performance and enforcement of this Agreement.
12.7 Notices. Except as otherwise provided in this Agreement, all notices
permitted or required by this Agreement shall be in writing and shall
be deemed to have been duly served: (i) upon personal delivery; (ii)
upon facsimile transmission (receipt of which has been confirmed by
the recipient); or (iii) seven (7) business days after deposit,
postage prepaid, return receipt requested, if sent by Registered Mail
and addressed to the address of the Parties first above stated or in
accordance with such other address information as the Party to receive
notice may provide in writing to the other Party in accordance with
the above notice provisions. Any notice given by any other method will
be deemed to have been duly served upon receipt thereof.
12.8 Assignment. The License Agreement is personal to the Parties and
therefore the Parties may not assign any of their rights or
obligations under the License Agreement without the prior written
consent of the other Party. Notwithstanding the aforementioned, THM
shall be entitled to assign this Agreement to any association and/or
organization and or company that was established in connection with or
for the benefit of the Sheba Medical Center.
12.9 Waivers and Amendment. No course of dealing in respect of, nor any
omission or delay in the exercise of, any right, power, or privilege
by either Party shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any further or other
exercise thereof or of any other, as each such right, power, or
privilege may be exercised either independently or concurrently with
others and as often and in such order as each Party may deem
expedient. Any term or provision of this Agreement may be amended only
in writing.
12.10Entire Agreement; Amendments. This Agreement, including its
schedules, contains the entire agreement of the Parties with respect
to its subject matter. No oral or prior written statements or
representations not incorporated herein shall have any force or
17
effect, nor shall any part of this Agreement be amended, supplemented,
waived or otherwise modified except in writing, signed by both
Parties.
12.11Severability. If any provision of this Agreement is determined by a
court of competent jurisdiction to be invalid, illegal, or
unenforceable, that determination shall not affect any other provision
of this Agreement, and each such other provision shall be construed
and enforced as if the invalid, illegal, or unenforceable provision
were not contained herein.
IN WITNESS WHEREOF, THE PARTIES HERETO HAVE CAUSED THIS AGREEMENT TO BE DULY
EXECUTED AND EACH OF THE UNDERSIGNED HEREBY WARRANTS AND REPRESENTS THAT HE OR
SHE HAS BEEN AND IS, ON THE DATE OF THIS AGREEMENT, DULY AUTHORIZED BY ALL
NECESSARY AND APPROPRIATE ACTION TO EXECUTE THIS AGREEMENT.
------------------------------------ ------------------------------------
Orgenesis Ltd. Tel Hashomer - Medical Research,
Infrastructure and Services Ltd.
(The Company) (THM)
Name: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇ Name: /s/ Tel Hashomer
------------------------------- -------------------------------
Title: Title:
------------------------------ ------------------------------
18
APPENDIX A
LICENSED PATENTS
Patents - ▇▇▇▇▇ ▇▇▇▇▇▇
Granted Patents: Methods of inducing regulated pancreatic hormone production in
non-pancreatic islet tissues
Application Patent Patent Application Related
Ser No number Issue Date Date Applications
------ ------ ---------- ---- ------------
09/584,216 6,774,120 August 10, 2004 May 31, 2000 Provisional No 60/198,532 Filed Apr 19 2000
Provisional No.60/137,143 Filed Jun 1 1999
Patent Applications: Methods of inducing regulated pancreatic hormone production
in non-pancreatic islet tissues
Application US Patent Application Application Related
Ser No Application Date Published Applications
------ ----------- ---- --------- ------------
10/852,994 US2004/0213769A1 May 24, 2004 October 28, 2004 ** Division of 09/584,216 filed may 31 , 2000
** Provisional No.60/137,143 Filed Jun 1 1999 &
Provisional No 60/198,532 Filed Apr 19 2000
10/843,801 US2005/0090465 May 12, 2004 April 28, 2005 CIP of 09/584,216 Provisional No. 60/469,715
filed May 12 2003
EP1180143B1 ▇▇▇▇▇▇ ▇▇▇▇▇ 2007-05-09 C12N 15/09
Title: IN VITRO METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES, PHARMACEUTICAL COMPOSITIONS RELATED THERETO
WO2000072885A3 ▇▇▇▇▇▇ ▇▇▇▇▇ 2001-05-10 C12N 15/09
Title: METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES [GRAPHIC OMITTED]
WO2000072885A9 ▇▇▇▇▇▇ ▇▇▇▇▇ 2001-03-01 C12N 15/09
Title: METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES [GRAPHIC OMITTED]
WO2000072885A2 ▇▇▇▇▇▇ ▇▇▇▇▇ 2000-12-07 C12N 15/09
Title: METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES [GRAPHIC OMITTED]
WO2004098646A1 ▇▇▇▇▇▇ ▇▇▇▇▇ 2004-11-18 A61K 48/00
Title: METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES [GRAPHIC OMITTED]
WO2004098646B1 ▇▇▇▇▇▇ ▇▇▇▇▇ 2005-04-28 A61K 48/00
Title: METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES [GRAPHIC OMITTED]
EP1180143A2 ▇▇▇▇▇▇ ▇▇▇▇▇ 2002-02-20 C12N 15/09
Title: IN VITRO METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES, PHARMACEUTICAL COMPOSITIONS RELATED THERETO
[GRAPHIC OMITTED]
EP1624898A1 ▇▇▇▇▇▇ ▇▇▇▇▇ 2006-02-15 A61K 48/00
Title: METHODS OF INDUCING REGULATED PANCREATIC HORMONE PRODUCTION IN
NON-PANCREATIC ISLET TISSUES [GRAPHIC OMITTED]
US20040213769A1 -- 2004-10-28 C12N 15/09
Title: Methods of inducing regulated pancreatic hormone production in
non-pancreatic islet tissues [GRAPHIC OMITTED]
US20050090465A1 -- 2005-04-28 A61K 38/17
Title: Methods of inducing regulated pancreatic hormone production in
non-pancreatic islet tissues
US6774120B1 ▇▇▇▇▇▇ ▇▇▇▇▇ 2004-08-10 C12N 15/09
Title: Methods of inducing regulated pancreatic hormone production in
non-pancreatic islet tissues
APPENDIX B
▇▇▇▇▇▇ - THM AGREEMENT
AGREEMENT
Made and entered into this ____ day of ______, 2011
Between
Tel Hashomer - Medical Research, Infrastructure and Services LTD
("THM")
and
▇▇. ▇▇▇▇
▇▇▇▇▇▇ I.D. Number 67278234
Of ▇▇/▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
("▇▇▇▇▇▇")
WHEREAS: THM is a private company whose purpose is, inter alia, to promote the
well fare of the ▇▇▇▇▇ Sheba Medical Center (the "Hospital"); AND
WHEREAS: To the request of the Hospital and Medical Research Infrastructure
Development and Health Services Fund by the Sheba Medical Center, a
non profit organization incorporated under the Laws of the State of
Israel (the "Fund"), THM undertook to act as the operational body of
the Hospital and the Fund, with respect to promotion, development and
commercialization of intellectual property deriving from inventions of
Hospital's and/or Fund's employees; AND
[The Hospital and the Fund jointly and severally :"Sheba"]
WHEREAS: ▇▇▇▇▇▇ declares that she has conceived, during the period and as a
result of her employment with the Hospital and/or the Fund, the
invention as fully described in the patents listed in Appendix A
attached hereto and constituting an integral part hereof (the
"Invention" and the "Patents", respectively); AND
WHEREAS: ▇▇▇▇▇▇ filed the Patents in her name as the sole owner of such
Patents, and paid all the expenses relating to the filing, maintenance
and prosecution of the Patents, and other legal work related to their
commercialization; AND
Whereas: ▇▇▇▇▇▇ affirms that, even though the Patents were filed in ▇▇▇▇▇▇'▇
name as the sole owner, THM has full ownership rights in and to the
Invention and Patents (as the trustee of the Hospital and/or the Fund)
because ▇▇▇▇▇▇ was an employee of Sheba when the Patents were
invented; AND
Whereas: ▇▇▇▇▇▇ wishes to transfer and assign, as Sheba's employee, at the date
of execution hereof, the registration of and all rights, title and
interest in and to the Patents to THM, and for such purpose execute
any and all documents including assignment documents as required to
register the ownership in and to the Patents in the name of THM in any
patent registry or such other regulatory authority in the world; AND
WHEREAS: the Parties wish to regulate in this Agreement their rights and
undertakings with respect to the assignment of the Patents and the
Invention, and their respective rights in connection with the
commercialization of the Invention and the Patents, as more fully set
forth herein;
NOW THEREFORE IT IS AGREED, STIPULATED AND DECLARED BY THE PARTIES HERETO AS
FOLLOWS:
1. Preamble:
The Preamble and appendices to this Agreement constitute and integral part
thereof.
2. ▇▇▇▇▇▇'▇ undertakings and declaration
▇▇▇▇▇▇ hereby undertakes warrants and declares, to the best of her knowledge, as
follows:
2.1. That she has invented the Invention solely by herself, and to her best
knowledge and based on professional advice she received from her
patent attorneys, she is the only named inventor therein, and no other
person or entity is entitled to be named as co-inventor;
2.2. That the only patent applications filed in respect of the Invention by
her are the Patents.
2.3. That she did not transfer any right to any of the Patents to any third
party or granted or has any obligation to grant any right in the
Patents to any third party, and any and all rights title and interest
in and/or to the Patents are fully owned by her, free and clear of any
third party rights, claims, and restrictions (but without conducting
any investigations of other patents or patent applications), all
subject to the rights of THM, the Hospital and the Fund as detailed in
this Agreement and the Investigator's Agreement;
2.4. That she has the authority and all powers, rights and title required
to enter into this Agreement, including without limitation to transfer
and assign the Patents and that there is no legal or contractual
impediment which prevents her from entering into this Agreement;
2.5. That her undertakings hereunder do not infringe any third parties'
rights;
2.6. That without conducting any investigations of other patents or patent
applications, there is no infringement by the exploitation of the
Invention and the Patents of any patents, copyrights or other
intellectual property rights of any third party;
2.7. That, until the date hereof, she or anyone on her behalf has not
received notice of there being any infringement, by the exploitation
of the Invention and/or the Patents, of any patents, copyrights or
other intellectual property rights of any third party and that she has
not received notice that any third party is currently infringing the
Invention or the Patents; The representations in Sections 2.6 and 2.7
above are subject to the existence of a patent covering the PDX1
vector, the consequences of which are unclear to ▇▇▇▇▇▇.
2.8. That she has not granted, directly or indirectly, any licenses or
other rights, nor has any obligation to grant licenses, or other
rights in relation to the Invention and/or the Patents.
2.9. That no representation or warranty made by her in this Agreement, or
in any written statement or certificate in connection with the
transaction contemplated by this Agreement, contains any untrue
statement of a material fact or omits, or will omit, to state a
material fact necessary to make the statements contained herein or
therein, in light of the circumstances under which such statements are
made, not misleading;
▇.▇▇.▇▇ execute any and all documents and take all further acts as she
shall be reasonably requested by THM in order to enable and effectuate
the performance of this Agreement and to further the prosecution and
issuance and defense of any patents and intellectual property rights
in respect of the Invention, and after reasonable coordination with
her; It is hereby clarified that ▇▇▇▇▇▇ shall not be required to bear
out of pocket unreasonable expenses such as traveling outside of
Israel or any out of pocket expense related to the preparation,
registration or prosecution of patents or patent applications etc.
3. THM Declarations
THM hereby undertakes, warrants and declares to ▇▇▇▇▇▇ as follows:
3.1. THM is a company duly organized and validly existing under the laws of
the State of Israel.
3.2. THM was authorized and empowered by Sheba to enter into this
Agreement;
3.3. THM has full corporate power and authority to enter into this
Agreement. The execution, delivery and performance of this Agreement
by THM have been duly authorized and approved by all necessary
corporate action;
3.4. This Agreement has been duly executed and delivered by THM and is the
legal, valid and binding obligation of THM enforceable in accordance
with its terms.
4. Title and Rights
4.1. ▇▇▇▇▇▇, as employee of Sheba, hereby irrevocably assigns and transfers
to THM, as the trustee of the Hospital and the Fund all rights, title
and interest in and to the Patents and undertakes to execute any and
all documents including assignment documents as reasonably required to
assign and register the ownership in and to the Patents in the name of
THM in any patent registry or such other regulatory authority in the
world, provided that all the out of pocket costs of such registration
(including patent attorney's fees) shall be born by THM; For such
purpose ▇▇▇▇▇▇ hereby executes an irrevocable power of attorney
empowering THM and/or anyone on it's behalf to perform said assignment
and execute the documents as specified in this clause.
4.2. ▇▇▇▇▇▇ shall fully cooperate with THM and shall take all necessary
actions, as well as execute any and all documents and/or any other
instruments which THM shall deem, at its sole discretion, as being
necessary to transfer and assign all right, title and interest in and
to the Invention to THM as well as to secure and protect THM's rights
therein, all after reasonable coordination with ▇▇▇▇▇▇. It is hereby
clarified that ▇▇▇▇▇▇ shall not be required to bear out of pocket
unreasonable expenses such as traveling outside of Israel or any out
of pocket expense related to the preparation, registration or
prosecution of patents or patent applications etc.
5. Investigators Agreement and THM undertakings:
5.1. THM undertakes to make efforts to commercialize the Invention and the
Patents, including protection of intellectual property rights in the
Invention, as customary in Sheba with respect to employees inventions,
according to the Hospital's Patents' Committee decisions and as
specified in the investigators agreement attached to this Agreement as
Appendix B and constituting an integral part thereof (the
"Investigator's Agreement"). For such purpose THM shall execute, at
the date of execution hereof, a License Agreement with ______________
with respect to the Invention and the Patents (the "License
Agreement").
5.2. The Parties shall execute the Investigator's Agreement at the date of
execution hereof.
5.3. In return for the assignment and transfer of the Inventions as
specified above, ▇▇▇▇▇▇ shall be entitled to the rights and payments
as specified in the Investigator's Agreement.
5.4. In addition, THM agrees to indemnify ▇▇▇▇▇▇ for any losses, damages
and claims made against her arising out of or resulting from the
execution of the License Agreement or the use of Invention and/or the
Patents under the License Agreement, provided however that ▇▇▇▇▇▇
acted in good faith and that all the representations and warranties
made by Ferber hereunder are true and shall not be discovered as
false.
6. Patents
All activities in respect of patenting the Invention and maintenance and
prosecution of the Patents shall be administered by THM according to its sole
discretion and to the Hospital's Patent Committee decision or by the licensee,
all as customary in Sheba for inventions of Sheba's employee's and ▇▇▇▇▇▇ shall
be kept informed of developments in connection therewith. In addition , THM
shall provide ▇▇▇▇▇▇ with available information regarding the Patents, the
Invention and their commercialization, as ▇▇▇▇▇▇ shall reasonably request from
time to time, as soon as practicable following her request.
7. No Restraint and No Warranty:
7.1. For the removal of doubt, no provision of this Agreement shall be
construed so as to restrict THM from acquiring an interest in
technology that can compete with all or any part of the Invention and
Patents, and THM may freely endeavor to commercialize such competitive
technologies.
7.2. For the removal of doubt, no provision of this Agreement shall be
construed as a warranty or representation by either party that the
commercialization of the invention shall succeed, or that the
invention is commercially exploitable.
7.3. In addition, nothing herein shall be construed as a representation or
warranty of ▇▇▇▇▇▇ that: (I) any patent application relating to the
inventions shall be granted or that any patent obtained relating to
the Invention shall be valid or afford proper protection; and in
addition, (ii) ▇▇▇▇▇▇ makes no and hereby specifically disclaims any
warranty of merchantability, fitness for a particular purpose,
completeness, use, accuracy or that the Licensed Information shall be
useful in any manner or commercially exploitable.
8. Notices
Any notice or communication under this Agreement shall be sent to the persons
and address as set out below, unless notified otherwise. If the notice involves
an alleged breach of this Agreement, it shall be sent by registered or certified
mail, and also communicated by telephone as soon as possible.
THM: Tel Hashomer Medical Research, Infrastructure and Services Ltd.
Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇, Director Business and Development
Address: ▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇, ▇▇▇▇▇▇
Telephone: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇
Fax: ▇▇▇▇ ▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇: ▇▇/▇▇ ▇▇▇▇▇▇▇ ▇▇. ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Telephone: ▇▇-▇▇▇▇▇▇▇
All communications relating to this Agreement shall be deemed to be duly
received ten (10) days after mailing, or upon actual receipt, whichever is
earlier, and shall be deemed received the day after transmission, if sent by
fax.
14. Assignability
This rights and title of the Parties referred to in this Agreement shall not be
assigned by either Party, without the prior written consent of the other Party,
which consent may not be unreasonably withheld. Notwithstanding the foregoing in
this clause, THM shall be entitled to assign all it's rights and obligations
hereunder to any technology transfer entity established for the benefit of the
▇▇▇▇▇ Sheba Medical Center.
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be duly
executed and each of the undersigned hereby warrants and represents that he or
she has been and is, on the date of this Agreement, duly authorized by all
necessary and appropriate action to execute this Agreement.
for THM for: ▇▇▇▇▇▇
By: _______________________ By: _______________________
Title:_____________________ Title: _______________________
Appendix A
List of Patents
Appendix B
Investigators Agreement
APPENDIX C
DISCLOSURES OF LICENSED INFORMATION TO THIRD PARTIES
Appendix C
List of NDAs signed regarding ▇▇▇▇. ▇▇▇▇▇▇ technology through THM
Date Recipient
April 14th, 2010 ▇▇▇▇▇ ▇▇▇▇▇ USA
July 2009 ▇▇▇▇▇▇▇ Shnegelsberg
May 2009 ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
August 13th 2008 Tal Simchony
July 2008 Van Leer Incubator
June 7th 2008 Kitty Ohel
January 10th, 2008 ▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇
December 2007 BioLineRx
APPENDIX D
ADDITIONAL INVENTION DOCUMENTATION
Post Stock Split 35 to 1 Pre Post License
Common % (fully Common ESOP (Common % (fully
Name of Shareholder Stock diluted) Stock Stock) Total FD diluted)
------------------- ----- -------- ----- ------ -------- --------
Current Shareholders & Investors* 37,000,000 76.88% 37,000,000 37,000,000 66.50%
Odded ▇▇▇▇▇▇▇▇ ** 11,126,951 23.12% 11,126,951 11,126,951 20.00%
▇▇▇▇▇ ▇▇▇▇▇▇ 2,781,905 2,781,905 5.00%
Patent Attorney 1,390,952 1,390,952 2.50%
▇▇▇▇▇ ▇▇▇▇▇▇ 0.00% -- 3,338,285 3,338,285 6.00%
Total 48,126,951 100.00% 7,511,142 55,638,093 100%
* investors 1,500,000 (this includes shares to be issued at the closing and
shares issuable upon the exercise of warrants).
** See also option granted by ▇▇. ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ and ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇
