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Exhibit 10.6
Portions of this exhibit have been omitted pursuant to a
request for confidential treatment. The omitted portions, marked by
[***], have been separately filed with the Securities and Exchange
Commission.
LICENSE AGREEMENT
This License Agreement (this " Agreement ") is entered
into as of this ___ day of
, 2005, by and between Icon Genetics AG, a company incorporated
under the laws of Germany (" Icon ") of Weinbergweg 23,
D-06120 Halle/Saale, Germany, on its own behalf and on behalf of
its Affiliates, and Protalix Ltd., a company incorporated under the
laws of Israel (" Protalix ") of 2 Snunit Street, Industrial
Park, Carmiel, Israel (Protalix and Icon may be referred to
individually as a " Party " and collectively as the "
Parties ").
PREMISES
WHEREAS, Icon is engaged in the development and
commercialization of plant transformation and gene expression
technologies and has developed and owns or controls (with rights
sufficient to grant the licenses herein granted) a proprietary
platform technology known as "Transgene Operating Systems" ("
Icon’s Technology "), the patents pertaining to which
are listed in Annex A attached hereto (together with
all divisions, continuations or continuations-in-part, reissues,
re-examinations, renewals, extensions, supplementary protection
certificates, or the like, as well as any certificates of
inventions or applications therefore, and all foreign counterparts
with respect to Icon’s Technology, being collectively
referred to as " Patents "); and
WHEREAS, Protalix is engaged in research, development,
production and commercialization of pharmaceutical proteins and the
expression thereof in plant cell culture systems (the " Protalix
Field "); and
WHEREAS, pursuant to the Collaborative Research Agreement
entered into between the Parties on April 30, 2004 (the "
Research Agreement "), an agreed research program (the "
Research Program ") directed towards expressing the cDNA
encoding of the 4 (four) proteins listed in Annex
B attached hereto (the " Research Proteins ") in
plant cells grown in Protalix’s bio-reactor systems with the
use of Icon’s Technology is currently underway; and
WHEREAS, pursuant to the Research Agreement , the
Parties have entered into an Option Agreement effective as of
April 30, 2004 (the " Option Agreement ", attached
hereto as Annex C ), whereby Protalix was granted an
Option to acquire certain Licenses (as such terms are defined in
the Option Agreement); and
WHEREAS, the Parties are entering into this Agreement to
record the understandings
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reached between them to govern
such Licenses, should they become operative pursuant to the terms
and conditions of the Option Agreement.
NOW THEREFORE, in consideration of the mutual
undertakings and covenants set forth herein, the sufficiency of
which is hereby acknowledged, the Parties hereby agree as
follows:
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1.
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DEFINITIONS
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1.1.
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Terms defined in this Section 1 and
elsewhere, parenthetically, in this Agreement, shall have the same
meaning throughout this Agreement.
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1.1.1.
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"Affiliate" when used with respect to
any person or entity, shall mean any individual, firm, partnership,
corporation, trust, joint venture or other entity, whether de
jure or de facto, which, directly or indirectly,
controls, is controlled by or is under common control with such
person or entity. As used in this definition, "control" shall mean
the possession, directly or indirectly, of the power to direct or
cause the direction of the policies and management of a person or
entity, whether by the ownership of stock, by contract or
otherwise.
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1.1.2.
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"Confidential Information " shall mean
any technical, business or other information in any form
whatsoever, with respect to a Party’s technology, its
applications, business and operations, including but not limited to
any materials, know-how, inventions, data, software programs and
their sources, processes, methods and formula, all whether or not
covered by patents, patent applications, copyrights or other
proprietary rights protection, and any financial information, trade
secrets, agreements, documents, names of potential suppliers,
customers, partners or investors, proposed business deals, reports,
plans, market studies, surveys and projections, and any other
information which is confidential or proprietary in nature.
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1.1.3.
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"Effective Date" shall mean the date
upon which the Licenses may go into force and effect as provided in
Section 2.1 below.
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1.1.4.
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[***].
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1.1.5.
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"Icon’s Technology" shall have
the meaning set out in the Premises to this Agreement.
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[***]
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Omitted pursuant to a confidential treatment
request. The confidential portion has been filed separately with
the Securities and Exchange Commission.
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1.1.6.
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"Indemnitee" shall have the meaning set
out in Section 9.1 of this Agreement.
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1.1.7.
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"Indemnitor" shall have the meaning set
out in Section 9.1 of this Agreement.
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1.1.8.
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" Improvement " shall mean any invention,
discovery or further development of Icon Technology’s Patents
generated by Protalix.
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1.1.9.
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"Licensed Product(s)" shall mean any
pharmaceutical Research Protein and each additional pharmaceutical
Protein expressed by Protalix or its Affiliates or sub-licensees
using Icon’s Technology. For the avoidance of doubt, active
ingredients for drugs developed by Protalix with the use of
Icon’s Technology and sold as such, shall be deemed as
Licensed Product(s).
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1.1.10.
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"Licenses" shall have the meaning set
out in Section 2.1 of this Agreement.
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1.1.11.
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"Net Sales" shall mean amounts received
by Protalix or any of its Affiliates or sub-licensees for the sale
of Licensed Products, less:
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1.1.11.1 discounts, refunds,
rebates, charge-backs and any other retroactive price adjustments
reducing the consideration thereby received;
1.1.11.2 amounts returned on account of product returns and
allowances;
1.1.11.3 charges for insurance, freight, and other
transportation costs; and
1.1.11.4 sales, tariff duties and any other taxes directly
imposed on the particular sale, but excluding federal, state or
local taxes based on income.
For the avoidance of doubt, Net Sales of any Licensed Products
constituting a pharmaceutical drug active ingredient shall be
determined as the industry net sales of the finished dosage form
(i.e. the sales of the pharmaceutical manufacturer or distributor
to wholesalers, pharmacies, hospitals, physicians or medical care
organizations) less the amounts as specified under Sections
1.1.11.1. to 1.1.11.4 above.
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1.1.12.
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"Owner" shall have the meaning set out
in Section 10.1 of this Agreement.
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1.1.13.
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" Patents " shall mean the Patents listed
in Annex A that are owned or controlled (with rights
sufficient to grant the licenses herein granted) by Icon or its
Affiliates, together with all divisions, continuations or
continuations-in-part, reissues, re-examinations, renewals,
extensions, supplementary protection certificates, or the like of
any such Patents, as well as any certificates of invention or
applications therefore, and all foreign counterparts, with respect
to any of the foregoing.
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1.1.14.
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"Protalix Field" shall have the meaning
set out in the Premises to this Agreement.
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1.1.15.
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" Protein " shall mean any protein,
protein fragment, peptide or polypeptide regardless of formation or
structure.
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1.1.16.
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"Recipient" shall have the meaning set
out in Section 10.1 of this Agreement.
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1.1.17.
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"Research Proteins" shall have the
meaning set out in the Premises to this Agreement.
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1.1.18.
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"Research Program" shall have the
meaning set out in the Premises to this Agreement.
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1.1.19.
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"Research Agreement" shall have the
meaning set out in the Premises to this Agreement.
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1.1.20.
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"Royalties" shall have the meaning set
out in Section 5.1 of this Agreement.
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1.1.21.
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"Royalty Period" shall have the meaning
set out in Section 5.4 of this Agreement.
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1.1.22.
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"Semi-Annual Payment" shall have the
meaning set out in Section 5.4 of this Agreement.
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1.1.23.
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"Term" shall have the meaning set out
in Section 12.1 of this Agreement.
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1.1.24.
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" Third Party " shall mean any person or
entity other than Icon, Icon Affiliates, Protalix and
Protalix’ Affiliates.
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1.1.25.
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"Third Party Claim" shall have the
meaning set out in Section 9.3 of this Agreement.
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1.2.
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The following terms shall have the meanings
ascribed to them in the Option Agreement: " Option ", "
Option Period ", " Exercise Fee ".
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1.3.
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The headings in this Agreement are intended
solely for convenience or reference and shall be given no effect in
the interpretation of this Agreement.
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2.
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THE LICENSE; IMPROVEMENTS
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2.1.
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Immediately upon and subject to the exercise of
the Option by Protalix during the Option Period or any longer
period agreed upon between the Parties in writing, and to the
receipt by Icon of the Exercise Fee determined pursuant to
Section 1.5 of the Option Agreement, the following licenses ("
Licenses ") shall be deemed as having been granted by Icon
to Protalix and to be in full force and effect:
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2.1.1.
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a non-exclusive worldwide license under the
Patents listed in Annex A to develop, test, use and
commercialize Icon’s Technology in the Protalix Field and to
make and have made Proteins expressed by using Icon’s
Technology in the Protalix Field; and
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2.1.2.
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an exclusive worldwide license under the Patents
listed in Annex A to develop, test, use and
commercialize Icon’s Technology to make and have made
Research Proteins in the Protalix Field for the following Protein
products: [***]. For the avoidance of doubt, the license in respect
to any [***] shall be non-exclusive, pursuant to Section 2.1.1
above.
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2.1.3.
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Notwithstanding the above said, the scope of the
Licenses granted under Sections 2.1.1. and 2.1.2. of this
Agreement in case of each specific Patent is further limited as
specified in Annex A .
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2.1.4.
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For the avoidance of doubt, the exclusivity under
Section 2.1.2. of this Agreement and any section of the Option
Agreement is granted only in the Protalix Field, and nothing in the
legal relationship between the Parties implies any limitation
imposed on Icon’s business activity and relationships with
any Third Party outside the granted exclusivity area.
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2.2.
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Protalix shall be permitted to sublicense its
rights under the Licenses, for the purpose of its sub-licensee(s)
further developing, testing, using, making and having made,
marketing and selling Licensed Products, and for no other purpose
whatsoever.
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2.3.
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For the avoidance of doubt, Protalix shall be
entitled to market and sell Licensed Products through
distributors.
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[***]
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Omitted pursuant to a confidential treatment
request. The confidential portion has been filed separately with
the Securities and Exchange Commission.
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2.4.
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Protalix shall use commercially reasonable
efforts to exploit the rights licensed under this
Agreement.
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2.5.
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Protalix may register the License with the
appropriate patent offices if necessary or desirable under any
applicable law, at its own expense. Icon shall cooperate with
Protalix for such purpose, sign all papers in support of such
registration, and execute a formal license that reflects the terms
of this Agreement, for such registration purposes.
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2.6.
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Improvement License to Icon
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Subject to the terms and conditions set forth in
this Agreement, if Protalix creates any Improvements of
Icon’s Patents licensed to Protalix under Section 2.1 herein,
Protalix grants Icon a non-exclusive, worldwide, royalty-free fully
paid up license (with the right to grant sublicenses) under
Protalix intellectual property arising from such Improvements of
Icon’s Patents to make, have made, use, sell, and import any
products other than research, development, production and
commercialization of (i) pharmaceutical proteins and the
expression thereof in plant cell culture systems or (ii)
commercialization of Research Proteins.
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2.7.
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Limited research license. As from the signing
this Agreement and throughout the Research Program (ending no later
than May 1, 2006), Protalix is granted a non-transferable
research license to practice Icon Patents listed in Annex A solely
for its internal research and development efforts, said research
license being limited to research activities not involving
production of material for clinical testing.
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3.
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TECHNOLOGY TRANSFER/ASSISTANCE
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3.1.
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Icon shall provide Protalix with copies of all of
the Icon Patents listed in Annex A within 10
(ten) days of the Effective Date.
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3.2.
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Icon shall provide Protalix with training in the
use of the Icon Technology and Confidential Information which Icon
is free to divulge in relation to the Icon Technology, at
Protalix’s reasonable request, from time to time during the
Term, so as to facilitate Protalix’s exploitation of the
License.
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4.
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LUMP SUM PAYMENTS.
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4.1.
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Protalix will make the following lump sum
payments to Icon upon achievement of each of the following
development milestones in respect of each Licensed
Product:
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4.1.1.
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[***]; and
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4.1.2.
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[***].
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4.2.
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Sections 5.7 and 5.8 of this Agreement shall
apply mutatis mutandis to lump sum payments made under this
Section 4.
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5.
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ROYALTIES.
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5.1.
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As from the first commercial sale by Protalix,
its Affiliates and/or sub-licensees of any Licensed Product,
Protalix shall pay Icon royalties (" Royalties ") on Net
Sales of such Licensed Product at the rate of [***] of such Net
Sales, until such time as Net Sales in respect of such Licensed
Product reach an aggregate amount of [***]. Thereafter, and for the
remainder of the Royalty Period (as defined below), Protalix shall
pay Royalties to Icon with respect to such Licensed Product at a
rate of [***] on Net Sales of such Licensed Product, unless
otherwise provided hereunder.
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5.2.
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Notwithstanding the provisions of the preceding
Section 5.1 of this Agreement:
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Should the [***] in any Licensed
Product exceed [***] grown in Protalix’s plant cells
bio-reactor systems, the Royalties payable with respect to such
Licensed Product shall be increased to [***] of the Net Sales of
such Licensed Product, for as long as aggregate Net Sales of such
Licensed Product are below [***]. Once aggregate Net Sales of such
Licensed Product exceed [***], the Royalty rate payable in respect
of such Licensed Product shall be increased to [***] of Net Sales
of such Licensed Product, for the remainder of the Royalty
Period.
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5.3.
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For the avoidance of doubt, it is hereby
clarified that sales of one Licensed Product shall not be taken
into consideration for purposes of calculation of the Royalties
required to be paid in connection with any other Licensed Product.
It is hereby further clarified that Protalix or its licensee have
to pay royalties once only, on "Licensed Product" sold in the form
of a pharmaceutical, and not on sales of an active
ingredient.
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[***]
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Omitted pursuant to a confidential treatment
request. The confidential portion has been filed separately with
the Securities and Exchange Commission.
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5.4.
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Protalix’s obligation to pay Royalties to
Icon in respect of Licensed Products shall remain in force and
effect until the first to occur of the following (the " Royalty
Period "): (i) the expiration of the [***] period
commencing as from the first commercial sale of the first US Food
and Drug Administration — or European Medicines Agency
— approved Licensed Product or (ii) until the expiration
of [***] years from the first commercial sale of any Licensed
Product not requiring FDA or similar approval as a active drug
ingredient.
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5.5.
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Royalties shall be payable on a [***] basis with
respect to the Net Sales of the preceding [***]. Each [***] shall
be made no later than [***]as from the lapse of the [***] period
for which the payment is due and shall be accompanied by a report
specifying the Net Sales during such [***] along with a calculation
of the Royalties owed to Icon.
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5.6.
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For the avoidance of doubt, it is hereby recorded
and agreed that following the expiry of the Royalty Period by
reason of the passage of time pursuant to Section 5.4 of this
Agreement, then notwithstanding such expiry, Protalix shall be
entitled to continue to utilize the Icon Patents, to make
commercial use of the Icon Technology in the Protalix Field,
without having to pay royalties to Icon in respect of such
activities.
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5.7.
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All payments to be made to Icon pursuant to this
Agreement shall be made in United States Dollars to such bank
account as Icon may direct from time to time during the
Term.
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5.8.
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All payments are quoted net and are made by
adding the statutory value added tax, if any.
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5.9.
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Protalix shall withhold and pay to the
appropriate authorities in respect of any amount due to Icon, any
and all withholding and other taxes as may be imposed by any taxing
authority. In such event, Protalix shall provide Icon with evidence
of such withholding and payment.
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5.10.
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Foreign currency shall be converted into United
States Dollars using an exchange rate equal to the exchange rate
for the purchase of United States Dollars, as reported by The
Wall Street Journal , on the last business day of the [***]
period for which the payment is due.
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5.11.
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Protalix shall endeavor to prepare accurate and
complete records relating to the Net Sales of the Licensed Products
during each accounting period. Icon or its duly authorized
representatives may during the Term of this Agreement and for up to
6 (six) months thereafter upon giving reasonable notice
– in any event of not less than 14 (fourteen) days
– to Protalix within the premises of Protalix
during
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[***]
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Omitted pursuant to a confidential treatment
request. The confidential portion has been filed separately with
the Securities and Exchange Commission.
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normal business hours and not
more frequently then once in any 12 (twelve) months period to
inspect and make copies of all such records in respect of the
period of 1 (one) year immediately proceeding the date of such
inspection.
Icon’s right referred to in this Section shall be
exercised by Icon at its own expense save that in the event that
any such inspection discloses that the total amount which should
have been accounted for hereunder by Protalix during the period
covered by the inspection exceeds by [***]or more the total amount
that was so accounted for by Protalix during such a period and that
Protalix auditors shall certify in writing such error exists that
Protalix shall forthwith reimburse Icon for reasonable costs of
Icon’s inspection.
If any inspection reveals that Protalix has under-reported the
amount payable to Icon Protalix agrees to make immediate payment to
Icon of the proper amount due.
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6.
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REPRESENTATIONS, WARRANTIES AND RELATED
UNDERTAKINGS OF THE PARTIES.
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6.1.
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Each Party hereby represents, warrants, and
covenants to the other Party as of the date hereof and as of the
Effective Date, as follows:
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6.1.1.
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such Party (i) has the power and authority
and the legal right to enter into this Agreement and
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