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.
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
”).
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
1
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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1.1.
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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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3
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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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4
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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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5
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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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4.1.
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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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5.1.
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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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7
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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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8
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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