Technology Transfer and Supply Agreement made as of June 18, 2013 by and between Protalix Ltd. and Fundao Oswaldo Cruz

1.1

For purposes of this AGREEMENT, the following terms shall have the meaning ascribed to such term herein:

1.2

Except where expressly stated otherwise in this AGREEMENT, the following rules of interpretation apply to this AGREEMENT: (a) “include”, “includes” and “including” are not limiting and mean include, includes and including, without limitation; (b) definitions contained in this AGREEMENT are applicable to the singular as well as the plural forms of such terms; (c) references to an agreement, statute or instrument mean such agreement, statute or instrument as from time to time amended, modified or supplemented; (d) references to a Person are also to its permitted successors and assigns; (e) references to an “Article”, “Section”, “Exhibit”, “Appendix” or “Schedule” refer to an Article or Section of, or any Exhibit, Appendix or Schedule to, this AGREEMENT unless otherwise indicated; (f) the word “will” shall be construed to have the same meaning and effect as the word “shall”; and (g) the word “any” shall mean “any and all” unless otherwise indicated by context.

2.1

The primary purpose and scope of this AGREEMENT is the TECHNOLOGY TRANSFER from PROTALIX to FIOCRUZ in order to enable FIOCRUZ to produce and supply PRODUCTS in the TERRITORY for the FIELD, as follows:

(i)

during the TECHNOLOGY TRANSFER, the sale and supply exclusively by PROTALIX to FIOCRUZ of the SUPPLIED MATERIALS for the purpose of FIOCRUZ manufacturing PRODUCTS in accordance with the STAGES and the provisions of Articles 5 and 6 in such quantities as provided herein, in order to satisfy the requirements of the Brazilian MOH for  plant cell expressed recombinant Glucocerebrosidase during the period of the TECHNOLOGY TRANSFER and until registration of the FINAL PRODUCT by ANVISA in FIOCRUZ's name. For the avoidance of doubt, subject to Section 4.8, sales by FIOCRUZ outside of Brazil will only apply to FINAL PRODUCT and shall only take place after full completion of the TECHNOLOGY TRANSFER and in accordance with the terms and conditions of this AGREEMENT;

(ii)

the supply of all of the, documentation and technical information reasonably necessary for the manufacturing and releasing of the PRODUCTS;

(iii)

a non-exclusive, non-transferable and non-sublicensable license of Protalix Patent Rights in the TERRITORY for the term of such PATENTS in the TERRITORY, subject to the terms and conditions of this AGREEMENT; and

(iv)

the provision of TECHNICAL ASSISTANCE by PROTALIX to FIOCRUZ.

3.1

This AGREEMENT shall become effective upon the last to occur of (a) the date of written notification by either PARTY to the other PARTY of approval by INPI of this AGREEMENT, (b) the date of written notification by either PARTY to the other PARTY of approval by OCS of this AGREEMENT, and (c) registration of the Product by ANVISA in the name of PROTALIX or, along with Laboratórios Pfizer Ltda.'s approval to import the PRODUCT into Brazil set forth on Appendix V, in the name of Laboratórios Pfizer Ltda. (the later of (a), (b) and (c), the “EFFECTIVE DATE”). If for any reason the supply of the FINISHED PACKAGED PRODUCT by PROTALIX to FIOCRUZ becomes prohibited under Brazilian LAW, notwithstanding anything to the contrary herein, PROTALIX shall not be required to supply such FINISHED PACKAGED PRODUCT for so long as such supply is prohibited and FIOCRUZ shall pay for any FINISHED PACKAGED PRODUCT already shipped to FIOCRUZ pursuant to the terms of this Agreement.

3.2

FIOCRUZ shall, at its sole cost and expense, submit this AGREEMENT to the INPI for approval and recordation (and take all other actions reasonably necessary to obtain such approval and recordation) promptly following the EXECUTION DATE and shall promptly notify PROTALIX of the approval and recordation of this AGREEMENT by INPI. PROTALIX shall, at its sole cost and expense, submit this AGREEMENT to the OCS for approval (and take all other actions reasonably necessary to obtain such approval) promptly following the EXECUTION DATE and shall promptly notify FIOCRUZ of the approval of this AGREEMENT by OCS.

4.1

Subject to the terms and conditions set forth herein, PROTALIX hereby grants to FIOCRUZ (a) the non-exclusive, non-transferable rights, as applicable, to use the Protalix Technology provided to FIOCRUZ hereunder, and (b) the non-exclusive, non-transferable and non-sublicensable license or sublicense, as applicable, under all PROTALIX PATENT RIGHTS in the TERRITORY for the duration of such Patent Rights, solely, with respect to the foregoing (a) and (b), for the purpose of MANUFACTURING PRODUCTS in the FACILITIES, and the COMMERCIALIZATION of such PRODUCTS, for sale within the Territory for the Field, as appropriate for each STAGE, in accordance with this AGREEMENT. Notwithstanding the foregoing, FIOCRUZ’s right to COMMERCIALIZE the PRODUCTS in the TERRITORY for the FIELD shall be exclusive; provided  that (x) such right shall become non-exclusive in the event that FIOCRUZ fails to comply with this Article 4.1 or Article 7.2 or is unable to meet demand for the PRODUCTS in the TERRITORY, and (y) shall not be exclusive with respect to any Protalix PATENTS RIGHTS or Protalix Technology that is subject to a THIRD PARTY LICENSE that does not provide PROTALIX the rights to grant exclusive sublicenses thereof. Any sublicense obligations required by a THIRD PARTY LICENSE to be included in a sublicense shall be deemed to be included in this AGREEMENT as obligations of FIOCRUZ [***].

4.2

FIOCRUZ shall not directly or indirectly market, promote, supply, distribute, offer for sale, or sell Products nor any other pharmaceutical product that contains DRUG SUBSTANCE or is derived from Protalix Technology or otherwise use or otherwise exploit the PROTALIX PATENTS RIGHTS, Protalix Technology, or SUPPLIED MATERIALS, in, for or to territories outside the TERRITORY or a field other than the Field, in connection with any other pharmaceutical products, or in any manner other than as expressly permitted hereunder.

4.3

FIOCRUZ shall not, without the prior written consent of PROTALIX directly or indirectly (a) disclose or otherwise make available the Protalix Technology, nor assign, transfer, license, or sublicense any rights obtained by FIOCRUZ hereunder, to any AFFILIATE or THIRD PARTY, (b) use the Protalix Technology for research or development, (c) MANUFACTURE or COMMERCIALIZE ProductS in any facility or plant other than the Facilities or through any unit of FIOCRUZ other than BIO-MANGUINHOS, nor (d) other than for the PRODUCTS, use the PROTALIX PATENTS RIGHTS or Protalix Technology in connection with any pharmaceutical products (including any successor or alternative delivery, presentations or dosing regimens of the Product).

4.4

During the Term, FIOCRUZ shall not directly or indirectly market, promote, supply, distribute, offer for sale, sell or otherwise exploit any other products that, in PROTALIX’s good faith judgment may compete with the PRODUCT.

4.5

During the Technology Transfer, PROTALIX shall make available to FIOCRUZ all Improvements CONTROLLED by such PARTY that are useful to the MANUFACTURE of the PRODUCTS.

4.6

Except for the licenses and other rights granted to FIOCRUZ herein, all right, title and interest in and to the Protalix Patent Rights and Protalix Technology shall remain solely with PROTALIX and its licensors, as applicable.

4.7

FIOCRUZ hereby covenants and agrees not to, directly or indirectly, commence (or assist any other Person in connection with) any claim, suit, action or other proceeding (including in front of any court or Governmental Authority, including any intellectual property office or registry), that challenges the legality, validity, enforceability, scope or ownership of any PROTALIX Patent Right or PROTALIX TECHNOLOGY (a “CHALLENGE”). If FIOCRUZ directly or indirectly commences (or assists any other Person in connection with) any Challenge, PROTALIX shall (a) have the right to immediately terminate this AGREEMENT by written notice effective upon receipt by FIOCRUZ, and (b) shall be entitled to recover from FIOCRUZ any and all costs and expenses, including reasonable attorneys’ fees and expenses of investigation and defense, incurred by PROTALIX in connection with such Challenge.

4.8

Notwithstanding anything to the contrary herein, following COMPLETION of the TECHNOLOGY TRANSFER, [***].

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4.9

For the avoidance of doubt, notwithstanding the license granted hereunder, PROTALIX shall retain its exclusive right in the TERRITORY to partner with patient advocacy groups, and provide patient support and medical education services to health care professionals, during the TERM and thereafter until COMPLETION of the TECHNOLOGY TRANSFER or for so long as PROTALIX continues to supply PRODUCTS to the TERRITORY.

4.10

From time to time throughout the TERM, PROTALIX will provide to FIOCRUZ information regarding the status of its development programs for the ORAL FORMULATION. Upon FIOCRUZ's reasonable request in writing (made no more than once per every twelve month period), PROTALIX agrees to discuss in good faith a possible collaboration with FIOCRUZ, or a license or sale to FIOCRUZ of rights, with respect to the ORAL FORMULATION. Any agreement resulting from such discussions relating to the ORAL FORMULATION (including any rights to be granted with respect to the ORAL FORMULATION) shall be separate and apart from this AGREEMENT. PROTALIX's obligations and FIOCRUZ's rights set forth in this Article 4.10 shall be PROTALIX's sole obligations and FIOCRUZ's sole rights hereunder with respect to the ORAL FORMULATION.

Stages

Supplied by

PROTALIX for

PRODUCT supply   

FIOCRUZ activity

Stages Quantity

Stage 0 -    Immediately after the EFFECTIVE DATE

 [***]

 [***]

[***]

Stage 1 -  Immediately after registration by ANVISA of PRODUCT 2 in FIOCRUZ's name

[***]

[***]

[***]

Stage 2 - After validation of FIOCRUZ new FILL AND FINISH facility

[***]

[***]

[***]

Stage 3 - After construction and validation of FIOCRUZ Plant Cell culturing facility and registration by ANVISA of FINAL PRODUCT in FIOCRUZ's name

[***]

[***]

[***]

TOTAL QUANTITY: [***] vials (or equivalent depending on PRODUCT type)

5.2

STAGES. The TECHNOLOGY TRANSFER will be implemented in the sequential STAGES set forth in Appendix II, subject to and in accordance with the terms hereof, including Appendix II.

5.3

Responsibilities of PROTALIX. The sole obligations of PROTALIX relating to the TECHNOLOGY TRANSFER are set forth in this Article 5 and FIOCRUZ agrees that PROTALIX shall have no other obligations, express or implied, with respect thereto.

5.4.3

FIOCRUZ shall take all necessary steps to ensure the FACILITY is constructed, maintained and operated in a manner that enables the safe and proper use of the PROTALIX TECHNOLOGY solely for the MANUFACTURE of the PRODUCTS in accordance with this AGREEMENT. FIOCRUZ will be responsible for the construction, validation, maintenance and operation of the FACILITIES during the term of this AGREEMENT and those FACILITIES shall at all times be (a) approved by ANVISA, (b) appropriate and adequate for implementing the then-current STAGE, and (c) in compliance with all the applicable LAWS, SPECIFICATIONS and GMP. The MANUFACTURING, COMMERCIALIZATION and storage operations, procedures and processes used by FIOCRUZ in connection with the MANUFACTURE of PRODUCTS hereunder (including any FACILITY) shall be in full compliance with all applicable SPECIFICATIONS and LAWS, including GMP and health and safety LAWS.

5.4.4

All costs and expenses related to the FACILITIES, including their construction, operation, maintenance and validation, shall be borne by FIOCRUZ. FIOCRUZ shall staff the FACILITIES with qualified personnel to perform all STAGES of the production and operation process and obtain the required GOVERNMENTAL APPROVALS therefor.

5.4.5

Except as otherwise expressly set forth herein, FIOCRUZ shall be responsible for the production and acquisition, at its own cost and expense, of all necessary materials. FIOCRUZ shall be responsible for the ensuring the quality of all such materials, including that such materials meet all requirements of applicable Brazilian LAWS.

5.5

ADVISORY COMMITTEE. PROTALIX and FIOCRUZ shall establish an ADVISORY COMMITTEE as of the EFFECTIVE DATE composed of three (3) senior members of each of PROTALIX and FIOCRUZ. The members of the ADVISORY COMMITTEE may be represented at any meeting by a designee appointed by such member for such meeting. The chairperson of the ADVISORY COMMITTEE shall be designated by PROTALIX. FIOCRUZ shall designate one of its representative members as secretary to the ADVISORY COMMITTEE. Each such PARTY shall be free to change its representative members by notice to the other such PARTY.

5.5.1

Responsibilities. The ADVISORY COMMITTEE shall be responsible for advising on and monitoring the implementation of the TECHNOLOGY TRANSFER, including clinical development work and regulatory activities in relation to PRODUCTS in a manner which is consistent with the terms and conditions of this AGREEMENT.

5.5.2

Meetings. The ADVISORY COMMITTEE shall meet at least twice every calendar year, (and more frequently should PROTALIX and FIOCRUZ agree to such more frequent meetings), on such dates and at such times as PROTALIX and FIOCRUZ shall agree. Additional meetings may also be called by either PROTALIX or FIOCRUZ as reasonably required, on forty (40) calendar days written notice to the other, unless such notice is waived by such other PARTY. The meetings shall alternate between the offices of PROTALIX and FIOCRUZ, unless the PARTIES otherwise agree. The chairperson shall be responsible for sending notices of meetings to all members. The ADVISORY COMMITTEE may also convene or be polled or consulted from time to time by means of telecommunications, video conferences or correspondence, as deemed necessary or appropriate. Fifteen (15) calendar days prior to each ADVISORY COMMITTEE meetings described above, an English summary of progress under the TECHNOLOGY TRANSFER shall be provided by FIOCRUZ to the members of the ADVISORY COMMITTEE, including detailed accounting of the expenditures.

5.5.3

Decisions. All decisions of the ADVISORY COMMITTEE shall be made by unanimous consent of the members present in person or by telephone or teleconferences/videoconferences at any meeting, with FIOCRUZ members cumulatively having one (1) vote and PROTALIX members cumulatively having one (1) vote. A quorum for a meeting shall require at least one (1) representative from FIOCRUZ and at least one (1) representative from PROTALIX.

5.5.4

In the event that unanimity cannot be reached by the ADVISORY COMMITTEE with respect to a matter that is subject to its decision-making authority, then the matter shall be referred for further review and resolution to the President of PROTALIX or such other similar position designated by PROTALIX from time to time, and the President of FIOCRUZ, or such other similar position designated by FIOCRUZ from time to time. The designated persons at each of PROTALIX and FIOCRUZ shall use reasonable efforts to resolve the matter within thirty (30) days after the matter is referred to them. In the event that the designated officers fail to resolve the matter during such time period, PROTALIX and FIOCRUZ agree to submit the matter to be resolved with the assistance of a suitably qualified independent mediator or expert. In the event that the matter is still not resolved within fifty (50) days after the matter was referred to the designated persons at each of PROTALIX and FIOCRUZ the proposal or

determination of PROTALIX’s President shall prevail (provided such proposal or determination shall be made in good faith).

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5.5.5

Minutes. Within fifteen (15) BUSINESS DAYS after each ADVISORY COMMITTEE meeting, the secretary of the ADVISORY COMMITTEE shall prepare and distribute minutes of the meeting, which shall provide a description in reasonable detail of the discussions held at that meeting and a list of any actions, decisions and/or determinations approved by the ADVISORY COMMITTEE. The secretary shall be responsible for circulation of all drafts and final minutes. Draft minutes shall be first circulated to the chairperson, edited and approved by the chairperson and then circulated in final draft form to all members of the ADVISORY COMMITTEE sufficiently in advance of the next meeting to allow adequate review and comment prior to the meeting. Minutes shall be approved or disapproved, and revised as necessary, at the next meeting. Final minutes shall be distributed to the members of the ADVISORY COMMITTEE.

5.5.6

Expenses. Each PARTY shall be responsible for all travel and related costs for its representatives to attend meetings of, and otherwise participate on, the ADVISORY COMMITTEE.

5.5.7

During the term of this AGREEMENT, the ADVISORY COMMITTEE shall be assisted by specific task forces (“TASK FORCES”) which shall be responsible for advising the ADVISORY COMMITTEE within their area of responsibilities and implementing the decisions made by the ADVISORY COMMITTEE to the extent such decisions are within the competence of the TASK FORCES. The following TASK FORCES shall be organized:

(i)

a technical TASK FORCE;

(ii)

a clinical and regulatory TASK FORCE;

(iii)

a manufacturing TASK FORCE; and

(iv)

other TASK FORCES may be established upon the decision of the ADVISORY COMMITTEE.

6.1

Agreement to Supply.

6.4.1

In the event the TECHNOLOGY TRANSFER is not COMPLETED by the end of the initial seven (7) year period, FIOCRUZ shall continue to obtain from PROTALIX its requirements of PROTALIX BULK PRODUCT for production of the PRODUCT at the same terms and conditions as described above and, for the renewal periods in TERM 1, PROTALIX shall provide [***]% discount over the last price of BULK PRODUCT as described in table below (6.4.2).

6.4.2

During TERM 1, the pricing for the SUPPLIED MATERIALS shall be as follows:

Year

FINISHED PACKAGED

PRODUCT PRICE  [***]

NAKED VIALS

PRICE  [***]

BULK

PRODUCT

PRICE  [***]

From the EFFECTIVE DATE until one (1) year after the EFFECTIVE DATE.

[***]

[***]

[***]

From the end of the foregoing period until two (2) years after the EFFECTIVE DATE.

[***]

[***]

[***]

From the end of the foregoing period until three (3) years after the EFFECTIVE DATE.

[***]

[***]

[***]

From the end of the foregoing period until four (4) years after the EFFECTIVE DATE.

[***]

[***]

[***]

From the end of the foregoing period until five (5) years after the EFFECTIVE DATE.

[***]

[***]

[***]

From the end of the foregoing period until six (6) years after the EFFECTIVE DATE.

[***]

[***]

[***]

From the end of the foregoing period until the COMPLETION of the TECHNOLOGY TRANSFER

[***]

[***]

[***]

6.4.4

Taxes. Subject to Article 9.5 of this Agreement:

II.

such taxes, if any, will be separately stated in PROTALIX's invoice and will be paid by FIOCRUZ to PROTALIX, unless FIOCRUZ provides an exemption to PROTALIX, and subject to receipt of a valid receipt or invoice to FIOCRUZ in the form and manner required by LAW to allow FIOCRUZ to recover such taxes to the extent allowable by LAW; and

III.

PROTALIX shall be solely responsible for the timely payment of all such taxes to the applicable GOVERNMENTAL AUTHORITY.

6.5

Purchase Order Effective Upon Anvisa Approval; Letter of Credit.

7.1

Manufacture

Employee (other than Supervisors, Managers or Directors)

[***] U.S. dollars per hour

Supervisor:

[***] U.S. dollars per hour

Manager:

[***] U.S. dollars per hour

Senior Manager or Director

[***] U.S. dollars per hour

8.1

Product Mark License to FIOCRUZ. PROTALIX hereby grants to FIOCRUZ, during the Term, a non-exclusive, non-transferable, non-sublicensable, limited license to use the Product Marks as they exist on the labeling and packaging of the FINISHED PACKAGED Product at the time such FINISHED PACKAGED PRODUCT is supplied to FIOCRUZ by PROTALIX hereunder in connection with COMMERCIALIZATION of such PRODUCT within the Territory for the Field in accordance with the terms and conditions of this AGREEMENT. For the avoidance of doubt, FIOCRUZ is not granted any rights to display the PRODUCT MARKS other than on the labeling and packaging of such FINISHED PACKAGED PRODUCT as such PRODUCT MARKS are already displayed thereon.

8.2

Quality Control.

8.2.2

FIOCRUZ shall (a) comply with all applicable Brazilian Laws pertaining to the proper use and designation of the Product Marks, (b) modify the labeling and packaging of any FINISHED PACKAGED PRODUCT as directed by PROTALIX, (c) not use any Product Mark as a corporate name, business name, or trade name, (d) not use the PRODUCT MARKS in connection with any SUPPLIED MATERIALS or PRODUCTS other than the FINISHED PACKAGED PRODUCT or in any manner not expressly permitted hereunder, and (e) not use any Product Mark in a manner that would reasonably be expected to materially impair the validity, reputation, or distinctiveness of any Product Mark.

8.3

Prosecution and Maintenance of Product Marks. PROTALIX (or its licensors) shall have the sole right, but not the obligation, through counsel of its choosing, to prosecute and maintain the Product Marks in and outside the Territory.

8.4

Enforcement of Product Marks. FIOCRUZ shall promptly notify PROTALIX in the event of any actual, potential or suspected infringement of a Product Mark by any Third PARTY. [***] shall have the sole right, but not the obligation, to institute litigation or take other remedial measures in connection with Third PARTY infringement of Product Marks. [***] shall be solely entitled to any and all recoveries from THIRD PARTIES resulting from such litigation or other appropriate action, after reimbursement from such recoveries of [***] costs and expenses in enforcing the PRODUCT MARKS in such litigation or other action [***].

8.5

Use of Names.

8.6

FIOCRUZ Covenants.

8.6.1

Other than as expressly permitted in this Article 8, FIOCRUZ shall not (a) use, register, or apply to register any name, mark, domain name, or logo that consists of or is confusingly similar to any name, mark, domain name, or logo owned or controlled by PROTALIX or its AFFILIATES; (b) use any name, mark, domain name, or logo owned or controlled by PROTALIX or its AFFILIATES together with any other mark or name, without prior written consent from such PARTY; or (c) take any action whereby any name, mark, domain name, or logo owned or controlled by PROTALIX or its AFFILIATES becomes invalid, unenforceable, generic or otherwise impaired.

8.6.2

FIOCRUZ shall not take any action that in any way might tend to disparage, diminish, or reflect negatively upon the goodwill, reputation or value of PROTALIX, the PRODUCT, FIOCRUZ or any name, mark domain name or logo owned or controlled by PROTALIX or its AFFILIATES

.

8.7

Prosecution and Maintenance of PROTALIX PATENT RIGHTS. PROTALIX shall have the sole right, but not the obligation, through counsel of its choosing, to prosecute and maintain the PROTALIX PATENT RIGHTS in and outside the TERRITORY.

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[***] Redacted pursuant to confidential treatment request.

8.8

Enforcement of PROTALIX PATENT RIGHTS. FIOCRUZ shall promptly notify PROTALIX in the event of any actual, potential or suspected infringement of a PROTALIX PATENT RIGHT by any Third PARTY. PROTALIX shall have the sole right, but not the obligation, to institute litigation or take other remedial measures in connection with Third PARTY infringement of PROTALIX PATENT RIGHTS. FIOCRUZ shall [***] cooperate with PROTALIX in any such litigation or other remedial measure, including by being named as a party if necessary to institute or maintain such litigation or other remedial measure. If FIOCRUZ is so named, it may hire its own counsel at its sole cost and expense to participate in such litigation or other remedial measure, provided that PROTALIX and its counsel shall at all times and in all cases control such litigation or other remedial measure. [***][***] shall be entitled to any and all recoveries from THIRD PARTIES resulting from such litigation or other remedial action, after reimbursement from such amount of [***] costs and expenses in enforcing the PROTALIX PATENT RIGHTS in such litigation or action [***].

9.1

Royalties. Commencing upon FIOCRUZ’s completion of a Phase III clinical trial and obtaining a GOVERNMENTAL APPROVAL from ANVISA for the MANUFACTURE entirely by FIOCRUZ of the FINAL PRODUCT in the TERRITORY, FIOCRUZ shall pay to PROTALIX for the exploitation of the PROTALIX patent RIGHTs and the PROTALIX TECHNOLOGY in the TERRITORY a running royalty of [***] of Net Sales (the “ROYALTY PAYMENTS”), on a quarterly basis in the manner described in this Article 9. For the avoidance of doubt, (i) FIOCRUZ shall not COMMERCIALIZE the FINAL PRODUCT until completion of a Phase III clinical trial and obtaining a GOVERNMENTAL APPROVAL from ANVISA for the MANUFACTURE entirely by FIOCRUZ of the FINAL PRODUCT in the TERRITORY, and (ii) the requirement to pay ROYALTY PAYMENTS shall survive any termination or expiration of this AGREEMENT until the expiration of the last to expire PROTALIX patent in Brazil.

9.2

Royalty Reporting and Payment. Not later than thirty (30) days after the end of each calendar quarter during the Term (a “REPORTING PERIOD”), FIOCRUZ shall (a) submit to PROTALIX a written report setting forth in reasonable detail (i) gross sales of FINAL Product during the Reporting Period, (ii) Net Sales and number of units of FINAL Product sold or distributed during the Reporting Period, as well as the computation of such Net Sales amounts, (iii) inventory of FINAL PRODUCT at the beginning and end of such Reporting Period, and (iv) all other information related to the business of FIOCRUZ during such Reporting Period to the extent necessary to enable the calculation of amounts payable hereunder to be verified, and (b) pay PROTALIX all amounts due for such Reporting Period.

9.3

Other Payments. Other than the Royalty Payments, which are subject to Article 9.2, all other payments (including any reimbursements) arising hereunder shall, unless otherwise set forth herein, be paid not later than [***] of receipt of an invoice or notice therefor.

9.4

Interest and other Charges. In the event that PROTALIX does not receive on or prior to the date when due hereunder all amounts owed by FIOCRUZ to PROTALIX, such unpaid amount shall be automatically subject to a flat penalty of [***] and monthly adjustment for inflation based on the positive variation of the [IGP-M/FGV] in the period. Any such amount (as increased by the penalty and the monetary correction mentioned above) shall bear default interest from the due date until payment is received by such PARTY at a rate of [***] per month (the “RATE”). The above additional charges shall be in addition to, and not in lieu of, any other remedy available to PROTALIX hereunder.

9.5

Taxes and Other Charges. FIOCRUZ represents and warrants to PROTALIX that, as of the EXECUTION DATE, there are no Brazilian taxes, customs, duties, assessments, excises, registration fees, surtax, stamp duties, or any other charges that are required to be levied upon or withheld from the importation of or assessed against the material furnished or rights licensed by PROTALIX hereunder, or for or on account of the operation of the FACILITY, the purchase, MANUFACTURE, COMMERCIALIZATION by or on behalf of FIOCRUZ of the SUPPLIED MATERIALS and PRODUCTS, or other business of FIOCRUZ contemplated under this AGREEMENT, including any withholding taxes or any such payments related to the registration or recording of this AGREEMENT, or any related documents (not including any ANVISA registration fees) (collectively "TAXES AND FEES"), other than as set forth in Exhibit C (which shall include details regarding applicable percentages and amounts if any such TAXES AND FEES, and the PARTY to be responsible therefore). If there are any TAXES AND FEES under Brazilian LAW that are not set forth on Exhibit C and are, or during the TERM become, in effect (whether as a result of any change in, or amendment to, Brazilian LAWS or otherwise), and such TAXES AND FEES materially change the dollar amount or timing of payments expected to be received by PROTALIX hereunder, then (i) the PARTIES shall discuss in good faith how to address such change in a mutually acceptable manner to compensate PROTALIX for such change (e.g., by an increase in pricing of PRODUCT, an increase in amount of PRODUCT to be purchased, etc.), and (ii) if the PARTIES do not come to an agreement in writing with respect thereto within thirty (30) calendar days, PROTALIX shall have the right to terminate this AGREEMENT immediately upon written notice to FIOCRUZ.

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[***] Redacted pursuant to confidential treatment request.

9.6

Currency and Mode of Payment. All payments to be made hereunder by one PARTY to another PARTY shall be paid in United States dollars, by electronic transfer in immediately available funds via either a bank wire transfer, an electronic funds transfer mechanism, at the paying PARTY’s election, to the bank account designated in Appendix VII or otherwise designated by the PARTY entitled to receive such payment. ROYALTY PAYMENTS and other payments due hereunder shall be converted into U.S. dollars at the exchange rate quoted by Brazilian Central Bank (or its successor in interest) at its market rate for the purchase of U.S. dollars with the applicable currency that needs to be converted (e.g., the currency of the Net Sales received) and applied by that bank on the day such payment is made.

9.7

Permits. FIOCRUZ assumes the sole responsibility of procuring Permits for the export of funds as may be required in the Territory; provided, however, that to the extent that it is impossible to make such payments due to the “blocking” of funds by LAW, such “blocked” funds shall be deposited to the credit of PROTALIX, in such depository as PROTALIX designates or, at the option of PROTALIX, paid directly to a Brazilian entity designated by PROTALIX. Other than as set forth on Exhibit C, there shall be no deduction or offset from, nor shall FIOCRUZ have any right to hold back any payment of, any payments owed by FIOCRUZ hereunder for any reason, including for any uncollectible accounts or other TAXES AND FEES for which FIOCRUZ is responsible hereunder, or for any banking cost or cost of exchange or expense of transmitting said funds. FIOCRUZ shall not conduct its business in any manner intended to reduce the ROYALTY PAYMENTS required to be paid by FIOCRUZ hereunder.

10.1

Any invention made, conceived or reduced to practice by PROTALIX in connection with the performance of the obligations of this AGREEMENT relating to: (i) a pharmaceutical product with the same chemical composition as the PRODUCT or (ii) an IMPROVEMENT to the PRODUCT or (iii) an IMPROVEMENT to the process or specifications provided by PROTALIX to FIOCRUZ, shall be the exclusive property of PROTALIX. PROTALIX, in its sole discretion, may file for patent protection in its own name for any such invention. PROTALIX shall, and hereby does, grant to FIOCRUZ a non-exclusive, irrevocable, perpetual, worldwide, royalty-free license to use, sublicense, practice and otherwise exploit in any manner any such invention and any patent or other intellectual property or proprietary rights therein throughout the world.

11.1

All non-public information, which is received or made available by or on behalf of PROTALIX or FIOCRUZ (each, in such capacity, the “RECIPIENT”) from or on behalf of the other (in such capacity, the “DISCLOSING PARTY”) prior to or during the Term of this AGREEMENT in connection with this AGREEMENT or relating hereto, including without limitation, relating to the PRODUCT or any other pharmaceutical product that contains DRUG SUBSTANCE (“CONFIDENTIAL INFORMATION”) shall be maintained in confidence and shall not be disclosed to any Third PARTY nor used for purposes other than as set forth herein, without the prior written consent of the DISCLOSING PARTY, except to the extent that the CONFIDENTIAL INFORMATION: (a) is known to the RECIPIENT prior to disclosure by the DISCLOSING PARTY to the RECIPIENT through no wrongful act of the RECIPIENT, provided that the RECIPIENT is able to provide competent proof of such prior knowledge; (b) is obtained by the RECIPIENT in a lawful manner from a source other than the DISCLOSING PARTY, which source (i) was not required to hold such secrets or information in confidence, and (ii) was not limited or restricted in its disclosure thereof, (c) has become public knowledge other than through the fault of the RECIPIENT; (d) has been developed by the RECIPIENT independently of the information received as established by written records. The PROTALIX TECHNOLOGY, SPECIFICATIONS and all other information relating thereto or to the business, operations, research or development of PROTALIX, shall be deemed included in the CONFIDENTIAL INFORMATION of PROTALIX.

11.2

Notwithstanding the foregoing, RECIPIENT shall be entitled to disclose CONFIDENTIAL INFORMATION to the extent disclosure by the RECIPIENT is required: (a) to submit applications by the RECIPIENT for GOVERNMENTAL APPROVALS (i) in the case of FIOCRUZ as RECIPIENT, to MANUFACTURE and COMMERCIALIZE the Product in accordance with the terms and conditions of this AGREEMENT, or (ii) in the case of PROTALIX as the RECIPIENT, in relation to the COMPOUND, DRUG SUBSTANCE, or PRODUCT, (b) in the case of PROTALIX as the RECIPIENT, in connection with filing or prosecution of the PROTALIX PATENT RIGHTS or the PRODUCT MARKS, prosecuting or defending litigation relating thereto or to the PROTALIX TECHNOLOGY, or (c) by LAW or by any THIRD PARTY LICENSE; provided  that the RECIPIENT shall use commercially reasonable efforts to obtain confidential treatment of any CONFIDENTIAL INFORMATION to the extent applicable and, if reasonably practicable under the circumstances, provide the DISCLOSING PARTY with sufficient advance notice of such intended disclosure so that the DISCLOSING PARTY will have the opportunity to seek, at its own cost, an appropriate protective order or other remedy, to the extent applicable, or waive compliance with the provisions of this AGREEMENT. If the DISCLOSING

PARTY seeks a protective order, the RECIPIENT will cooperate. If the DISCLOSING PARTY fails to obtain a protective order or waive compliance with the relevant portions of this AGREEMENT, the RECIPIENT will disclose only that portion of information concerning the COMPOUND or PRODUCT which its legal counsel determines it is required to disclose.

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11.3

For the avoidance of doubt, the [***] shall be deemed included in the CONFIDENTIAL INFORMATION of PROTALIX. In addition to the obligations set forth in Article 11.1 and 11.2, FIOCRUZ agrees to (i) treat the [***] with the utmost confidence and in a manner at least as protective as the manner in which FIOCRUZ protects its own most highly sensitive confidential information, trade secrets and know-how, (ii) not use such [***] for any purpose other than for the MANUFACTURING of the FINAL PRODUCT, and (iii) not disclose the information to any PERSON, other than as permitted pursuant to Article 11.2 to PERSONS (a) who have a need to know such information for the purpose of MANUFACTURING the FINAL PRODUCT, (b) who are informed by FIOCRUZ of the confidential nature thereof and the obligations under this AGREEMENT with respect thereto, and (c) who agree in writing with PROTALIX to comply with the obligations of FIOCRUZ under this Article 11 with respect thereto.

11.4

The confidentiality obligations set forth in this Article 11 shall survive the termination or expiration of this AGREEMENT until fifteen (15) years from the EFFECTIVE DATE. Notwithstanding anything to the contrary herein, FIOCRUZ's obligations under this Article 11 with respect to the [***] shall survive the termination or expiration of this AGREEMENT for no less than fifteen (15) years from the completion of the transfer of such [***] to FIOCRUZ.

12.1

This AGREEMENT shall come into force and effect as of the EFFECTIVE DATE, and shall remain in force for seven (7) years following the EFFECTIVE DATE, and may be renewed upon the written agreement of FIOCRUZ and PROTALIX, if INPI authorizes such renewal, for additional five (5) years periods. If in the end of the initial seven (7) year period or any such renewal period the TECHNOLOGY TRANSFER has not been COMPLETED, the PARTIES may renew the AGREEMENT for the period needed for the COMPLETION of the TECHNOLOGY TRANSFER in accordance with the foregoing sentence (the initial period and any such renewal periods, collectively, "TERM 1"), and upon COMPLETION of the TECHNOLOGY TRANSFER TERM 1 shall immediately and automatically expire and TERM 2 shall immediately and automatically commence.

12.2

FIOCRUZ shall pay royalties hereunder to PROTALIX for the PROTALIX PATENT RIGHTS for the period of time beginning on the completion of TERM 1 until the later of expiration of the last to expire PROTALIX patent in Brazil in accordance with ARTICLE 9 ("TERM 2"). The TERM 2 is valid only for the purpose of royalties payment, any terms and conditions relating to PROTALIX PATENT RIGHTS or PRODUCT MARKS in any way (including, for the avoidance of doubt, all license rights and restrictions), and any other obligations that survive termination or expiration of this AGREEMENT. The other obligations of this AGREEMENT (i.e., those obligations not referenced in the foregoing sentence) shall expire with the end of TERM 1.

12.3

Without limiting any other provision of this AGREEMENT, this AGREEMENT may be terminated by PROTALIX as follows:

(a)

if FIOCRUZ materially breaches its representations or warranties made in this AGREEMENT, or materially breaches or materially defaults in the performance or observance of any of its obligations under this AGREEMENT, and such breach or default is not cured within [***] after the giving of written notice by PROTALIX, specifying such breach or default, then PROTALIX shall have the right to terminate this AGREEMENT by providing FIOCRUZ written notice following the expiration of such [***][***] period (such termination to be effective upon receipt of such termination notice);

(b)

immediately upon written notice to FIOCRUZ if any GOVERNMENTAL AUTHORITY announces plans to privatize FIOCRUZ and a competitor of PROTALIX acquires FIOCRUZ or any part of FIOCRUZ that is responsible for the MANUFACTURE or COMMERCIALIZATION of PRODUCTS;

(c)

if FIOCRUZ fails to make any payment when due in accordance with the terms and conditions of this AGREEMENT and such failure to pay is not cured within [***] after the giving of written notice by PROTALIX of such failure, then PROTALIX shall have the right to terminate this AGREEMENT by providing FIOCRUZ written notice following the expiration of such [***] period (such termination to be effective upon receipt of such termination notice);

(d)

immediately upon written notice if FIOCRUZ undergoes a change of control (as such term is defined in the definition of AFFILIATE);

(e)

immediately upon written notice if FIOCRUZ orders, purchases, accepts or otherwise imports from a third party any product that is a therapy for the treatment of Gaucher Disease;

(f)

immediately upon written notice in the event of: (i) FIOCRUZ’s insolvency or bankruptcy, (ii) a liquidation committee or team being formed pursuant to the liquidation rules or Laws of any applicable jurisdiction with respect to FIOCRUZ, or substantially all of the property or assets of FIOCRUZ is under custody by the liquidation committee under the provisions of any bankruptcy, insolvency, or similar LAW, (iv) FIOCRUZ making an assignment for the benefit of its creditors, or (v) FIOCRUZ being dissolved; and

(g)

The purchase by and supply to FIOCRUZ of SUPPLIED MATERIALS during each STAGE in order to proceed to the subsequent STAGE of TECHNOLOGY TRANSFER shall occur subject to [***] and PROTALIX’s prior written approval of such quantities. In the event that (i) PROTALIX does not agree in advance in writing with such quantities proposed by the Brazilian MOH or (ii) the [***] and corresponding PURCHASE ORDERS issued by FIOCRUZ to PROTALIX for any year are less than the amount set forth in the following chart for any given year, PROTALIX shall have the right to terminate this AGREEMENT immediately upon providing FIOCRUZ written notice:

12.4

Without limiting any other provision of this AGREEMENT, this AGREEMENT may be terminated by FIOCRUZ as follows:

(a)

if PROTALIX materially breaches its representations or warranties made in this AGREEMENT, or materially breaches or defaults in the performance or observance of any of its respective obligations under, this AGREEMENT, and such breach or default is not cured within [***] after the giving of written notice by FIOCRUZ to PROTALIX specifying such breach or default, then FIOCRUZ shall have the right to terminate this AGREEMENT by providing PROTALIX written notice following the expiration of such [***] period (such termination to be effective upon receipt of such termination notice);

(b)

immediately upon notice to PROTALIX if FIOCRUZ due to any change in Brazilian LAW is unable to maintain compliance with this AGREEMENT;  provided FIOCRUZ used its best efforts to prevent any of the foregoing events from occurring and to mitigate or cure any effects thereof prior to exercising such termination right; and

(c)

if the pharmaceutical product plant cell expressed recombinant Glucocerebrosidase in a finished dosage form of a drug product that contains DRUG SUBSTANCE (excluding any ORAL FORMULATION) is recalled by both ANVISA and the United States Food and Drug Administration in a manner that is not curable within [***]. In the case of termination pursuant to this Section 12.4(c), FIOCRUZ shall not be required to pay any outstanding payment obligations incurred prior to the effective date of such termination under this AGREEMENT for any PRODUCT batches subject to such recall.

12.5

FIOCRUZ shall notify PROTALIX at least twenty (20) days prior to the occurrence of any of the events or scenarios described in Articles 12.3(b) and (d) and 12.4(b), or, if not possible on such time frame, as soon as possible prior to such occurrence.

12.6

Termination of this AGREEMENT shall be in addition to, and not in lieu of, any other rights or remedies available to the terminating PARTY under this AGREEMENT or applicable Brazilian LAW. Termination of this AGREEMENT in accordance with the terms hereof shall not be the basis for any compensation or other claim for damages resulting therefrom (including any lost profits due to such termination), other than as set forth in Section 12.7.

12.7

Termination of this AGREEMENT for any reason (a) shall be without prejudice to and shall not impair or limit in any manner PROTALIX’s right to receive payment from FIOCRUZ in respect of any payment obligations incurred prior to the effective date of such termination, whether or not the due date for such payment is after such effective date of termination and (b) shall not release a PARTY hereto from any indebtedness, liability, payment or other obligation incurred hereunder (including liability for breach of this AGREEMENT) by such PARTY prior to the effective date of such termination.

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[***] Redacted pursuant to confidential treatment request.

13.1

Except as expressly provided for hereunder, upon the effective date of termination of this AGREEMENT in accordance with this AGREEMENT, all licenses and rights granted to FIOCRUZ herein shall automatically and immediately terminate and FIOCRUZ shall immediately cease all use of the PROTALIX TECHNOLOGY, PROTALIX PATENTS, SPECIFICATIONS and any other CONFIDENTIAL INFORMATION provided to FIOCRUZ hereunder.

13.2

FIOCRUZ shall, promptly after termination of this AGREEMENT, provide to PROTALIX or its designee (or upon PROTALIX’s direction with respect to specific items, destroy) all documents, data, reports, records, regulatory correspondence and other materials and information (and any copies thereof) that contain or are related to the PROTALIX TECHNOLOGY, CONFIDENTIAL INFORMATION disclosed by PROTALIX, and the COMPOUNDS, DRUG SUBSTANCES, CELL BANK, reagents, and PRODUCTS (including and GOVERNMENTAL APPROVALS and regulatory filings with respect thereto) in a form and format useable by PROTALIX. Upon such termination, FIOCRUZ shall assign and transfer to PROTALIX or its designee all of FIOCRUZ’s right, title and interest in and to all GOVERNMENTAL APPROVALS for or related to the PRODUCTS, COMPOUND or DRUG SUBSTANCE in the Territory and any related data and other materials transferred or delivered or deliverable by FIOCRUZ pursuant to this Article 13.2. FIOCRUZ shall execute and deliver to PROTALIX such documents, and take such other actions requested by PROTALIX that are necessary or appropriate to carry out the intent and purposes of this Article 13.2 and to perfect and confirm such assignment, including submitting letters to the GOVERNMENTAL AUTHORITIES in forms reasonably acceptable to PROTALIX.

13.3

Following termination of this AGREEMENT, upon a PARTY’s reasonable request and at such requesting PARTY’s cost, the other PARTY shall reasonably cooperate with the requesting PARTY (including by providing relevant information and data) in connection with any requests or investigations of a regulatory authority, any Third PARTY claims against the requesting PARTY, or such requesting PARTY’s efforts to comply with Laws, relating to the PRODUCTS, COMPOUND, DRUG SUBSTANCE, PROTALIX TECHNOLOGY, or SPECIFICATIONS.

13.4

Upon termination of this AGREEMENT, FIOCRUZ shall terminate the MANUFACTURE and COMMERCIALIZATION of any COMPOUND, DRUG SUBSTANCE, or PRODUCTS and, at PROTALIX’s sole option, shall (a) only in the event of termination by PROTALIX pursuant to Article 12.3, arrange the sale to PROTALIX or its designee at FIOCRUZ’s cost of all (or at PROTALIX’s option, a portion of the) SUPPLIED MATERIAL, DRUG SUBSTANCES and PRODUCTS in FIOCRUZ’s inventory, and/or (b) dispose of all (or at PROTALIX’s option, a portion of the) SUPPLIED MATERIAL, DRUG SUBSTANCES and PRODUCTS in FIOCRUZ’s inventory.

13.5

Upon termination of this AGREEMENT, FIOCRUZ shall cooperate with PROTALIX to effect a cancellation or termination of any recordation of this AGREEMENT with the appropriate Governmental Authorities in the Territory, and the FIOCRUZ will grant, and hereby does grant, to PROTALIX an irrevocable power of attorney coupled with an interest to effect such cancellation within twenty (20) days after the termination of this AGREEMENT.

14.1

FIOCRUZ shall keep and maintain during the TERM and for one (1) years after the termination of this AGREEMENT, accurate and correct books and records setting forth gross sales of the PRODUCTS, Net Sales, number of units of PRODUCT sold, inventory of PRODUCT and all other information related to the business of FIOCRUZ necessary to enable the calculation of amounts payable hereunder to be verified and the confirmation of FIOCRUZ’s compliance with this AGREEMENT. PROTALIX shall have the right to request that an independent accountant reasonably selected by it examine FIOCRUZ’s books and records at any reasonable time, upon reasonable notice and at the Facilities or other facilities where such books and records are normally kept. The opinion of such independent accountants regarding such payments shall be binding on the PARTIES, other than in the case of manifest error. Except as set forth below, the auditing PARTY shall bear the cost of any such examination and review.

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14.2

If the review of FIOCRUZ’s records reveals that FIOCRUZ failed to accurately report information pursuant to Article 9.2 or otherwise underpaid any amounts due hereunder, then FIOCRUZ’s shall promptly pay PROTALIX the amount of any underpayment due hereunder, which shall be subject to all additional charges mentioned in Article 9.4 above, including the default interest at the Rate. If such discrepancy is greater than five percent (5%) of the amount due, FIOCRUZ shall promptly reimburse all costs incurred by PROTALIX in connection with such examination.

15.1

The PARTIES agree that this AGREEMENT shall be governed by and construed in accordance with the laws of Brazil and the courts of Brazil shall have jurisdiction over any disputes arising in connection with this AGREEMENT. It is acknowledged that PROTALIX and FIOCRUZ shall not be excluded from adjudicating and enforcing their rights under this AGREEMENT as relate to countries other than Brazil (including but not limited to enforcing any restriction on a PARTY outside the TERRITORY) in courts other than the courts of Brazil.

16.1

FIOCRUZ shall indemnify, defend and hold PROTALIX and its AFFILIATES and their respective directors, officers, shareholders, representatives, agents, successors, assigns, licensors and employees harmless from and against all Losses, in each case to the extent arising out of (a) any acts or omissions of FIOCRUZ or any of its Affiliates, agents, consultants or contractors in connection with its activities under this AGREEMENT, including MANUFACTURE, use or sale of the SUPPLIED MATERIALS, COMPOUND, Drug Substance and/or Products, unless such Losses are for Losses to which FIOCRUZ is entitled to indemnification pursuant to Article 16.2, as applicable, (b) the breach of any covenant, warranty or representation made by FIOCRUZ under this AGREEMENT, or (c) the negligence, recklessness, or willful misconduct of, or violation of Brazilian LAW by, FIOCRUZ or any of its Affiliates, agents, consultants or contractors.

16.2

PROTALIX shall indemnify, defend and hold FIOCRUZ and its AFFILIATES and their respective directors, officers, shareholders, representatives, agents, successors, assigns, and employees harmless from and against all Losses arising from Third PARTY Claims that the MANUFACTURE and sale of the PRODUCTS by FIOCRUZ within the Territory for the Field in accordance with the terms and conditions hereof, infringes any Patent Rights of any THIRD PARTY.

16.3

For purposes of this AGREEMENT, “THIRD PARTY CLAIM” means a claim asserted by a Third PARTY (in no event to include any Affiliate of either PARTY) against a PARTY or any of its Affiliates, or any of their respective directors, officers, shareholders, representatives, agents, successors, assigns, licensors or employees. In the event a Third PARTY Claim is asserted or LOSSES are incurred with respect to any matter for which a PARTY or any of its Affiliates, or any of their respective directors, officers, shareholders, representatives, agents, successors, assigns, licensors and employees (the “INDEMNIFIED PARTY”) is entitled to indemnification hereunder, then the Indemnified PARTY shall promptly notify in writing the PARTY obligated to indemnify the Indemnified PARTY (the “INDEMNIFYING PARTY”) thereof; provided , however, that no delay on the part of the Indemnified PARTY in notifying the Indemnifying PARTY shall relieve the Indemnifying PARTY from any obligation hereunder unless (and then only to the extent that) the Indemnifying PARTY is prejudiced thereby.

16.4

The Indemnifying PARTY shall assume direction and control of the defense, litigation, settlement, appeal or other disposition of the Third PARTY Claim (including the right to settle the claim solely for monetary consideration) with counsel selected by the Indemnifying PARTY and reasonably acceptable to the Indemnified PARTY. The Indemnified PARTY shall have the right to join in (including the right to conduct discovery, interview and examine witnesses and participate in all settlement conferences), but not control, at its own expense, the defense of any Third PARTY Claim that the Indemnifying PARTY is defending as provided in this AGREEMENT. Notwithstanding anything to the contrary contained herein, an Indemnified PARTY shall be entitled to assume the defense of any Third PARTY Claim with respect to the Indemnified PARTY, (i) upon written notice to the Indemnifying PARTY, in which case the Indemnifying PARTY shall be relieved of liability under Article 16.1 or 16.2, as applicable, solely for such Third PARTY Claim and related Losses, or (ii) in the event the INDEMNIFYING PARTY refuses or fails to assume the defense as required hereunder, in which case the Indemnifying PARTY shall not be relieved of liability under Article 16.1 or 16.2, as applicable, solely for such Third PARTY Claim and related Losses.

16.5

FIOCRUZ will not enter into any settlement of any THIRD PARTY CLAIM for which PROTALIX or any of its Affiliates, or any of their respective directors, officers, shareholders, representatives, agents, successors, assigns, licensors or employees is entitled to indemnification hereunder involving PROTALIX TECHNOLOGY, PROTALIX PATENT RIGHTS, CONFIDENTIAL INFORMATION of PROTALIX, PRODUCT MARKS, COMPOUND, Drug Substance, PRODUCTS or SUPPLIED MATERIALS, without such Indemnified PARTY’s prior written consent. Without limiting the foregoing, FIOCRUZ shall not, without the written consent of the Indemnified PARTY (which consent shall not be unreasonably withheld), effect any settlement of any pending or threatened litigation in which the Indemnified PARTY has sought indemnification hereunder by FIOCRUZ, unless such settlement involves solely monetary damages and includes an unconditional release of the Indemnified PARTY from all liability on claims that are the subject matter of such litigation.

16.6

IN NO EVENT SHALL EITHER PARTY OR ANY OF ITS RESPECTIVE AFFILIATES BE LIABLE UNDER THIS AGREEMENT FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, NEGLIGENCE, STRICT LIABILITY OR OTHERWISE, INCLUDING LOSS OF PROFITS OR REVENUE, SUFFERED BY PROTALIX, FIOCRUZ OR ANY OF THEIR RESPECTIVE AFFILIATES. THE FOREGOING SENTENCE SHALL NOT LIMIT (A) THE OBLIGATIONS OF EITHER PARTY TO INDEMNIFY THE OTHER PARTY AS PROVIDED HEREUNDER, (B) ANY LIABILITIES RESULTING FROM A BREACH OF THE CONFIDENTIALITY OBLIGATIONS UNDER ARTICLE 11 OR FROM USE OF ANY INTELLECTUAL PROPERTY OTHER THAN IN ACCORDANCE WITH THE LICENSE GRANTED PURSUANT TO ARTICLE 4, OR (C) ANY PAYMENT OBLIGATIONS UNDER THIS AGREEMENT.  EXCEPT FOR LOSSES TO THE EXTENT RESULTING FROM PROTALIX'S GROSS NEGLIGENCE, FRAUD OR WILLFUL MISCONDUCT, IN NO EVENT SHALL PROTALIX'S TOTAL LIABILITY TO FIOCRUZ ARISING IN CONNECTION WITH THE SUPPLY OF SUPPLIED MATERIALS PURSUANT TO SECTION 6 HEREOF EXCEED, ON A SUPPLIED MATERIAL-BY-SUPPLIED MATERIAL BASIS, THE TOTAL AMOUNT PAID BY FIOCRUZ FOR SUCH SUPPLIED MATERIAL.

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17.1

Each PARTY hereby represents and warrants as of the EXECUTION DATE and the Effective Date that such PARTY has the requisite corporate power and authority to execute and deliver this AGREEMENT and to perform its obligations hereunder, and that the execution, delivery and performance of this AGREEMENT by such PARTY has been duly and validly authorized and approved by proper corporate action on the part of such PARTY, and such PARTY has taken all other action required by LAW,

its certificate of incorporation, by-laws or other organizational documents, required to authorize such execution, delivery and performance. Assuming due authorization, execution and delivery on the part of the other PARTY, each PARTY represents and warrants as of the EFFECTIVE DATE that this AGREEMENT constitutes a legal, valid and binding obligation of such PARTY, enforceable against such PARTY in accordance with its terms.

17.2

FIOCRUZ hereby represents and warrants to PROTALIX as of the EXECUTION DATE and the EFFECTIVE DATE, and covenants to PROTALIX, as follows:

(a)

In connection with the COMPOUND, Drug Substance and Products Manufactured by, or under authority of, FIOCRUZ: (i) any FACILITY and all equipment, tooling and molds utilized in the Manufacture hereunder by FIOCRUZ shall be maintained in good operating condition and shall be maintained and operated in accordance with all applicable Brazilian Laws and GMP, (ii) the Manufacturing, COMMERCIALIZATION and storage operations, procedures and processes utilized by FIOCRUZ hereunder (including any Facility) shall be in full compliance with all applicable Brazilian Laws, including GMP and Brazilian health and safety Laws, (iii) FIOCRUZ shall hold all Permits required by any Governmental Authority for it to Manufacture, COMMERCIALIZE and otherwise distribute the COMPOUND, Drug Substance and PRODUCTS in accordance with this AGREEMENT (subject to Article 5.1.5), and (iv) the PRODUCTS, or its containers, shall be marked by FIOCRUZ in accordance with the applicable patent marking LAWS.

(b)

The COMPOUND, Drug Substance and Products, as applicable, shall be Manufactured, COMMERCIALIZED, packaged, labeled, handled, stored and shipped by FIOCRUZ, in accordance with the SPECIFICATIONS and in compliance with all applicable Brazilian Laws and GMP, and in accordance with the PHARMACOVIGILANCE AGREEMENT and any other quality assurance requirements provided in writing to FIOCRUZ by PROTALIX, and this AGREEMENT.

(c)

FIOCRUZ shall not allow the introduction into the Drug SUBSTANCE or PRODUCTS of (i) any material that has not been used, handled or stored in accordance with the Specifications, all applicable Brazilian Laws, GMP, the PHARMACOVIGILANCE AGREEMENT, (ii) any material that would cause the Drug Substance or Products to be adulterated or misbranded within the meaning of any Brazilian Laws, and (iii) any defects in material and workmanship.

(d)

Each PARTY does not, to such PARTY's knowledge, currently employ and will not knowingly employ during the Term, and does not, to such PARTY's knowledge, use as a subcontractor and will not knowingly use as a subcontractor during the Term, and such subcontractors do not, to such PARTY's knowledge, currently employ and will not employ or engage during the Term, any Person that has been debarred or has otherwise been disqualified or suspended from performing scientific or clinical investigations or otherwise subjected to any restrictions or sanctions by the ANVISA or any other Governmental Authority or professional body with respect to the performance of scientific or clinical investigations, or any Person finally convicted of a criminal offense, with no existing rights to appeal such conviction, in relation to: (i) the development or approval (including the process for development or

approval) of an abbreviated drug application, (ii) the development or approval of any drug product or otherwise relating to the regulation of any drug product, or (iii) bribery, payment of illegal gratuities, fraud, perjury, racketeering, blackmail, extortion, falsification or destruction of records or interference with, obstruction of an investigation into a prosecution of any criminal offense.

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(e)

FIOCRUZ shall operate and maintain all equipment used at the Facilities in a safe manner and provide adequate employee training with respect thereto.

(f)

Each PARTY has not, to such PARTY's knowledge, and will not knowingly offer or pay, or authorize such offer or payment, of any money or anything of value or improperly seek to influence any Government Official in connection with this AGREEMENT. For purposes of this Article, a “GOVERNMENT OFFICIAL” is defined as and includes: (i) any elected or appointed government official (e.g., a member of a ministry of health); (ii) any employee or person acting for or on behalf of a government official, agency, or enterprise performing a governmental function; (iii) any political party, officer, employee, or person acting for or on behalf of a political party or candidate for public office; (iv) an employee or person acting for or on behalf of a public international organization; or (v) any person otherwise categorized as a Government Official under local law where “government” includes all levels and subdivisions of non-U.S. governments (i.e., local, regional, or national and administrative, legislative, or executive).

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(g)

FIOCRUZ shall (i) not use, sell or distribute the PRODUCTS or any other product that contains the DRUG SUBSTANCE, for any purpose other than as set forth herein, (ii) use the SUPPLIED MATERIALS and PROTALIX TECHNOLOGY solely for the purpose of converting such SUPPLIED MATERIALS into the PRODUCTS for sale within the Territory in the Field, in accordance with this AGREEMENT, (iii) not source materials for inclusion in the PRODUCTS other than through PROTALIX, and (iv) not sell, distribute or use a Product if it does not conform with the SPECIFICATIONS.

17.3

PROTALIX hereby represents and warrants to FIOCRUZ that, to its knowledge, as of the EXECUTION DATE and the Effective Date:

(a)

The COMPOUND, DRUG SUBSTANCE, BULK PRODUCT, NAKED VIAL, CELL BANK and the FINISHED PACKAGED PRODUCT supplied by PROTALIX to FIOCRUZ hereunder is in full compliance with all applicable Brazilian Laws, including GMP and Brazilian health and safety Laws.

(b)

The PROTALIX PATENT RIGHTS, PROTALIX TECHNOLOGY, PRODUCT MARKS or CONFIDENTIAL INFORMATION does not infringe any THIRD PARTY rights.

17.4

PROTALIX hereby covenants to FIOCRUZ that the COMPOUND, DRUG SUBSTANCE, BULK PRODUCT, NAKED VIAL, CELL BANK and the FINISHED PACKAGED PRODUCT supplied by PROTALIX to FIOCRUZ hereunder shall be in full compliance with GMP.

17.5

Disclaimer of Warranty. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, NEITHER PARTY MAKES ANY REPRESENTATION OR WARRANTY OF ANY KIND WITH RESPECT TO THE COMPOUND, DRUG SUBSTANCE, THE PRODUCT, PROTALIX PATENT RIGHTS, PROTALIX TECHNOLOGY, PRODUCT MARKS OR CONFIDENTIAL INFORMATION. EXCEPT AS OTHERWISE EXPRESSLY STATED IN THIS AGREEMENT, EACH PARTY EXPRESSLY DISCLAIMS ALL WARRANTIES, EXPRESS OR IMPLIED, INCLUDING WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND NON-INFRINGEMENT.

18.1

The PARTIES agree to comply with the terms and conditions of the Pharmacovigilance Agreement set forth as Appendix VIII.

18.2

The PARTIES agree in good faith to establish mutually agreeable quality guidelines following the EXECUTION DATE and prior to distribution of PRODUCT by FIOCRUZ, which shall cover, amongst other matters, delivery and storage of PRODUCT by FIOCRUZ.  The PARTIES agree to comply with such quality guidelines during the TERM.

19.1

Except where expressly stated otherwise herein, all approvals and consent rights of a PARTY under this AGREEMENT shall be in such PARTY’s sole and absolute but good faith discretion. Any approval or consent may be subject to such conditions as such PARTY deems appropriate or be granted on a “test” or temporary basis, in each case to the extent identified to the PARTY requesting such approval or consent. If a PARTY does not grant any required approval or consent within ten (10) business Days of any submission or request for approval or consent, such submission or request shall be deemed to be disapproved.

20.1

Force Majeure. Neither PARTY shall be liable to the other PARTY for any losses or damages attributable to a default under or breach of this AGREEMENT that is the result of war (whether declared or undeclared), acts of God, revolution, acts of terror, fire, earthquake, flood, pestilence, riot, enactment or change of LAW (following the EXECUTION Date) making performance of this AGREEMENT by such PARTY impossible, accident(s), labor trouble, shortage of or inability to obtain material equipment or transport or any other cause beyond the reasonable control of such PARTY (each, a “FORCE MAJEURE EVENT”);  provided  that if such a cause occurs, then the PARTY affected will promptly notify the other PARTY of the nature and likely result and duration (if known) of such cause and use its commercially reasonable efforts to avoid or remove such causes of nonperformance as soon as is reasonably practicable. Upon termination of the Force Majeure Event, the performance of any suspended obligation or duty shall promptly recommence. If the event lasts for a period of longer than one (1) month, the PARTIES shall meet and work diligently to implement appropriate remedial measures. Notwithstanding anything to the contrary herein, despite the existence of any such Force Majeure Event affecting FIOCRUZ's ability to pay all monies due hereunder for PRODUCTS delivered or services or licenses provided hereunder, FIOCRUZ shall pay any such amounts immediately upon the termination of such FORCE MAJEURE EVENT without penalty for any such delay during the continuance of the FORCE MAJEURE EVENT, in accordance with the terms hereof.

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20.2

Severability. If and solely to the extent that any provision of this AGREEMENT shall be invalid or unenforceable, such offending provision shall be of no effect and shall not affect the enforceability or validity of the remainder of this AGREEMENT or any of its provisions; provided, however, the PARTIES shall use their respective reasonable efforts to mutually agree to replace the invalid provisions in a manner that best accomplishes the original intentions of the PARTIES.

20.3

Waivers. Any term or condition of this AGREEMENT may be waived at any time by the PARTY that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the PARTY waiving such term or condition. Neither the waiver by any PARTY of any term or condition of this AGREEMENT nor the failure on the part of any PARTY, in one or more instances, to enforce any of the provisions of this AGREEMENT or to exercise any right or privilege, shall be deemed or construed to be a waiver of such term or condition for any similar instance in the future or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this AGREEMENT shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation or agreement.

20.4

Entire Agreement; Amendments. This AGREEMENT (together with any agreements between the PARTIES expressly contemplated to be entered into by this AGREEMENT) sets forth the entire agreement and understanding between the PARTIES as to the subject matter hereof and supersedes all agreements or understandings, verbal or written, made between FIOCRUZ and PROTALIX before the EXECUTION DATE with respect to the subject matter hereof. All Confidential Information disclosed between FIOCRUZ and PROTALIX prior to the Effective Date will be deemed to have been disclosed pursuant to and under this AGREEMENT. None of the terms of this AGREEMENT shall be amended, supplemented or modified except in writing signed by the PARTIES.

20.5

Survival. The provisions of Articles 1, 4.3, 4.6, 4.7, 8.6, 9 (for any payment obligations incurred during the TERM until the date of termination), 10, 11, 12.6, 12.7, 13, 14, 15, 16, 17, 19 and 20, as well as (i) any other Articles, Exhibits, Schedules or Appendices or defined terms referred to in such Articles necessary to give them effect and (ii) any other provision that by its terms expressly survives termination of this AGREEMENT, shall survive termination of this AGREEMENT and remain in force until discharged in full. Furthermore, any other provisions required to interpret and enforce the PARTIES’ rights and obligations or to wind up their outstanding obligations under this AGREEMENT shall survive to the extent required, including any payment obligations incurred during the Term or pursuant to any surviving Article.

20.6

Assignment; Binding Effect. Neither this AGREEMENT nor any rights or obligations of FIOCRUZ in, to or under this AGREEMENT may be assigned or otherwise transferred by FIOCRUZ without the prior written consent of PROTALIX. For purposes of this AGREEMENT, an “assignment” includes any change of control of FIOCRUZ (as such term is defined in the definition of AFFILIATES) or assignment by operation of LAW. PROTALIX may assign this AGREEMENT or any of its rights or obligations hereunder, in whole or in part, with the prior consent of FIOCRUZ (such consent not to be unreasonably withheld or delayed); provided  that, for the avoidance of doubt, no such consent of FIOCRUZ shall be required for an assignment in connection with a change of control (as such term is defined in the definition of AFFILIATES), merger or reorganization of PROTALIX or any of its AFFILIATES, or a sale or other transfer by PROTALIX or any of its AFFILIATES of all or substantially all of the assets or business to which this AGREEMENT relates. Subject to the foregoing, this AGREEMENT shall be binding upon and inure to the benefit of the PARTIES and their successors, respective heirs, and legal representatives. Any purported assignment in violation of this Article 20.6 shall be void ab initio. Any permitted assignee shall assume all obligations of its assignor under this AGREEMENT. Notwithstanding the foregoing, should Bio-Manguinhos become a company controlled by FIOCRUZ (Empresa Brasileira de Biotecnologia em Saúde - Bio-Manguinhos), both parties consent that this agreement may be transferred to such company at FIOCRUZ's sole discretion without Protalix written consent.

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20.7

Independent Contractor. The relationship between the PARTIES is that of independent contractors. The PARTIES are not joint venturers, partners, principal and agent, employer and employee, and have no other relationship other than independent contracting parties. Neither PARTY has the authorization or right hereunder to make any representations, enter into any agreements or assume any other obligations on behalf of the other PARTY.

20.8

Publicity. FIOCRUZ shall not make (and shall cause its Affiliates not to make) any press release or public statement (written or oral) concerning the terms of, or events related to, this AGREEMENT or concerning PROTALIX, the PRODUCT, COMPOUND, DRUG SUBSTANCE, SUPPLIED MATERIALS, or PROTALIX TECHNOLOGY, without the prior written approval of PROTALIX, except where such statement is required by Brazilian LAW. In the case of any press release or public statement (written or oral) that is required by Brazilian LAW, FIOCRUZ shall use all reasonable efforts to give PROTALIX sufficient advance notice of the text of any such public statement, so that PROTALIX will have the opportunity to comment upon the statement, and give due consideration to any of PROTALIX's comments on such text.

20.9

Notices. All notices, consents, approvals, requests or other communications required hereunder given by one PARTY to the other hereunder shall be in writing and made by registered or certified air mail, facsimile, express overnight courier or delivered personally to the following addresses of the respective PARTIES:

20.10

Third Party Beneficiaries. Except for the rights of PERSONS not a PARTY to this AGREEMENT to indemnification pursuant to Article 16 (which is intended to benefit such PERSONS), none of the provisions of this AGREEMENT shall be for the benefit of or enforceable by any Third PARTY, including any creditor of any PARTY. No Third PARTY shall obtain any right under any provision of this AGREEMENT or shall by reason of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against any PARTY.

20.11

Subcontractors. FIOCRUZ shall not use any subcontractors to perform its obligations or exercise its rights hereunder, without the prior written consent of PROTALIX. PROTALIX may use one or more of its Affiliates or any reasonably able Third PARTIES to exercise its rights or perform its obligations hereunder (including each other). Despite any such subcontracting the PARTIES shall remain liable hereunder for the performance of all of its obligations hereunder (including the payment of any amounts due hereunder).

20.12

Headings. Headings in this AGREEMENT are included herein for ease of reference only and shall have no legal effect.

20.13

Language. This AGREEMENT has been prepared in the English language and has been translated into the Portuguese language and the Portuguese language version shall control all questions of interpretation and performance hereof. If there is any difference in meaning between any portion of the English version and any other version, the Portuguese version shall prevail. Unless otherwise specifically required by Brazilian LAW or by written agreement of the PARTIES or as otherwise provided herein, all notices and other communications required or permitted under this AGREEMENT shall be made in the English language.

Authorized Importer:

Fiocruz - Instituto de Tecnologia em Imunobiológicos, Bio-Manguinhos

CNPJ nº 33.781.055/0015-30

Legal Representative

Legal Responsible

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