EXHIBIT 10.21


 










[ * ]  = CERTAIN
CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS
BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION
PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


 


EXCLUSIVE LICENSE AGREEMENT


 


“ISOLATION AND APPLICATION OF P53 INHIBITORS TO CONTROLLING TISSUE
RESPONSE TO A VARIETY OF STRESSES AND FACILITATING ANTI-CANCER TREATMENT”

(UIC Tech ID #CS01)


 


TABLE OF CONTENTS


 


	
  PREAMBLE

  ARTICLES:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  I

  	
   

  	
  DEFINITIONS

  
	
  II

  	
   

  	
  GRANT

  
	
  III

  	
   

  	
  DUE DILIGENCE

  
	
  IV

  	
   

  	
  PAYMENTS

  
	
  V

  	
   

  	
  REPORTS AND RECORDS

  
	
  VI

  	
   

  	
  PATENT MAINTENANCE, ENFORCEMENT AND DEFENSE

  
	
  VII

  	
   

  	
  CONFIDENTIALITY

  
	
  VIII

  	
   

  	
  REPRESENTATIONS, WARRANTIES AND COVENANTS

  
	
  IX

  	
   

  	
  INDEMNIFICATION, PRODUCT LIABILITY

  
	
  X

  	
   

  	
  EXPORT CONTROLS

  
	
  XI

  	
   

  	
  NON-USE OF NAMES

  
	
  XII

  	
   

  	
  ASSIGNMENTS

  
	
  XIII

  	
   

  	
  TERMINATION

  
	
  XIV

  	
   

  	
  DISPUTE RESOLUTION

  
	
  XV

  	
   

  	
  PAYMENTS, NOTICES AND OTHER COMMUNICATIONS

  
	
  XVI

  	
   

  	
  MISCELLANEOUS PROVISIONS

  



 


i

















 


This EXCLUSIVE LICENSE
AGREEMENT is effective on the date last subscribed below (the “Effective
Date”), and is by and between THE BOARD OF TRUSTEES OF
THE UNIVERSITY OF ILLINOIS, a body corporate and politic of the
State of Illinois (“UNIVERSITY”) with offices in Chicago, Illinois 60612, and QUARK BIOTECH, INC., a California corporation with principal
offices at 1059 Serpentine Lane, Pleasanton, California 94566, (“QBI”).


 


WITNESSETH


 


WHEREAS, in the course of
research conducted under UNIVERSITY auspices, Dr. Andrei Gudkov and Elena
Komarova in the Department of Molecular Genetics of UNIVERSITY (the “INVENTORS”),
have produced an invention entitled [ * ] (the “INVENTION”) which is covered by
the Patent Rights as defined in Article 1.5 below;


 


WHEREAS, pursuant to an
assignment by Drs. Gudkov and Komarova to UNIVERSITY of all their right, title
and interest in and to the INVENTION and any patents resulting therefrom,
UNIVERSITY is the owner of the INVENTION and the corresponding Patent Rights,
and has the right to grant licenses under said Patent Rights;


 


WHEREAS, UNIVERSITY desires to
have the Patent Rights utilized in the public interest and QBI seeks to
commercially develop the Patent Rights, and accordingly, the UNIVERSITY is
willing to grant to QBI an exclusive license to its interest in the INVENTION
and the Patent Rights on the terms and conditions set forth herein;


 


WHEREAS, LICENSEE seeks to
commercially develop the Patent Rights through a thorough, vigorous and
diligent program of exploiting the Patent Rights whereby public utilization
shall result therefrom; and


 


NOW, THEREFORE, in consideration
of the premises and the mutual covenants contained herein, the parties hereto
agree as follows:


 


ARTICLE I – DEFINITIONS


 


For the purpose of this Agreement, the following words
and phrases shall have the following meanings:


 


1.1                               “LICENSEE” shall mean QBI.


 


1.2                               “Affiliate” shall mean any person,
firm, corporation or other entity controlling, controlled by, or under common
control with a party hereto. The term “control” wherever used throughout this
Agreement shall mean ownership, directly or indirectly, of more than 50% of the
equity capital. Other than LICENSEE, any corporation, company, partnership,
joint venture, firm, individual or other entity which does not come within this
definition shall be a “Non-Affiliate”.


 


1.3                               “University Existing Technology” and “Sponsor Existing Technology” have
the meaning given to them in the Research Agreement between UNIVERSITY and QBI
effective September 1, 1999, attached hereto as Appendix A and incorporated
herein by reference (“Research Agreement”).


 


1.4                               “Confidential Information” means (i)
any proprietary or confidential information or material in tangible form
disclosed hereunder that is marked as “Confidential” at the time it is
delivered to the receiving party, (ii) any proprietary or confidential
information disclosed orally hereunder that is identified as confidential or
proprietary when disclosed and such disclosure is confirmed in writing to the
receiving party within 30 days by the disclosing party, and (iii) any information
concerning the terms of this Agreement.


 


1.5                               “Patent Rights” shall mean all of the
following UNIVERSITY owned intellectual property:


 






[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED
IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY
WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE
SECURITIES ACT OF 1933, AS AMENDED.


 


1

















(a)                                  the
United States patent application entitled [ * ] and all foreign patent applications
based on this U.S. application;


 


(b)                                  United
States and foreign patents issued from this application, and divisionals and
continuations of this application;


 


(c)                                  claims
of U.S. and foreign continuation-in-part applications, and of the resulting
patents which are directed to subject matter specifically described in the U.S.
patent application Serial Number [ * ]; and


 


(d)                                  any
reissues or re-examinations of patents described in (a), (b), or (c), above.


 


1.6                               A
“Licensed Product” shall mean any
product or part thereof developed by or on behalf of LICENSEE which:


 


(a)                                  is
covered in whole or in part by an issued, unexpired claim or a pending claim
contained in the Patent Rights which have not been held unenforceable or
invalid by a court or other governmental agency of competent jurisdiction and
which have not been admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise in any country in which such product is made, used or
sold relative to said product or part; or


 


(b)                                  is
manufactured by using a process which is covered in whole or in part by an
issued, unexpired claim or a pending claim contained in the Patent Rights which
have not been held unenforceable or invalid by a court or other governmental
agency of competent jurisdiction and which have not been admitted to be invalid
or unenforceable through reissue, disclaimer or otherwise in the country in
which any such process is used or in which any such product is used or sold
relative to said process.


 


1.7                               A
“Licensed Process” shall mean any
process which is covered in whole or in part by an issued, unexpired claim or a
pending claim contained in the Patent Rights in any country in which such
process is practiced.


 


1.8                               “Net Sales” shall mean the gross
amount invoiced by LICENSEE or Affiliate for sales of Licensed Products or
Licensed Processes to Non-Affiliate independent third parties, less the sum of
the following:


 


(a)                                  promotional
allowances, rebates, credits and cash, trade and quantity discounts, in amounts
customary in the trade, actually taken;


 


(b)                                  excise
taxes, sales, use, value added, and other consumption taxes and other
compulsory payments to governmental authorities, actually paid;


 


(c)                                  outbound
transportation charges and related insurance costs prepaid or allowed;


 


(d)                                  amounts
allowed or credited due to returns and uncollectible amounts;


 


(e)                                  cost
of any shipping packages and packing, if billed separately;


 


(f)                                    import
and/or export duties and tariffs actually paid;


 


(g)                                 rebates;
and


 


(h)                                 interest,
service, finance, or sales or carrying charges paid by customers for extension
of credit


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


2

















 


No deductions shall be made for commissions paid to
individuals whether they be with independent sales agencies or regularly
employed by LICENSEE or Affiliates and on its payroll, or for cost of
collections. Licensed Products shall be considered “sold” when billed or
invoiced.


 


1.9                               “Sublicense” shall mean the right to
make, use or sell Licensed Products or Licensed Processes, other than by
outright sale to any Non-Affiliate (including any Non-Affiliated distributor).


 


ARTICLE 2



GRANT


 


2.1                               UNIVERSITY
hereby grants to LICENSEE an exclusive worldwide right and license in any field
of use, including the right to sublicense, to make, have made, use, lease,
offer to sell, export and otherwise exploit UNIVERSITY’s right, title and
interest in the Licensed Products or Licensed Processes derived from the Patent
Rights, on a royalty-bearing basis until the end of the last to expire patent
of the Patent Rights on a country by country basis, subject to the rights
reserved in Section 2.2 below.


 


2.2                               Notwithstanding
any other provisions of this Agreement, it is agreed that UNIVERSITY shall
retain the right to use (subject to LICENSEE’s right to use) the technology
being licensed under the Patent Rights, including any improvements, solely for
its own non-commercial teaching and research activities; subject, however, to
confidentiality obligations as set forth in Article VII.


 


2.3                               LICENSEE
hereby agrees that every Sublicense to which it shall be party and which shall
relate to the rights, privileges and license granted hereunder shall contain a
statement describing the date upon which LICENSEE’S exclusive rights,
privileges and license hereunder shall terminate.


 


2.4                               LICENSEE
agrees that any Sublicenses granted will be in terms consistent and not in
conflict with any of the material terms and conditions of this Agreement
including, without limitation the provisions under Articles III, V, VII, VIII,
IX, X, XI, XIII and XVI of this Agreement.


 


2.5                               LICENSEE
agrees to forward to UNIVERSITY a copy of any and all fully executed sublicense
agreements within [ * ] of execution of same, and further agrees to forward to
UNIVERSITY within [ * ] a copy of such reports received by LICENSEE from its
sublicensees during the preceding [ * ] period under the Sublicenses as shall
be pertinent to a royalty accounting under said Sublicense agreements.


 


2.6                               Subject
to the Research Agreement and other than the Existing Technology, the license
granted hereunder shall not be construed to confer any rights upon LICENSEE by
implication, estoppel or otherwise as to any technology not included in the
Patent Rights and to which or in which LICENSEE does not otherwise have rights,
title or an interest.


 


ARTICLE 3



DUE DILIGENCE


 


3.1                               LICENSEE
and its sublicensees shall use commercially reasonable efforts to bring
Licensed Products or Licensed Processes to market [ * ] exploitation of the
Patent Rights. Non-compliance with this Section 3.1 shall be grounds for
termination.


 


3.2                               In
addition, LICENSEE and UNIVERSITY shall adhere to the following:


 


(a)                                  LICENSEE
shall deliver to UNIVERSITY within [ * ] of Effective Date of this Agreement a
business plan including [ * ], to the extent formed by LICENSEE. Similar
reports shall be provided to UNIVERSITY within [ * ] to relay update and status
information on LICENSEE’s progress on development of the Patent Rights,
including projections of activity anticipated for the next reporting year.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


3

















 


(b)                                  LICENSEE
shall be responsible for diligently and promptly taking all reasonable steps to
secure all required and/or necessary governmental approvals to sell, exploit,
or market any and all Licensed Products. Subject to the terms and conditions of
the Research Agreement, the Licensee shall meet the Milestones set forth below.
Licensee can request extension of each Milestone deadline for a period of one
(1) year upon payment of a fee of [ * ] for each extension requested (“Extended
Deadline”).


 


(i)                                    If
Licensee fails to [ * ], or within the Extended Deadline, than the licenses set
forth in Section 2.1 for that particular Licensed Product shall terminate and
be no longer valid, unless Licensee shall have earlier demonstrated to the
satisfaction of the University that there is a valid cause for delaying the [ *
].


 


(ii)                                If
Licensee fails to [ * ], or within the Extended Deadline, than the licenses set
forth in Section 2.1 for that particular Licensed Product shall terminate and
be no longer valid, unless Licensee shall have earlier demonstrated to the
satisfaction of the University that there is a valid cause for delaying the [ *
].


 


(c)                                  UNIVERSITY
agrees to provide existing back-up data and documentation as may be required by
regulatory agencies for purposes of supporting applications under government
review.


 


(d)                                  LICENSEE
shall advise UNIVERSITY, through [ * ] reports to be provided [ * ] pursuant to
Section 5.2 below, of its program of development for and status of obtaining
said approvals.


 


ARTICLE 4



PAYMENTS


 


4.1                               For
the rights, privileges and licenses granted hereunder, LICENSEE shall pay to
the UNIVERSITY, in the manner hereinafter provided, until the end of the last
to expire patent of the Patent Rights on a country by country basis or until
this Agreement shall be terminated, as hereinafter provided, whichever occurs
first:


 


(a)                                  a
royalty in an amount equal to [ * ] of the aggregate Net Sales by LICENSEE or
any Affiliate of the Licensed Products or Licensed Processes;


 


(b)                                  a
[ * ] payments received by LICENSEE from sublicensees, based on Net Sales of
Licensed Products or Licensed Processes by sublicensees, exclusive of [ * ]
covered by Section 4.1(c) below; and


 


(c)                                  a
[ * ]. No payments will be made under this Section 4.1(c) to the extent already
covered under Section 4.1(b).


 


4.2                               In
the event a competitive product is sold in a country by an unlicensed
thirdpart, and such third party’s activities demonstrably diminish LICENSEE’s
capability to compete in the market, UNIVERSITY agrees to meet with LICENSEE to
negotiate a reduction of royalties due for sales in that country, provided
LICENSEE provides to the UNIVERSITY, prior to such meeting, [ * ].


 


4.3                               Only
one royalty shall be payable with respect to any unit of Licensed Product
regardless of whether it is covered by more than one of the Patent Rights
patent applications or Patent Rights patents licensed under this Agreement, or
to be covered in more than one subsection of Section 4.1 hereof.


 


4.4                               Royalty
payments shall be paid quarterly within [ * ] of the close of each calendar
quarter ending March 31, June 30, September 30 and December 31, in United
States dollars in Chicago, Illinois,


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


4

















 


or at such other place as UNIVERSITY may reasonably
designate consistent with the laws and regulations controlling in any foreign
country, but not in any other currency. If any currency conversion shall be
required in connection with the payment of royalties hereunder, such conversion
shall be made by using the exchange rate prevailing at [ * ] on the last
business day of the calendar quarterly reporting period to which such royalty
payments relate.


 


4.5                               Any
taxes required to be paid or withheld on account of amounts payable to
UNIVERSITY under this Agreement shall be deducted from the amounts due pursuant
to Section 4.1 at the rates specified by applicable law or treaty. LICENSEE
shall provide to UNIVERSITY, as soon as practical, receipts of payment of any
such taxes from the appropriate taxing authority.


 


4.6                               In
the event that the LICENSEE’s, the Affiliates or its Sublicensees development,
manufacture, use or sale of a Product would constitute an infringement of any
patent right or intellectual property right of any third party, the Parties
shall together use their reasonable endeavors to obtain an appropriate license
from such third party. If such license requires LICENSEE to pay royalties to
such third party, the royalty due and payable to the University under this
Agreement for sale of the Product shall be reduced by [ * ] the amount which
the Licensee is required to pay to said third party, provided that no royalty
due to the University hereunder shall be reduced by more than [ * ].


 


ARTICLE 5



REPORTS AND RECORDS


 


5.1                               LICENSEE
shall keep full, true and accurate records pertaining to the sale or other
disposition of the Licensed Products or Licensed Processes in sufficient detail
as may be necessary to show the amounts payable to UNIVERSITY hereunder. Said
records shall be kept at LICENSEE’s principal place of business. For the term
of this Agreement, upon receipt of [ * ] prior written notice, UNIVERSITY shall
have the right to cause an independent, certified public accountant to audit
such records to confirm LICENSEE’s, affiliate’s and sublicensee’s Net Sales and
royalty payments and all other payments or exchanges related to Patent Rights
for the preceding year at UNIVERSITY’s expense. Such audits may be exercised
during normal business hours once a year.


 


5.2                               LICENSEE,
within [ * ] after [ * ] of each year, shall deliver to UNIVERSITY true and
accurate reports, giving such particulars of the business conducted by LICENSEE
and its sublicensees during the preceding [ * ] period under this Agreement as
shall be pertinent to a royalty accounting hereunder. These shall include at
least the following, to be itemized per Licensed Product or Licensed Process:


 


(a)                                  number
of Licensed Products commercially used, manufactured and sold, rented or
leased;


 


(b)                                  total
billings for Licensed Products and Licensed Processes commercially used, sold,
rented or leased;


 


(c)                                  deductions
applicable as provided in Paragraph 1.8.


 


(d)                                  total
royalties due;


 


(e)                                  [
* ];


 


(f)                                    [
* ].


 


(g)                                 [
* ]; and


 


(h)                                 [
* ].


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


5

















 


5.3                               If
no royalties shall be due, LICENSEE shall so report.


 


ARTICLE 6



PATENT MAINTENANCE, ENFORCEMENT AND DEFENSE


 


6.1                               Subject
to this Article VI, UNIVERSITY shall control all decisions and activities
related to the preparation, pursuit, filing, issuance, maintenance, enforcement
and prosecution of the Patent Rights. UNIVERSITY shall diligently take all
reasonable steps to obtain issuance of pending patent application(s) included
in the Patent Rights in the name of The Board of Trustees of the University of
Illinois. UNIVERSITY shall promptly provide LICENSEE with copies of all
relevant documentation so that LICENSEE may be informed and appraised of the
status of the Patent Rights at all times. The parties shall coordinate and
communicate with each other during the term of this Agreement with respect to
the filing and prosecution of patent applications and foreign counterparts
thereto in respect of any invention in order to promote comprehensive
cost-efficient patent coverage. UNIVERSITY agrees it will not abandon any
patent application or issued patent if LICENSEE desires to continue prosecution
or maintenance, provided LICENSEE is not in default of its payment obligations
hereunder.


 


6.2                               UNIVERSITY
shall use its best efforts to amend any patent application to include claims
reasonably requested by LICENSEE and required to protect the Licensed Products
contemplated to be sold under this agreement.


 


6.3                               LICENSEE
shall be responsible for and pay all costs and expenses incurred by UNIVERSITY
for the preparation, filing, prosecution, issuance, and maintenance of the
Patent Rights pre-dating the Effective Date and post-dating the Effective Date
for the term of this Agreement.


 


6.4                               LICENSEE
and UNIVERSITY shall promptly notify the other in writing of any alleged or
threatened infringement of any Patent included in the Patent Rights or claiming
the Invention. Both parties shall use their best efforts in cooperating with
each other to terminate such infringement without litigation. LICENSEE shall
have the first right to bring and control any action or proceeding with respect
to such infringement at its own expense and by counsel of its own choice, and UNIVERSITY
shall have the right, at its own expense, to be represented in any action
involving any Patent Rights by counsel of its choice. If LICENSEE fails to
bring an action or proceeding within (i) [ * ] following the notice of alleged
infringement or (ii) [ * ] before the time limit, if any, set forth in the
appropriate laws and regulations for the filing of such actions, whichever
comes first, UNIVERSITY shall have the right to bring and control any such
action at its own expense and by counsel of its own choice, and LICENSEE shall
have the right, at its own expense, to be represented in any such action by
counsel of its own choice. In the event a party brings an infringement action,
the other party shall cooperate fully, including if required to bring such
action, the furnishing of a power of attorney. Neither party shall have the
right to settle any patent infringement litigation under this Section 6.4 in a
manner that diminishes the rights or interests of the other party without the
consent of such other party, which consent shall not be unreasonably withheld. All
costs of any action to enforce the Patent Rights taken by LICENSEE shall be
borne by LICENSEE and LICENSEE shall keep any recovery of damages derived
therefrom, [ * ]. All costs of any action to enforce the Patent Rights taken by
UNIVERSITY shall be borne be UNIVERSITY and UNIVERSITY shall share with
LICENSEE any recovery of damages derived therefrom on a pro rata basis per
costs incurred by UNIVERSITY and LICENSEE respectively in such policing
activity.


 


6.5                               LICENSEE,
during the exclusive period of this Agreement, shall have the sole right in
accordance with the terms and conditions herein to sublicense any alleged
infringer for future use of the Patent Rights, with any royalty covered by Section
4.1 above to be paid to UNIVERSITY as required.


 


6.6                               LICENSEE
and UNIVERSITY shall promptly notify the other in writing of any allegation by
a third party that the activity of either of the parties infringes or may
infringe the intellectual property rights on such third party. LICENSEE shall
defend the claim at its own expense and by counsel of its own choice including,
without limitation, the right to settle, compromise or otherwise pursue such
defense in any manner and on such terms as LICENSEE shall determine. UNIVERSITY
agrees to provide


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


6

















 


assistance to LICENSEE as may be reasonably necessary
or appropriate to pursue such actions. If LICENSEE fails to proceed with regard
to such defense within (i) [ * ] following the notice of alleged infringement
or [ * ] before the time limit, if any, set forth in the appropriate laws and
regulations for the filing of such actions, whichever comes first, or otherwise
elects not to defend such a claim, UNIVERSITY shall have the right to defend
the claim at its own expense and by counsel of its choice including, without
limitation, the right to settle, compromise or otherwise pursue such defense in
any manner and on such terms as UNIVERSITY shall determine. [ * ] of the
royalty payments due from LICENSEE to UNIVERSITY hereunder shall be placed in
escrow pending a resolution of the action. If it is determined by judgment or
settlement that LICENSEE is required to make payments to said third party in
order to continue to market, distribute or sell or otherwise use the Licensed
Products, than any such payments owing to such third party shall be credited
and offset against the escrowed royalty payments and LICENSEE may, at its
option, terminate this Agreement pursuant to Section 13.2.


 


ARTICLE 7



CONFIDENTIALITY


 


7.1                               During
the term of this Agreement and for a period of [ * ] after termination thereof,
each party will maintain all Confidential Information in trust and confidence
and will not disclose any Confidential Information to any third party or use
any Confidential Information for any purpose except as expressly authorized by
this Agreement. Each party may use such Confidential Information only to the
extent required to accomplish the purposes of this Agreement, including
sublicensing. Each party will use the highest standard of care to protect
Confidential Information and to ensure that its employees, agents, consultants
and other representatives or, in the case of the UNIVERSITY, students, do not
disclose or make any unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.


 


7.2                               Confidential
Information shall not include information that:


 


(a)                                  is
now, or hereafter becomes, through no act or failure to act on the part of the
receiving party, in the public domain or published;


 


(b)                                  is
in possession of the receiving party at the time of receiving such information,
as evidenced by its prior written records;


 


(c)                                  is
hereafter furnished to the receiving party by a third party, as a matter of
right and without restriction on disclosure; or


 


(d)                                  is
required by law or a court order to be disclosed or is the subject of a written
permission to disclose provided by the disclosing party.


 


7.3                               Notwithstanding
the above, a party may disclose Confidential Information of the other party:


 


(a)                                  to
potential sublicensees to the extent such disclosure is reasonably necessary
and provided sublicensee personnel are bound by obligations of confidentiality
no less restrictive than those provided hereunder; or


 


(b)                                  if
required by law or a court order to be disclosed or is the subject of a written
permission to disclose provided by the disclosing party; to regulatory agencies
in order to obtain registrations required; and to professional advisors,
consultants and/or potential investors in connection with a private placement
or public offering.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


7

















 


ARTICLE 8



REPRESENTATIONS, WARRANTIES AND COVENANTS


 


8.1                               Each
party hereby represents and warrants that such party is duly organized and
validly existing under the laws of the state of its incorporation and has full
power and authority to enter into this Agreement and to carry out the
provisions hereof.


 


8.2                               Each
party hereby represents and warrants that such party is duly authorized to
execute and deliver this Agreement and to perform its obligations hereunder and
that this Agreement is a legal and valid obligation binding upon each party,
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation of any court, governmental
body or administrative or other agency having authority over it.


 


8.3                               UNIVERSITY
hereby represents that, to the best of its knowledge, no University patents or
patent applications, other than the rights granted to LICENSEE hereunder to the
Patent Rights, conflict with the representations and rights given to LICENSEE
under this Agreement.


 


ARTICLE 9



INDEMNIFICATION, PRODUCT LIABILITY


 


9.1                               LICENSEE
shall at all times during the term of this Agreement and thereafter, indemnify,
defend and hold UNIVERSITY, its trustees, officers, employees and affiliates,
harmless against all claims, expenses, damages or liability (collectively, the “Losses”)
including legal expenses and reasonable attorneys’ fees, resulting from the
production, manufacture, sale, use, lease, consumption or advertisement of the
Licensed Product(s) or arising from any obligation of LICENSEE hereunder,
except to the extent that such Losses result from UNIVERSITY’s gross negligence
or willful misconduct.


 


9.2                               For
the term of this Agreement, upon the commencement of production, sale, or
transfer, whichever occurs first, of any Licensed Product, LICENSEE shall
obtain and carry in full force and effect liability insurance which shall
protect LICENSEE and UNIVERSITY in regard to events covered by Section 8.1
above, the nature and extent of which insurance coverage shall be commensurate
with usual and customary industry practices, as determined by LICENSEE’s good
faith assessment.


 


9.3                               Except
as otherwise expressly set forth in this Agreement, UNIVERSITY AND SPONSOR MAKE
NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR PENDING.


 


ARTICLE 10



EXPORT CONTROLS


 


It is understood that UNIVERSITY is subject to United
States laws and regulations controlling the export of technical data, computer
software, laboratory prototypes and other commodities (including the Arms
Export Control Act, as amended and the Export Administration Act of 1979), and
that its obligations hereunder are contingent on compliance with applicable
United States export laws and regulations. The transfer of certain technical
data and commodities may require a license from the cognizant agency of the
United States Government and/or written assurances by LICENSEE that LICENSEE
shall not export data or commodities to certain foreign countries without prior
approval of such agency. UNIVERSITY neither represents that a license shall not
be required nor that, if required, it shall be issued, but shall provide to


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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LICENSEE reasonable
assistance for determining the need for and the procuring of such license or
other consent. LICENSEE agrees to comply with all applicable export and import
control laws governing sales of Licensed Products and Licensed Processes.


 


ARTICLE 11



NON-USE OF NAMES


 


LICENSEE shall not use the names of the University of
Illinois nor any of its employees, nor any adaptation thereof, in any
advertising, promotional or sales literature without prior written consent
obtained from UNIVERSITY in each case, except that LICENSEE may state that it
is licensed by UNIVERSITY under one or more of the Patents comprising the Patent
Rights and, if appropriate, that research related to the INVENTION or Patent
Rights is ongoing at UNIVERSITY.


 


ARTICLE 12



ASSIGNMENT


 


12.1                        This
Agreement may not be assigned by LICENSEE other than to QBI Enterprises Ltd.,
an Israeli limited liability company and a subsidiary of LICENSEE, without
prior written consent from UNIVERSITY.


 


12.2                        Notwithstanding
the foregoing prohibition, LICENSEE may, without UNIVERSITY’s consent, merge
into, consolidate with, or transfer substantially all of its assets (“substantially”
being respectively [ * ] or more thereof) as an entirety to any corporation, so
long as the successor surviving corporation in any such merger, consolidation,
transfer or reorganization assumes in writing the obligations of this Agreement.
Such merger, consolidation, transfer or reorganization shall not in any way be
a breach of this Article XII, nor be any default under this Agreement.


 


ARTICLE 13



TERMINATION


 


13.1                        Either
party may terminate this Agreement upon [ * ] written notice upon the occurrence
of any of the following:


 


(a)                                  Upon
or after the bankruptcy, insolvency, dissolution or winding-up of the other
party (other than dissolution or winding-up for the purposes of reconstruction
or amalgamation); or


 


(b)                                  Upon
or after the breach of any material provision of this Agreement by the other
party if the breaching party has not cured such breach within [ * ] following
written notice of termination by the other party.


 


13.2                        LICENSEE
shall have the right to terminate this Agreement with or without cause at any
time upon [ * ] advance written notice to UNIVERSITY subject to LICENSEE’s
remittance of payments that may be due under this Agreement up to the effective
date of termination. All rights granted to LICENSEE hereunder shall revert to
UNIVERSITY upon the effective date of such termination.


 


13.3                        Upon
termination of this Agreement for any reason, nothing herein shall be construed
to release either party from any obligation that matured prior to the effective
date of such termination. LICENSEE shall return to UNIVERSITY all materials
containing Licensed Product (exclusive of materials relating to Sponsor
Existing Technology); provided, however, that LICENSEE shall have the right for
one year thereafter to dispose of all Licensed Products then in its inventory,
and shall pay royalties thereon, in accordance with the provisions of Article
IV and shall submit the related reports as required by Article V, as though
this Agreement had not terminated. Each party shall, promptly upon termination,
return to the


 






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other party Confidential Information received from the
other party and still subject to obligations of confidentiality hereunder, and
neither party shall thereafter be entitled under this Agreement to use any such
Confidential Information of the other party for any purpose.


 


ARTICLE 14



DISPUTE RESOLUTION


 


Other than any claim arising from LICENSEE’s failure
to pay royalties due under this Agreement, any controversy or bonafide disputed
claim arising under this Agreement between the parties, which dispute cannot be
resolved by mutual agreement, shall, by the election of either party, be
resolved by submitting to dispute resolution before a fact-finding body
composed of one or more experts in the field, selected by mutual agreement
within thirty days of written request by either party. Said dispute resolution
shall be held in Chicago or at such other place as shall be mutually agreed
upon in writing by the parties. The fact-finding body shall determine who shall
bear the cost of said resolution. In the event that the parties cannot mutually
agree within said thirty (30) days on the dispute resolution body, the parties
will apply the procedural rules of a mutually agreeable forum.


 


ARTICLE 15



PAYMENTS, NOTICES AND OTHER COMMUNICATIONS


 


Any payment, notice or other communication pursuant to
this Agreement shall be sufficiently made or given on the date of receipt if
sent to such party by telefax or overnight courier, or on the date three days
after mailing if sent by certified mail, postage prepaid, addressed to it at
its address below or as it shall designate by written notice given to the other
party:


 


In the case of
UNIVERSITY:


 


Intellectual Property Office


Office of the Vice Chancellor of Research


University of Illinois at Chicago


1737 West Polk Street, 312 AOB (M/C 672)


Chicago, Illinois 60612


ATTN: Director, Intellectual Property Office


 


In the case of LICENSEE:


 


Quark Biotech, Inc.


c/o QBI Enterprises, Ltd.


Weizmann Scientific Park


Building 3, 4th Floor


P. O. Box 741


Nes Ziona, Israel 74106


ATTN: Daniel Zurr, President & CEO


FAX: 011-972-8-940-6476


 


ARTICLE 16



MISCELLANEOUS PROVISIONS


 


16.1                        This
Agreement shall be construed, governed, interpreted and applied in accordance
with the laws of the State of Illinois, U.S.A., except that questions affecting
the construction and effect of any patent shall be determined by the law of the
country in which the patent was granted.


 






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16.2                        The
parties hereto acknowledge that this Agreement together with the Research
Agreement set forth the entire Agreement and understanding of the parties
hereto as to the subject matter hereof, and shall not be subject to any change
or modification except by the execution of a written instrument subscribed to
by the parties hereto.


 


16.3                        The
provisions of this Agreement are severable, and in the event that any
provisions of this Agreement shall be determined to be invalid or unenforceable
under any controlling body of the law, such invalidity or unenforceability
shall not in any way affect the validity or enforceability of the remaining
provisions hereof.


 


16.4                        LICENSEE
agrees to mark the Licensed Products sold in the United States with all
applicable United States patent numbers. All Licensed Products shipped to or
sold in other countries shall be marked in such a manner as to conform with the
patent laws and practice of the country of manufacture or sale.


 


16.5                        The
failure of either party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not constitute a
waiver of that right or excuse a similar subsequent failure to perform any such
term or condition by the other party.


 


16.6                        This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be an original and all such counterparts
shall together constitute but one and the same agreement.


 






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IN WITNESS WHEREOF, the parties
have hereunto set their hands and seals and duly executed this Agreement the
day and year set forth below.


 


THE BOARD OF TRUSTEES OF THE
UNIVERSITY OF ILLINOIS


 


 


	
  By:

  	
  /s/
  Craig S. Bazzani

  	
   

  	
  Date:

  	
  9/1/99

  	
   

  
	
    Craig
  S. Bazzani, Comptroller

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest:

  	
    /s/
  Michele M. Thompson          9/2/99

  	
   

  	
  Date:

  	
  APPROVED:

  	
   

  
	
   

  	
  Michele
  M. Thompson, Secretary

  	
   

  	
  /s/
  Jill A. Tarzian Sorensen

  	
   

  	
  9-1-99

  	
   

  
	
   

  	
   

  	
  Jill A. Tarzian Sorensen

  	
  Date

  
	
   

  	
   

  	
  Director

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Intellectual Property Office

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  QUARK
  BIOTECH, INC.

  	
  Date:

  	
  9.3.99

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/
  Daniel Zurr

  	
   

  	
   

  	
   

  
	
   Dr. Daniel Zurr, President and CEO

  	
   

  	
   

  
														



 






[ * ] = CERTAIN CONFIDENTIAL
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RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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APPENDIX A



RESEARCH AGREEMENT


 






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RESEARCH
AGREEMENT


 


This Research Agreement is entered into as of
September 1, 1999 (“Effective
Date”) by and between The Board of Trustees of The University of
Illinois, a body corporate and politic of the State of Illinois, with principal
offices at Urbana, Illinois, and offices in Chicago, Illinois 60612 (“University”), and
Quark Biotech, Inc., a California corporation with principal offices at 1059
Serpentine Lane, Pleasanton, California 94566 (“Sponsor”).


 


WHEREAS, the University and Sponsor desire to
undertake a collaborative research program (“Research Program”) based on application
of Existing Technologies (as defined in Schedule I); and


 


WHEREAS, the Research Program is to be funded by
Sponsor and carried out, in part, in the University’s laboratories pursuant to
the terms and conditions set forth herein, and in part in the Sponsor’s
laboratories.


 


NOW, THEREFORE, in consideration of the premises
hereof and the mutual covenants and agreements contained herein, the parties
hereto agree as follows:


 


1.                                      STATEMENT
OF WORK


 


a.                                       Objectives. The University and the
Sponsor shall collaborate in the research according to this Agreement directed
towards [ * ], based on p53 gene [ * ].


 


b.                                       Resource Commitment. The
University shall, with the funds and/or equipment and/or technology made
available by the Sponsor, furnish the necessary and appropriate personnel,
materials, services, laboratories and other facilities and equipment for the
conduct of its part of the work and initial Research Program (“Program”) described
in Schedule II hereto and incorporated herein by reference. The Program may be
amended or modified from time to time as the parties shall mutually agree. The
University and Sponsor shall each permit the other party and any of its
personnel to visit the laboratories or other facilities where the Research
Program is being conducted at reasonable times and make all personnel who are
engaged in the Research Program available to consult with the other party and
any of its personnel during such visits or by telephone and/or by
correspondence during the term of the Research Program.


 


c.                                       Conduct of Research. The Research
Program shall be conducted in accordance with the Program and the Budget (as
defined below) within the time periods contemplated therein as set forth in
Schedule II(a) and (b) respectively. The Sponsor and the University agree to
commence performance of the Research Program within [ * ] of the Effective Date
hereof and each agrees to conduct the Research Program in a prudent and
skillful manner in accordance [ * ] with the Program and Budget and all
applicable federal, state and local laws, rules or regulations, and subject to
the terms and conditions hereof. With respect to the Research Program set forth
in Schedule II(a), Sponsor agrees that the University will [ * ] provided that,
(i) Sponsor shall, [ * ]; (ii) the University shall [ * ]; and (iii) Sponsor [
* ].


 


2.                                      PRINCIPAL
INVESTIGATOR. All research at the University in the subject matter of the
Research Program shall be performed by Dr. Andrei Gudkov, as Principal
Investigator, and the research team under his supervision, and subject to this
Agreement. The University hereby


 






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assigns Dr. Andrei Gudkov
as the Principal Investigator for directing the performance of the Research
Program. The University shall notify Sponsor immediately if such Principal
Investigator becomes unavailable and shall identify a successor, subject to
Sponsor’s approval. If Sponsor does not approve the successor identified by the
University or the University does not or cannot identify a successor, this
Agreement may be terminated by Sponsor subject to Section 13 hereof.


 


3.                                      PERIOD
OF PERFORMANCE.


 


a.                                       Term of Research Program. The
period of performance of the Research Program set forth in Schedule II(a) will
be three (3) years, commencing on September 1, 1999, and ending on August 31,
2002. The period of performance of the Research Program set forth in Schedule
II(b) will be one (1) year, commencing on September 1, 1999, and ending on
August 31, 2000. The term of the Research Program may be extended upon mutual
written consent.


 


b.                                       Sponsor’s Right to Terminate Research Program.
The Research Program may be terminated at any time prior to its expiration if
Sponsor determines, at its sole discretion, that the Research Program is no
longer viable or commercially feasible. In such case. Sponsor will notify
University of that decision in writing, and the parties will work together to
(i) [ * ].


 


4.                                      RESEARCH
PROGRAM FUNDING.


 


a.                                       Budget. The Sponsor will pay the
University up to the amounts set forth in the budget attached hereto as
Schedule III and incorporated herein by reference (“Budget”), which
Budget shall reflect the actual costs incurred in carrying out the performance
of this Agreement plus the indirect costs assessed at the rate(s) agreed to by
the parties. The University shall certify in writing, upon presentment of each
Report (as defined below) that work as budgeted has been actually performed and
that the University is in fact complying with all other provisions of this
Agreement, and shall provide Sponsor with a written expense report for all
amounts expended, pursuant to the Budget during the previous quarterly period. The
aggregate annual cost under this Agreement shall not exceed the amount stated
therefor in the Budget. The University is not obligated to expend any other
funds on the Program nor is the Sponsor obligated to pay the University in
excess of the stated amount set forth in the Budget, or to otherwise increase
the Budget. The University, together with the Principal Investigator, shall be
responsible for the correct and appropriate distribution and/or allocation of
the funds in accordance with the Budget.


 


b.                                       Payments. The University shall be
reimbursed within [ * ] after it submits its quarterly Report and expense
report pursuant to Section 5(a) to Sponsor for costs incurred during the
previous quarter with final payment to the University due upon Sponsor’s
receipt of a final Report, marked as such, from the University no later than [
* ] after the expiration of the term of the Research Program. Payments shall be
by check payable to the University of Illinois, and mailed to:


 


University of Illinois at Chicago


Office of Research Services


304 AOB, M/C 672


1737 W. Polk Street


Chicago, Illinois 60612-7227


ATTN:  Paula
Means, Director


 






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INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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c.                                       Equipment. Subject to Schedule II,
[ * ] under this Agreement.


 


5.                                      FISCAL MANAGEMENT. The University shall maintain
complete and accurate accounting records in accordance with accepted accounting
practices for institutions of higher education. These records shall be
available for inspection, review and audit at reasonable times during the term
of this Agreement and for a period of [ * ] after the termination hereof by the
Sponsor or any of its duly authorized representatives, at Sponsor’s expense.


 


6.                                      WORK
PRODUCT. Subject to the provisions
of Section 8 herebelow, each party shall own the work product, tangible and
intangible, that it generates under this Agreement, and shall maintain records
of its activities with respect to the Research Program in sufficient detail so
as to properly reflect all work done and results achieved in the performance of
the Research Program. Each party shall have reasonable access to all materials
and data generated by or on behalf of the other party with respect to any and
all work carried out under the Research Program, for each party’s internal,
non-commercial use, not including work product licensed by Sponsor from
University hereunder, subject to the confidentiality obligations in Section 9
hereof.


 


7.                                      REPORTS. The
University and Sponsor, as collaborators in the Research Program, shall each provide
to the other party a written report within [ * ] after the end of each calendar
quarter, commencing after the end of the first full calendar quarter following
the Effective Date of this Agreement, summarizing the progress and status of
the Program set forth in Schedule II(a) (each, a “Report”). Within [ * ] following the end of the
term of the Research Program set forth in Schedule II(a), the University
and Sponsor will each furnish to the other party a final technical Report
summarizing the work performed pursuant to the Program and the results thereof.


 


8.                                      INTELLECTUAL
PROPERTY.


 


a.                                       Ownership of Technology. It is
hereby acknowledged and agreed that each party has rights (including patent and
other intellectual property rights) to certain technologies related to the
Research Program (“University
Existing Technology” as defined in Schedule I(a) hereto, and “Sponsor Existing Technology”
as defined in Schedule I (b) hereto, collectively the “Existing Technologies”),
and each party acknowledges that it does not have nor shall have any rights,
title or interest to the other party’s Existing Technology. With the exception
of the Existing Technologies, Sponsor and University agree that each shall
notify the other of inventions, discoveries and intellectual property
conceived, reduced to practice or otherwise developed under the Research
Program (i) by the Principal Investigator and his personnel (“UIC Invention”);
(ii) by Sponsor and its personnel at its laboratories in connection with
the Research Program set forth in Schedule II(a) (“Sponsor Invention”);
or (iii) jointly by personnel of the Sponsor and the Principal Investigator and
his personnel under the Research Program (“Joint Inventions”), collectively referred to
as “Inventions”.


 


b.                                       Notification of Inventions and Discoveries.
Each party shall promptly notify the other in writing of any Invention within [
* ] of such discovery. Disclosure to and from University shall be made by
filing of an Invention Disclosure statement with the University’s


 






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Intellectual Property
Office. Copy of each such Invention Disclosure statement and the respective
application filed with the patent office shall be sent promptly to Sponsor. All
disclosures and notifications made pursuant to this clause 8(b) shall be deemed
Confidential Information, as defined below, and subject to the provisions
respecting confidentiality in Section 9 below.


 


c.                                       License. The University hereby
grants the Sponsor (i) an exclusive worldwide license to the University’s right,
title and interest in the UIC Invention set forth in the Exclusive License
Agreement between the University and Sponsor dated as of the date hereof and
attached hereto as Exhibit A (“License A”), and (ii) an exclusive option to obtain
exclusive worldwide licenses to the University’s right, title and interest in
any other UIC Invention or Joint Invention disclosed. Such option shall be for
a [ * ] period, commencing with the date the notification of such Invention is
received by Sponsor, and shall be exercised in writing by Sponsor, at which
time the parties agree to execute license agreements (“License B”) in the
same form and of the same terms and conditions as the Future Exclusive License
Agreement attached hereto as Exhibit B.


 


d.                                       Patents. University shall control
the preparation, filing, issuance, maintenance and prosecution of any U.S. or
foreign patent application, including any division, continuation,
continuation-in-part and substitution thereof, and any U.S. or foreign patent,
including any reexamination, reissue, renewal, extension, confirmation,
registration, revalidation and addition thereof with respect to any UIC
Invention (the “UIC
Patents”). Sponsor shall control the preparation, filing,
issuance, maintenance and prosecution of any U.S. or foreign patent
application, including any division, continuation, continuation-in-part and
substitution thereof, and any U.S. or foreign patent, including any
reexamination, reissue, renewal, extension, confirmation, registration,
revalidation or addition thereof with respect to any Joint Invention (the “Joint Patents”). The
party controlling patenting shall be free to decide in its sole discretion
whether or not to file or continue prosecution or maintain any patent and shall
engage counsel of its choice and at its expense to prepare, file, prosecute and
maintain any such patents, in full consultation with the other party. The party
controlling patenting shall communicate and coordinate with the other party its
preparation, filing and prosecution of patent applications and shall provide
the other party with copies of draft patent applications in sufficient time for
the other party to comment thereon prior to filing, and shall give proper
attention to any comments offered by the other party in preparing the final
draft of the application for submission. The controlling party shall use its
best efforts to amend any patent application to include claims reasonably
requested by the other party and required to protect the UIC Inventions or
Joint Inventions. The controlling party shall promptly provide the other party
with copies of all relevant documentation and shall promptly share all patent
filing and prosecution information, including notifying the other party of all
filing and response deadlines so that the other party may be informed and
appraised of the continuing prosecution, and the other party agrees to keep
this documentation confidential. Should the controlling party elect not to
prepare, file, prosecute or maintain a patent or discontinues its support of
any of these activities, it shall promptly notify the other party but in no
event later than [ * ] predating any response, filing or abandonment deadline,
and the other party shall be free to decide, in its sole discretion and at its
expense, whether or not to support or continue any such activities. The
controlling party agrees to [ * ] promptly upon written request from the other
party after it receives notice from the controlling


 






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party of its intention to
abandon any patent rights in whole or in part, subject to any pre-existing
rights of the federal government.


 


9.                                      CONFIDENTIALITY.


 


a.                                       Confidential information. During
the course of the Research Program, the parties may each reveal to the other
(i) any proprietary or confidential information or material in tangible form
disclosed hereunder that is marked as “Confidential” at the time it is
delivered to the receiving party, (ii) any proprietary or confidential
information disclosed orally hereunder that is identified as confidential or
proprietary when disclosed and such disclosure is confirmed in writing to the
receiving party within 30 days by the disclosing party, and (iii) any
information concerning the existence of this Agreement or its terms or the
Research Program (including the Program, the Budget and any information or data
generated pursuant thereto) (collectively, “Confidential Information”). Except
as expressly provided herein, the parties agree that during the term of the
Research Program and for a period of [ * ] thereafter, neither party shall use
or disclose Confidential Information to any third party except for the purposes
contemplated in this Agreement and the License. Notwithstanding the foregoing,
the parties agree that Confidential Information useful or necessary for the
conduct of the Program may be disclosed to the Principal Investigator and the
authorized personnel working under his direct supervision and to Sponsor’s
personnel in the course of conducting the Research Program, subject to such
individuals being bound by confidentiality restrictions at least as restrictive
as those herein.


 


b.                                       Protection of Confidential Information. Sponsor
and University agree to protect all Confidential Information received from the
other party from unauthorized use or disclosure with the highest degree of care
and shall not copy or disseminate any Confidential Information or allow it to
be copied or disseminated and shall return any Confidential Information given
to it when requested to do so. Each party shall promptly notify the other upon
discovery of any unauthorized use or disclosure of the other’s Confidential
Information. The University shall cause the Principal Investigator and each
individual working under his supervision with respect to the Research Program
(including any graduate or other students and whether or not such individuals
are employees of the University) to execute and deliver appropriate
Non-Disclosure Agreements in the form attached hereto as Exhibit C. No
individual shall be permitted to work on the Research Program unless he/she has
executed such agreement.


 


c.                                       Exceptions. Confidential
Information shall not include any information that (i) is now, or hereafter
becomes, through no act or failure to act on the part of the receiving party,
in the public domain or published; (ii) is in the possession of the receiving
party prior to disclosure by the disclosing party, as evidenced by its written
records; or (iii) is hereafter furnished to the receiving party by a third
party, as a matter of right and without restriction on disclosure.


 


d.                                       Permitted Disclosures. Notwithstanding
the above, a party may disclose Confidential Information of the other party:


 


(i)                                    to
its personnel to the extent such disclosure is reasonably necessary to achieve
the objectives of the Program and provided such personnel are bound by
obligations of confidentiality no less restrictive than those provided
hereunder;


 






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INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
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(ii)                                to
potential sublicensees to the extent such disclosure is reasonably necessary and
provided sublicensee personnel are bound by obligations of confidentiality no
less restrictive than those provided hereunder;


 


(iii)                            if
required by law or a court order to be disclosed or is the subject of a written
permission to disclose provided by the disclosing party; to regulatory agencies
in order to obtain registrations required; and to professional advisors,
consultants and/or potential investors in connection with a private placement
or public offering.


 


10.                               PUBLICATION;
PUBLICITY. University shall have the right to publish or otherwise present
the results of the Research Program at symposia or academic meetings; provided
that it first submit all proposed publications and presentations to the Sponsor
[ * ] prior to submission of such proposed publication or presentation to a
journal, editor or other third party. Sponsor shall have [ * ] after the
receipt of the publication or presentation to review and comment upon it. Upon
notice by Sponsor that Sponsor reasonably believes a patent application relating
to an Invention should be filed prior to the publication or presentation or
that exigent circumstances exist necessitating a delay in publication or
presentation. Sponsor may request the University to delay and the University
agrees to delay submission of the publication or presentation for up to an
additional [ * ] from the date of Sponsor’s notification to the University or
until a patent application or applications are filed, whichever come first. University
shall give Sponsor appropriate recognition and credit for its contributions in
all such publications and presentations at symposia or meetings including,
without limitation, right of authorship and acknowledgement of QBI’s
sponsorship. Any publicity, including press releases, press conferences or
other disclosures, about the Research Program (including, without limitation,
the establishment of any aspects of the Program, its progress or any results
generated therefrom) shall be permitted only with the prior written approval of
both the Sponsor and the University.


 


11.                               RELATIONSHIP OF PARTIES. The University’s relationship to the Sponsor under this Agreement shall
be that of independent contractor and not as an agent, joint venturer or
partner of Sponsor, notwithstanding the joint ownership by University and
Sponsor of certain Inventions hereunder.


 


12.                               WARRANTIES
AND INDEMNIFICATION. The University and Sponsor disclaim any guaranty that
the Research Program shall be successful, in whole or in part. THE UNIVERSITY
AND SPONSOR EXPRESSLY DISCLAIM ANY WARRANTIES OR CONDITIONS, EXPRESS, IMPLIED,
STATUTORY OR OTHERWISE, WITH RESPECT TO THE RESEARCH PROGRAM, INCLUDING BUT NOT
LIMITED TO, THE MARKETABILITY, USE OR FITNESS FOR ANY PARTICULAR PURPOSE OF THE
RESEARCH RESULTS DEVELOPED UNDER THE RESEARCH PROGRAM, OR THAT SUCH RESULTS DO
NOT INFRINGE UPON ANY THIRD PARTY’S INTELLECTUAL PROPERTY RIGHTS. Sponsor
agrees to indemnify and hold harmless the University and its employees and
agents against any and all costs, damages and expenses, including reasonably attorneys’
fees, arising from any claim, damages and liabilities asserted by third parties
arising from Sponsor’s use of the research results from the Research Program,
except to the extent that the same is caused by any negligent or willful act or
omission by or on behalf of the University. The University agrees to be
responsible for any and all costs, damages and expenses, including reasonably
attorneys’ fees, arising from any misrepresentation or breach by University of
any of its covenants hereunder or


 






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INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


19

















 


the performance of any of
its obligations under this Agreement, except to the extent that the same, is
caused by any negligent or willful act or omission by or on behalf of the
Sponsor. Notwithstanding anything to the contrary in the foregoing, neither
party assumes any responsibility or liability for the nature, conduct or
results of any research, testing or other work performed by the other party on
such party’s premises.


 


13.                               TERMINATION.


 


a.                                       Termination upon Default. Either
party may terminate this Agreement upon [ * ] written notice upon the
occurrence of any of the following:


 


(i)                                    Upon
or after the bankruptcy, insolvency, dissolution or winding-up of the other
party (other than dissolution or winding-up for the purposes of reconstruction
or amalgamation); or


 


(ii)                                Upon
or after the breach of any material provision of this Agreement by the other
party if the breaching party has not cured such breach within the [ * ]
following written notice of termination by the other party.


 


b.                                       Sponsor’s Right to Terminate. Sponsor
shall have the right to terminate this Agreement (i) upon [ * ] written notice
to the University if Sponsor does not approve of a successor Principal
Investigator or no such successor is identified in accordance with Section 2;
or (ii) upon [ * ] written notice to the University if Sponsor determines that
the Research Program is no longer feasible in accordance with Section 3(b) and
subject to the provisions of Section 3(b).


 


c.                                       Effect
of Termination.


 


(i)                                    In
the event of termination of this Agreement under the provisions of
Section 13(b)(i) hereabove, University shall issue a final Report and,
within [ * ] of receipt thereof, Sponsor shall pay to University the Pro rata portion of any direct or
applicable indirect costs due to the University pursuant to the Budget which
have been incurred up to and including the effective date of termination, or
the University shall reimburse the Sponsor, on a pro rata basis, for any direct or applicable indirect costs
that have been prepaid by Sponsor and which cover costs that have not been
incurred by or at the time of termination. The termination of this Agreement
under Section 13(b)(i) shall not relieve any party of any obligation or
liability accrued hereunder prior to such termination nor affect or impair the
rights of any party arising under this Agreement prior to and as of such
termination including, without limitation, the right of Sponsor to obtain an
exclusive license to Inventions and related patent and other intellectual
property rights pursuant to the terms hereof. Any termination or cancellation
of this Agreement or the Research Program under Section 13(b)(i) shall not
terminate or cancel the License A or any License B executed, or options
exercised for Inventions disclosed pursuant to Sections 8(b) and 8(c) above,
prior to such termination. Without limiting the foregoing, Sections 7, 8, 9 and
12 shall survive termination of this Agreement as provided therein.


 


(ii)                                In
the event of termination of this Agreement under the provisions of Section
13(b)(ii) hereabove, University shall issue a final Report. The termination of
this Agreement under Section 13(b)(ii) shall not relieve any party of any
obligation or liability


 






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accrued hereunder prior
to such termination nor affect or impair the rights of any party arising under
this Agreement prior to and as of such termination including, without
limitation, the right of Sponsor to obtain an exclusive license to Inventions
and related patent and other intellectual property rights pursuant to the terms
hereof. Any termination or cancellation of this Agreement or the Research
Program hereunder shall not terminate or cancel the License A or any License B
executed, or options exercised for Inventions disclosed pursuant to Sections
8(b) and 8(c) above, prior to such termination, with the exception that
termination of the Research Program under the provisions of Section 3(b)(i) or
3(b)(iii) will result in termination or cancellation of all options exercised
for Inventions disclosed pursuant to Sections 8(b) and 8(c) above for which
license agreements have not been executed. Without limiting the foregoing,
Sections 7, 8, 9 and 12 shall survive termination of this Agreement as provided
therein.


 


14.                               AMENDMENTS.
This Agreement, together with the License and the Schedules and Exhibits
attached hereto, embodies the entire understanding of the parties and shall
supersede all previous communication, either verbal or written, between the
parties relating to this Agreement. This Agreement may only be amended by the
mutual written agreement of the parties hereto.


 


15.                               ASSIGNMENT.
This Agreement may not be assigned by either party without the prior
written consent of the other; provided, however, that Sponsor may assign its
rights, interest and obligations under this Agreement at any time and without
the University’s consent, to QBI Enterprises, Ltd., an Israeli limited
liability company and a subsidiary of Sponsor.


 


16.                               GOVERNING
LAW. This Agreement is to be governed by and construed in accordance with
the laws of the State of Illinois.


 


17.                               NOTICES. Any payment, notice or
other communication pursuant to this Agreement shall be sufficiently made or
given on the date of receipt if sent to such party by telefax or overnight
courier, or on the date three days after mailing if sent by certified mail,
postage prepaid, addressed to it at its address below or as it shall designate
by written notice given to the other party:


 


In the case of UNIVERSITY:


 


University of Illinois at Chicago


Office of Research Services


304 AOB, M/C 672


1737 W. Polk Street


Chicago, Illinois 60612-7227


ATTN:  Paula
Means, Interim Director


 


In the case of SPONSOR:


 


Quark Biotech, Inc.


c/o QBI Enterprises, Ltd.


Weizmann Scientific Park


Building 3, 4th Floor


P.O. Box 741


Nes Ziona, Israel 74106


Attn: Daniel Zurr,
President & CEO


FAX: 011-972-8-940-6476


 






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18.                               DISPUTE
RESOLUTION. Any controversy or bonafide dispute arising under this
Agreement between the parties, which dispute cannot be resolved by mutual
agreement, shall, by the election of either party, be resolved by submitting to
dispute resolution before a fact-finding body composed of one or more experts
in the field, selected by mutual agreement within thirty (30) days of written
request by either party. Said dispute resolution shall be held in Chicago or at
such other place as shall be mutually agreed upon in writing by the parties. The
fact-finding body shall determine who shall bear the cost of said resolution. In
the event that the parties cannot mutually agree within said thirty (30) days
on the dispute resolution body, the parties will apply the procedural rules of
a mutually agreeable forum.


 






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IN WITNESS WHEREOF, the parties hereto have duly
executed this Agreement by affixing, their respective signatures below as of
the day and year there noted.


 


 


THE BOARD OF TRUSTEES OF THE
UNIVERSITY OF ILLINOIS


 


 


	
  /s/ Craig S. Bazzani

  	
   

  	
   

  	
   

  
	
  Craig S. Bazzani, Comptroller

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Michele M. Thompson

  	
   

  	
  9/15/99

  	
   

  
	
  Michele M. Thompson, Secretary

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  APPROVED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Jill A. Tarzian
  Sorensen

  	
   

  	
  9-1-99

  	
   

  
	
  Jill A. Tarzian Sorensen

  	
   

  	
  Date

  
	
  Director

  	
   

  	
   

  
	
  Intellectual Property
  Office

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  QUARK BIOTECH, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Daniel Zurr

  	
   

  	
  9/15/99

  	
   

  
	
  Dr. Daniel Zurr, President & CEO

  	
   

  	
  Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGREED
  AND ACKNOWLEDGED:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  PRINCIPAL
  INVESTIGATOR

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /s/ Andrei Gudkov

  	
   

  	
  9-14-99

  	
   

  
	
  Dr. Andrei Gudkov

  	
   

  	
  Date:

  
						



 






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  SCHEDULE I:

  	
  DEFINITION OF EXISTING
  TECHNOLOGIES

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)                                  UNIVERSITY
  EXISTING TECHNOLOGY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)                                 SPONSOR
  EXISTING TECHNOLOGY

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE II:

  	
  RESEARCH PROGRAM

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (a)                                  UNIVERSITY
  RESEARCH PROGRAM

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (b)                                 QBI
  BIOCHIP TECHNOLOGY FACILITY PROGRAM

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULE III:

  	
  BUDGET FOR UNIVERSITY
  RESEARCH PROGRAM

  
	
   

  	
   

  



 


EXHIBIT A:                               EXCLUSIVE
LICENSE AGREEMENT (“LICENSE A”)


 


EXHIBIT B:                                 FUTURE
EXCLUSIVE LICENSE AGREEMENT (“LICENSE B”)


 


EXHIBIT C:                                 NON-DISCLOSURE
AGREEMENT


 


Schedules & Exhibits






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SCHEDULE
I(a)


 


UNIVERSITY
EXISTING TECHNOLOGY


 


The United States patent application entitled [ * ]


 






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SCHEDULE
I(b)


 


SPONSOR
EXISTING TECHNOLOGY


 


“Sponsor
Existing Technologies” shall mean QBI [ * ].


 






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SCHEDULE
II(a)


 


UNIVERSITY
RESEARCH PROGRAM


 


[ * ].


 






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SCHEDULE
II(b)


 


[ * ].


 






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AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
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SCHEDULE
III


 


BUDGET
FOR UNIVERSITY RESEARCH PROGRAM


 


for the
program of studies of Pifithrin-a

(September 1, 1999 – August 31, 2002)


 


	
  Year 1

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  



 


 


	
  Year 2

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  



 


 


	
  Year 3

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  
	
  [ * ]

  	
   

  	
  [ * ]

  



 






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AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 

















 


EXHIBIT
A


 


EXCLUSIVE
LICENSE AGREEMENT (“LICENSE A”)


 


{This License A is identical to the Exclusive License
Agreement at the front of this Exhibit 10.21 to the Quark Pharmaceuticals, Inc.
Registration Statement on Form S-1 in executed form.}


 






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EXHIBIT
B


 


FUTURE
EXCLUSIVE LICENSE AGREEMENT (LICENSE B)


 


(UIC Tech ID #               )


 


TABLE OF
CONTENTS


 


	
  PREAMBLE

  	
   

  
	
  ARTICLES

  	
   

  	
   

  
	
   

  	
  I

  	
  DEFINITIONS

  
	
   

  	
  II

  	
  GRANT

  
	
   

  	
  III

  	
  DUE DILIGENCE

  
	
   

  	
  IV

  	
  PAYMENTS

  
	
   

  	
  V

  	
  REPORTS AND RECORDS

  
	
   

  	
  VI

  	
  PATENT MAINTENANCE,
  ENFORCEMENT AND DEFENSE

  
	
   

  	
  VII

  	
  CONFIDENTIALITY

  
	
   

  	
  VIII

  	
  REPRESENTATIONS,
  WARRANTIES AND COVENANTS

  
	
   

  	
  IX

  	
  INDEMNIFICATION,
  PRODUCT LIABILITY

  
	
   

  	
  X

  	
  EXPORT CONTROLS

  
	
   

  	
  XI

  	
  NON-USE OF NAMES

  
	
   

  	
  XII

  	
  ASSIGNMENTS

  
	
   

  	
  XIII

  	
  TERMINATION

  
	
   

  	
  XIV

  	
  DISPUTE RESOLUTION

  
	
   

  	
  XV

  	
  PAYMENTS, NOTICES AND
  OTHER COMMUNICATIONS

  
	
   

  	
  XVI

  	
  MISCELLANEOUS
  PROVISIONS

  
				



 






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RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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This EXCLUSIVE LICENSE AGREEMENT is effective on the
date last subscribed below (the “Effective Date”), and is by and between THE
BOARD OF TRUSTEES OF THE UNIVERSITY OF ILLINOIS, a body corporate and politic
of the State of Illinois (“UNIVERSITY”)
with offices in Chicago, Illinois 60612, and QUARK BIOTECH, INC., a California
corporation with principal offices at 1059 Serpentine Lane, Pleasanton,
California 94566, (“QBI”).


 


WITNESSETH


 


WHEREAS, pursuant to a Research Agreement between the
UNIVERSITY and QBI of even date herewith, attached as Appendix A hereto and
incorporated herein by reference (“Research Agreement”), QBI has agreed to
sponsor certain research program, a portion of which to be conducted in the
UNIVERSITY’s laboratories (“Research Program”), based on the application of certain
technologies and intellectual property in which and to which UNIVERSITY and QBI
has certain rights; and


 


WHEREAS, Dr.                       
in the Department of Molecular genetics of UNIVERSITY {and                                                                    of QBI} (the “INVENTORS”) have
produced an invention entitled “                                                                  ”
(the “INVENTION”)
which is covered by the Patent Rights as defined in Article 1.5 below;


 


WHEREAS, the UNIVERSITY is the owner of the INVENTION
and the corresponding Patent Rights, and has the right to grant licenses under
said Patent Rights OR the
UNIVERSITY and QBI own the Invention and the corresponding Patent Rights, which
pursuant to the Research Agreement, constitutes a Joint Invention (strike out inapplicable portion);


 


WHEREAS, UNIVERSITY desires to have the Patent Rights
utilized in the public interest and QBI seeks to commercially develop the
Patent Rights, and accordingly, the UNIVERSITY is willing to grant to QBI an
exclusive license to its interest in the INVENTION and the Patent Rights on the
terms and conditions set forth herein;


 


WHEREAS, LICENSEE seeks to commercially develop the
Patent Rights through a thorough, vigorous and diligent program of exploiting
the Patent Rights whereby public utilization shall result therefrom; and


 


NOW, THEREFORE, in consideration of the premises and
the mutual covenants contained herein, the parties hereto agree as follows:


 


ARTICLE 1


 


DEFINITIONS


 


For the purpose of this Agreement, the following words
and phrases shall have the following meanings:


 


1.1                               “LICENSEE” shall mean
QBI.


 






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2

















 


1.2                               “Affiliate” shall mean
any person, firm, corporation or other entity controlling, controlled by, or
under common control with a party hereto. The term “control” wherever used
throughout this Agreement shall mean ownership, directly or indirectly, of more
than 50% of the equity capital. Other than LICENSEE, any corporation, company,
partnership, joint venture, firm, individual or other entity which does not
come within this definition shall be a “Non-Affiliate”.


 


1.3                               “University Existing Technology”
and “Sponsor Existing
Technology” have the meaning given to them in the Research
Agreement between UNIVERSITY and QBI effective August 12, 1999, attached hereto
as Appendix A and incorporated herein by reference (“Research Agreement”).


 


1.4                               “Confidential Information”
means (i) any proprietary or confidential information or material in tangible
form disclosed hereunder that is marked as “Confidential” at the time it is
delivered to the receiving party, (ii) any proprietary or confidential
information disclosed orally hereunder that is identified as confidential or
proprietary when disclosed and such disclosure is confirmed in writing to the
receiving party within 30 days by the disclosing party, and (iii) any
information concerning the terms of this Agreement.


 


1.5                               “Patent Rights” shall
mean all of the following intellectual property:


 


(a)                                  the
United States patent application entitled “                      ”,
filed in the United States Patent Office on                       ,
and assigned Serial Number                       
and all foreign patent applications based on this U.S. application;


 


(b)                                  United
States and foreign patents issued for this application, and divisionals and
continuations of this application;


 


(c)                                  claims
of U.S. and foreign continuation-in-part applications, and of the resulting
patents which are directed to subject matter specifically described in the U.S.
patent application Serial Number                       ;
and


 


(d)                                  any
reissues or re-examinations of patents described in (a), (b), or (c), above.


 


1.6                               A
“Licensed Product”
shall mean any product or part thereof developed by or on behalf of LICENSEE
which:


 


(a)                                  is
covered in whole or in part by an issued, unexpired claim or a pending claim
contained in the Patent Rights which have not been held unenforceable or
invalid by a court or other governmental agency of competent jurisdiction and
which have not been admitted to be invalid or unenforceable through reissue,
disclaimer or otherwise in any country in which such product is made, used or
sold relative to said product or part; or


 


(b)                                  is
manufactured by using a process which is covered in whole or in part by an
issued, unexpired claim or a pending claim contained in the Patent Rights which
have not been held unenforceable or invalid by a court or other governmental
agency of competent jurisdiction and which have not been admitted to be invalid
or unenforceable through reissue, 


 






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disclaimer or otherwise in the country in which any
such process is used or in which any such product is used or sold relative to
said process.


 


1.7                               A
“Licensed Process”
shall mean any process which is covered in whole or in part by an issued,
unexpired claim or a pending claim contained in the Patent Rights in any
country in which such process is practiced.


 


1.8                               “Net Sales” shall mean
the gross amount invoiced by LICENSEE or Affiliate for sales of Licensed
Products or Licensed Processes to Non-Affiliate independent third parties, less
the sum of the following:


 


(a)                                  promotional
allowances, rebates, credits and cash, trade and quantity discounts, in amounts
customary in the trade, actually taken;


 


(b)                                  excise
taxes, sales, use, value added, and other consumption taxes, and other compulsory
payments to governmental authorities, actually paid;


 


(c)                                  outbound
transportation charges and related insurance costs prepaid or allowed;


 


(d)                                  amounts
allowed or credited due to returns and uncollectible amounts;


 


(e)                                  cost
of any shipping packages and packing, if billed separately;


 


(f)                                    import
and/or export duties and tariffs actually paid;


 


(g)                                 rebates;
and


 


(h)                                 interest,
service, finance, or sales or carrying charges paid by customers for extension
of credit


 


No deductions shall be made for commissions paid to
individuals whether they be with independent sales agencies or regularly
employed by LICENSEE or Affiliates and on its payroll, or for cost of
collections. Licensed Products shall be considered “sold” when billed or
invoiced.


 


1.9                               “Sublicense” shall
mean the right to make, use or sell Licensed Products or Licensed Processes,
other than by outright sale to any Non-Affiliate (including any Non-Affiliated
distributor).


 


ARTICLE 2


 


GRANT


 


2.1                               UNIVERSITY
hereby grants to LICENSEE an exclusive worldwide right and license in any field
of use, including the right to sublicense, to make, have made, use, lease,
offer to sell, export and otherwise exploit UNIVERSITY’s right, title and
interest in the Licensed Products or Licensed Processes derived from the Patent
Rights, on a royalty-bearing basis until 


 






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4

















 


the end of the last to expire patent of the Patent
Rights on a country by country basis, subject to the rights reserved in Section
2.2 below.


 


2.2                               Notwithstanding
any other provisions of this Agreement, it is agreed that UNIVERSITY shall
retain the right to use (subject to LICENSEE’s right to use) the technology
being licensed under the Patent Rights, including any improvements, solely for
its own non-commercial teaching and research activities; subject, however, to
confidentiality obligations as set forth in Article VII.


 


2.3                               LICENSEE
hereby agrees that every Sublicense to which it shall be party and which shall
relate to the rights, privileges and license granted hereunder shall contain a
statement describing the date upon which LICENSEE’S exclusive rights,
privileges and license hereunder shall terminate.


 


2.4                               LICENSEE
agrees that any Sublicenses granted will be in terms consistent and not in
conflict with any of the material terms and conditions of this Agreement
including, without limitation the provisions under Articles III, V, VII, VIII,
IX, X, XI, XIII and XVI of this Agreement.


 


2.5                               LICENSEE
agrees to forward to UNIVERSITY a copy of any and all fully executed sublicense
agreements within [ * ] of execution of same, and further agrees to forward to
UNIVERSITY within [ * ] a copy of such reports received by LICENSEE from its
sublicensees during the preceding [ * ] period under the Sublicenses as shall
be pertinent to a royalty accounting under said Sublicense agreements.


 


2.6                               Subject
to the Research Agreement and other than the Existing Technology, the license
granted hereunder shall not be construed to confer any rights upon LICENSEE by
implication, estoppel or otherwise as to any technology owned by the UNIVERSITY
that is not included in the Patent Rights and to which or in which LICENSEE
does not otherwise have rights, title or an interest.


 


ARTICLE 3


 


DILIGENCE


 


3.1                               LICENSEE
and its sublicensees shall use commercially reasonable efforts to bring
Licensed Products or Licensed Processes to market through a [ * ] exploitation
of the Patent Rights. Non-compliance with this Section 3.1 shall be grounds for
termination.


 


3.2                               in
addition, LICENSEE and UNIVERSITY shall adhere is the following:


 


(a)                                  LICENSEE
shall deliver to UNIVERSITY within [ * ] of Effective Date of this Agreement a
business plan including [ * ], to the extent formed by LICENSEE. Similar
reports shall be provided to UNIVERSITY within [ * ] to relay update and status
information on LICENSEE’s progress on development of the Patent Rights,
including projections of activity anticipated for the next reporting year.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


5

















 


(b)                                  LICENSEE
shall be responsible for diligently and promptly taking all reasonable steps to
secure all required and/or necessary governmental approvals to sell, exploit,
or market any and all Licensed Products. Subject to the terms and conditions of
the Research Agreement, the Licensee shall meet the Milestones set forth below.
Licensee can request extension of each Milestone deadline for a period of one
(1) year upon payment of a fee of [ * ] for each extension requested (“Extended Deadline”).


 


(i)                                    If
Licensee fails to [ * ], or within the Extended Deadline, than the licenses set
forth in Section 2.1 for that particular Licensed Product shall terminate and
be no longer valid, unless Licensee shall have earlier demonstrated to the
satisfaction of the University that there is a valid cause for delaying the [ *
].


 


(ii)                                If
Licensee fails to [ * ], or within the Extended Deadline, than the licenses set
forth in Section 2.1 for that particular Licensed Product shall terminate and
be no longer valid, unless Licensee shall have earlier demonstrated to the
satisfaction of the University that there is a valid cause for delaying the [ *
].


 


(c)                                  UNIVERSITY
agrees to provide existing back-up data and documentation as may be required by
regulatory agencies for purposes of supporting applications under government
review.


 


(d)                                  LICENSEE
shall advise UNIVERSITY, through [ * ] reports to be provided [ * ] pursuant to
Section 5.2 below, of its program of development for and status of obtaining
said approvals.


 


ARTICLE 4


 


PAYMENTS


 


4.1                               For
the rights, privileges and licenses granted hereunder, LICENSEE shall pay to
the UNIVERSITY, in the manner hereinafter provided, until the end of the last
to expire patent of the Patent Rights on a country by country basis or until
this Agreement shall be terminated, as hereinafter provided, whichever occurs first:


 


(a)                                  a
royalty in an amount to be negotiated in good faith, but not less than [ * ]
and not more than [ * ], of the aggregate Net Sales by LICENSEE or any
Affiliate of the Licensed Products or Licensed Processes;


 


(b)                                  for
Licensed Products or Licensed Processes derived from UNIVERSITY Inventions, a [
* ] payments received by LICENSEE from sublicensees, based on Net Sales of
Licensed Products or Licensed Processes by sublicensees, exclusive of [ * ]
covered by Section 4.1(d) below;


 


(c)                                  for
Licensed Products or Licensed Processes derived from Joint Inventions, a [ * ]
payments received by LICENSEE from sublicensees, based on Net Sales of Licensed
Products or Licensed Processes by sublicensees, exclusive of [ * ] covered by
Section 4.1(d) below;


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


6

















 


(d)                                  a
[ * ]. No payments will be made under this Section 4.1(d) to the extent
already covered under Sections 4.1(b) and (c).


 


4.2                               In
the event a competitive product is sold in a country by an unlicensed third
part, and such third party’s activities demonstrably diminish LICENSEE’s
capability to compete in the market, UNIVERSITY agrees to meet with LICENSEE to
negotiate a reduction of royalties due for sales in that country, provided
LICENSEE provides to the UNIVERSITY, prior to such meeting, [ * ].


 


4.3                               Only
one royalty shall be payable with respect to any unit of Licensed Product
regardless of whether it is covered by more than one of the Patent Rights
patent applications or Patent Rights patents licensed under this Agreement, or
to be covered in more than one subsection of Section 4.1 hereof.


 


4.4                               Royalty
payments shall be paid quarterly within [ * ] of the close of each calendar
quarter ending March 31, June 30, September 30 and December 31, in United
States dollars in Chicago, Illinois, or at such other place as UNIVERSITY may
reasonably designate consistent with the laws and regulations controlling in
any foreign country, but not in any other currency. If any currency conversion
shall be required in connection with the payment of royalties hereunder, such
conversion shall be made by using the exchange rate prevailing at [ * ] on the
last business day of the calendar quarterly reporting period to which such
royalty payments relate.


 


4.5                               Any
taxes required to be paid or withheld on account of amounts payable to
UNIVERSITY under this Agreement shall be deducted from the amounts due pursuant
to Section 4.1 at the rates specified by applicable law or treaty. LICENSEE
shall provide to UNIVERSITY, as soon as practical, receipts of payment of any
such taxes from the appropriate taxing authority.


 


4.6                               In
the event that the LICENSEE’s, the Affiliates or its Sublicensees development,
manufacture, use or sale of a Product would constitute an infringement of any
patent right or intellectual property right of any third party, the Parties
shall together use their reasonable endeavors to obtain an appropriate license
from such third party. If such license requires LICENSEE to pay royalties to
such third party, the royalty due and payable to the University under this
Agreement for sale of the Product shall be reduced by [ * ] the amount which
the Licensee is required to pay to said third party, provided that no royalty
due to the University hereunder shall be reduced by more than [ * ].


 


ARTICLE 5


 


REPORTS AND RECORDS


 


5.1                               LICENSEE
shall keep full, true and accurate records pertaining to the sale or other
disposition of the Licensed Products or Licensed Processes in sufficient detail
as may be necessary to show the amounts payable to UNIVERSITY hereunder. Said
records shall be kept at LICENSEE’s principal place of business. For the term
of this Agreement, upon receipt of [ * ] prior written notice, UNIVERSITY shall
have the right to cause an independent, certified public 


 






[ * ] = CERTAIN CONFIDENTIAL INFORMATION
CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED AND FILED
SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO RULE 406 OF
THE SECURITIES ACT OF 1933, AS AMENDED


 


7

















 


accountant to audit such records to confirm LICENSEE’s,
affiliate’s and sublicensee’s Net Sales and royalty payments and all other
payments or exchanges related to Patent Rights for the preceding year at
UNIVERSITY’s expense. Such audits may be exercised during normal business hours
once a year.


 


5.2                               LICENSEE,
within [ * ] after [ * ] of each year, shall deliver to UNIVERSITY true and
accurate reports, giving such particulars of the business conducted by LICENSEE
and its sublicensees during the preceding [ * ] period under this Agreement as
shall be pertinent to a royalty accounting hereunder. These shall include at
least the following, to be itemized per Licensed Product or Licensed Process:


 


(a)                                  number
of Licensed Products commercially used, manufactured and sold, rented or
leased;


 


(b)                                  total
billings for Licensed Products and Licensed Processes commercially used, sold,
rented or leased;


 


(c)                                  deductions
applicable as provided in Paragraph 1.8.


 


(d)                                  total
royalties due;


 


(e)                                  [
* ];


 


(f)                                    [
* ].


 


(g)                                 [
* ]; and


 


(h)                                 [
* ].


 


5.3                               If
no royalties shall be due, LICENSEE shall so report.


 


ARTICLE 6


 


PATENT MAINTENANCE, ENFORCEMENT AND DEFENSE


 


6.1                               Subject
to this Article VI, UNIVERSITY shall control all decisions and activities
related to the preparation, pursuit, filing, issuance, maintenance, enforcement
and prosecution of the Patent Rights for University Inventions. UNIVERSITY
shall diligently take all reasonable steps to obtain issuance of pending patent
application(s) included in the Patent Rights in the name of The Board of
Trustees of the University of Illinois. UNIVERSITY shall communicate and
coordinate with LICENSEE during the term of this Agreement with respect to the
filing and prosecution of patent applications and foreign counterparts thereto
in respect of any UNIVERSITY Invention in order to promote comprehensive
cost-efficient patent coverage. UNIVERSITY shall give proper attention to any
comments offered by LICENSEE in preparing the final draft of the application
for submission, and shall use its best efforts to amend any patent application
to include claims reasonably requested by LICENSEE and required to protect the
Licensed Products or Licensed Processes contemplated to be sold under this
Agreement. UNIVERSITY shall promptly provide LICENSEE with copies of all
relevant documentation so 


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


8

















 


that LICENSEE may be informed and appraised of the
status of the Patent Rights at all times. UNIVERSITY agrees it will not abandon
any patent application or issued patent if LICENSEE desires to continue
prosecution or maintenance, provided LICENSEE is not in default of its payment
obligations hereunder.


 


6.2                               LICENSEE
shall be responsible for and pay all costs and expenses incurred by UNIVERSITY
for the preparation, filing, prosecution, issuance, and maintenance of the
Patent Rights pre-dating the Effective Date and post-dating the Effective Date
for the term of this Agreement.


 


6.3                               LICENSEE
shall control the preparation, filing, issuance, maintenance, enforcement and
prosecution of the Patent Rights for Joint Inventions. LICENSEE shall be free
to decide in its sole discretion whether or not to file or continue prosecution
or maintain any Patent and shall engage counsel of its choice and its expense
to prepare, file, prosecute and maintain any such Patents. University shall
have a right of accounting for all Patents and income generated from such
Patents. LICENSEE shall communicate and coordinate with the University its
preparation, filing and prosecution of patent applications and shall provide
the University with copies of draft patent applications in sufficient time for
the University to comment thereon prior to filing, and shall give proper
attention to any comments offered by the University in preparing the final
draft of the application for submission. LICENSEE shall promptly provide
University with copies of all relevant documentation and shall promptly share
all patent filing and prosecution information, including notifying University
of all filing and response deadlines so that University may be informed and
appraised of the continuing prosecution, and University agrees to keep this
documentation confidential. Should LICENSEE elect not to prepare, file,
prosecute or maintain a Patent or discontinues its support of any of these
activities, it shall promptly notify the University but in no event later than
[ * ] predating any response, filing or abandonment deadline, and the
University shall be free to decide, in its sole discretion and at its expense,
whether or not to support or continue any such activities. LICENSEE agrees to
assign all right, title and interest it holds in any claim or patent
application abandoned by LICENSEE, which assignment shall be made by LICENSEE
to University promptly upon written request from University after it receives
notice from LICENSEE of its intention to abandon any patent rights in whole or
in part.


 


6.4                               LICENSEE
and UNIVERSITY shall promptly notify the other in writing of any alleged or
threatened infringement of any Patent included in the Patent Rights or claiming
the Invention. Both parties shall use their best efforts in cooperating with
each other to terminate such infringement without litigation. LICENSEE shall
have the first right to bring and control any action or proceeding with respect
to such infringement at its own expense and by counsel of its own choice, and
UNIVERSITY shall have the right, at its own expense, to be represented in any
action involving any Patent Rights by counsel of its choice. If LICENSEE fails
to bring an action or proceeding within (i) [ * ] following the notice of
alleged infringement or (ii) [ * ] before the time limit, if any, set forth in
the appropriate laws and regulations for the filing of such actions, whichever
comes first, UNIVERSITY shall have the right to bring and control any such
action at its own expense and by counsel of its own choice, and LICENSEE shall
have the right, at its own expense, to be represented in any such action by
counsel of its own choice. In the event a party brings an infringement action,
the other party shall cooperate fully, including if required to bring such
action, the furnishing of a power of attorney. Neither party shall have the 


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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right to settle any patent infringement litigation
under this Section 6.4 in a manner that diminishes the rights or interests of
the other party without the consent of such other party, which consent shall
not be unreasonably withheld. All costs of any action to enforce the Patent
Rights taken by LICENSEE shall be borne by LICENSEE and LICENSEE shall keep any
recovery of damages derived therefrom, [ * ]. All costs of any action to
enforce the Patent Rights taken by UNIVERSITY shall be borne be UNIVERSITY and
UNIVERSITY shall share with LICENSEE any recovery of damages derived therefrom
on a pro rata basis per costs incurred by UNIVERSITY and LICENSEE respectively
in such policing activity.


 


6.5                               LICENSEE,
during the exclusive period of this Agreement, shall have the sole right in
accordance with the terms and conditions herein to sublicense any alleged
infringer for future use of the Patent Rights, with any royalty covered by
Section 4.1 above to be paid to UNIVERSITY as required.


 


6.6                               LICENSEE
and UNIVERSITY shall promptly notify the other in writing of any allegation by
a third party that the activity of either of the parties infringes or may
infringe the intellectual property rights on such third party. LICENSEE shall
defend the claim at its own expense and by counsel of its own choice including,
without limitation, the right to settle, compromise or otherwise pursue such
defense in any manner and on such terms as LICENSEE shall determine. UNIVERSITY
agrees to provide assistance to LICENSEE as may be reasonably necessary or
appropriate to pursue such actions. If LICENSEE fails to proceed with regard to
such defense within (i) [ * ] following the notice of alleged infringement
or [ * ] before the time limit, if any, set forth in the appropriate laws and
regulations for the filing of such actions, whichever comes first, or otherwise
elects not to defend such a claim, UNIVERSITY shall have the right to defend
the claim at its own expense and by counsel of its choice including, without
limitation, the right to settle, compromise or otherwise pursue such defense in
any manner and on such terms as UNIVERSITY shall determine. [ * ] of the
royalty payments due from LICENSEE to UNIVERSITY hereunder shall be placed in
escrow pending a resolution of the action. If it is determined by judgement or
settlement that LICENSEE is required to make payments to said third party in
order to continue to market, distribute or sell or otherwise use the Licensed
Products, than any such payments owing to such third party shall be credited
and offset against the escrowed royalty payments and LICENSEE may, at its
option, terminate this Agreement pursuant to Section 13.2.


 


ARTICLE 7


 


CONFIDENTIALITY


 


7.1                               During
the term of this Agreement and for a period of [ * ] after termination thereof,
each party will maintain all Confidential Information in trust and confidence
and will not disclose any Confidential Information to any third party or use
any Confidential Information for any purpose except as expressly authorized by
this Agreement. Each party may use such Confidential Information only to the
extent required to accomplish the purposes of this Agreement, including
sublicensing. Each party will use the highest standard of care to protect
Confidential Information and to ensure that its employees, agents, consultants
and other representatives or, in the case of the UNIVERSITY, students, do not
disclose or make any 


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


10

















 


unauthorized use of the Confidential Information. Each
party will promptly notify the other upon discovery of any unauthorized use or
disclosure of the Confidential Information.


 


7.2                               Confidential
Information shall not include information that:


 


(a)                                  is
now, or hereafter becomes, through no act or failure to act on the part of the
receiving party, in the public domain or published;


 


(b)                                  is
in possession of the receiving party at the time of receiving such information,
as evidenced by its prior written records;


 


(c)                                  is
hereafter furnished to the receiving party by a third party, as a matter of
right and without restriction on disclosure; or


 


(d)                                  is
required by law or a court order to be disclosed or is the subject of a written
permission to disclose provided by the disclosing party.


 


7.3                               Notwithstanding
the above, a party may disclose Confidential Information of the other party:


 


(a)                                  to
potential sublicensees to the extent such disclosure is reasonably necessary
and provided sublicensee personnel are bound by obligations of confidentiality
no less restrictive than those provided hereunder; or


 


(b)                                  if
required by law or a court order to be disclosed or is the subject of a written
permission to disclose provided by the disclosing party; to regulatory agencies
in order to obtain registrations required; and to professional advisors,
consultants and/or potential investors in connection with a private placement
or public offering.


 


ARTICLE 8


 


REPRESENTATIONS, WARRANTIES AND COVENANTS


 


8.1                               Each
party hereby represents and warrants that such party is duly organized and
validly existing under the laws of the state of its incorporation and has full
power and authority to enter into this Agreement and to carry out the
provisions hereof.


 


8.2                               Each
party hereby represents and warrants that such party is duly authorized to
execute and deliver this Agreement and to perform its obligations hereunder and
that this Agreement is a legal and valid obligation binding upon each party,
enforceable in accordance with its terms. The execution, delivery and
performance of this Agreement by such party does not conflict with any
agreement, instrument or understanding, oral or written, to which it is a party
or by which it may be bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having authority over it.


 


8.3                               UNIVERSITY
hereby represents that, to the best of its knowledge, no University patents or
patent applications, other than the rights granted to LICENSEE hereunder to the
Patent Rights, conflict with the representations and rights given to LICENSEE
under this Agreement.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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ARTICLE 9


 


INDEMNIFICATION, PRODUCT LIABILITY


 


9.1                               LICENSEE
shall at all times during the term of this Agreement and thereafter, indemnify,
defend and hold UNIVERSITY, its trustees, officers, employees and affiliates,
harmless against all claims, expenses, damages or liability (collectively, the “Losses”) including
legal expenses and reasonable attorneys’ fees, resulting from the production,
manufacture, sale, use, lease, consumption or advertisement of the Licensed
Product(s) or arising from any obligation of LICENSEE hereunder, except to the
extent that such Losses result from UNIVERSITY’s gross negligence or willful
misconduct.


 


9.2                               For
the term of this Agreement, upon the commencement of production, sale, or
transfer, whichever occurs first, of any Licensed Product, LICENSEE shall
obtain and carry in full force and effect liability insurance which shall
protect LICENSEE and UNIVERSITY in regard to events covered by Section 8.1
above, the nature and extent of which insurance coverage shall be commensurate
with usual and customary industry practices, as determined by LICENSEE’s good
faith assessment.


 


9.3                               Except
as otherwise expressly set forth in this Agreement, UNIVERSITY AND SPONSOR MAKE
NO REPRESENTATIONS AND EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR
IMPLIED, INCLUDING BUT NOT LIMITED TO WARRANTIES OF MERCHANTABILITY, FITNESS
FOR A PARTICULAR PURPOSE, AND VALIDITY OF PATENT RIGHTS CLAIMS, ISSUED OR
PENDING.


 


ARTICLE 10


 


EXPORT CONTROLS


 


It is understood that UNIVERSITY is subject to United
States laws and regulations controlling the export of technical data, computer
software, laboratory prototypes and other commodities (including the Arms
Export Control Act, as amended and the Export Administration Act of 1979), and
that its obligations hereunder are contingent on compliance with applicable United
States export laws and regulations. The transfer of certain technical data and
commodities may require a license from the cognizant agency of the United
States Government and/or written assurances by LICENSEE that LICENSEE shall not
export data or commodities to certain foreign countries without prior approval
of such agency. UNIVERSITY neither represents that a license shall not be
required nor that, if required, it shall be issued, but shall provide to
LICENSEE reasonable assistance for determining the need for and the procuring
of such license or other consent. LICENSEE agrees to comply with all applicable
export and import control laws governing sales of Licensed Products and
Licensed Processes.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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ARTICLE 11


 


NON-USE OF NAMES


 


LICENSEE shall not use the names of the University of
Illinois nor any of its employees, nor any adaptation thereof, in any
advertising, promotional or sales literature without prior written consent
obtained from UNIVERSITY in each case, except that LICENSEE may state that it
is licensed by UNIVERSITY under one or more of the Patents comprising the
Patent Rights and, if appropriate, that research related to the INVENTION or
Patent Rights is ongoing at UNIVERSITY.


 


ARTICLE 12


 


ASSIGNMENT


 


12.1                        This
Agreement may not be assigned by LICENSEE other than to QBI Enterprises Ltd.,
an Israeli limited liability company and a subsidiary of LICENSEE, without
prior written consent from UNIVERSITY.


 


12.2                        Notwithstanding
the foregoing prohibition, LICENSEE may, without UNIVERSITY’s consent, merge
into, consolidate with, or transfer substantially all of its assets (“substantially”
being respectively [ * ] or more thereof) as an entirety to any corporation, so
long as the successor surviving corporation in any such merger, consolidation,
transfer or reorganization assumes in writing the obligations of this Agreement.
Such merger, consolidation, transfer or reorganization shall not in any way be
a breach of this Article XII, nor be any default under this Agreement.


 


ARTICLE 13


 


TERMINATION


 


13.1                        Either
party may terminate this Agreement upon [ * ] written notice upon the
occurrence of any of the following:


 


(a)                                  Upon
or after the bankruptcy, insolvency, dissolution or winding-up of the other
party (other than dissolution or winding-up for the purposes of reconstruction
or amalgamation); or


 


(b)                                  Upon
or after the breach of any material provision of this Agreement by the other
party if the breaching party has not cured such breach within [ * ] following
written notice of termination by the other party.


 


13.2                        LICENSEE
shall have the right to terminate this Agreement with or without cause at any
time upon [ * ] advance written notice to UNIVERSITY subject to LICENSEE’s
remittance of payments that may be due under this Agreement up to the effective
date of termination. All rights granted to LICENSEE hereunder shall revert to
UNIVERSITY upon the effective date of such termination.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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13.3                        Upon
termination this Agreement for any reason, nothing herein shall be construed to
release either party from any obligation that matured prior to the effective
date of such termination. LICENSEE shall return to UNIVERSITY all materials
containing Licensed Product derived from a UNIVERSITY Invention (exclusive of
materials relating to Sponsor Existing Technology); provided, however, that
LICENSEE shall have the right for one year thereafter to dispose of all
Licensed Products then in its inventory, and shall pay royalties thereon, in
accordance with the provisions of Article IV and shall submit the related
reports as required by Article V, as though this Agreement had not terminated. Each
party shall, promptly upon termination, return to the other party Confidential
Information received from the other party and still subject to obligations of
confidentiality hereunder, and neither party shall thereafter be entitled under
this Agreement to use any such Confidential Information of the other party for
any purpose.


 


ARTICLE 14


 


DISPUTE RESOLUTION


 


Other than any claim arising from LICENSEE’s failure
to pay royalties due under this Agreement, any controversy or bonafide disputed
claim arising under this Agreement between the parties, which dispute cannot be
resolved by mutual agreement, shall, by the election of either party, be
resolved by submitting to dispute resolution before a fact-finding body
composed of one or more experts in the field, selected by mutual agreement
within thirty days of written request by either party. Said dispute resolution
shall be held in Chicago or at such other place as shall be mutually agreed
upon in writing by the parties. The fact-finding body shall determine who shall
bear the cost of said resolution. In the event that the parties cannot mutually
agree within said thirty (30) days on the dispute resolution body, the parties
apply the procedural rules of a mutually agreeable forum.


 


ARTICLE 15


 


PAYMENTS, NOTICES AND OTHER COMMUNICATIONS


 


Any payment, notice or other communication pursuant to
this Agreement shall be sufficiently made or given on the date of receipt if
sent to such party by telefax or overnight courier, or on the date three days
after mailing if sent by certified mail, postage prepaid, addressed to it at
its address below or as it shall designate by written notice given to the other
party:


 


In the case of UNIVERSITY:


 


Intellectual Property Office


Office of the Vice Chancellor of Research


University of Illinois at Chicago


1737 W. Polk Street, 312 AOB (M/C 672)


Chicago, Illinois 60612


ATTN:  Director,
Intellectual Property Office


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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In the case of LICENSEE:


 


Quark Biotech, Inc.


c/o QBI Enterprises, Ltd.


Weizmann Scientific Park


Building 3, 4th Floor


P.O. Box 741


Nes Ziona, Israel 74106


Attn: Daniel Zurr, President & CEO


FAX: 011-972-8-940-6476


 


ARTICLE 16


 


MISCELLANEOUS PROVISIONS


 


16.1                        This
Agreement shall be construed, governed, interpreted and applied in accordance
with the laws of the State of Illinois, U.S.A., except that questions affecting
the construction and effect of any patent shall be determined by the law of the
country in which the patent was granted.


 


16.2                        The
parties hereto acknowledge that this Agreement together with the Research
Agreement set forth the entire Agreement and understanding of the parties
hereto as to the subject matter hereof, and shall not be subject to any change
or modification except by the execution of a written instrument subscribed to
by the parties hereto.


 


16.3                        The
provisions of this Agreement are severable, and in the event that any
provisions of this Agreement shall be determined to be invalid or unenforceable
under any controlling body of the law, such invalidity or unenforceability
shall not in any way affect the validity or enforceability of the remaining
provisions hereof.


 


16.4                        LICENSEE
agrees to mark the Licensed Products sold in the United States with all
applicable United States patent numbers. All Licensed Products shipped to or
sold in other countries shall be marked in such a manner as to conform with the
patent laws and practice of the country of manufacture or sale.


 


16.5                        The
failure of either party to assert a right hereunder or to insist upon
compliance with any term or condition of this Agreement shall not constitute a
waiver of that right or excuse a similar subsequent failure to perform any such
term or condition by the other party.


 


16.6                        This
Agreement may be executed in any number of counterparts and each of such
counterparts shall for all purposes be an original and all such counterparts
shall together constitute but one and the same agreement.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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IN WITNESS WHEREOF, the parties have hereunto set
their hands and seals and duly executed this Agreement the day and year set
forth below.


 


 


THE BOARD OF TRUSTEES OF THE
UNIVERSITY OF ILLINOIS


 


 


	
  By

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
	
  Craig S. Bazzani,
  Comptroller

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Attest

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
	
  Michele M. Thompson,
  Secretary

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  QUARK BIOTECH, INC.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
   

  	
   

  	
  Date

  	
   

  	
   

  
	
  Dr. Daniel Zurr, President
  & CEO

  	
   

  	
   

  
							



 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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EXHIBIT
C


 


NONDISCLOSURE
AGREEMENT


 


THIS AGREEMENT is effective this                 
day of                 ,
1999 (“Effective Date”)
by and between THE BOARD OF TRUSTEES OF THE UNIVERSITY OF ILLINOIS, Office of
the Vice Chancellor for Research, 1737 West Polk Street, Chicago, Illinois
60612, (hereinafter referred to as “UNIVERSITY”) and                                                                 
having a place of business at                                                                 
(hereinafter referred to as “COMPANY”);


 


WITNESSETH:


 


WHEREAS, members of the faculty of the UNIVERSITY have
created the following:


 


“                                                ”                                (Tech
ID#                                 )


 


(hereinafter referred to
as the “Inventions”,
and are the property of the UNIVERSITY; and


 


WHEREAS, UNIVERSITY has the right to disclose to
others the Inventions, supporting disclosure materials, and other written
materials relating thereto, and prototypes and/or samples thereof (the “Technical Information”);


 


WHEREAS, COMPANY wishes to review the Technical
Information for the purpose of determining whether or not it is interested in
acquiring a license and/or other rights from the UNIVERSITY which would enable
COMPANY to undertake further development of products or services embodying the
Inventions;


 


NOW, THEREFORE, in consideration of the premises and
covenants herein contained, the parties hereto agree as follows:


 


1.                                      UNIVERSITY
shall disclose to COMPANY the Technical Information regarding the Inventions.


 


2.                                      Upon
execution of this Agreement, a confidential relationship shall arise between
UNIVERSITY and COMPANY, and COMPANY agrees to hold in confidence all Technical
Information disclosed to it by UNIVERSITY and not to disclose such Technical
Information to anyone except such of its employees as may be necessary and not
use such Technical information for a purpose not by this Agreement, unless:


 


a.                                       such
Technical Information is part of the public domain prior to the Effective Date;
or


 


b.                                       such
Technical Information becomes part of the public domain not due to some
unauthorized act by or omission of COMPANY after this Agreement is executed; or


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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c.                                       such
Technical Information is disclosed to COMPANY by a third party who has the
right to make such disclosure; or


 


d.                                       permission
to disclose said Technical Information or to make use thereof is obtained by
COMPANY from UNIVERSITY in writing; or


 


e.                                       such
Technical Information is independently developed by persons in COMPANY’s employ
or otherwise who have no contact with Technical Information furnished by
UNIVERSITY hereunder, as proven with written records.


 


3.                                      COMPANY
shall use its best efforts to preserve the confidentiality of the Technical
Information disclosed as it would if the Technical Information had been
developed by COMPANY and was to be retained in confidence by it. If COMPANY
elects or desires to pursue its evaluation of the Technical Information by
presenting that information in whole or in part to a third party, then prior to
said presentation and as a condition precedent thereto the COMPANY shall
execute with said third party a comprehensive confidentiality agreement
containing, at a minimum, the same terms and conditions as this Agreement and
providing that said third party shall be responsible to COMPANY and UNIVERSITY
to the same extent that COMPANY is responsible to UNIVERSITY hereunder.


 


4.                                      It
is understood and agreed that the Technical Information referred to hereunder
shall be furnished to COMPANY for internal evaluation in order that COMPANY may
determine its interest in developing products under an agreement to be
negotiated with UNIVERSITY and for no other purpose. No express or implied
license to use the Inventions or Technical Information for any purpose other
than said evaluations is permitted hereunder.


 


5.                                      Either
party may terminate this Agreement at will. Upon termination, and at the
request of the UNIVERSITY, COMPANY shall return to UNIVERSITY all Technical
Information furnished by UNIVERSITY to COMPANY under this Agreement except that
COMPANY may retain a copy thereof in the files of its legal counsel solely for
archival purposes. The termination shall not affect the obligations of COMPANY
to treat the Technical Information disclosed to COMPANY as confidential and not
use same, which shall continue for a period of three (3) years from receipt of
such information by COMPANY. Upon the expiration of such period, all of COMPANY’s
obligations hereunder shall expire.


 


6.                                      This
Agreement shall he binding upon and inure to the benefit of the successors and
assigns of the parties hereto, but neither of the parties hereto shall assign
this Agreement without the prior written consent of the other party.


 


7.                                      No
modification or waiver of any of the provisions of this Agreement shall be
valid unless in writing and signed by the parties hereto.


 


8.                                      Illinois
law shall govern this agreement.


 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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The COMPANY agrees to these terms through signature by
an authorized representative of the COMPANY, affixed below.


 


 


THE BOARD OF TRUSTEES OF THE
UNIVERSITY OF ILLINOIS


 


 


	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
  Craig S. Bazzani

  	
   

  	
   

  
	
  Comptroller

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  FOR COMPANY

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Printed name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
								



 






[ * ] = CERTAIN CONFIDENTIAL
INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS, HAS BEEN OMITTED
AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO
RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED


 


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