EXHIBIT 10.23


 






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Option and Licence Agreement


 


between


 


Atugen AG, a company incorporated under
the laws of Germany, whose registered office is at Robert-Rössle-Str. 10, D13125 Berlin, Germany of the first Part;


(hereinafter
referred to as “Atugen”),


 


and


 


Quark
Biotech, Inc., a private limited company incorporated under the laws of California
whose principal office is at 6540 Kaiser Drive, Fremont CA 94555, U.S.A. and QBI Enterprises Ltd., a private company
incorporated under the laws of the State of Israel whose principal office is at
Weizmann Science Park, P.O. box 4071, Nes Ziona 
70400, ISRAEL, of the second Part (together hereinafter referred to as
“QBI”)


 


of


 


xx March 2005


 


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WHEREAS


 


A.                         Atugen has established proprietary technology
and patent rights related to the development and manufacture of siRNA molecules
(atuRNAiTM) potentially silencing any gene in any species and has prepared or
will prepare liposome-based formulations (atuFect) as inhibitors for specific
molecular drug targets (atuRNAi) and has filed patent applications for these
technologies (Atugen IP) as listed in Annex 1 to this Agreement; and


 


B.                           QBI owns patent rights and know-how
directed to the structure and function of five genes and its role in diseases
(QBI Targets) as listed in the Annex 2 to this Agreement; and


 


C.                       QBI wishes to obtain a licence under
Atugen IP in the event that the evaluation of the specific atuRNAi against QBI
Targets shows positive results and that QBI wishes to implement a drug development
project based on the specific atuRNAi inhibiting a QBI Target; and


 


D.                      Atugen is prepared to develop and
supply QBI with five atuRNAis inhibiting specific QBI Targets, to provide to
QBI certain appertaining research and development services as hereinafter
defined and to grant QBI options for non-exclusive licences under Atugen IP;


 


NOW, THEREFORE, it is agreed as
follows:


 


1.             Definitions


 


As used herein, capitalised
terms shall have the respective meaning set forth below:


 


1.1                                 “Affiliate” means any enterprise which
controls, is controlled by, or is under common control with, such party as long
as such control exists. For the purpose of the preceding sentence, the word
“control” means the ownership of at least 50% of the outstanding voting stock
of such enterprise or, a comparable equity interest in any other type of
entity.


 


1.2                                 “Atugen
IP” means the Atugen patents and patent applications as of the date
of this Agreement as identified in Annex 1.
For the purposes of this Agreement “Atugen Patent” shall be considered to be an
issued patent if issued to Atugen in the US or the European Union (European
Patent) and having valid claims which
claims would otherwise be infringed by the QBI Product.


 


1.3                                 “atuRNAi(s)” shall mean the siRNAs developed by
or for Atugen and supplied to QBI under this Agreement as potential inhibitors
of certain molecular drug targets for therapeutic intervention.


 


1.4                                 “Clinical
Development” means the trials conducted in human subjects to
determine the safety, efficacy and pharmacokinetics of a compound as required
by the US FDA. Clinical Development includes Phase I, Phase II, Phase III (and
IV if


 






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required), and the New Drug
Application (NDA) for Regulatory Approval by the FDA .


 


1.5                                 “Evaluation”
means those in vivo animal studies testing the efficacy and safety
of a Product candidate in a disease model that a Party developing such Product
deems necessary and sufficient to proceed to Formal Preclinical Development
stage of the Product towards filing of an IND.


 


1.6                                 “First
Commercial Sale” means the first sale to a third party in an arm’s
length transaction for use or consumption in such country after required
Regulatory Approval has been granted by the relevant regulatory authority in
such country.


 


1.7                                 “Formal
Preclinical Development” means the aggregate of in vitro and in vivo
studies required by the US FDA to determine the potential risk a compound poses
to man and the environment, necessary and sufficient for an IND approval.


 


1.8                                 “IMPD” means an Investigational Medical
Product Development filed with the EMEA in Europe.


 


1.9                                 “IND”
means an Investigational New Drug application filed with the FDA in the USA for
a Product in order to obtain approval for the commencement of clinical trials.


 


1.10                           “Major
Country” shall mean any of: [ * ].


 


1.11                           “Net Sales” shall mean the aggregate gross
sales of any Product invoiced to third parties in an arm’s length transaction
by QBI or their Affiliates, less the following deductions (to the extent that
such deductions are actually shown on the relevant invoices to third-party
customers):


 


(a)          any tax, duty
or other governmental charge on the import or export, sale or use of any
royalty-bearing Product (not including franchise tax or income tax); and


 


(b)         actual costs
of transportation and insurance if invoiced to the customer; and


 


(c)          [ * ] deduction of [ * ] of the
price invoiced for Products to cover all the usual sales expenses such as
charges or allowances given or normal trade discounts allowed or commissions
paid in lieu of trade discounts as well as credits or allowances given or made
on account of return or rejection of any royalty-bearing Product;


 


1.12                           “Patent
Rights” shall mean any and all (a) patents, (b) pending
patent applications, including, without limitation, all provisional
applications, continuations, continuations-in-part, divisions, reissues,
renewals, and all patents granted thereon, and (c) all
patents-of-addition, reissue patents, reexaminations and extensions or
restorations by existing or future extension or restoration mechanisms,
including, without limitation, supplementary protection certificates or the
equivalent thereof.


 






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1.13                           “Products”
means RNAi products that are (i) based on the Atugen IP or discovered, developed
or produced using the Atugen IP, and (ii) are based on the QBI IP and directed
to QBI Target.


 


1.14                           “QBI
IP” means the present and future Patent Rights and Know-How owned by
QBI and directed to the [ * ] to the
QBI Target genes and methods of treatment of diseases using these, including
but not limited to rights to patents and patent applications listed in Annex 2.


 


1.15                           “QBI
Products” means Products and Drug Products for the treatment of
human diseases covered by QBI IP.


 


1.16                           “QBI Targets” shall mean the genes covered by QBI
IP listed in Annex 2 to this Agreement.


 


1.17                           “Regulatory
Approval” shall mean any and all NDA (New Drug Approval), MAA
(Marketing Authorization Application) approvals or post-MAA approvals
(including any applicable governmental price and reimbursement approvals),
licenses, registrations, or authorizations of any federal, national,
multinational, state, provincial or local regulatory agency, department, bureau
or other governmental entity necessary for the development, manufacture, use,
storage, import, transport, promotion, marketing and sale of a product in a
country.


 


1.18                           “Sublicense
Revenues” shall
mean all revenues from any royalties or similar payments that QBI or an
Affiliate of QBI receives from a sub-licensee on account of sales of Products
by such sub-licensee or its sub-licensee, including, but not limited to,
down-payments, milestone payments and royalties.


 


1.19                           “Territory” shall mean any of the (i) USA, (ii)
a Major Country) and (iii) Japan.


 


1.20                           “Valid Patent Claim” shall mean: (i) a claim under
an issued and unexpired patent which has not been revoked, held unenforceable
or invalidated by a decision of a court or other governmental agency of
competent jurisdiction, is unappealable or for which an appeal has not been
filed within the time allowed for appeal and which has not been discharged,
denied or admitted to be invalid or unenforceable through reissue or disclaimer
or otherwise; or (ii) a claim in a pending patent application, which
application: (a) is under active prosecution; or (b) for which formal
examination has been requested; or (c) is a provisional application, the
benefit of which can be claimed in a non-provisional application.


 


2.                       Evaluation
Stage


 


2.1                                 In the initial stage of the Agreement Atugen agrees to provide QBI
certain services and to supply specific atuRNAis and liposomal transfection
reagents for five (5) defined QBI Targets for Evaluation.


 


2.2                                 Four of these QBI Targets have been defined in Annex 2 to this
Agreement. QBI shall have the right to select the fifth QBI Target to be
included in this Agreement


 






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EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.


 


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and
such target shall be added to Annex 2 unless it would violate Atugen’s existing
contractual obligations to third parties existing at the time of notification
by QBI of its target selection, in which event BI shall be entitled to select
another target that does not conflict with such contractual obligations of
Atugen.


 


2.3                                 Furthermore, Atugen understands that QBI might wish to obtain
licences under Atugen IP for additional genes in which QBI has an intellectual
property position and agrees, when requested by QBI, to consider such request
and negotiate in good faith the inclusion of such additional genes as QBI
Targets at terms and conditions to be discussed, provided [ * ].


 


2.4                                 Any atuRNAi supplied by Atugen to QBI during the Evaluation stage
will be used by QBI solely for conducting research and evaluation studies
including in vivo studies in animals for the purpose of obtaining proof of
concept under the QBI IP. QBI is specifically not authorized to and is
forbidden from: (i) reselling, transferring or distributing the material either
as a stand- alone product or as a component of another product, (ii) using the
material for diagnostic or therapeutic purposes. With respect to research use,
QBI will be permitted to transfer material to a bona fide third party
performing contracted research and consulting services for QBI, or an
alternative supplier in accordance with the provisions of Sections 2.8 and 2.9
below, provided that the third party performing such services is bound by
limited use obligations consistent with this Agreement.


 


2.5                                 QBI agrees to use [ * ] to enter
into an appropriate R&D Program for evaluation of the atuRNAis supplied by
Atugen, and to report and to make available to Atugen all the findings, results
and data obtained in the evaluation and R&D Program.


 


2.6                                 Any improvements to Atugen technology, as defined by Atugen IP,
resulting from the QBI R&D Programs shall be owned by Atugen with the right
to apply for patents in its name and at its own expense and such results, data
and improvements shall be a partial compensation for the rights granted by
Atugen to QBI under this Agreement.


 


QBI shall own all other results, data and intellectual property obtained
by QBI in the QBI R&D Programs. QBI shall have the right to use such
results for any purpose in its discretion and shall have the right to file
patents for such results in its name and at its own expense.


 


2.7                                 In
consideration of the right to evaluate the atuRNAis inhibiting the QBI Targets
and the right to obtain options for licences under Atugen IP as hereinafter
specified, QBI agrees to pay to Atugen upon the non-refundable sum of [ * ] one half of which shall be creditable against the
option fee for the first QBI Target selected by QBI according to section 3
below.


Within [ * ]
from receipt by Atugen of such payment, Atugen shall deliver to QBI the
atuRNAis that have been ordered and synthesized to date.


 


2.8                                 For the quantities of atuRNAi required for the Evaluation
and further development the Parties agree upon preliminary target prices as
follows:


•                                Initial quantity of [ * ] atuRNAi [ * ]


 






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CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
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EXCHANGE COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS
AMENDED.


 


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•                                Quantity of [ * ] atuRNAi [ * ]


•                                Quantity of [ * ] atuRNAi [ * ]


•                                Quantity of [ * ] atuRNAi [ * ]


 


The
prices for liposomal transfection reagents shall be determined separately.


 


Atugen agrees to use [ * ]
to supply the atuRNAi for quantities of [ * ] at the target
prices and to inform QBI after synthesis of the initial quantity of [ * ] whether these price levels may be kept. In the event
that the cost of synthesis of specific atuRNAi sequences of quantities of [ * ] should be higher, QBI shall have the right to (i)
select a different siRNA for the same target which might be synthesized at a
lower cost, or (ii) source the same RNAi from an alternative supplier, provided
that such alternative supplier is able to synthesize the siRNA [ * ] required by QBI.


 


2.9                                 Atugen agrees to use its
commercially reasonable efforts to supply or have supplied any specific QBI
order for quantities of [ * ] of
atuRNAi in accordance with the specifications and quality requirements of QBI
and within [ * ] of the receipt by Atugen of
QBI’s order therefor and any specific order for quantities of [ * ] of atuRNAi within [ * ] on
receipt by Atugen of QBI’s order therefor. Atugen will inform QBI as soon as
possible of any potential delay of delivery, and QBI shall be entitled to
source the atuRNAi from an alternative supplier provided that such alternative
supplier is able to [ * ] required
by QBI.


 


2.10                           Atugen agrees to render to QBI upon
QBI’s request certain development services such as the optimisation of cell
lines and the screening of siRNA molecules.


 


2.11                           QBI agrees to compensate Atugen for
such services with fees as follows:


 


•                  For the [ * ] a monthly
FTE rate of [ * ]


•                  For the [ * ]
a fee of [ * ]


•                  For the [ * ]
a fee of [ * ]


 


Fees for other services mutually
agreed upon shall be determined in good faith by the Parties.


 


3.             Option


 


3.1                                Grant


 


Atugen hereby grants QBI the
right to request from Atugen for each of the QBI Targets an option on a
non-exclusive and worldwide licence for Atugen IP with the right to sub-license
at terms consistent with this Agreement to evaluate, develop and commercialise
therapeutic atuRNAis inhibiting the specific QBI Target agreed upon (the “QBI
Option”) at the terms and conditions hereinafter specified.


 


3.2                                 It is understood by the Parties that
a QBI Option will be separately granted by Atugen for each QBI Target under the
conditions specified below but does not include the QBI Target RTP 801 covered
by a separate agreement between the Parties.


 






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3.3                                 Option Period


 


QBI shall be entitled to obtain
the option for each QBI Targetupon achieving proof of concept [ * ] for the specific QBI Target to QBI’s satisfaction,
however, not later than (i) [ * ] from the
date of the [ * ] delivery of a quantity of
more than [ * ] of atuRNAi required by QBI to
allow the achievement of proof of concept [ * ] (the “POC
Quantity”), or (ii) [ * ] from the
date of the delivery by Atugen of the [ * ] quantity
of the respective atuRNAi ordered by QBI (“First Delivery”)  in the event that QBI does not order the POC
Quantity within [ * ].


 


3.4                                 The request for any such option
shall be made by QBI in writing (the “QBI Option Notice”).


 


3.5                                 Each QBI Option is granted to QBI
for the period starting from achieving proof of concept [ * ]
or the date specified in section 3.3 above until thirty days after obtaining an
IND or any similar approval by the health authorities (IMPD) allowing clinical
phase I trials required by the EMEA or FDA as prerequisite of a drug approval
for a product developed by QBI hereunder inhibiting a QBI Target (a “QBI
Product”), or until twenty-four (24) months after delivery by QBI to
Atugen of the relevant QBI Option Notice, whichever is earlier (the “Option
Period”), and shall automatically expire thereafter unless QBI has exercised
the option by delivery to Atugen of written notice thereof.


 


3.6                                 Diligence


 


During the option period QBI
shall diligently pursue the development of the specific atuRNAi under the QBI
Option and agrees to submit quarterly reports and a final report on the results.


 


3.7           Option Fees


 


For
each single QBI Option requested by QBI and granted by Atugen for the option
period, QBI agrees to pay Atugen a non-refundable option fee as follows:


 


3.7.1                        [ * ] if at the time
the QBI Option is granted [ * ], a sum
which shall be increased to


 


3.7.2                        [
* ] if (i) [ * ] at the
time the relevant QBI Option is granted or (ii) if [ * ]
but prior to [ * ] with respect to the relevant
QBI Target. The difference due according to 3.7.2 (ii) shall be [ * ] from receipt by QBI of Atugen’s notice of [ * ]..


 


The
option fee shall be payable within [ * ] from
delivery of the respective QBI Option Notice.


 


3.8           Exercise of the QBI Options


 


3.8.1                        QBI can exercise each of the QBI
Options granted hereunder at any time during the Option Period. The exercise of
the QBI Option is contingent upon payment of the exercise fee of:


 






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3.8.2                         [ * ] if at the time the relevant QBI
Option is exercised [ * ], a sum
which shall be increased to


 


3.8.3                         [ * ] if (i) [ * ]
at the time the relevant QBI Option is exercised or (ii) if [ * ] but prior to [ * ] with
respect to the relevant QBI Target. The difference due according to 3.8.3.(ii)
shall be [ * ] from receipt by QBI of Atugen’s
notice of [ * ].


 


3.9           Development Plan / Milestones


 


QBI
agrees to submit to Atugen QBI’s development plan describing QBI’s best estimate
of the time schedule for reaching the following milestones: [ * ].


 


4.             License


 


Upon exercise of each specific
option in accordance with section 3.8 above Atugen shall grant a non-exclusive
license under Atugen IP in accordance with the terms and conditions specified below:


 


4.1           Grant


 


Atugen agrees to grant to QBI a
non-exclusive and worldwide license with the right to sub-license at terms and
conditions consistent with this Agreement under the Atugen IP and the know-how
relating to the atuRNAi(s) to research, develop, have developed, manufacture,
have manufactured, market and sell QBI Products.


 


4.2           Diligence


 


QBI undertakes to diligently
pursue the development work in accordance with the QBI Plan.


 


4.3                                 Milestone Payments


 


4.3.1                        As long as [ * ], QBI agrees to make the milestone payments set forth below for the first indication of a
QBI Product to reach such milestone with respect to each QBI Target :


 


4.3.1.1               [ * ]


 


4.3.1.2               [ * ]


 


4.3.1.3               [ * ]


 


4.3.2                        If [ * ]
by the time any milestone payments defined in 4.3.1.1 through 4.3.1.3 are due,
the amounts specified as milestone payments on such date shall be [ * ].


 






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SECURITIES ACT OF 1933, AS AMENDED.


 


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4.3.3                      For the removal of doubt, it is
clarified that these milestone payments are payable once only for each QBI
Product, and only for the first indication of a QBI Product developed for each
QBI Target that achieves the relevant milestone.


 


Milestone payments 4.3.1.2 and
4.3.1.3 are payable for [ * ], to a
maximum amount payable per milestone of [ * ] if the
Atugen IP has issued.


 


4.4   Royalties


 


4.4.1                         Should any QBI Product covered by
this license be marketed by QBI or by any of its Affiliates and as long as [ * ], QBI agrees to pay to Atugen on Net Sales of any QBI
Product covered by this license, royalties as follows:


 


•                  [ * ] for the first [ * ]
of annual Net Sales;


•                  [ * ] for the next [ * ]
of annual Net Sales; and


•                  [ * ] for all annual Net Sales above [ * ]


 


4.4.2                                            As soon as [ * ]
the royalty rates specified shall [ * ] with
respect to sales in that part of the Territory [ * ].


 


4.4.3                                            [ * ]


 


4.5                                                     Sub-Licence Revenues


 


In
the event of sub-licensing of a specific QBI Product by QBI in the Territory or country within a Territory, QBI agrees to pay to Atugen in lieu of all payments to be made
hereunder after such sub-licence in respect to such QBI Product and Territory
or country within a Territory, a share of all Sub-Licence Revenues received by
QBI from such sub-licence. This share of the Sub-Licence Revenues shall depend
on the status of the development of the respective QBI Product at the time of
the grant of the sub-licence as follows:


 


4.5.1                                            [ * ] of the
Sub-License Revenues if the sub-licensing to a third party happens prior to [ * ];


 


4.5.2                                            [ * ]
of the Sub-License Revenues, if the sub-licensing to a third party happens
after [ * ].


 


4.6                  Supplies
of Materials


 


In order to guarantee a
continuous supply of GMP quality atuRNAis used by QBI in development of QBI
Products, Atugen shall provide manufacturing information to a third party GMP producer
selected by QBI to supply all of QBI’s or its sub-licensee’s requirements of
the specific atuRNAi.


 


In the event the Atugen Patent
is finally rejected in any Territory and such rejection is not appealed or
appealable by Atugen, QBI shall have the right to forthwith terminate the
license agreement in such Territory.


 


5.                                                                       Atugen Options


 






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5.1                                                                 In consideration of the rights granted under the Licence Agreement
QBI agrees to grant to Atugen [ * ] licence [ * ] to any improvement of the atuRNAi and liposome
formulation technology, in
accordance with section 2.6 above.


 


5.2                                                                 Atugen shall have, furthermore, the option to enter into an
agreement with QBI related to the joint development for oncology applications
of atuRNAi inhibiting the QBI Targets being subject matter of this Agreement
with worldwide licences and with the right to sub-license. QBI agrees that such
negotiations shall be held in good faith along the lines of the terms and
principles outlined in the 801-Agreement between the parties hereto e.g. time
periods and percentages [ * ] of the
development of the respective QBI project at the time of the request for
negotiations. For the avoidance of doubt it is clarified that therapeutic
products related to the treatment of side effects of radiology, chemotherapy or
other forms of treatment of cancer, are not oncology applications and are not
subject to such option.


 


6.             Liability / Disclaimer


 


All materials and information are provided on an “as
is” basis, and the parties expressly disclaim all implied warranties, including
without limitation any warranty of non-infringement, any obligation to defend
any action or suit brought by any third party, and any warranty with respect to
quality of the results, and fitness of the results for any particular purpose.


 


Neither party shall be liable for any damages caused
by simple negligence of any of its officers; employees or subcontractors except
for negligence in the performance of essential obligations of this agreement.


 


Each party expressly disclaims any warranty that the
results will not be subject to prior rights, including patents, of any other
entity including that party itself or entities related thereto, nor that
another party, including the party itself or an entity related thereto, is not
researching the same genomic, expressed and/or protein sequence data or has not
reached the same results, whether through analyses performed by the party,
through use of the party’s databases and software or otherwise.


 


7.                                     Miscellaneous Provisions


 


7.1          Assignment


 


Neither
Party shall be entitled to assign its rights hereunder without the express
written consent of the other Party hereto, except that both QBI and Atugen may
otherwise assign their respective rights and transfer their respective duties
hereunder to any assignee of all or substantially all of their respective
businesses (or that portion thereof to which this Agreement relates) or in the
event of their respective merger or consolidation or similar transaction. No
assignment and transfer shall be valid or effective unless and until the
assignee/transferee shall


 






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agree
in writing to be bound by the provisions of this Agreement in which case the
Agreement will inure to the benefit of such successors and assigns.


 


7.2           Further Actions


 


Each
Party agrees to execute, acknowledge and deliver such further instruments, and
to do all such other acts, as may be necessary or appropriate in order to carry
out the purposes and intent of this Agreement.


 


7.3                                 Use of Name


 


Except
as otherwise provided herein, neither Party shall have any right, express or
implied, to use in any manner the name or other designation of the other Party
or any other trade name or trademark of the other Party for any purpose in
connection with the performance of this Agreement.


 


7.4                                 Public Announcements


 


Except
as required by law (including, without limitation, disclosure requirements of
the U.S. Securities and Exchange Commission, Nasdaq or any other stock exchange,
neither Party shall make any public announcement concerning this Agreement or
the subject matter hereof without the prior written consent of the other, which
shall not be unreasonably withheld. It shall not be unreasonable for a Party to
withhold consent with respect to any public announcement containing any of such
Party’s confidential information. In the event of a required public
announcement, to the extent practicable under the circumstances, the Party
making such announcement shall provide the other Party with a copy of the proposed
text prior to such announcement sufficiently in advance of the scheduled
release of such announcement to afford such other PARTY a reasonable opportunity
to review and comment upon the proposed text.


 


7.5           Waiver


 


A
waiver by either Party of any of the terms and conditions of this Agreement in
any instance shall not be deemed or construed to be a waiver of such term or
condition for the future, or of any subsequent breach hereof. All rights,
remedies, undertakings, obligations and agreements contained in this Agreement
shall be cumulative and none of them shall be in limitation of any other
remedy, right, undertaking, obligation or agreement of either PARTY.


 


7.6           Severability


 


When
possible, each provision of this Agreement will be interpreted in such manner
as to be effective and valid under applicable law, but if any provision of this
Agreement is held to be prohibited by or invalid under applicable law, such
provision will be ineffective only to the extent of such prohibition or
invalidity, without invalidating the remainder of this Agreement and the
parties shall negotiate, in good faith, a new provision which will, as closely
as possible, carry out the intentions of the parties provided for in the
invalidated provision. In the event that any invalidated or prohibited
provision materially affects the rights and


 






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obligations
of a Party and the Parties fail to agree to a new provision, the Party thus
affected shall have the right to terminate this Agreement by written notice to
the other Party.


 


7.7           Amendment


 


No
amendment, modification or supplement of any provisions of this Agreement shall
be valid or effective unless made in writing and signed by a duly authorized
officer of each Party.


 


7.8           Entire Agreement


 


This Agreement,
together with the Annexes hereto, sets forth the entire agreement and
understanding between the Parties as to the subject matter hereof and merges
all prior discussions and negotiations between them, and neither of the Parties
shall be bound by any conditions, definitions, warranties, understandings or
representations with respect to such subject matter other than as expressly
provided herein or as duly set forth on or subsequent to the date hereof in
writing and signed by a proper and duly authorized officer or representative of
the Party to be bound thereby.


 


7.9           Parties in Interest


 


All the
terms and provisions of this Agreement shall be binding upon, inure to the
benefit of and be enforceable by the Parties hereto and their respective
permitted successors and assigns.


 


7.10         Descriptive Headings


 


The
descriptive headings of this Agreement are for convenience only, and shall be
of no force or effect in construing or interpreting any of the provisions of
this Agreement.


 


8.             Law
and Venue


 


8.1                                 This Agreement shall be construed in
accordance with the Laws of Switzerland.


 


8.2                                 The parties agree to submit any
dispute, controversy or claim arising out of or relating to this Agreement to
arbitration to be held in the English language in accordance with the rules of
conciliation and arbitration of the International Chamber of Commerce to the
exclusion of all other jurisdiction. Arbitration shall be held in Zurich, Switzerland, in the English
language.


 






[ * ]  = 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.


 


12

















 


	
  QBI

  	
   

  	
  Atugen AG

  
	
  Quark Biotech Inc./

  	
   

  	
   

  
	
  QBI Enterprises
  Ltd.

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By

  	
     /s/ Daniel Zurr

  	
   

  	
   

  	
  By

  	
   

  	
  /s/ T. Christely , /s/ P. Buckel

  	
   

  
	
  Name

  	
    Daniel Zurr

  	
   

  	
   

  	
  Name

  	
  T. Christely , P. Buckel

  	
   

  
	
  Title

  	
    CEO

  	
   

  	
   

  	
  Title

  	
   

  	
  COO/CFO, CEO

  	
   

  
	
  Date

  	
    April 18, 2005

  	
   

  	
   

  	
  Date

  	
   

  	
  April 19, 2005

  	
   

  
													



 


 






[ * ]  = 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.


 


13

















 


Annex 1


 


1.               [ * ]


 


2.               [ * ]


 


 






[ * ]  = 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.


 


14