Document:

exv10w1

 

Exhibit 10.1

1995 DIRECTORS STOCK OPTION PLAN

1. Purpose.

     
(a) The purpose of the 1995 Directors Stock Option
Plan (the “Plan”) is to provide a means by which each
director of Cadence Design Systems, Inc., a Delaware corporation
(the “Company”), who is not otherwise at the time of
grant an employee of the Company or of any Affiliate of the
Company (each such person being hereafter referred to as a
“Non-Employee Director”) will be given an opportunity
to purchase stock of the Company through the grant of options.

     
(b) The word “Affiliate” as used in the Plan
means any corporation or other entity which is controlled by the
Company, which controls the Company, or which is under common
control with the Company.

     
(c) The Company, by means of the Plan, seeks to retain the
services of persons now serving as Non-Employee Directors of the
Company, to secure and retain the services of persons capable of
serving in such capacity, and to provide incentives for such
persons to exert maximum efforts for the success of the Company.

     
(d) No option granted under the Plan is intended to be an
“incentive stock option” within the meaning of
Section 422 of the Internal Revenue Code of 1986, as
amended (the “Code”).

2. Administration.

     
(a) The Plan shall be administered by the Board of
Directors of the Company (the “Board”) unless and
until the Board delegates administration to a committee, as
provided in section 2(c).

     
(b) The Board shall have the power, subject to, and within
the limitations of, the express provisions of the Plan, to
construe, interpret and administer the Plan and options granted
under the Plan, and to establish, amend and revoke rules and
regulations for its administration. The Board, in the exercise
of this power, may correct any defect, omission or inconsistency
in the Plan or in any option, in a manner and to the extent it
shall deem necessary or desirable to make the Plan fully
effective. All decisions of the Board on such matters shall be
final, binding and conclusive on all persons having an interest
in such decision.

     
(c) The Board may delegate administration of the Plan to a
committee composed of not fewer than two (2) members of the
Board (the “Committee”). If administration is
delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers
theretofore possessed by the Board, subject, however, to such
resolutions, not inconsistent with the provisions of the Plan,
as may be adopted from time to time by the Board. The Board may
abolish the Committee at any time and revest in the Board the
administration of the Plan.

3. Shares Subject to the Plan.

     
(a) The number of shares of the Company’s
$.01 par value common stock (the “Common Stock”)
that may be sold pursuant to options granted under the Plan
shall not exceed in the aggregate three million fifty thousand
(3,050,000) shares of Common Stock. If any option granted under
the Plan shall for any reason expire or otherwise terminate
without having been exercised in full, the stock not purchased
under such option shall again become available for issuance
under the Plan. The number of shares of Common Stock authorized
for issuance under the Plan shall be subject to and adjusted by
the provisions of Section 10 relating to adjustments in the
capital structure of the Company.

     
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.

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4. Eligibility.

     
Options shall be granted only to Non-Employee Directors of the
Company.

5. Non-Discretionary Grants.

     
(a) Each person who first becomes a Non-Employee Director
shall automatically be granted an option to purchase six
thousand two hundred fifty (6,250) shares of Common Stock
multiplied by the number of calendar quarters occurring between
the date on which such person begins serving as a director of
the Company and the first April 1 occurring after the date
such person becomes a director of the Company on the terms and
conditions set forth herein. If a person becomes a Non-Employee
Director during a calendar quarter, he or she shall be treated
as serving as a director of the Company for the entire such
calendar quarter only if he or she becomes a Non-Employee
Director during the first half of such calendar quarter.

     
(b) On April 1 of each year, each person who on that
date is then a Non-Employee Director shall automatically be
granted an annual option to purchase twenty five thousand
(25,000) shares of Common Stock on the terms and conditions set
forth herein. If the Non-Employee Director is serving as the
Chairman of the Board on the date the annual option is granted,
then such director shall automatically be granted an option to
purchase an additional twenty five thousand (25,000) shares of
Common Stock on the terms and conditions set forth herein on
each annual option grant date.

6. Option Provisions.

     
Each option shall be subject to the following terms and
conditions:

     
(a) The term of each option commences on the date it is
granted and, unless sooner terminated as set forth herein,
expires on the date ten (10) years from the date of grant
(the “Expiration Date”). In any and all circumstances,
an option may be exercised only as to no more than that number
of shares as to which it is exercisable at the time in question
under the provisions of section 6(e).

     
(b) The exercise price of each option shall be one hundred
percent (100%) of the fair market value of the stock subject to
such option on the date such option is granted. The “fair
market value” of the Common Stock shall be the mean average
of the closing price of the Company’s common stock for each
of the last twenty trading days prior to the date of the grant
of the option on the national securities exchange, national
market system or other trading market on which the
Company’s common stock has the highest average trading
volume.

     
(c) The optionholder may elect to make payment of the
exercise price under one of the following alternatives:

		
	 	     
    (i) Payment of the exercise price per share in cash (by
    check) at the time of exercise; or
	 
	 	     
    (ii) Provided that at the time of the exercise the Common
    Stock is publicly traded and quoted regularly in the Wall Street
    Journal, payment by delivery of shares of Common Stock already
    owned by the optionholder for the period required to avoid a
    charge to the Company’s reported earnings, and owned free
    and clear of any liens, claims, encumbrances or security
    interest, which common stock shall be valued at its fair market
    value on the last day on which the Common Stock was actively
    traded preceding the date of exercise;
	 
	 	     
    (iii) Payment by the delivery of the optionholder’s
    full recourse promissory note on such terms as may be determined
    by the Board which are not inconsistent with the terms of the
    Plan; or
	 
	 	     
    (iv) Payment by a combination of the methods of payment
    specified in sections 6(c)(i) through 6(c)(iii) above.

     
For purposes of section 6(c)(ii), the “fair market
value” of Common Stock shall be the closing price of such
stock on the last trading day preceding the date of delivery of
such Common Stock to the Company on the national securities
exchange, national market system or other trading market on
which the Common Stock has the highest average trading volume.
If the optionholder uses a promissory note as partial payment of
the exercise price pursuant to section 6(c)(iii), then such
principal amount of such note may not exceed the

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maximum amount permitted by law (including but not limited to
the limitation under the Delaware General Corporation Law that
the par value of shares of stock may not be paid with a
promissory note) and interest shall be compounded at least
annually and shall be charged at no less than the minimum rate
of interest necessary to avoid the treatment as interest, under
any applicable provisions of the Code, of any amounts other than
amounts stated to be interest under the terms of such promissory
note.

     
Notwithstanding the foregoing, this option may be exercised
pursuant to a program developed under Regulation T as
promulgated by the Federal Reserve Board which results in the
receipt of cash (or check) by the Company either prior to the
issuance of shares of the Company’s common stock or
pursuant to the terms of irrevocable instructions issued by the
optionholder prior to the issuance of shares of the
Company’s common stock.

     
(d) Except as otherwise expressly provided in an
optionholder’s option agreement, an option shall not be
transferable except by will or by the laws of descent and
distribution and shall be exercisable during the lifetime of the
person to whom the option is granted only by such person or by
his guardian or legal representative. The person to whom the
Option is granted may, by delivering written notice to the
Company, in a form satisfactory to the Company, designate a
third party who, in the event of the death of the optionholder,
shall thereafter be entitled to exercise the option.

     
(e) An option granted pursuant to section 5(a) or 5(b)
shall vest and become exercisable in full on the first
March 31 following the grant of such option; provided,
however, the optionholder has continuously served in the
same capacity which entitled him or her to the grant of such
option from the date of grant until and including the next
following March 31.

     
(f) The Company may require any optionholder, or any person
to whom an option is transferred under section 6(d), as a
condition of exercising any such option: (i) to give
written assurances satisfactory to the Company as to the
optionholder’s knowledge and experience in financial and
business matters; and (ii) to give written assurances
satisfactory to the Company stating that such person is
acquiring the stock subject to the option for such person’s
own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any
assurances given pursuant to such requirements, shall be
inoperative if (i) the issuance of the shares upon the
exercise of the option has been registered under a
then-currently effective registration statement under the
Securities Act of 1933, as amended (the “Securities
Act”), or (ii), as to any particular requirement, a
determination is made by counsel for the Company that such
requirement need not be met in the circumstances under the then
applicable securities laws. The Company may require any
optionholder to provide such other representations, written
assurances or information which the Company shall determine is
necessary, desirable or appropriate to comply with applicable
securities laws as a condition of granting an option to the
optionholder or permitting the optionholder to exercise the
option. The Company may, upon advice of counsel to the Company,
place legends on stock certificates issued under the Plan as
such counsel deems necessary or appropriate in order to comply
with applicable securities laws, including, but not limited to,
legends restricting the transfer of the stock.

     
(g) Notwithstanding anything to the contrary contained
herein, an option may not be exercised unless the shares
issuable upon exercise of such option are then registered under
the Securities Act or, if such shares are not then so
registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of
the Securities Act.

7. Covenants of the Company.

     
(a) During the terms of the options granted under the Plan,
the Company shall keep available at all times the number of
shares of the Common Stock required to satisfy such options.

     
(b) The Company shall seek to obtain from each regulatory
commission or agency having jurisdiction over the Plan such
authority as may be required to issue and sell shares of Common
Stock upon exercise of the options granted under the Plan;
provided, however, that this undertaking shall not
require the Company to register under the Securities Act either
the Plan, any option granted under the Plan, or any stock issued
or issuable pursuant to any such option. If, after reasonable
efforts, the Company is unable to obtain from any such
regulatory commission or agency the authority which counsel for
the Company deems necessary for the

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lawful issuance and sale of stock under the Plan, the Company
shall be relieved from any liability for failure to issue and
sell stock upon exercise of such options.

8. Use of Proceeds from Stock.

     
Proceeds from the sale of Common Stock pursuant to options
granted under the Plan shall constitute general funds of the
Company.

9. Miscellaneous.

     
(a) Neither an optionholder nor any person to whom an
option is transferred under section 6(d) shall be deemed to
be the holder of, or to have any of the rights of a holder with
respect to, any shares subject to such option unless and until
such person has satisfied all requirements for exercise of the
option pursuant to its terms.

     
(b) Throughout the term of any option granted pursuant to
the Plan, the Company shall make available to the holder of such
option, not later than one hundred twenty (120) days after
the close of each of the Company’s fiscal years during the
option term, upon request, such financial and other information
regarding the Company as comprises the annual report to the
stockholders of the Company provided for in the Bylaws of the
Company and such other information regarding the Company as the
holder of such option may request under applicable law.

     
(c) Nothing in the Plan or in any instrument executed
pursuant thereto shall confer upon any Non-Employee Director any
right to continue in the service of the Company or any Affiliate
in any capacity or shall affect any right of the Company, its
Board or stockholders or any Affiliate to remove any
Non-Employee Director pursuant to the Company’s Bylaws and
the provisions of the Delaware General Corporation Law (or the
laws of the Company’s state of incorporation should that
change in the future).

     
(d) No Non-Employee Director, individually or as a member
of a group, and no beneficiary or other person claiming under or
through him, shall have any right, title or interest in or to
any option reserved for the purposes of the Plan except as to
such shares of common stock, if any, as shall have been reserved
for him pursuant to an option granted to him.

     
(e) In connection with each option made pursuant to the
Plan, it shall be a condition precedent to the Company’s
obligation to issue or transfer shares to a Non-Employee
Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements
satisfactory to the Company to insure that the amount of any
federal or other withholding tax required to be withheld with
respect to such sale or transfer, or such removal or lapse, is
made available to the Company for timely payment of such tax.

     
(f) The size of the Plan’s share reserve set forth in
section 3, the size of individual option grants described
in section 5, and all other references in the Plan to
specific numbers of shares of the Common Stock reflect and have
taken into account (i) the Company’s three-for-two
(3:2) stock dividends effective as of October 31, 1995 and
May 31, 1996, including all options granted under the Plan
prior to May 31, 1996 and (ii) the Company’s
two-for-one (2:1) stock dividend effective as of
November 14, 1997, including all options granted under the
Plan prior to November 14, 1997.

10. Adjustments Upon Changes in Stock.

     
(a) If any change is made in the Common Stock subject to
the Plan, or subject to any option granted under the Plan
(through merger, consolidation, reorganization,
recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of
shares, exchange of shares, change in corporate structure or
other transaction not involving the receipt of consideration by
the Company), the Plan and outstanding options will be
appropriately adjusted in the class(es) and maximum number of
shares subject to the Plan and the class(es) and number of
shares and exercise price per share of stock subject to
outstanding options. Such adjustments shall be made by the
Board, the determination of which shall be final, binding, and
conclusive. (The conversion of any convertible securities of the
Company shall not be treated as a “transaction not
involving the receipt of consideration by the Company.”) No
adjustment shall result in the

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creation of a fractional share of stock or in an exercise price
per share of stock expressed in units of less than one
cent ($.01).

     
(b) In the event of the occurrence of a Change in Control,
to the extent not prohibited by applicable law, the time during
which options outstanding under the Plan may be exercised shall
be accelerated by the Board to a time prior to or as of the
occurrence of such event and the options terminated if not
exercised by the time specified by the Board, which in any event
shall be after the effective time of such acceleration. If the
Board fails to specify a time for acceleration of outstanding
options and/or termination of outstanding options, then the time
during which options outstanding under the Plan may be exercised
shall be accelerated to a time immediately preceding the
occurrence of the Change in Control, and the options terminated
if not exercised prior to or upon the occurrence of a Change in
Control defined in section 10(b)(i) or
section 10(b)(iii) or within three (3) months
following the occurrence of a Change in Control defined in
section 10(b)(ii), section 10(b)(iv), or
section 10(b)(v).

     
For purposes of the Plan, a “Change in Control” means
the happening of any of the following events:

		
	 	     
    (i) A dissolution or liquidation of the Company.
	 
	 	     
    (ii) A sale of all or substantially all of the assets of
    the Company.
	 
	 	     
    (iii) Either a merger or consolidation in which the Company
    is not the surviving corporation and the stockholders of the
    Company immediately prior to the merger or consolidation fail to
    possess direct or indirect beneficial ownership of more than
    eighty percent (80%) of the voting power of the securities of
    the surviving corporation (or if the surviving corporation is a
    controlled affiliate of another entity, then the required
    beneficial ownership shall be determined with respect to the
    securities of that entity which controls the surviving
    corporation and is not itself a controlled affiliate of any
    other entity) immediately following such transaction, or a
    reverse merger in which the Company is the surviving corporation
    and the stockholders of the Company immediately prior to the
    reverse merger fail to possess direct or indirect beneficial
    ownership of more than eighty percent (80%) of the securities of
    the Company (or if the Company is a controlled affiliate of
    another entity, then the required beneficial ownership shall be
    determined with respect to the securities of that entity which
    controls the Company and is not itself a controlled affiliate of
    any other entity) immediately following the reverse merger. For
    purposes of this section 10(b)(iii), any person who
    acquired securities of the Company prior to the occurrence of a
    merger, reverse merger, or consolidation in contemplation of
    such transaction and who after such transaction possesses direct
    or indirect beneficial ownership of at least ten percent (10%)
    of the securities of the Company or the surviving corporation
    (or if the Company or the surviving corporation is a controlled
    affiliate, then of the appropriate entity as determined above)
    immediately following such transaction shall not be included in
    the group of stockholders of the Company immediately prior to
    such transaction.
	 
	 	     
    (iv) An acquisition by any person, entity or group within
    the meaning of Section 13(d) or 14(d) of the Securities
    Exchange Act of 1934, as amended (the “Exchange Act”),
    or any comparable successor provisions (excluding any employee
    benefit plan, or related trust, sponsored or maintained by the
    Company or a subsidiary or other controlled affiliate of the
    Company) of the beneficial ownership (within the meaning of
    Rule 13d-3 promulgated under the Exchange Act, or
    comparable successor rule) of securities of the Company
    representing at least twenty percent (20%) of the combined
    voting power entitled to vote in the election of directors.
	 
	 	     
    (v) The individuals who, as of the date immediately
    following the Company’s 1999 Annual Meeting of
    Stockholders, are members of the Board (the “Incumbent
    Board”), cease for any reason to constitute at least fifty
    percent (50%) of the Board. If the election, or nomination for
    election by the Company’s stockholders, of any new director
    was approved by a vote of at least fifty percent (50%) of the
    Incumbent Board, such new director shall be considered as a
    member of the Incumbent Board; provided, however, that no
    individual shall be considered a member of the Incumbent Board
    if the individual initially assumed office as a result of either
    an actual or threatened “Election Contest” (as
    described in Rule 14a-11 promulgated under the Exchange
    Act) or other actual or threatened solicitation of proxies or
    consents

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    by or on behalf of a Person other than the Board (a “Proxy
    Contest”) including by reason of any agreement intended to
    avoid or settle any Election Contest or Proxy Contest.

11. Amendment of the Plan.

     
(a) The Board at any time, and from time to time, may amend
the Plan and/or some or all outstanding options granted under
the Plan. Except as provided in section 10 relating to
adjustments upon changes in stock, no amendment shall be
effective unless approved by the stockholders of the Company
where the amendment would:

		
	 	     
    (i) Increase the number of shares which may be issued under
    the Plan;
	 
	 	     
    (ii) Modify the requirements as to eligibility for
    participation in the Plan (to the extent such modification
    requires stockholder approval in order for the Plan to comply
    with the requirements of Rule 16b-3); or
	 
	 	     
    (iii) Modify the Plan in any other way if such modification
    requires stockholder approval in order for the Plan to comply
    with the requirements of Rule 16b-3 or any securities
    exchange or other trading market on which the Common Stock is
    actively traded.

     
(b) Rights and obligations under any option granted before
any amendment of the Plan or of the terms of such option shall
not be impaired by such amendment unless (i) the Company
requests the consent of the person holding the option, and
(ii) such person consents in writing.

12. Termination or Suspension of the Plan.

     
(a) The Board may suspend or terminate the Plan at any
time. Unless sooner terminated, the Plan shall terminate on the
date that all of the shares of the Company’s Common Stock
have been issued. No options may be granted under the Plan while
the Plan is suspended or after it is terminated.

     
(b) Rights and obligations under any option granted while
the Plan is in effect shall not be altered or impaired by
suspension or termination of the Plan, except with the consent
of the holder of the option.

6Exhibit 10.15

              SHAREHOLDERS' AGREEMENT - COMPANY SPAXEN ITALIA SRL

                                     BETWEEN

The National Institute of Infectious  Diseases "Lazzaro  Spallanzani",  from now
named  INMI,  represented  by  the  legal  representative  Dr  Raffaele  Perrone
Donnorso,  born  in  Naples  on  03/13/1939  and  having  his  address  for  the
institutional  functions  in  the  National  Institute  of  Infectious  Diseases
"Lazzaro Spallanzani", situated in Via Portuense n.292 - 00149 ROME, Fiscal Code
and Vat number 050800991002

                                       AND

The Xenomics Inc.  represented by the legal  representative  Dr. L. David Tomei,
born in  Williamsporto  (USA) on  04/27/1945  and having his address in Piazzale
Clementi, 5 - 00030 Genazzano - ROME, Fiscal Code TMO LDV 45D27 Z404D

                                     WHEREAS

1)   the  partnership  shares  in the  company  SpaXen  Italia  srl are  held as
     follows:
-    INMI 50%; INMI will contribute euro 100.000,00 in cash to SpaXen
     Italia srl;
-    Xenomics Inc. 50%;  Xenomics Inc. will  contribute all right,  in a certain
     technology and related patent application  (collectively,  the "Contributed
     IP")  that  applies  Xenomics  Inc.  proprietary  Transrenal  Nucleic  Acid
     technology  ("Xenomics IP") to the field of infectious diseases, as it will
     be  further  provided  in a  certain  Collaborative  Research  and  License
     Agreement to be entered into by the  shareholders  and SpaXen Italia srl as
     soon as reasonably  possible upon  formation of SpaXen Italia srl.

     INMI and Xenomics Inc. agree that the Contributed IP has a value equal to
     INMI's cash contribution and INMI provide the cost related to the guarantee
     required by the art. 2484 of Civil Code concerning the Xenomics Inc.
     contribute.

2)   it is the  intention  of all the  shareholders  that  any  profits  made be
     reinvested   into  research   activity  in  order  to  develop   additional
     intellectual   property  and  patents  pertaining  to  the  application  of
     transrenal  DNA  technology to  pathologies  caused by or  associated  with
     infection agents and to develop of additional  patents  (collectively,  the
     "Newly Developed IP");

3)   it is the  intention  of all the  shareholders  that  any  losses  suffered
     following devaluations of the capitalized research costs, insofar as deemed
     no longer  suitable for the  obtainment of patents  within the time-span of
     the  company's   duration,   must  not  be  covered  by  means  of  further
     contributions  of cash or other  assets and  consequently,  in the event of
     losses of such  entity  that they  would  impinge on the  capital  stock by
     reducing it to an extent  exceeding the minimum limits  established by law,
     they shall resolve without delay to put the company into liquidation; it is
     the further  intention of all  shareholders,  that the Contributed IP shall
     revert back to Xenomics Inc. upon liquidation of SpaXen Italia srl;

4)   it is the intention of all the shareholders  that,  taking into account the
     validity of the  research  costs borne  together  with the need for further
     contributions  of capital,  any further capital stock increases be resolved
     upon with the exclusive commitment to provide contributions in cash;

5)   it is the intention of the  shareholders  that any surpluses found to exist
     following liquidation proceedings be deemed the exclusive property of INMI,
     provided,  however,  that the  Contributed IP shall revert back to Xenomics
     Inc. upon liquidation of SpaXen Italia srl;

<PAGE>

6)   it is the intention of the  shareholders  that the Newly Developed IP shall
     be the property of INMI, that all patents pertaining to the Newly Developed
     IP shall  be in the name of INMI,  that  SpaXen  Italia  srl will  obtain a
     license to utilize the Newly  Developed  IP, and that  Xenomics  Inc.  will
     obtain the exclusive,  worldwide right to commercialise the Newly Developed
     IP, all as further to be provided in the Collaborative Research and License
     Agreement as soon as possible upon formation of SpaXen Italia srl;

7)   In order to accomplish its mission SpaXen Italia Srl requires  personnel on
     the staff of INMI, laboratory spaces and scientific equipments necessary to
     carry out the research project.

                 IT IS HEREBY AGREED AND STIPULATED AS FOLLOWS:

A)   The  shareholders  INMI and  Xenomics  Inc.  note in any case  that for any
     distribution  of profits to be effected it is necessary for a resolution to
     be passed with 100% of the shareholders'  votes, and that consequently,  in
     practice, each shareholder has a de facto right of veto.

B)   The same  commitment  noted in point "A" above is made  with  reference  to
     losses suffered  following the  devaluation of capitalized  research costs,
     the valuation of which shall be effected in the balance sheet in the manner
     required by the rules of  accountancy,  meaning that no resolution  must be
     passed in consequence of proposals on the agenda of  extraordinary  general
     meetings of shareholders regarding the coverage of possible losses. In this
     case  too,  the  articles  of  association   will  have   established  that
     resolutions  of this type must be passed with a majority  equal to 100%. It
     follows that should SpaXen Italia Srl suffer losses due to  devaluations of
     research  costs such as to affect the capital stock to such an extent as to
     entail the  consequence of dissolution  and liquidation as per article 2484
     No. 4) of the Civil Code, the shareholders undertake in any case to resolve
     to put the company into voluntary liquidation.

C)   Any surplus left over  following the winding-up of SpaXen Srl shall be made
     over exclusively to INMI provided,  however,  that the Contributed IP shall
     revert back to Xenomics Inc.  Accordingly,  the  shareholder  Xenomics Inc.
     pledges  here and now that in that event it will make a donation to INMI in
     an amount  corresponding to whatever liquidation surplus it may be entitled
     to (however, excluding the Contributed IP).

D)   In the event that the evaluation of research  expenses  should instead show
     the need for further  capital  because the  research in question has proved
     valid and deserves to be continued and/or because there has arisen a shared
     desire to accelerate  the  time-schedule  needed to obtain the patent,  the
     shareholders  may pass unanimous  resolutions for capital stock  increases,
     even in the form of  instalments,  for amounts  agreed upon  following  the
     approval of a final costs  estimate  for these  research  expenses  for the
     purpose of obtaining the relative  patent.  It is mutually  agreed that any
     resolution  whatsoever  to increase the capital stock can be passed only if
     unanimous and exclusively providing for contributions in cash, and that any
     resolution  for  this  purpose  must  maintain   unchanged  the  reciprocal
     percentage  shares of capital stock held by the shareholders at the date of
     incorporation of SpaXen Italia srl.

E)   The right of ownership of the Newly Developed IP obtained from the research
     activities of SpaXen Italia Srl shall be the property of INMI whilst SpaXen
     Italia srl shall retain the user's  license for  utilisation of the patent.
     Any  intellectual  property that may be derived from SpaXen's  research for
     the  application  of  transrenal  DNA  technology  in fields  other than to
     pathologies  caused by or associated  with  infection  agents  ("Derivative
     IP"),  shall be the sole  property of SpaXen  Italia srl and any patent for
     such  Derivative  IP shall be in SpaXens'  name. It is also agreed that the
     shareholder  Xenomics  Inc.  shall hold the  exclusive  worldwide  right to
     market the products  based upon the Newly  Developed and  Derivative IP. To
     this  end,  Xenomics  Inc.  here and now  undertakes  to grant  SpaXen  srl
     royalties in the maximum amount of 10% of the net proceeds  relative to the
     products  marketed  using Newly  Developed  IP. The user's  license held by
     SpaXen  Italia srl for Newly  Developed IP shall expire once SpaXen  Italia
     srl is closed down. Once the

<PAGE>

     user's  license has lapsed,  the  royalties  from the marketing of products
     shall  become  payable  directly  to  INMI.  The  exclusive  right  for the
     commercialization  of the products shall have a duration of 5 years. At the
     end of the five-year  period it must be deemed to have expired,  but can be
     renewed  for a further  period  of five  years;  provided  that if a patent
     incorporating the Newly Developed IP has been issued at that time, INMI and
     SpaXen  Italia srl must agree to revnew such  commercialisation  rights for
     the duration of such patent. The attribution of commercialisation rights to
     Xenomics  Inc. is  understood  to be in return for the  attribution  of the
     Newly  Developed IP to INMI.  Consequently,  the  attribution  of these two
     rights shall be the object of a gratuitous  legal  transaction,  any fiscal
     consequence  of which shall be to Spaxen's  charge.  The  shareholders  and
     SpaXen  Italia  srl  agree  to  enter  into a  Collaborative  Research  and
     Licensing  Agreement as soon as reasonably  possible after the formation of
     SpaXen  Italia srl to provide in more detail for the  respective  rights of
     obligations of the parties mentioned in this paragraph E.

F)   The  agreement  indicated  in  point  "E"  must be set out in a  trilateral
     synallagmatic  contract between Spaxen Italia srl, the company Xenomics Inc
     and INMI, and must take into account any fiscal problems  pertaining to the
     transfer price.

G)   INMI undertakes, within the limits of its available resources, and taking
     into consideration in any case the need to assure its own current levels of
     research, to make available to SpaXen Italia Srl personnel and laboratory
     spaces equipped with the scientific equipments necessary to carry out the
     research project. This undertaking shall be subject to annual review.

All disputes arising out of the  interpretation,  performance and/or termination
of the above  contract shall be submitted for settlement to a Committee of three
arbitrators,  of which two shall be appointed by the parties,  one each, and the
third  by the two  thus  appointed  by  mutual  agreement  or  otherwise  by the
presiding  judge of the Court of Rome,  who shall also appoint the arbitrator to
be appointed by the party to whom the invitation is addressed  should it fail to
do so within the time limits.  The arbitrators shall decide according to the law
following the procedural rules  established in articles 806 et seq. of the Civil
Procedure Code and may decide also with regard to the right of withdrawal of the
dissenting party.
Read and signed in four original copies.

Rome, April  7th  2004

National Institute of Infectious Diseases                Xenomics Inc.
         "Lazzaro Spallanzani"

Prof. Raffaele Perrone Donnorso                          Dr. L. David Tomei

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