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As filed with the Securities and Exchange Commission on June 25, 2007

Registration No. 333-141682

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Amendment No. 5
To
Form S-1
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933

QUARK PHARMACEUTICALS, INC.
(Exact name of registrant as specified in its charter)

California
(State or other jurisdiction of
incorporation or organization) 2834
(Primary Standard Industrial
Classification Code Number) 94-3192416
(I.R.S. Employer
Identification Number)

6501 Dumbarton Circle
Fremont, CA 94555
(510) 402-4020
(Address, including zip code, and telephone number, including
area code, of registrant's principal executive offices)

Daniel Zurr, Ph.D.
Chief Executive Officer
6501 Dumbarton Circle
Fremont, CA 94555
(510) 402-4020
(Name, address, including zip code, and telephone number, including area code, of agent for service)

Copies to:

Robert L. Jones, Esq.
Robert J. Brigham, Esq.
Cooley Godward Kronish LLP
Five Palo Alto Square
3000 El Camino Real
Palo Alto, CA 94306-2155
(650) 843-5000 Alan F. Denenberg, Esq.
Davis Polk & Wardwell
1600 El Camino Real
Menlo Park, CA 94025
(650) 752-2000

Approximate date of commencement of proposed sale to the public:
As soon as practicable after the effective date of this registration statement.

        If any of the securities being registered on this form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.    o

        If this form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.    o

        If this form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.    o

The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment that specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933, as amended, or until the Registration Statement shall become effective on such date as the Commission, acting pursuant to said Section 8(a), may determine.

EXPLANATORY NOTE

        This Pre-Effective Amendment No. 5 to the Registration Statement on Form S-1 (File No. 333-141682) of Quark Pharmaceuticals, Inc. is being filed solely for the purpose of (a) amending "Part II—Item 16. Exhibits and Financial Statement Schedules" and "Part II—Exhibit Index" and (b) filing herewith Exhibits 1.1, 4.2, 5.1, 23.2 and Exhibits 10.21 and 10.26, the omitted portions of which have been filed separately with the U.S. Securities and Exchange Commission in connection with the request for confidential treatment of such omitted portions.

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

Item 13. Other Expenses of Issuance and Distribution.

        The following table sets forth all costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale of the common stock being registered. All amounts shown are estimates except for the SEC registration fee, the NASD filing fee and the NASDAQ Global Market filing fee.

		Amount to be Paid
SEC Registration Fee		$	2,648
NASD Filing Fee			9,125
NASDAQ Global Market Filing Fee			100,000
Blue Sky Qualification Fees And Expenses			15,000
Printing and Engraving Expenses			300,000
Legal Fees and Expenses			1,100,000
Accounting Fees and Expenses			450,000
Transfer Agent and Registrar Fees and Expenses			25,000
Miscellaneous Expenses			248,227
	Total	$	2,250,000

Item 14. Indemnification of Directors and Officers.

        We are incorporated under the laws of the State of California. Section 317 of the California Corporations Code authorizes a court to award, or a corporation's Board of Directors to grant, indemnity to directors and officers who are parties or are threatened to be made parties to any proceeding (with certain exceptions) by reason of the fact that the person is or was an agent of the corporation, against expenses, judgments, fines, settlements and other amounts actually and reasonably incurred in connection with the proceeding if that person acted in good faith and in a manner the person reasonably believed to be in the best interests of the corporation. Section 204 of the California Corporations Code provides that this limitation on liability has no effect on a director's liability (a) for acts or omissions that involve intentional misconduct or a knowing and culpable violation of law, (b) for acts or omissions that a director believes to be contrary to the best interests of the corporation or its shareholders or that involve the absence of good faith on the part of the director, (c) for any transaction from which a director derived an improper personal benefit, (d) for acts or omissions that show a reckless disregard for the director's duty to the corporation or its shareholders in circumstances in which the director was aware, or should have been aware, in the ordinary course of performing a director's duties, of a risk of a serious injury to the corporation or its shareholders, (e) for acts or omissions that constitute an unexcused pattern of inattention that amounts to an abdication of the director's duty to the corporation or its shareholders, (f) under Section 310 of the law (concerning contracts or transactions between the corporation and a director), or (g) under Section 316 of the law (directors' liability for improper dividends, loans and guarantees). Section 317 does not extend to acts or omissions of a director in his capacity as an officer. Further, Section 317 has no effect on claims arising under federal or state securities laws and does not affect the availability of injunctions and other equitable remedies available to our shareholders for any violation of a director's fiduciary duty to us or our shareholders. Although the validity and scope of the legislation underlying Section 317 have not yet been interpreted to any significant extent by the California courts, Section 317 may relieve directors of

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monetary liability to us for grossly negligent conduct, including conduct in situations involving attempted takeovers of Quark.

        In accordance with Section 317, our articles of incorporation eliminate the liability of each of our directors for monetary damages to the fullest extent permissible under California law. Our articles of incorporation further authorize us to provide indemnification to our agents (including our officers and directors), subject to the limitations set forth above. The articles of incorporation and our amended and restated bylaws further provide for indemnification of our officers and directors to the maximum extent permitted by California law, and also permit the indemnification of other corporate agents to the maximum extent permitted by California law at the discretion of our Board of Directors. Additionally, we maintain insurance policies which insure our officers and directors against certain liabilities.

        The foregoing summaries are necessarily subject to the complete text of the California Corporations Code, our articles of incorporation, our amended and restated bylaws and the agreements referred to above and are qualified in their entirety by reference thereto.

        As permitted by the California Corporations Code, we have entered into indemnity agreements with each of our directors and executive officers, that require us to indemnify such persons against any and all expenses (including attorneys' fees), witness fees, damages, judgments, fines, settlements and other amounts incurred (including expenses of a derivative action) in connection with any action, suit or proceeding, whether actual or threatened, to which any such person may be made a party by reason of the fact that such person is or was a director, an officer or an employee of Quark or any of its affiliated enterprises, provided that such person acted in good faith and in a manner such person reasonably believed to be in or not opposed to our best interests and, with respect to any criminal proceeding, had no reasonable cause to believe his or her conduct was unlawful. The indemnification agreements also set forth certain procedures that will apply in the event of a claim for indemnification thereunder.

        At present, there is no pending litigation or proceeding involving any of our directors or executive officers as to which indemnification is required or permitted, and we are not aware of any threatened litigation or proceeding that may result in a claim for indemnification.

        We have an insurance policy covering our officers and directors with respect to certain liabilities, including liabilities arising under the Securities Act or otherwise.

        We plan to enter into an underwriting agreement which provides that the underwriters are obligated, under some circumstances, to indemnify our directors, officers and controlling persons against specified liabilities, including liabilities under the Securities Act.

ITEM 15. Recent Sales of Unregistered Securities.

        The following list sets forth information regarding all unregistered securities sold by us since our inception through May 23, 2007 and gives effect to a 2.9-for-1 reverse split of our outstanding shares of common stock which became effective June 4, 2007. The shares of preferred stock described below were not recombined under the reverse stock split. However, the conversion ratios of the preferred shares will adjust automatically under provisions contained in our amended and restated articles of incorporation and will give effect to the reverse split upon the conversion of the preferred shares into common shares at the completion of this offering.

        (1)   We have granted options under our 1994 Stock Option Plan, to purchase 389,644 post-split shares of common stock to our employees, directors, and consultants, having exercise prices ranging from $0.00029 to $1.16 per share. Of these, options to purchase 336,199 shares of common stock have been exercised for aggregate consideration of $162,072.50, at exercise prices ranging from $0.00029 to $1.16 per share.

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        (2)   We have granted options under our 1997 Stock Plan, to purchase 1,237,760 post-split shares of common stock to our employees, directors, and consultants, having exercise prices ranging from $1.16 to $17.40 per share. Of these, options to purchase 26,906 shares of common stock have been exercised for aggregate consideration of $67,301.50, at exercise prices ranging from $1.16 to $17.40 per share.

        (3)   We have granted options under our 2003 Israeli Stock Plan, to purchase 168,644 post-split shares of common stock to our Israeli employees, directors, and consultants, with an exercise price of $5.80 per share. Of these, options to purchase 1,724 shares of common stock have been exercised for aggregate consideration of $10,000.00.

        (4)   On March 19, 2007, we granted options under our 2007 Equity Incentive Plan, to purchase 1,040,939 post-split shares of common stock to our employees and consultants, at exercise prices ranging from $2.175 to $7.975.

        (5)   On January 14, 1994, we issued and sold 1,724,137 post-split shares of our common stock to one of our founders and executive officers for $500.00.

        (6)   On January 14, 1994, we issued and sold 206,896 post-split shares of our common stock to one of our founders and executive officers for $60.00.

        (7)   On January 14, 1994, we issued and sold 112,068 post-split shares of our common stock to one of our founders and executive officers for $32.50.

        (8)   On January 14, 1994, we issued and sold 232,758 post-split shares of our common stock to one of our founders and executive officers for $67.50.

        (9)   On January 14, 1994, we issued and sold 344 post-split shares of our common stock to one of our executive officers for $0.10.

        (10) On February 18, 1994, we issued and sold an aggregate of 645,000 shares of our Series A preferred stock (222,409 shares of common stock on an as-converted, post-split basis) to a total of 11 accredited investors for aggregate consideration of $806,250.00.

        (11) On March 14, 1994, we issued and sold an aggregate of 543,000 shares of our Series A preferred stock (166,547 shares of common stock on an as-converted, post-split basis) to a total of 14 accredited investors for aggregate consideration of $678,750.00.

        (12) On March 31, 1994, we issued and sold an aggregate of 132,000 shares of our Series A preferred stock (45,514 shares of common stock on an as-converted, post-split basis) to a total of 6 accredited investors for aggregate consideration of $165,000.00.

        (13) On May 3, 1994, we issued and sold 40,000 shares of our Series A preferred stock (13,793 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $50,000.00.

        (14) On June 1, 1995, we issued and sold 4,000,000 shares of our Series B preferred stock (1,379,310 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $5,000,000.00.

        (15) On August 30, 1995, we issued and sold an aggregate of 266,824 shares of our Series B preferred stock (75,829 shares of common stock on an as-converted, post-split basis) to a total of 8 accredited investors for aggregate consideration of $333,530.00.

        (16) On October 3, 1996, we issued and sold 1,375,000 shares of our Series C preferred stock (474,137 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $5,500,000.00.

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        (17) On December 31, 1996, we issued and sold an aggregate of 68,692 shares of our Series C preferred stock (23,683 shares of common stock on an as-converted, post-split basis) to a total of 7 accredited investors for aggregate consideration of $274,768.00.

        (18) On May 30, 1997, we issued and sold 125,000 shares of our Series C preferred stock (43,103 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $500,000.00.

        (19) On August 28, 1997, we issued and sold 5,000,000 shares of our Series D preferred stock (1,724,137 shares of common stock on an as-converted, post-split basis) and issued a warrant to purchase up to 4,125,000 shares of our Series D preferred stock (1,422,413 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $20,000,000.00.

        (20) On September 9, 1997, we issued and sold 439,413 shares of our Series D preferred stock (151,521 shares of common stock on an as-converted, post-split basis) and issued a warrant to purchase up to 410,940 shares of our Series D preferred stock (141,703 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $1,757,652.00.

        (21) On December 17,1999, we issued and sold 2,034,588 shares of our Series E preferred stock (701,582 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $20,000,000.00.

        (22) On May 26, 2000, we issued and sold an aggregate of 16,232 shares of our Series E preferred stock (5,594 shares of common stock on an as-converted, post-split basis) to a total of 6 accredited investors for aggregate consideration of $159,569.56.

        (23) On March 27, 2001 we issued and sold an aggregate of 458,333 shares of our Series F preferred stock (158,044 shares of common stock on an as-converted, post-split basis) to a total of 2 accredited investors for aggregate consideration of $5,499,996.00.

        (24) On April 12, 2001 we issued and sold an aggregate of 335,434 shares of our Series F preferred stock (115,666 shares of common stock on an as-converted, post-split basis) to a total of 2 accredited investors for aggregate consideration of $4,025,208.00.

        (25) On June 25, 2001 we issued and sold 250,000 shares of our Series F preferred stock (86,206 shares of common stock on an as-converted, post-split basis) to 1 accredited investor for $3,000,000.00.

        (26) On September 30, 2001 we issued and sold an aggregate of 99,997 shares of our Series F preferred stock (34,977 shares of common stock on an as-converted, post-split basis) to a total of 7 accredited investors for aggregate consideration of $1,199,964.00.

        (27) On December 27, 2005, we issued and sold an aggregate of 7,342,646 shares of our Series G preferred stock (2,531,945 shares of common stock on an as-converted, post-split basis) and issued warrants to purchase up to 1,468,528 shares of our common stock (506,388 shares of common stock on a post-split basis) to a total of 4 accredited investors for aggregate consideration of $10,499,983.78.

        (28) On February 24, 2006, we issued and sold an aggregate of 1,923,086 shares of our Series G preferred stock (663,132 shares of common stock on an as-converted, post-split basis) and issued warrants to purchase up to 384,617 shares of our common stock (132,625 shares of common stock on a post-split basis) to a total of 3 accredited investors for aggregate consideration of $2,750,012.98.

        (29) On May 1, 2006, we issued and sold an aggregate of 1,223,779 shares of our Series G preferred stock (421,991 shares of common stock on an as-converted, post-split basis) and issued warrants to purchase up to 244,755 shares of our common stock (84,396 shares of common stock on a post-split basis) to a total of 3 accredited investors for aggregate consideration of $1,750,003.97.

        The offers, sales and issuances of the securities described in Item 15(1) through 15(4) were exempt from registration under the Securities Act under Rule 701 in that the transactions were under

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compensatory benefit plans and contracts relating to compensation as provided under Rule 701. The recipients of such securities were our employees, directors or consultants and received the securities under our 2007 Equity Incentive Plan, 1997 Stock Plan, 2003 Israeli Stock Option Plan or 1994 Stock Option Plan. Appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions had adequate access, through employment or business relationships, to information about us.

        The offers, sales, and issuances of the securities described in Items 15(5) through 15(29) were exempt from registration under the Securities Act under Section 4(2) of the Securities Act and Regulation D promulgated thereunder as transactions by an issuer not involving a public offering. The recipients of securities in each of these transactions acquired the securities for investment only and not with a view to or for sale in connection with any distribution thereof and appropriate legends were affixed to the securities issued in these transactions. Each of the recipients of securities in these transactions was an accredited or sophisticated person and had adequate access, through employment, business or other relationships, to information about us.

Item 16. Exhibits and Financial Statement Schedules.

(a)

Exhibits.

Exhibit Number	Description of Document
1.1	Form of Underwriting Agreement.
3.1*	Amended and Restated Articles of Incorporation of the Registrant, effective June 4, 2007.
3.2*	Amended and Restated Bylaws of the Registrant, as currently in effect.
4.1	Reference is made to exhibits 3.1 and 3.2.
4.2	Specimen Common Stock Certificate.
4.3*	Third Amended and Restated Investor Rights Agreement, dated as of December 27, 2005, by and between the Registrant and the persons and entities named therein.
4.4*	Amendment No. 1 to Third Amended and Restated Investor Rights Agreement of the Registrant.
4.5*	Form of Series D Preferred Stock Purchase Warrant of Registrant.
5.1	Opinion of Cooley Godward Kronish LLP.
10.1*#	Form of Indemnification Agreement between the Registrant and its officers and directors.
10.2*#	Employment Agreement, dated as of January 1, 2002, by and between the Registrant and Daniel Zurr.
10.3*#	Employment Agreement, dated as of January 1, 2002, by and between QBI Enterprises, Ltd. and Daniel Zurr.
10.4*#	Employment Agreement, dated as of September 14, 1997, by and between QBI Enterprises, Ltd. and Smadar Samira Shakked.
10.5*#	Employment Agreement, dated as of November 13, 2006, by and between the Registrant and Smadar Samira Shakked.
10.6*#	Employment Agreement, dated as of May 10, 2007, by and between QBI Enterprises, Ltd. and Rami Skaliter.
10.7*#	Employment Agreement, dated as of May 10, 2007, by and between QBI Enterprises, Ltd. and Juliana Friedmann.

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10.8*#	Employment Agreement, dated as of March 7, 2007, by and between QBI Enterprises, Ltd. and Yaron Garmazi.
10.9*#	Employment Agreement, dated as of March 9, 2003, by and between Registrant and Shai Erlich.
10.10*#	Amendment to Employment Agreement, dated as of March 29, 2007, by and between QBI Enterprises, Ltd. and Yaron Garmazi.
10.11*#	1997 Stock Plan.
10.12*#	1997 Stock Option Plan for Israeli Employees.
10.13*#	Form of Option Agreement and Form of Option Grant Notice under the 1997 Stock Plan.
10.14*#	Form of Option Agreement and Form of Option Grant Notice under the 1997 Stock Plan for Israeli Employees.
10.15*#	2003 Stock Option Plan for Israeli Employees.
10.16*#	Form of Option Agreement and Form of Option Grant Notice under the 2003 Israeli Stock Option Plan.
10.17*#	2007 Equity Incentive Plan.
10.18*#	Form of Stock Option Agreement and Form of Option Grant Notice under the 2007 Equity Incentive Plan.
10.19*	Lease Agreement, dated September 8, 2006, by and between the Registrant and John Arrillaga, Trustee and Richard T. Peery, Trustee.
10.20*	Lease Contract, dated December 15, 1995, by and between the Registrant and Kiryat Weizmann Science Park Ltd.
10.21‡	Exclusive License Agreement, dated September 3, 1999, by and between the Registrant and The Board of Trustees of The University of Illinois.
10.22*‡	Collaboration Agreement, dated as of December 6, 2004, by and among the Registrant, QBI Enterprises, Ltd., and Atugen AG.
10.23*‡	License Agreement, dated as of December 17, 2004, by and between Registrant and Sanwa Kagaku Kenkyusho Co., Ltd.
10.24*‡	Option and License Agreement, dated as of April 19, 2005, by and among the Registrant, QBI Enterprises, Ltd., and Atugen AG.
10.25*‡	Amendment to Collaboration Agreement, dated as of May 25, 2006, by and among the Registrant, QBI Enterprises, Ltd., and Atugen AG.
10.26‡	Deed of Amendment and Option, dated as of September 25, 2006, by and among the Registrant, Atugen AG, QBI Enterprises, Ltd., and Pfizer Inc.
10.27*‡	License Agreement, dated as of September 25, 2006, by and between Registrant and Pfizer Inc.
10.28*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.
10.29*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.
10.30*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.

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10.31*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.
10.32*‡	First Amendment to the License Agreement between the Board of Trustees of The University of Illinois and the Registrant, dated March 23, 2007.
10.33*#	Employment Agreement, dated as of February 21, 2007, by and between the Registrant and Gavin Samuels, M.D.
10.34*#	Amendment to Employment Agreement, dated as of March 29, 2007, by and between the Registrant and Gavin Samuels, M.D.
10.35*#	2007 Employee Stock Purchase Plan.
21.1*	List of Subsidiaries of the Registrant.
23.1*	Consent of Independent Registered Public Accounting Firm.
23.2	Consent of Cooley Godward Kronish LLP (included in Exhibit 5.1).
23.3*	Consent of Empire Valuation Consultants, LLC.
24.1*	Power of Attorney.
24.2*	Power of Attorney of Howard T. Slayen.

*

Previously filed.

#

Indicates management contract or compensatory plan.

‡

Confidential treatment has been requested with respect to certain portions of this exhibit. The redacted portions have been filed separately with the SEC as required by Rule 406 of Regulation C.

(b)

Financial Statement Schedules.

        No financial statement schedules are provided because the information called for is not required or is shown either in the financial statements or the notes thereto.

Item 17. Undertakings.

        The undersigned Registrant hereby undertakes to provide to the underwriters at the closing specified in the Underwriting Agreement, certificates in such denominations and registered in such names as required by the underwriters to permit prompt delivery to each purchaser.

        Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the Registrant pursuant to the foregoing provisions, or otherwise, the Registrant has been advised that in the opinion of the Securities and Exchange Commission such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the Registrant of expenses incurred or paid by a director, officer or controlling person of the Registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue.

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        The undersigned Registrant hereby undertakes that:

        (1)   For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

        (2)   For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

        That, for the purpose of determining liability under the Securities Act of 1933 to any purchaser, if the Registrant is subject to Rule 430C, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering, other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the Registration Statement as of the date it is first used after effectiveness. Provided, however, that no statement made in a registration statement or prospectus that is part of the Registration Statement or made in a document incorporated or deemed incorporated by referenced into the Registration Statement or prospectus that is part of the Registration Statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the Registration Statement or prospectus that was part of the Registration Statement or made in any such document immediately prior to such date of first use.

        That, for the purpose of determining liability of the Registrant under the Securities Act of 1933 to any purchaser in the initial distribution of the securities, the undersigned Registrant undertakes that in a primary offering of securities of the undersigned Registrant pursuant to this Registration Statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned Registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser:

(i)

Any preliminary prospectus or prospectus of the undersigned Registrant relating to the offering required to be filed pursuant to Rule 424;



(ii)

Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned Registrant or used or referred to by the undersigned Registrant;



(iii)

The portion of any other free writing prospectus relating to the offering containing material information about the undersigned Registrant or its securities provided by or on behalf of the undersigned Registrant; and



(iv)

Any other communication that is an offer in the offering made by the undersigned Registrant to the purchaser.

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SIGNATURES

        Pursuant to the requirements of the Securities Act, the Registrant has duly caused this Amendment No. 5 to the Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Fremont, State of California, on the 25th day of June, 2007.

QUARK PHARMACEUTICALS, INC.
By:	/s/  DANIEL ZURR Daniel Zurr, Ph.D. President and Chief Executive Officer

        Pursuant to the requirements of the Securities Act, this Amendment No. 5 to the Registration Statement has been signed by the following persons in the capacities and on the dates indicated.

Signature	Title	Date
/s/  DANIEL ZURRDANIEL ZURR, PH.D.	President, Chief Executive Officer and Director (Principal Executive Officer)	June 25, 2007
/s/  YARON GARMAZIYARON GARMAZI	Chief Financial Officer (Principal Financial and Accounting Officer)	June 25, 2007
*PHILIP B. SIMON	Chairman of the Board	June 25, 2007
*JOSEPH RUBINFELD, PH.D.	Vice-Chairman of the Board	June 25, 2007
*STEVEN B. FINK	Director	June 25, 2007
*HOWARD T. SLAYEN	Director	June 25, 2007
*TOMOMI OKAMOTO	Director	June 25, 2007

*By:
/s/  YARON GARMAZIYaron Garmazi
Attorney-in-fact

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EXHIBIT INDEX

Exhibit Number	Description of Document
1.1	Form of Underwriting Agreement.
3.1*	Amended and Restated Articles of Incorporation of the Registrant, effective June 4, 2007.
3.2*	Amended and Restated Bylaws of the Registrant, as currently in effect.
4.1	Reference is made to exhibits 3.1 and 3.2.
4.2	Specimen Common Stock Certificate.
4.3*	Third Amended and Restated Investor Rights Agreement, dated as of December 27, 2005, by and between the Registrant and the persons and entities named therein.
4.4*	Amendment No. 1 to Third Amended and Restated Investor Rights Agreement of the Registrant.
4.5*	Form of Series D Preferred Stock Purchase Warrant of Registrant.
5.1	Opinion of Cooley Godward Kronish LLP.
10.1*#	Form of Indemnification Agreement between the Registrant and its officers and directors.
10.2*#	Employment Agreement, dated as of January 1, 2002, by and between the Registrant and Daniel Zurr.
10.3*#	Employment Agreement, dated as of January 1, 2002, by and between QBI Enterprises, Ltd. and Daniel Zurr.
10.4*#	Employment Agreement, dated as of September 14, 1997, by and between QBI Enterprises, Ltd. and Smadar Samira Shakked.
10.5*#	Employment Agreement, dated as of November 13, 2006, by and between the Registrant and Smadar Samira Shakked.
10.6*#	Employment Agreement, dated as of May 10, 2007, by and between QBI Enterprises, Ltd. and Rami Skaliter.
10.7*#	Employment Agreement, dated as of May 10, 2007, by and between QBI Enterprises, Ltd. and Juliana Friedmann.
10.8*#	Employment Agreement, dated as of March 7, 2007, by and between QBI Enterprises, Ltd. and Yaron Garmazi.
10.9*#	Employment Agreement, dated as of March 9, 2003, by and between Registrant and Shai Erlich.
10.10*#	Amendment to Employment Agreement, dated as of March 29, 2007, by and between QBI Enterprises, Ltd. and Yaron Garmazi.
10.11*#	1997 Stock Plan.
10.12*#	1997 Stock Option Plan for Israeli Employees.
10.13*#	Form of Option Agreement and Form of Option Grant Notice under the 1997 Stock Plan.
10.14*#	Form of Option Agreement and Form of Option Grant Notice under the 1997 Stock Plan for Israeli Employees.
10.15*#	2003 Stock Option Plan for Israeli Employees.
10.16*#	Form of Option Agreement and Form of Option Grant Notice under the 2003 Israeli Stock Option Plan.
10.17*#	2007 Equity Incentive Plan.
10.18*#	Form of Stock Option Agreement and Form of Option Grant Notice under the 2007 Equity Incentive Plan.
10.19*	Lease Agreement, dated September 8, 2006, by and between the Registrant and John Arrillaga, Trustee and Richard T. Peery, Trustee.

10.20*	Lease Contract, dated December 15, 1995, by and between the Registrant and Kiryat Weizmann Science Park Ltd.
10.21‡	Exclusive License Agreement, dated September 3, 1999, by and between the Registrant and The Board of Trustees of The University of Illinois.
10.22*‡	Collaboration Agreement, dated as of December 6, 2004, by and among the Registrant, QBI Enterprises, Ltd., and Atugen AG.
10.23*‡	License Agreement, dated as of December 17, 2004, by and between Registrant and Sanwa Kagaku Kenkyusho Co., Ltd.
10.24*‡	Option and License Agreement, dated as of April 19, 2005, by and among the Registrant, QBI Enterprises, Ltd., and Atugen AG.
10.25*‡	Amendment to Collaboration Agreement, dated as of May 25, 2006, by and among the Registrant, QBI Enterprises, Ltd., and Atugen AG.
10.26‡	Deed of Amendment and Option, dated as of September 25, 2006, by and among the Registrant, Atugen AG, QBI Enterprises, Ltd., and Pfizer Inc.
10.27*‡	License Agreement, dated as of September 25, 2006, by and between Registrant and Pfizer Inc.
10.28*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.
10.29*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.
10.30*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.
10.31*‡	License Agreement, dated as of September 26, 2006, by and between the Registrant and Alnylam Pharmaceuticals, Inc.
10.32*‡	First Amendment to the License Agreement between the Board of Trustees of The University of Illinois and the Registrant, dated March 23, 2007.
10.33*#	Employment Agreement, dated as of February 21, 2007, by and between the Registrant and Gavin Samuels, M.D.
10.34*#	Amendment to Employment Agreement, dated as of March 29, 2007, by and between the Registrant and Gavin Samuels, M.D.
10.35*#	2007 Employee Stock Purchase Plan.
21.1*	List of Subsidiaries of the Registrant.
23.1*	Consent of Independent Registered Public Accounting Firm.
23.2	Consent of Cooley Godward Kronish LLP (included in Exhibit 5.1).
23.3*	Consent of Empire Valuation Consultants, LLC.
24.1*	Power of Attorney.
24.2*	Power of Attorney of Howard T. Slayen.

*

Previously filed.

#

Indicates management contract or compensatory plan.

‡

Confidential treatment has been requested with respect to certain portions of this exhibit. The redacted portions have been filed separately with the SEC as required by Rule 406 of Regulation C.

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EXPLANATORY NOTE
PART II INFORMATION NOT REQUIRED IN PROSPECTUS
SIGNATURES
EXHIBIT INDEX

EX-1.1

Exhibit 1.1

FORM OF UNDERWRITING AGREEMENT

QUARK PHARMACEUTICALS, INC.

5,000,000 Shares of Common Stock

Underwriting Agreement

                                                                                                                                                            ;                 , 2007

J.P. Morgan Securities Inc.

Banc of America Securities LLC

  CIBC World Markets Corp.

  C.E. Unterberg, Towbin, LLC

c/o J.P. Morgan Securities Inc.

277 Park Avenue

New York, New York  10172

Banc of America Securities Inc.

9 West 57th Street

New York, NY 10019

Ladies and Gentlemen:

                Quark Pharmaceuticals, Inc., a California corporation (the “Company”), proposes to issue and sell to the several Underwriters listed in Schedule 1 hereto (the “Underwriters”), for whom you are acting as Representatives (the “Representatives”), an aggregate of 5,000,000 shares of common stock, par value $0.001 per share, of the Company (the “Underwritten Shares”) and, at the option of the Underwriters, up to an additional 750,000 shares of common stock of the Company (the “Option Shares”).  The Underwritten Shares and the Option Shares are herein referred to as the “Shares”.  The shares of common stock of the Company to be outstanding after giving effect to the sale of the Shares are herein referred to as the “Stock”.

                The Company and the Underwriters agree that up to 250,000 of the Underwritten Shares to be purchased by the Underwriters (the “Directed Shares”) shall be reserved for sale at the initial public offering price by the Underwriters to certain eligible directors, officers and employees of the Company and persons having business relationships with the Company (collectively, the “DSP Participants”), as part of the distribution of the Shares by the Underwriters (the “Directed Share Program”) subject to the terms of this Agreement, the applicable rules, regulations and interpretations of the NASD, Inc. (the “NASD”) and all other applicable laws, rules and regulations.  Banc of America Investment Services, Inc. (“BAI”) shall be selected to process the sales to the DSP Participants under the Directed Share Program.  To the extent that such Directed Shares are not orally confirmed for purchase by the DSP Participants by 7:30 A.M. New York City time on the first business day after the date of this Agreement, such Directed Shares may be offered to the public as set forth in the Prospectus (as defined below).  The Company has supplied BAI with the names, addresses and telephone

numbers of the individuals or other entities that the Company has designated to be participants in the Directed Share Program.

                The Company hereby confirms its agreement with the several Underwriters concerning the purchase and sale of the Shares, as follows:

                1.             Registration Statement.  The Company has prepared and filed with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Securities Act”), a registration statement (File No.                       ) including a prospectus, relating to the Shares.  Such registration statement, as amended at the time it becomes effective, including the information, if any, deemed pursuant to Rule 430A under the Securities Act to be part of the registration statement at the time of its effectiveness (“Rule 430A Information”), is referred to herein as the “Registration Statement”; and as used herein, the term “Preliminary Prospectus” means each prospectus included in such registration statement (and any amendments thereto) before it becomes effective, any prospectus filed with the Commission pursuant to Rule 424(a) under the Securities Act and the prospectus included in the Registration Statement at the time of its effectiveness that omits Rule 430A Information, and the term “Prospectus” means the prospectus in the form first used (or made available upon request of purchasers pursuant to Rule 173 under the Securities Act) in connection with confirmation of sales of the Shares.  If the Company has filed an abbreviated registration statement pursuant to Rule 462(b) under the Securities Act (the “Rule 462 Registration Statement”), then any reference herein to the term “Registration Statement” shall be deemed to include such Rule 462 Registration Statement.  Capitalized terms used but not defined herein shall have the meanings given to such terms in the Registration Statement and the Prospectus.

                At or prior to the time when sales of the Shares were first made (the “Time of Sale”), the Company had prepared the following information (collectively with the pricing information set forth on Annex B, the “Time of Sale Information”): a Preliminary Prospectus dated                           , 2007, and each “free-writing prospectus” (as defined pursuant to Rule 405 under the Securities Act) listed on Annex B hereto.

                2.             Purchase of the Shares by the Underwriters.  (a)  The Company agrees to issue and sell the Shares to the several Underwriters as provided in this agreement (the “Agreement”), and each Underwriter, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, agrees, severally and not jointly, to purchase from the Company the respective number of Underwritten Shares set forth opposite such Underwriter’s name in Schedule 1 hereto at a price per share (the “Purchase Price”) of $            .

                In addition, the Company agrees to issue and sell the Option Shares to the several Underwriters as provided in this Agreement, and the Underwriters, on the basis of the representations, warranties and agreements set forth herein and subject to the conditions set forth herein, shall have the option to purchase, severally and not jointly, from the Company the Option Shares at the Purchase Price.

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                If any Option Shares are to be purchased, the number of Option Shares to be purchased by each Underwriter shall be the number of Option Shares which bears the same ratio to the aggregate number of Option Shares being purchased as the number of Underwritten Shares set forth opposite the name of such Underwriter in Schedule 1 hereto (or such number increased as set forth in Section 10 hereof) bears to the aggregate number of Underwritten Shares being purchased from the Company by the several Underwriters, subject, however, to such adjustments to eliminate any fractional Shares as the Representatives in their sole discretion shall make.

                The Underwriters may exercise the option to purchase the Option Shares at any time in whole, or from time to time in part,  on or before the thirtieth day following the date of this Agreement, by written notice from the Representatives to the Company.  Such notice shall set forth the aggregate number of Option Shares as to which the option is being exercised and the date and time when the Option Shares are to be delivered and paid for which may be the same date and time as the Closing Date (as hereinafter defined) but shall not be earlier than the Closing Date nor later than the tenth full business day (as hereinafter defined) after the date of such notice (unless such time and date are postponed in accordance with the provisions of Section 10 hereof).  Any such notice shall be given at least two Business Days prior to the date and time of delivery specified therein.

                (b)           The Company understands that the Underwriters intend to make a public offering of the Shares as soon after the effectiveness of this Agreement as in the judgment of the Representatives is advisable, and initially to offer the Shares on the terms set forth in the Prospectus.  The Company acknowledges and agrees that the Underwriters may offer and sell Shares to or through any affiliate of an Underwriter and that any such affiliate may offer and sell Shares purchased by it to or through any Underwriter.

(c)           Payment for the Shares shall be made by wire transfer in immediately available funds to the account specified by the Company to the Representatives in the case of the Underwritten Shares, at the offices of Davis Polk & Wardwell at 10:00 A.M. New York City time on              , 2007, or at such other time or place on the same or such other date, not later than the fifth business day thereafter, as the Representatives and the Company may agree upon in writing or, in the case of the Option Shares, on the date and at the time and place specified by the Representatives in the written notice of the Underwriters’ election to purchase such Option Shares.  The time and date of such payment for the Underwritten Shares is referred to herein as the “Closing Date” and the time and date for such payment for the Option Shares, if other than the Closing Date, is herein referred to as the “Additional Closing Date”.

                Payment for the Shares to be purchased on the Closing Date or the Additional Closing Date, as the case may be, shall be made against delivery to the Representatives for the respective accounts of the several Underwriters of the Shares to be purchased on such date in definitive form registered in such names and in such denominations as the Representatives shall request in writing not later than two full business days prior to the Closing Date or the Additional Closing Date, as the case may be, with any transfer taxes payable in connection with the sale of the Shares duly paid by the Company.  The certificates for the Shares will be made available for inspection and packaging by the Representatives at the office of J.P. Morgan Securities Inc. set

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forth above not later than 1:00 P.M., New York City time, on the business day prior to the Closing Date or the Additional Closing Date, as the case may be.

                (d)           The Company acknowledges and agrees that the Underwriters are acting solely in the capacity of an arm’s length contractual counterparty to the Company with respect to the offering of Shares contemplated hereby (including in connection with determining the terms of the offering) and not as a financial advisor or a fiduciary to, or an agent of, the Company or any other person.  Additionally, neither the Representatives nor any other Underwriter is advising the Company or any other person as to any legal, tax, investment,  accounting or regulatory matters in any jurisdiction.  The Company shall consult with its own advisors concerning such matters and shall be responsible for making its own independent investigation and appraisal of the transactions contemplated hereby, and the Underwriters shall have no responsibility or liability to the Company with respect thereto. Any review by the Underwriters of the Company, the transactions contemplated hereby or other matters relating to such transactions will be performed solely for the benefit of the Underwriters and shall not be on behalf of the Company.

                3.             Representations and Warranties of the Company.  The Company represents and warrants to each Underwriter that:

                                (a)           Preliminary Prospectus.  No order preventing or suspending the use of any Preliminary Prospectus has been issued by the Commission, and each Preliminary Prospectus, at the time of filing thereof, complied in all material respects with the Securities Act and did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in any Preliminary Prospectus.

                                (b)           Time of Sale Information. The Time of Sale Information, at the Time of Sale did not, and at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in such Time of Sale Information.  No statement of material fact included in the Prospectus has been omitted from the Time of Sale Information and no statement of material fact included in the Time of Sale Information that is required to be included in the Prospectus has been omitted therefrom.

                                (c)           Issuer Free Writing Prospectus.  Other than the Preliminary Prospectus and the Prospectus, the Company (including its agents and representatives, other than the Underwriters in their capacity as such) has not made, used, prepared, authorized, approved or referred to and will

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not prepare, make, use, authorize, approve or refer to any “written communication” (as defined in Rule 405 under the Securities Act) that constitutes an offer to sell or solicitation of an offer to buy the Shares (each such written communication by the Company or its agents and representatives (other than a communication referred to in clause (i) below) an “Issuer Free Writing Prospectus”) other than (i) any written communication not constituting a prospectus pursuant to the Securities Act or any rule under the Securities Act (including Rule 134 under the Securities Act) or (ii) the documents listed on Annex B hereto and other written communications approved in writing in advance by the Representatives.  Each such Issuer Free Writing Prospectus complied in all material respects with the Securities Act, has been filed in accordance with the Securities Act (to the extent required thereby) and, when taken together with the Preliminary Prospectus accompanying, or delivered prior to delivery of, such Issuer Free Writing Prospectus, did not, and at the Closing Date and as of the Additional Closing Date, as the case may be, will not, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in each such Issuer Free Writing Prospectus in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in any Issuer Free Writing Prospectus.

                                (d)           Registration Statement and Prospectus.  The Registration Statement has been declared effective by the Commission.  No order suspending the effectiveness of the Registration Statement has been issued by the Commission and no proceeding for that purpose or pursuant to Section 8A of the Securities Act against the Company or related to the offering has been initiated or threatened by the Commission; as of the applicable effective date of the Registration Statement and any amendment thereto, the Registration Statement complied and will comply in all material respects with the Securities Act, and did not and will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein not misleading; and as of the date of the Prospectus and any amendment or supplement thereto and as of the Closing Date and as of the Additional Closing Date, as the case may be, the Prospectus will not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances under which they were made, not misleading; provided that the Company makes no representation and warranty with respect to any statements or omissions made in reliance upon and in conformity with information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement and the Prospectus and any amendment or supplement thereto.

                                (e)           Financial Statements.  The financial statements and the related notes thereto of the Company and its consolidated subsidiaries included in the Registration Statement, the Time of Sale Information and the Prospectus comply in all material respects with the applicable requirements of the Securities Act and the Securities Exchange Act of 1934, as amended, and the rules and regulations of the Commission thereunder (collectively, the “Exchange Act”), as applicable, and present fairly the financial position of the Company and its subsidiaries as of the

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dates indicated and the results of their operations and the changes in their cash flows for the periods specified; such financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America applied on a consistent basis throughout the periods covered thereby, and the supporting schedules included in the Registration Statement present fairly the information required to be stated therein; the other financial information included  in the Registration Statement, the Time of Sale Information and the Prospectus has been derived from the accounting records of the Company and its subsidiaries and presents fairly the information shown thereby.

                                (f)            No Material Adverse Change.  Since the date of the most recent financial statements of the Company included in the Registration Statement, the Time of Sale Information and the Prospectus, and except for issuances of options to purchase the Company’s Common Stock as disclosed in the Registration Statement, the Time of Sale Information and the Prospectus, and issuances of Common Stock made upon the exercise of options pursuant to the Company’s equity incentive plans existing as of the date of this Agreement as disclosed in the Registration Statement, the Time of Sale Information and the Prospectus, (i) there has not been any change in the capital stock or long-term debt of the Company or any of its subsidiaries, or any dividend or distribution of any kind declared, set aside for payment, paid or made by the Company on any class of capital stock, or any material adverse change, or any development involving a prospective material adverse change, in or affecting the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole; (ii) neither the Company nor any of its subsidiaries has entered into any transaction or agreement that is material to the Company and its subsidiaries taken as a whole or incurred any liability or obligation, direct or contingent, that is material to the Company and its subsidiaries taken as a whole; and (iii) neither the Company nor any of its subsidiaries has sustained any material loss or interference with its business from fire, explosion, flood or other calamity, whether or not covered by insurance, or from any labor disturbance or dispute or any action, order or decree of any court or arbitrator or governmental or regulatory authority, except in each case as otherwise disclosed in the Registration Statement, the Time of Sale Information and the Prospectus.

                (g)           Organization and Good Standing.  The Company and each of its subsidiaries have been duly organized and are validly existing and in good standing under the laws of their respective jurisdictions of organization, are duly qualified to do business and are in good standing in each jurisdiction in which their respective ownership or lease of property or the conduct of their respective businesses requires such qualification, and have all power and authority necessary to own or hold their respective properties and to conduct the businesses in which they are engaged, except where the failure to be so qualified or have such power or authority would not, individually or in the aggregate, have a material adverse effect on the business, properties, management, financial position, stockholders’ equity, results of operations or prospects of the Company and its subsidiaries taken as a whole (a “Material Adverse Effect”).  The Company does not own or control, directly or indirectly, any corporation, association or other entity other than the subsidiaries listed in Exhibit 21 to the Registration Statement.

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                (h)           Capitalization.  The Company has an authorized capitalization as set forth in the Registration Statement, the Time of Sale Information and the Prospectus under the heading “Capitalization”; all the outstanding shares of capital stock of the Company have been duly and validly authorized and issued and are fully paid and non-assessable and are not subject to any pre-emptive or similar rights; except as described in or expressly contemplated by the Time of Sale Information and the Prospectus, there are no outstanding rights (including, without limitation, pre-emptive rights), warrants or options to acquire, or instruments convertible into or exchangeable for, any shares of capital stock or other equity interest in the Company or any of its subsidiaries, or any contract, commitment, agreement, understanding or arrangement of any kind relating to the issuance of any capital stock of the Company or any such subsidiary, any such convertible or exchangeable securities or any such rights, warrants or options; the capital stock of the Company conforms in all material respects to the description thereof contained in the Registration Statement, the Time of Sale Information and the Prospectus; and all the outstanding shares of capital stock or other equity interests of each subsidiary of the Company have been duly and validly authorized and issued, are fully paid and non-assessable and except as otherwise described in the Registration Statement, the Time of Sale Information and the Prospectus and are owned directly or indirectly by the Company, free and clear of any lien, charge, encumbrance, security interest, restriction on voting or transfer or any other claim of any third party.

                (i)            Due Authorization.  The Company has full right, power and authority to execute and deliver this Agreement and to perform its obligations hereunder and thereunder; and all action required to be taken by it for the due and proper authorization, execution and delivery of this Agreement and the consummation by it of the transactions contemplated thereby has been duly and validly taken.

                (j)            Underwriting Agreement.  This Agreement has been duly authorized, executed and delivered by the Company.

(k)           The Shares.  The Shares to be issued and sold by the Company hereunder have been duly authorized by the Company and, when issued and delivered and paid for as provided herein, will be duly and validly issued and will be fully paid and nonassessable and will conform to the descriptions thereof in the Time of Sale Information and the Prospectus; and the issuance of the Shares is not subject to any preemptive or similar rights.

                                (l)            No Violation or Default.  Neither the Company nor any of its subsidiaries is (i) in violation of its charter or by-laws or similar organizational documents; (ii) in default, and no event has occurred that, with notice or lapse of time or both, would constitute such a default, in the due performance or observance of any term, covenant or condition contained in any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject; or (iii) in violation of any law or statute or any judgment, order, rule or regulation of any court or arbitrator or governmental or regulatory authority, except, in the case of clauses (ii) and (iii) above, for any such default or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

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                                (m)          No Conflicts.  The execution, delivery and performance by the Company of this Agreement, the issuance and sale of the Shares and the consummation of the transactions contemplated hereby will not (i) conflict with or result in a breach or violation of any of the terms or provisions of, or constitute a default under, or result in the creation or imposition of any lien, charge or encumbrance upon any property or assets of the Company or any of its subsidiaries pursuant to, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Company or any of its subsidiaries is a party or by which the Company or any of its subsidiaries is bound or to which any of the property or assets of the Company or any of its subsidiaries is subject, (ii) result in any violation of the provisions of the charter or by-laws or similar organizational documents of the Company or any of its subsidiaries or (iii) result in the violation of any law or statute or any judgment, order, rule  or regulation of any court or arbitrator or governmental or regulatory authority having jurisdiction over the Company or any of its subsidiaries, except, in the case of clauses (i) and (iii) above, for any such conflict, breach or violation that would not, individually or in the aggregate, have a Material Adverse Effect.

                                (n)           No Consents Required.  No consent, approval, authorization, order, registration or qualification of or with any court or arbitrator or governmental or regulatory authority is required for the execution, delivery and performance by the Company of the Agreement, the issuance and sale of the Shares and the consummation of the transactions contemplated by the Agreement, except for the registration of the Shares under the Securities Act and such consents, approvals, authorizations, orders and registrations or qualifications as may be required under applicable state securities laws or applicable rules and regulations of the NASDAQ Stock Market, Inc. in connection with the purchase and distribution of the Shares by the Underwriters.

                                (o)           Legal Proceedings.  Except as described in the Registration Statement, the Time of Sale Information and the Prospectus, there are no legal, governmental or regulatory investigations, actions, suits or proceedings pending to which the Company or any of its subsidiaries is or may be a party or to which any property of the Company or any of its subsidiaries is or may be the subject that, individually or in the aggregate, where there is a reasonable possibility that such action might be determined adversely to the Company or any of its subsidiaries, could reasonably be expected to have a Material Adverse Effect or materially and adversely affect the ability of the Company to perform its obligations under this Agreement; no such investigations, actions, suits or proceedings are threatened or, to the best knowledge of the Company, contemplated by any governmental or regulatory authority or threatened by others; and (i) there are no current or pending legal, governmental or regulatory actions, suits or proceedings that are required under the Securities Act to be described in the Registration Statement that are not so described in the Registration Statement, the Time of Sale Information and the Prospectus and (ii) there are no statutes, regulations or contracts or other documents that are required under the Securities Act to be filed as exhibits to the Registration Statement or described in the Registration Statement or the Prospectus that are not so filed as exhibits to the Registration Statement or described in the Registration Statement, the Time of Sale Information and the Prospectus.

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                                (p)           Independent Accountants.  Ernst & Young LLP, who have certified certain financial statements of the Company and its subsidiaries and is an independent registered public accounting firm with respect to the Company and its subsidiaries within the applicable rules and regulations adopted by the Commission and the Public Company Accounting Oversight Board (United States) and as required by the Securities Act.

                                (q)           Title to Real and Personal Property.  The Company and its subsidiaries have good and marketable title in fee simple to, or have valid rights to lease or otherwise use, all items of real and personal property that are material to the respective businesses of the Company and its subsidiaries, in each case free and clear of all liens, encumbrances, claims and defects and imperfections of title except those that (i) do not materially interfere with the use made and proposed to be made of such property by the Company and its subsidiaries or (ii) could not reasonably be expected, individually or in the aggregate, to have a Material Adverse Effect.

                (r)            Title to Intellectual Property.  The Company and its subsidiaries own or possess adequate rights to use all material patents, patent applications, trademarks, service marks, trade names, trademark registrations, service mark registrations, copyrights, licenses and know-how (including trade secrets and other unpatented and/or unpatentable proprietary or confidential information, systems or procedures) (collectively, “Intellectual Property”) necessary for the conduct of their respective businesses; and the conduct of their respective businesses will not conflict in any material respect with any such rights of others, and the Company and its subsidiaries have not received any notice of any claim of infringement or conflict with any such rights of others.  Except as described in the Registration Statement, Time of Sale Information and the Prospectus, (i) to the Company’s knowledge there are no third parties who have or will be able to establish rights to any Intellectual Property that is material to the Company, except for the retained rights of the owners of the Intellectual Property which is licensed to the Company; (ii) there is no pending, or to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the Company’s rights in or to any Intellectual Property, and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; (iii) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others challenging the validity, enforceability or scope of any Intellectual Property, and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; (iv) there is no pending or, to the Company’s knowledge, threatened action, suit, proceeding or claim by others that the Company infringes or misappropriates any patent, trademark, trade name, service name, copyright, trade secret or other proprietary rights of others and the Company is unaware of any facts which could form a reasonable basis for any such action, suit, proceeding or claim; and (v) to the Company’s knowledge, there is no patent or patent application that contains claims that interfere with the issued or pending claims of any of the Intellectual Property.

                                (s)           Preclinical and Clinical Trials.  The preclinical and clinical trials described in the Time of Sale Information were and, if still pending, are being conducted (to the Company’s knowledge, after due inquiry, with respect to such studies conducted by third parties) in accordance in all material respects with standard medical and scientific research procedures and all applicable rules, regulations and policies of the Food and Drug Administration, including

9

current Good Clinical Practices and Good Laboratory Practice, and all applicable foreign regulatory requirements and standards.

                                (t)            No Undisclosed Relationships.  No relationship, direct or indirect, exists between or among the Company or any of its subsidiaries, on the one hand, and the directors, officers, stockholders, suppliers, licensors or collaboration partners of the Company or any of its subsidiaries, on the other, that is required by the Securities Act to be described in the Registration Statement and the Prospectus and that is not so described in such documents and in the Time of Sale Information.

                                (u)           Investment Company Act.  The Company is not and, after giving effect to the offering and sale of the Shares and the application of the proceeds thereof as described in the Registration Statement, the Time of Sale Information and the Prospectus, will not be required to register as an “investment company” or an entity “controlled” by an “investment company” within the meaning of the Investment Company Act of 1940, as amended, and the rules and regulations of the Commission thereunder (collectively, “Investment Company Act”).

                (v)           Taxes.  The Company and its subsidiaries have paid all federal, state, local and foreign taxes and filed all tax returns required to be paid or filed through the date hereof; and except as otherwise disclosed in the Registration Statement, the Time of Sale Information and the Prospectus, there is no tax deficiency that has been, or could reasonably be expected to be, asserted against the Company or any of its subsidiaries or any of their respective properties or assets, in each case, except as would not have a Material Adverse Effect.

                (w)          Licenses and Permits.  The Company and its subsidiaries possess all licenses, certificates, permits and other authorizations issued by, and have made all declarations and filings with, the appropriate federal, state, local or foreign governmental or regulatory authorities that are necessary for the ownership or lease of their respective properties or the conduct of their respective businesses as described in the Registration Statement, the Time of Sale Information and the Prospectus, except where the failure to possess or make the same would not, individually or in the aggregate, have a Material Adverse Effect; and except as described in the Registration Statement, the Time of Sale Information and the Prospectus, neither the Company nor any of its subsidiaries has received notice of any revocation or modification of any such license, certificate, permit or authorization or has any reason to believe that any such license, certificate, permit or authorization will not be renewed in the ordinary course.

                (x)            No Labor Disputes.  No labor disturbance by or dispute with employees of the Company or any of its subsidiaries exists or, to the knowledge of the Company, is contemplated or threatened and the Company is not aware of any existing or imminent labor disturbance by, or dispute with, the employees of any of its or its subsidiaries’ principal suppliers or contractors, except as would not have a Material Adverse Effect.

                                (y)           Compliance With Environmental Laws.  (i) The Company and its subsidiaries (x) are in compliance with any and all applicable federal, state, local and foreign laws, rules, regulations, requirements, decisions and orders relating to the protection of human health and

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safety, the environment or hazardous or toxic substances or wastes, pollutants or contaminants (collectively, “Environmental Laws”); (y) have received and are in compliance with all permits, licenses, certificates or other authorizations or approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (z) have not received notice of any actual or potential liability for the investigation or remediation of any disposal or release of hazardous or toxic substances or wastes, pollutants or contaminants, and (ii) there are no costs or liabilities associated with Environmental Laws of or relating to the Company or its subsidiaries, except in the case of each of (i)(x) and (i)(y) above, for any such failure to comply, or failure to receive required permits, licenses or approvals, or cost or liability, as would not, individually or in the aggregate, have a Material Adverse Effect.

                                (z)            Compliance With ERISA.  Each employee benefit plan, within the meaning of Section 3(3) of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), that is maintained, administered or contributed to by the Company or any of its affiliates for employees or former employees of the Company and its affiliates has been maintained in compliance with its terms and the requirements of any applicable statutes, orders, rules and regulations, including but not limited to ERISA and the Internal Revenue Code of 1986, as amended (the “Code”); no prohibited transaction, within the meaning of Section 406 of ERISA or Section 4975 of the Code, has occurred with respect to any such plan excluding transactions effected pursuant to a statutory or administrative exemption; and for each such plan that is subject to the funding rules of Section 412 of the Code or Section 302 of ERISA, no “accumulated funding deficiency” as defined in Section 412 of the Code has been incurred, whether or not waived, and the fair market value of the assets of each such plan (excluding for these purposes accrued but unpaid contributions) exceeds the present value of all benefits accrued under such plan determined using reasonable actuarial assumptions.

                                (aa)         Disclosure Controls.  The Company and its subsidiaries maintain an effective system of “disclosure controls and procedures” (as defined in Rule 13a-15(e) of the Exchange Act) that is designed to ensure that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the Commission’s rules and forms, including controls and procedures designed to ensure that such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure.

                (bb)         Accounting Controls.  The Company and its subsidiaries maintain systems of “internal control over financial reporting” (as defined in Rule 13a-15(f) of the Exchange Act) that comply with the requirements of the Exchange Act and have been designed by, or under the supervision of, their respective principal executive and principal financial officers, or persons performing similar functions, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles, including, but not limited to internal accounting controls sufficient to provide reasonable assurance that (i) transactions are executed in accordance with management’s general or specific authorizations; (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with generally accepted accounting

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principles and to maintain asset accountability; (iii) access to assets is permitted only in accordance with management’s general or specific authorization; and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences.  Except as disclosed in the Registration Statement, the Time of Sale Information and the Prospectus, there are no material weaknesses in the Company’s internal controls.

                (cc)         Insurance.  The Company and its subsidiaries have insurance covering their respective properties, operations, personnel and businesses, including business interruption insurance, which insurance is in amounts and insures against such losses and risks as, to the Company’s knowledge, are customary within the industry and are, to the Company’s knowledge, adequate to protect the Company and its subsidiaries and their respective businesses; and neither the Company nor any of its subsidiaries has (i) received notice from any insurer or agent of such insurer that capital improvements or other expenditures are required or necessary to be made in order to continue such insurance or (ii) any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage at reasonable cost from similar insurers as may be necessary to continue its business.

                (dd)         No Unlawful Payments.  Neither the Company nor any of its subsidiaries nor, to the best knowledge of the Company, any director, officer, agent, employee or other person associated with or acting on behalf of the Company or any of its subsidiaries has (i) used any corporate funds for any unlawful contribution, gift, entertainment or other unlawful expense relating to political activity; (ii) made any direct or indirect unlawful payment to any foreign or domestic government official or employee from corporate funds; (iii) violated or is in violation of any provision of the Foreign Corrupt Practices Act of 1977; or (iv) made any bribe, rebate, payoff, influence payment, kickback or other unlawful payment.

                (ee)         Compliance with Money Laundering Laws.  The operations of the Company and its subsidiaries are and have been conducted at all times in compliance with applicable financial recordkeeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, the money laundering statutes of all jurisdictions, the rules and regulations thereunder and any related or similar rules, regulations or guidelines, issued, administered or enforced by any governmental agency (collectively, the “Money Laundering Laws”) and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any of its subsidiaries with respect to the Money Laundering Laws is pending or, to the best knowledge of the Company, threatened.

                (ff)           Compliance with OFAC.  None of the Company, any of its subsidiaries or, to the knowledge of the Company, any director, officer, agent, employee or Affiliate of the Company or any of its subsidiaries is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Department of the Treasury (“OFAC”); and the Company will not directly or indirectly use the proceeds of the offering of the Shares hereunder, or lend, contribute or otherwise make available such proceeds to any subsidiary, joint venture partner or other person or entity, for the purpose of financing the activities of any person currently subject to any U.S. sanctions administered by OFAC.

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(gg)         No Restrictions on Subsidiaries.  No subsidiary of the Company is currently prohibited, directly or indirectly, under any agreement or other instrument to which it is a party or is subject, from paying any dividends to the Company, from making any other distribution on such subsidiary’s capital stock, from repaying to the Company any loans or advances to such subsidiary from the Company or from transferring any of such subsidiary’s properties or assets to the Company or any other subsidiary of the Company.

                   (hh)         No Broker’s Fees.  Neither the Company nor any of its subsidiaries is a party to any contract, agreement or understanding with any person (other than this Agreement) that would give rise to a valid claim against the Company or any of its subsidiaries or any Underwriter for a brokerage commission, finder’s fee or like payment in connection with the offering and sale of the Shares.

                (ii)           No Registration Rights.  No person has the right to require the Company or any of its subsidiaries to register any securities for sale under the Securities Act by reason of the filing of the Registration Statement with the Commission or the issuance and sale of the Shares except as otherwise disclosed in the Registration Statement, the Time of Sale Information and the Prospectus.

                (jj)           No Stabilization.  The Company has not taken, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

                (kk)         Forward-Looking Statements.  No forward-looking statement (within the meaning of Section 27A of the Securities Act and Section 21E of the Exchange Act) contained in the Registration Statement, the Time of Sale Information and the Prospectus has been made or reaffirmed without a reasonable basis or has been disclosed other than in good faith.

(ll)           Statistical and Market Data.  Nothing has come to the attention of the Company that has caused the Company to believe that the statistical and market-related data included in the Registration Statement, the Time of Sale Information and the Prospectus is not based on or derived from sources that are reliable and accurate in all material respects.

                (mm)       Sarbanes-Oxley Act.  There is and has been no failure on the part of the Company or any of the Company’s directors or officers, in their capacities as such, to comply with any provision of the Sarbanes-Oxley Act of 2002 and the rules and regulations promulgated in connection therewith (the “Sarbanes-Oxley Act”), including Section 402 related to loans.

                (nn)         Status under the Securities Act.  The Company is not an ineligible issuer as defined under the Securities Act, in each case at the times specified in the Securities Act in connection with the offering of the Shares.

                (oo)         Directed Share Program.  (i) The Registration Statement, the Time of Sale Information and the Prospectus comply, and any further amendments or supplements thereto will comply, with any applicable laws or regulations of foreign jurisdictions in which the Time of

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Sale Information and the Prospectus, as amended or supplemented, if applicable, are distributed in connection with the Directed Share Program, and (ii) no authorization, approval, consent, license, order registration or qualification of or with any government, governmental instrumentality or court, other than such as have been obtained, is necessary under the securities laws and regulations of foreign jurisdictions in which the Directed Shares are offered outside the United States.  The Company has not offered, or caused the Underwriters or BAI to offer, any Shares to any person pursuant to the Directed Share Program with the intent to unlawfully influence (i) a customer or supplier of the Company to alter the customer’s or supplier’s level or type of business with the Company or (ii) a trade journalist or publication to write or publish favorable information about the Company or its products.

                4.             Further Agreements of the Company.  The Company covenants and agrees with each Underwriter that:

                (a)           Required Filings.  The Company will file the final Prospectus with the Commission within the time periods specified by Rule 424(b) and Rule 430A under the Securities Act, will file any Issuer Free Writing Prospectus to the extent required by Rule 433 under the Securities Act; and the Company will furnish copies of the Prospectus and each Issuer Free Writing Prospectus (to the extent not previously delivered) to the Underwriters in New York City prior to 10:00 A.M., New York City time, on the business day next succeeding the date of this Agreement in such quantities as the Representatives may reasonably request.

                (b)           Delivery of Copies.  The Company will deliver, without charge, (i) to the Representatives, four signed copies of the Registration Statement as originally filed and each amendment thereto, in each case including all exhibits and consents filed therewith; and (ii) to each Underwriter (A) a conformed copy of the Registration Statement as originally filed and each amendment thereto (without exhibits) and (B) during the Prospectus Delivery Period (as defined below), as many copies of the Prospectus (including all amendments and supplements thereto) and each Issuer Free Writing Prospectus as the Representatives may reasonably request.  As used herein, the term “Prospectus Delivery Period” means such period of time after the first date of the public offering of the Shares as in the opinion of counsel for the Underwriters a prospectus relating to the Shares is required by law to be delivered (or required to be delivered but for Rule 172 under the Securities Act) in connection with sales of the Shares by any Underwriter or dealer.

                (c)           Amendments or Supplements, Issuer Free Writing Prospectuses.  Before preparing, using, authorizing, approving, referring to or filing any Issuer Free Writing Prospectus, and before filing any amendment or supplement to the Registration Statement or the Prospectus, the Company will furnish to the Representatives and counsel for the Underwriters a copy of the proposed Issuer Free Writing Prospectus, amendment or supplement for review and will not prepare, use, authorize, approve, refer to or file any such Issuer Free Writing Prospectus or file any such proposed amendment or supplement to which the Representatives reasonably object.

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                (d)           Notice to the Representatives.  The Company will advise the Representatives promptly, and confirm such advice in writing, (i) when the Registration Statement has become effective; (ii) when any amendment to the Registration Statement has been filed or becomes effective; (iii) when any supplement to the Prospectus, the Time of Sale Information or any Issuer Free Writing Prospectus or any amendment to the Prospectus has been filed; (iv) of any request by the Commission for any amendment to the Registration Statement or any amendment or supplement to the Prospectus or the receipt of any comments from the Commission relating to the Registration Statement or any other request by the Commission for any additional information; (v) of the issuance by the Commission of any order suspending the effectiveness of the Registration Statement or preventing or suspending the use of any Preliminary Prospectus or the Prospectus or the initiation or threatening of any proceeding for that purpose or pursuant to Section 8A of the Securities Act; (vi) of the occurrence of any event within the Prospectus Delivery Period as a result of which the Prospectus, the Time of Sale Information or any Issuer Free Writing Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus, the Time of Sale Information or any such Issuer Free Writing Prospectus is delivered to a purchaser, not misleading; and (vii) of the receipt by the Company of any notice with respect to any suspension of the qualification of the Shares for offer and sale in any jurisdiction or the initiation or threatening of any proceeding for such purpose; and the Company will use its best efforts to prevent the issuance of any such order suspending the effectiveness of the Registration Statement, preventing or suspending the use of any Preliminary Prospectus or the Prospectus or suspending any such qualification of the Shares and, if any such order is issued, will obtain as soon as possible the withdrawal thereof.

                (e)           Ongoing Compliance.  (1) If during the Prospectus Delivery Period (i) any event shall occur or condition shall exist as a result of which the Prospectus as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary in order to make the statements therein, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, not misleading or (ii) it is necessary to amend or supplement the Prospectus to comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission and furnish to the Underwriters and to such dealers as the Representatives may designate, such amendments or supplements to the Prospectus as may be necessary so that the statements in the Prospectus as so amended or supplemented will not, in the light of the circumstances existing when the Prospectus is delivered to a purchaser, be misleading or so that the Prospectus will comply with law and (2) if at any time prior to the Closing Date (i) any event shall occur or condition shall exist as a result of which the Time of Sale Information as then amended or supplemented would include any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements therein, in the light of the circumstances, not misleading or (ii) it is necessary to amend or supplement the Time of Sale Information to comply with law, the Company will immediately notify the Underwriters thereof and forthwith prepare and, subject to paragraph (c) above, file with the Commission (to the extent required) and furnish to the Underwriters and to such dealers as the Representatives may designate, such amendments or supplements to the Time of Sale Information as may be necessary

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so that the statements in the Time of Sale Information as so amended or supplemented will not, in the light of the circumstances, be misleading or so that the Time of Sale Information will comply with law.

                (f)            Blue Sky Compliance.  The Company will qualify the Shares for offer and sale under the securities or Blue Sky laws of such jurisdictions as the Representatives shall reasonably request and will continue such qualifications in effect so long as required for distribution of the Shares; provided that the Company shall not be required to (i) qualify as a foreign corporation or other entity or as a dealer in securities in any such jurisdiction where it would not otherwise be required to so qualify, (ii) file any general consent to service of process in any such jurisdiction or (iii) subject itself to taxation in any jurisdiction if it is not otherwise so subject.

                (g)           Earning Statement.  The Company will make generally available to its security holders and the Representatives as soon as practicable an earning statement that satisfies the provisions of Section 11(a) of the Securities Act and Rule 158 of the Commission promulgated thereunder covering a period of at least twelve months beginning with the first fiscal quarter of the Company occurring after the “effective date” (as defined in Rule 158) of the Registration Statement.

                (h)           Clear Market.  For a period of 180 days after the date of the initial public offering of the Shares, the Company will not (i) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase or otherwise transfer or dispose of, directly or indirectly, any shares of Stock or any securities convertible into or exercisable or exchangeable for Stock or (ii) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Stock, whether any such transaction described in clause (i) or (ii) above is to be settled by delivery of Stock or such other securities, in cash or otherwise, without the prior written consent of J.P. Morgan Securities Inc. and Banc of America Securities LLC, other than (A) the Shares to be sold hereunder, (B) grants of restricted stock and options under equity incentive plans existing on the date hereof and (C) any shares of Stock of the Company issued upon the exercise of options granted under existing employee stock option plans. Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs; or (2) prior to the expiration of the 180-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions imposed by this Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

                (i)            Use of Proceeds.  The Company will apply the net proceeds from the sale of the Shares as described in the Registration Statement, the Time of Sale Information and the Prospectus under the heading “Use of Proceeds”.

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                (j)            No Stabilization.  The Company will not take, directly or indirectly, any action designed to or that could reasonably be expected to cause or result in any stabilization or manipulation of the price of the Shares.

                (k)           Exchange Listing.  The Company will use its best efforts to list for quotation the Shares on the Nasdaq Global Market.

                (l)            Reports.  So long as the Shares are outstanding (but in no event for more than two years after the date hereof), the Company will make available to the Representatives, as soon as they are available, copies of all Exchange Act reports or other communications (financial or other) furnished to holders of the Shares, and copies of any Exchange Act reports (and related financial statements) furnished to or filed with the Commission or any national securities exchange or automatic quotation system.

                (m)          Record Retention.  The Company will, pursuant to reasonable procedures developed in good faith, retain copies of each Issuer Free Writing Prospectus that is not filed with the Commission in accordance with Rule 433 under the Securities Act.

(n)           Filings.  The Company will file with the Commission such reports as may be required by Rule 463 under the Securities Act.

                5.             Conditions of Underwriters’ Obligations.  The obligation of each Underwriter to purchase the Underwritten Shares on the Closing Date or the Option Shares on the Additional Closing Date, as the case may be as provided herein is subject to the performance by the Company of its covenants and other obligations hereunder and to the following additional conditions:

                (a)           Registration Compliance; No Stop Order.  The Registration Statement (or if a post-effective amendment thereto is required to be filed under the Securities Act, such post-effective amendment) shall have become effective, and the Representatives shall have received notice thereof, not later than 5:00 P.M., New York City time, on the date hereof; no order suspending the effectiveness of the Registration Statement shall be in effect, and no proceeding for such purpose pursuant to Section 8A under the Securities Act shall be pending before or

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threatened by the Commission; the Prospectus and each Issuer Free Writing Prospectus shall have been timely filed with the Commission under the Securities Act (in the case of an Issuer Free Writing Prospectus, to the extent required by Rule 433 under the Securities Act) and in accordance with Section 4(a) hereof; and all requests by the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representatives.

                (b)           Representations and Warranties.  The representations and warranties of the Company contained herein shall be true and correct on the date hereof and on and as of the Closing Date or the Additional Closing Date, as the case may be; and the statements of the Company and its officers made in any certificates delivered pursuant to this Agreement shall be true and correct on and as of the Closing Date or the Additional Closing Date, as the case may be.

                (c)           No Downgrade.  Subsequent to the execution and delivery of this Agreement, (i) no downgrading shall have occurred in the rating accorded any securities or preferred stock of or guaranteed by the Company or any of its subsidiaries by any “nationally recognized statistical rating organization”, as such term is defined by the Commission for purposes of Rule 436(g)(2) under the Securities Act and (ii) no such organization shall have publicly announced that it has under surveillance or review, or has changed its outlook with respect to, its rating of any securities or preferred stock of or guaranteed by the Company or any of its subsidiaries (other than an announcement with positive implications of a possible upgrading).

                (d)           No Material Adverse Change.  No event or condition of a type described in Section 3(f) hereof shall have occurred or shall exist, which event or condition is not described in the Time of Sale Information (excluding any amendment or supplement thereto) and the Prospectus (excluding any amendment or supplement thereto) and the effect of which in the judgment of the Representatives makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus.

                (e)           Officer’s Certificate.  The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, a certificate of the chief financial officer or chief accounting officer of the Company and one additional senior executive officer of the Company who is satisfactory to the Representatives (i) confirming that such officers have carefully reviewed the Registration Statement, the Time of Sale Information and the Prospectus and, to the best knowledge of such officers, the representations set forth in Sections 3(b) and 3(d) hereof are true and correct, (ii) confirming that the other representations and warranties of the Company in this Agreement are true and correct and that the Company has complied with all agreements and satisfied all conditions on its part to be performed or satisfied hereunder at or prior to such Closing Date and (iii) to the effect set forth in paragraphs (a), (c) and (d) above.

                (f)            Comfort Letters.  On the date of this Agreement and on the Closing Date or the Additional Closing Date, as the case may be, Ernst & Young LLP shall have furnished to the

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Representatives, at the request of the Company, letters, dated the respective dates of delivery thereof and addressed to the Underwriters, in form and substance reasonably satisfactory to the Representatives, containing statements and information of the type customarily included in accountants’ “comfort letters” to underwriters with respect to the financial statements and certain financial information contained in the Registration Statement, the Time of Sale Information and the Prospectus; provided, that the letter delivered on the Closing Date or the Additional Closing Date, as the case may be shall use a “cut-off” date no more than three business days prior to such Closing Date or such Additional Closing Date, as the case may be.

                (g)           Opinion of Counsel for the Company.  Cooley Godward Kronish LLP, Cooper & Dunham LLP and Hacohen, Rosenberg, Goddard and Efrat, counsel for the Company, shall have furnished to the Representatives, at the request of the Company, their written opinion, dated the Closing Date or the Additional Closing Date, as the case may be, and addressed to the Underwriters, in the forms set forth in Annex A-1, Annex A-2 and Annex A-3, respectively, hereto.

                (h)           Opinion of Counsel for the Underwriters.  The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, an opinion of Davis Polk & Wardwell, counsel for the Underwriters, with respect to such matters as the Representatives may reasonably request, and such counsel shall have received such documents and information as they may reasonably request to enable them to pass upon such matters.

(i)            No Legal Impediment to Issuance.  No action shall have been taken and no statute, rule, regulation or order shall have been enacted, adopted or issued by any federal, state or foreign governmental or regulatory authority that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares; and no injunction or order of any federal, state or foreign court shall have been issued that would, as of the Closing Date or the Additional Closing Date, as the case may be, prevent the issuance or sale of the Shares.

                (j)            Good Standing.  The Representatives shall have received on and as of the Closing Date or the Additional Closing Date, as the case may be, satisfactory evidence of the good standing of the Company and its subsidiaries in their respective jurisdictions of organization and their good standing as foreign entities in such other jurisdictions as the Representatives may reasonably request, in each case in writing or any standard form of telecommunication from the appropriate Governmental Authorities of such jurisdictions.

                (k)           Exchange Listing.  The Shares to be delivered on the Closing Date or Additional Closing Date, as the case may be, shall have been approved for listing on the Nasdaq Global Market, subject to official notice of issuance.

                (l)            Lock-up Agreements.  The “lock-up” agreements, each substantially in the form of Exhibit A hereto, between you and the stockholders, officers and directors of the Company relating to sales and certain other dispositions of shares of Stock or certain other securities,

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delivered to you on or before the date hereof, shall be full force and effect on the Closing Date or Additional Closing Date, as the case may be.

(m)          Additional Documents.  On or prior to the Closing Date or the Additional Closing Date, as the case may be, the Company shall have furnished to the Representatives such further certificates and documents as the Representatives may reasonably request.

                All opinions, letters, certificates and evidence mentioned above or elsewhere in this Agreement shall be deemed to be in compliance with the provisions hereof only if they are in form and substance reasonably satisfactory to counsel for the Underwriters.

                6.             Indemnification and Contribution.

                (a)           Indemnification of the Underwriters.  The Company agrees to indemnify and hold harmless each Underwriter, its affiliates, directors and officers and each person, if any, who controls such Underwriter within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, from and against any and all losses, claims, damages and liabilities (including, without limitation, reasonable legal fees and other expenses incurred in connection with any suit, action or proceeding or any claim asserted, as such fees and expenses are incurred), joint or several, that arise out of, or are based upon, (i) any untrue statement or alleged untrue statement of a material fact contained in the Registration Statement or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary in order to make the statements therein, not misleading, or (ii) any untrue statement or alleged untrue statement of a material fact contained in the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale Information (including any Time of Sale Information that has subsequently been amended), or caused by any omission or alleged omission to state therein a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading, in each case except insofar as such losses, claims, damages or liabilities arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to any Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use therein, it being understood and agreed that the only such information furnished by any Underwriter consists of the information described as such in subsection (b) below.

                (b)           Indemnification of the Company.  Each Underwriter agrees, severally and not jointly, to indemnify and hold harmless the Company, its directors, its officers who signed the Registration Statement and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act to the same extent as the indemnity set forth in paragraph (a) above, but only with respect to any losses, claims, damages or liabilities that arise out of, or are based upon, any untrue statement or omission or alleged untrue statement or omission made in reliance upon and in conformity with any information relating to such Underwriter furnished to the Company in writing by such Underwriter through the Representatives expressly for use in the Registration Statement, the Prospectus (or any amendment or supplement thereto), any Issuer Free Writing Prospectus or any Time of Sale

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Information, it being understood and agreed upon that the only such information furnished by any Underwriter consists of the following information in the Prospectus furnished on behalf of each Underwriter: the concession and reallowance figures appearing in the third paragraph under the caption “Underwriting” the information contained in the tenth, eleventh and twelfth paragraphs under the caption “Underwriting” referring to passive market making.

                (c)           Notice and Procedures.  If any suit, action, proceeding (including any governmental or regulatory investigation), claim or demand shall be brought or asserted against any person in respect of which indemnification may be sought pursuant to either paragraph (a) or (b) above, such person (the “Indemnified Person”) shall promptly notify the person against whom such indemnification may be sought (the “Indemnifying Person”) in writing; provided that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have under this Section 6 except to the extent that it has been materially prejudiced (through the forfeiture of substantive rights or defenses) by such failure; and provided, further, that the failure to notify the Indemnifying Person shall not relieve it from any liability that it may have to an Indemnified Person otherwise than under this Section 6.  If any such proceeding shall be brought or asserted against an Indemnified Person and it shall have notified the Indemnifying Person thereof, the Indemnifying Person shall retain counsel reasonably satisfactory to the Indemnified Person (who shall not, without the consent of the Indemnified Person, be counsel to the Indemnifying Person) to represent the Indemnified Person in such proceeding and shall pay the fees and expenses of such counsel related to such proceeding, as incurred.  In any such proceeding, any Indemnified Person shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified Person unless (i) the Indemnifying Person and the Indemnified Person shall have mutually agreed to the contrary or (ii) the Indemnifying Person has failed within a reasonable time to retain counsel reasonably satisfactory to the Indemnified Person.  It is understood and agreed that the Indemnifying Person shall not, in connection with any proceeding or related proceeding in the same jurisdiction, be liable for the fees and expenses of more than one separate firm (in addition to any local counsel) for all Indemnified Persons, and that all such fees and expenses shall be paid or reimbursed as they are incurred.  Any such separate firm for any Underwriter, its affiliates, directors and officers and any control persons of such Underwriter shall be designated in writing by J.P. Morgan Securities Inc. and any such separate firm for the Company, its directors, its officers who signed the Registration Statement and any control persons of the Company shall be designated in writing by the Company.  The Indemnifying Person shall not be liable for any settlement of any proceeding effected without its written consent, but if settled with such consent or if there be a final judgment for the plaintiff, the Indemnifying Person agrees to indemnify each Indemnified Person from and against any loss or liability by reason of such settlement or judgment.  Notwithstanding the foregoing sentence, if at any time an Indemnified Person shall have requested that an Indemnifying Person reimburse the Indemnified Person for fees and expenses of counsel as contemplated by this paragraph, the Indemnifying Person shall be liable for any settlement of any proceeding effected without its written consent if (i) such settlement is entered into more than 30 days after receipt by the Indemnifying Person of such request and (ii) the Indemnifying Person shall not have reimbursed the Indemnified Person in accordance with such request prior to the date of such settlement.  No Indemnifying Person shall, without the written consent of the Indemnified Person, effect any settlement of any pending or threatened proceeding in respect of

21

which any Indemnified Person is or could have been a party and indemnification could have been sought hereunder by such Indemnified Person, unless such settlement (x) includes an unconditional release of such Indemnified Person, in form and substance reasonably satisfactory to such Indemnified Person, from all liability on claims that are the subject matter of such proceeding and (y) does not include any statement as to or any admission of fault, culpability or a failure to act by or on behalf of any Indemnified Person.

                (d)           Contribution.  If the indemnification provided for in paragraphs (a) and (b) above is unavailable to an Indemnified Person or insufficient in respect of any losses, claims, damages or liabilities referred to therein, then each Indemnifying Person under such paragraph, in lieu of indemnifying such Indemnified Person thereunder, shall contribute to the amount paid or payable by such Indemnified Person as a result of such losses, claims, damages or liabilities (i) in such proportion as is appropriate to reflect the relative benefits received by the Company, on the one hand, and the Underwriters, on the other, from the offering of the Shares or (ii) if the allocation provided by clause (i) is not permitted by applicable law, in such proportion as is appropriate to reflect not only the relative benefits referred to in clause (i) but also the relative fault of the Company, on the one hand, and the Underwriters, on the other, in connection with the statements or omissions that resulted in such losses, claims, damages or liabilities, as well as any other relevant equitable considerations.  The relative benefits received by the Company, on the one hand, and the Underwriters, on the other, shall be deemed to be in the same respective proportions as the net proceeds (before deducting expenses) received by the Company from the sale of the Shares and the total underwriting discounts and commissions received by the Underwriters in connection therewith, in each case as set forth in the table on the cover of the Prospectus, bear to the aggregate offering price of the Shares.  The relative fault of the Company, on the one hand, and the Underwriters, on the other, shall be determined by reference to, among other things, whether the untrue or alleged untrue statement of a material fact or the omission or alleged omission to state a material fact relates to information supplied by the Company or by the Underwriters and the parties’ relative intent, knowledge, access to information and opportunity to correct or prevent such statement or omission.

                (e)           Indemnification for Directed Shares.  In connection with the offer and sale of the Directed Shares, the Company agrees, promptly upon a request in writing, to indemnify and hold harmless the Underwriters from and against any and all losses, liabilities, claims, damages and expenses incurred by them as a result of the failure of the DSP Participants to pay for and accept delivery of Directed Shares which, by 7:30 A.M. New York City time on the first business day after the date of this Agreement, were subject to a properly confirmed agreement to purchase.  The Company agrees to indemnify and hold harmless BAI, its directors, officers, employees and agents, and each person, if any, who controls BAI within the meaning of the Securities Act or the Exchange Act against any loss, claim, damage, liability or expense, as incurred, to which BAI, or any such director, officer, employee, agent or controlling person may become subject, which (i) is caused by any untrue statement or alleged untrue statement of a material fact contained in any material prepared by or with the consent of the Company for distribution to DSP Participants in connection with the Directed Share Program or caused by any omission or alleged omission to state therein a material fact required to be stated therein or necessary to make the statements therein not misleading; (ii) is caused by the failure of any DSP Participant to pay for and accept

22

delivery of Directed Shares that such DSP Participant agreed to purchase; (iii) arises out of or is based upon the violation of any applicable laws or regulations of foreign jurisdictions where Directed Shares have been offered or (iv) is related to, arising out of, or in connection with the Directed Share Program.  The indemnity agreement set forth in this paragraph shall be in addition to any liabilities that the Company may otherwise have.  Notwithstanding anything contained herein to the contrary, if indemnification may be sought pursuant to this Section 6(e), then in addition to such separate counsel as may be provided for the indemnified parties pursuant to this Section 6, the indemnifying party shall be liable for the reasonable fees and expenses of not more than one separate firm (in addition to any local counsel) for BAI, the directors, officers, employees and agents of BAI, and all persons, if any, who control BAI within the meaning of either the Securities Act or the Exchange Act for the defense of any losses, claims, damages or liabilities arising out of the Directed Share Program.

                (f)            Limitation on Liability.  The Company and the Underwriters agree that it would not be just and equitable if contribution pursuant to this Section 6 were determined by pro rata allocation (even if the Underwriters were treated as one entity for such purpose) or by any other method of allocation that does not take account of the equitable considerations referred to in paragraph (d) above.  The amount paid or payable by an Indemnified Person as a result of the losses, claims, damages and liabilities referred to in paragraph (d) above shall be deemed to include, subject to the limitations set forth above, any legal or other expenses incurred by such Indemnified Person in connection with any such action or claim.  Notwithstanding the provisions of this Section 6, in no event shall an Underwriter be required to contribute any amount in excess of the amount by which the total underwriting discounts and commissions received by such Underwriter with respect to the offering of the Shares exceeds the amount of any damages that such Underwriter has otherwise been required to pay by reason of such untrue or alleged untrue statement or omission or alleged omission.  No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person who was not guilty of such fraudulent misrepresentation.  The Underwriters’ obligations to contribute pursuant to this Section 6 are several in proportion to their respective purchase obligations hereunder and not joint.

(g)           Non-Exclusive Remedies.  The remedies provided for in this Section 6 are not exclusive and shall not limit any rights or remedies which may otherwise be available to any Indemnified Person at law or in equity.

                7.             Effectiveness of Agreement.  This Agreement shall become effective upon the execution and delivery hereof by the parties hereto.

                8.             Termination.  This Agreement may be terminated in the absolute discretion of the Representatives, by notice to the Company, if after the execution and delivery of this Agreement and prior to the Closing Date or, in the case of the Option Shares, prior to the Additional Closing Date (i) trading generally shall have been suspended or materially limited on or by any of the New York Stock Exchange, the American Stock Exchange, the National Association of Securities Dealers, Inc., the Chicago Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of Trade; (ii) trading of any securities issued or guaranteed by the

23

Company shall have been suspended on any exchange or in any over-the-counter market; (iii) a general moratorium on commercial banking activities shall have been declared by federal or New York State authorities; (iv) there shall have occurred any outbreak or escalation of hostilities or any change in financial markets or any calamity or crisis, either within or outside the United States, that, in the judgment of the Representatives, is material and adverse and makes it impracticable or inadvisable to proceed with the offering, sale or delivery of the Shares on the Closing Date or the Additional Closing Date, as the case may be, on the terms and in the manner contemplated by this Agreement, the Time of Sale Information and the Prospectus; or (v) the representation in Section 3(b) is incorrect in any respect.

                9.             Defaulting Underwriter.  (a)  If, on the Closing Date or the Additional Closing Date, as the case may be, any Underwriter defaults on its obligation to purchase the Shares that it has agreed to purchase hereunder on such date, the non-defaulting Underwriters may in their discretion arrange for the purchase of such Shares by other persons satisfactory to the Company on the terms contained in this Agreement.  If, within 36 hours after any such default by any Underwriter, the non-defaulting Underwriters do not arrange for the purchase of such Shares, then the Company shall be entitled to a further period of 36 hours within which to procure other persons satisfactory to the non-defaulting Underwriters to purchase such Shares on such terms.  If other persons become obligated or agree to purchase the Shares of a defaulting Underwriter, either the non-defaulting Underwriters or the Company may postpone the Closing Date or the Additional Closing Date, as the case may be, for up to five full business days in order to effect any changes that in the opinion of counsel for the Company or counsel for the Underwriters may be necessary in the Registration Statement and the Prospectus or in any other document or arrangement, and the Company agrees to promptly prepare any amendment or supplement to the Registration Statement and the Prospectus that effects any such changes.  As used in this Agreement, the term “Underwriter” includes, for all purposes of this Agreement unless the context otherwise requires, any person not listed in Schedule 1 hereto that, pursuant to this Section 9, purchases Shares that a defaulting Underwriter agreed but failed to purchase.

                (b)           If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be does not exceed one-eleventh of the aggregate number of Shares to be purchased on such date, then the Company shall have the right to require each non-defaulting Underwriter to purchase the number of Shares that such Underwriter agreed to purchase hereunder on such date plus such Underwriter’s pro rata share (based on the number of Shares that such Underwriter agreed to purchase on such date) of the Shares of such defaulting Underwriter or Underwriters for which such arrangements have not been made.

                (c)           If, after giving effect to any arrangements for the purchase of the Shares of a defaulting Underwriter or Underwriters by the non-defaulting Underwriters and the Company as provided in paragraph (a) above, the aggregate number of Shares that remain unpurchased on the Closing Date or the Additional Closing Date, as the case may be, exceeds one-eleventh of the aggregate amount of Shares to be purchased on such date, or if the Company shall not exercise the

24

right described in paragraph (b) above, then this Agreement or, with respect to any Additional Closing Date, the obligation of the Underwriters to purchase Shares on the Additional Closing Date, as the case may be, shall terminate without liability on the part of the non-defaulting Underwriters.  Any termination of this Agreement pursuant to this Section 9 shall be without liability on the part of the Company, except that the Company will continue to be liable for the payment of expenses as set forth in Section 10 hereof and except that the provisions of Section 6 hereof shall not terminate and shall remain in effect.

                (d)           Nothing contained herein shall relieve a defaulting Underwriter of any liability it may have to the Company or any non-defaulting Underwriter for damages caused by its default.

                10.           Payment of Expenses.  (a)  Whether or not the transactions contemplated by this Agreement are consummated or this Agreement is terminated, the Company will pay or cause to be paid all costs and expenses incident to the performance of its obligations hereunder, including without limitation, (i) the costs incident to the authorization, issuance, sale, preparation and delivery of the Shares and any taxes payable in that connection; (ii) the costs incident to the preparation, printing and filing under the Securities Act of the Registration Statement, the Preliminary Prospectus, any Issuer Free Writing Prospectus, any Time of Sale Information and the Prospectus (including all exhibits, amendments and supplements thereto) and the distribution thereof; (iii) the costs of reproducing and distributing the Agreement; (iv) the fees and expenses of the Company’s counsel and independent accountants; (v) the fees and expenses incurred in connection with the registration or qualification and determination of eligibility for investment of the Shares under the laws of such jurisdictions as the Representatives may designate and the preparation, printing and distribution of a Blue Sky Memorandum (including the related fees and expenses of counsel for the Underwriters) not exceeding $20,000 in the aggregate; (vi) the cost of preparing stock certificates; (vii) the costs and charges of any transfer agent and any registrar; (viii) application fees and reasonable expenses incurred in connection with any filing with, and clearance of the offering by, the National Association of Securities Dealers, Inc.; (ix) all expenses incurred by the Company in connection with any “road show” presentation to potential investors (provided that the costs of private air transportation, if any, used in connection with any “road show” presentation shall be borne one-half by the Company and one-half by the Underwriters); and (x) all expenses and application fees related to the listing of the Shares on the Nasdaq Global Market.

                (b)           If (i) this Agreement is terminated pursuant to clause (ii) or clause (v) of Section 8, (ii) the Company for any reason fails to tender the Shares for delivery to the Underwriters or (iii) the Underwriters decline to purchase the Shares for any reason permitted under this Agreement, the Company agrees to reimburse the Underwriters for all out-of-pocket costs and expenses (including the fees and expenses of their counsel) reasonably incurred by the Underwriters in connection with this Agreement and the offering contemplated hereby.

                11.           Persons Entitled to Benefit of Agreement.  This Agreement shall inure to the benefit of and be binding upon the parties hereto and their respective successors and the officers and directors and any controlling persons referred to in Section 6 hereof.  Nothing in this Agreement is intended or shall be construed to give any other person any legal or equitable right,

25

remedy or claim under or in respect of this Agreement or any provision contained herein.  No purchaser of Shares from any Underwriter shall be deemed to be a successor merely by reason of such purchase.

12.           Survival.  The respective indemnities, rights of contribution, representations, warranties and agreements of the Company and the Underwriters contained in this Agreement or made by or on behalf of the Company or the Underwriters pursuant to this Agreement or any certificate delivered pursuant hereto shall survive the delivery of and payment for the Shares and shall remain in full force and effect, regardless of any termination of this Agreement or any investigation made by or on behalf of the Company or the Underwriters.

                13.           Certain Defined Terms.  For purposes of this Agreement, (a) except where otherwise expressly provided, the term “affiliate” has the meaning set forth in Rule 405 under the Securities Act; (b) the term “business day” means any day other than a day on which banks are permitted or required to be closed in New York City; and (c) the term “subsidiary” has the meaning set forth in Rule 405 under the Securities Act.

                14.           Miscellaneous.  (a)  Authority of the Representatives.  Any action by the Underwriters hereunder may be taken by J.P. Morgan Securities Inc. on behalf of the Underwriters, and any such action taken by J.P. Morgan Securities Inc. shall be binding upon the Underwriters.

(b)           Notices.  All notices and other communications hereunder shall be in writing and shall be deemed to have been duly given if mailed or transmitted and confirmed by any standard form of telecommunication.  Notices to the Underwriters shall be given to the Representatives c/o J.P. Morgan Securities Inc., 277 Park Avenue, New York, New York 10172 (fax: (212) 622-8358); Attention: Equity Syndicate Desk. and “c/o Banc of America Securities LLC, 9 West 57th Street, New York, NY 10019 (fax: (212) 933-2217), Attention: Syndicate Department.” Notices to the Company shall be given to it at 6501 Dumbarton Circle, Fremont, California 94555, (fax: (510) 402-4021); Attention: Chief Financial Officer.

                (c)           Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of New York.

                (d)           Counterparts.  This Agreement may be signed in counterparts (which may include counterparts delivered by any standard form of telecommunication), each of which shall be an original and all of which together shall constitute one and the same instrument.

                (e)           Amendments or Waivers.  No amendment or waiver of any provision of this Agreement, nor any consent or approval to any departure therefrom, shall in any event be effective unless the same shall be in writing and signed by the parties hereto.

                (f)            Headings.  The headings herein are included for convenience of reference only and are not intended to be part of, or to affect the meaning or interpretation of, this Agreement.

26

                If the foregoing is in accordance with your understanding, please indicate your acceptance of this Agreement by signing in the space provided below.

Very truly yours,
QUARK PHARMACEUTICALS, INC.
By
	Title:

Accepted:                    , 2007

J.P. MORGAN SECURITIES INC.

BANC OF AMERICA SECURITIES LLC

 For themselves and on behalf of the

 several Underwriters listed

 in Schedule 1 hereto.

By
	Authorized Signatory of
	J.P. MORGAN SECURITIES INC.
By
	Authorized Signatory of
	BANC OF AMERICA SECURITIES LLC

27

Schedule 1

Underwriter	Number of Shares
J.P. Morgan Securities Inc.
Banc of America Securities LLC
CIBC World Markets Corp.
C.E. Unterberg, Towbin, LLC
Total

28

Exhibit A

FORM OF LOCK-UP AGREEMENT

                        , 2007

J.P. MORGAN SECURITIES INC.

BANK OF AMERICA SECURITIES LLC

CIBC WORLD MARKETS CORP.

C.E. UNTERBERG, TOWBIN, LLC

As Representatives of

the several Underwriters listed in

Schedule I to the Underwriting

Agreement referred to below

c/o J.P. Morgan Securities Inc.

277 Park Avenue

New York, NY  10172

                Re:          Quark Pharmaceuticals, Inc. --- Public Offering

Ladies and Gentlemen:

                The undersigned understands that you, as Representatives of the several Underwriters, propose to enter into an Underwriting Agreement (the “Underwriting Agreement”) with Quark Pharmaceuticals, Inc., a California corporation, providing for the public offering (the “Public Offering”) by the several Underwriters named in Schedule I to the Underwriting Agreement (the “Underwriters”), of common stock, of the Company (the “Securities”). Capitalized terms used herein and not otherwise defined shall have the meanings set forth in the Underwriting Agreement.

                In consideration of the Underwriters’ agreement to purchase and make the Public Offering of the Securities, and for other good and valuable consideration receipt of which is hereby acknowledged, the undersigned hereby agrees that, without the prior written consent of J.P. Morgan Securities Inc. on behalf of the Underwriters, the undersigned will not, during the period ending 180 days after the date of the prospectus relating to the Public Offering (the “Prospectus”), (1) offer, pledge, announce the intention to sell, sell, contract to sell, sell any option or contract to purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase, or otherwise transfer or dispose of, directly or indirectly, any shares of Common Stock of the Company (the “Common Stock”) or any securities convertible into or exercisable or exchangeable for Common Stock (including without limitation, Common Stock which may be deemed to be beneficially owned by the undersigned in accordance with the rules and regulations of the Securities and Exchange Commission and securities which may be issued

upon exercise of a stock option or warrant) or (2) enter into any swap or other agreement that transfers, in whole or in part, any of the economic consequences of ownership of the Common Stock, whether any such transaction described in clause (1) or (2) above is to be settled by delivery of Common Stock or such other securities, in cash or otherwise. In addition, the undersigned agrees that, without the prior written consent of J.P. Morgan Securities Inc. on behalf of the Underwriters, it will not, during the period ending 180 days after the date of the Prospectus, make any demand for or exercise any right with respect to, the registration of any shares of Common Stock or any security convertible into or exercisable or exchangeable for Common Stock.  Nothing in the foregoing sentence shall prohibit the undersigned’s (A) exercise of any option or warrant to acquire Common Stock or conversion of any convertible security into Common Stock, provided that any shares of Common Stock obtained by such exercise or conversion shall remain subject to the terms of this Letter Agreement, or (B) sale of any shares of Common Stock or other securities convertible into Common Stock acquired in the Public Offering or in open market transactions after the completion of the Public Offering, provided any such sale is not required to be reported, and the undersigned does not otherwise voluntarily report such sale, in any public report or filing with the Securities and Exchange Commission.

Notwithstanding the foregoing, if (1) during the last 17 days of the 180-day restricted period, the Company issues an earnings release or material news or a material event relating to the Company occurs; or (2) prior to the expiration of the 180-day restricted period, the Company announces that it will release earnings results during the 16-day period beginning on the last day of the 180-day period, the restrictions imposed by this Letter Agreement shall continue to apply until the expiration of the 18-day period beginning on the issuance of the earnings release or the occurrence of the material news or material event.

Notwithstanding the foregoing, the undersigned may transfer, without obtaining consent, shares of Common Stock or any security convertible into shares of Common Stock: (i) as a bona fide gift or gifts; (ii) as a transfer to a trust for the direct or indirect benefit of the undersigned and members of the undersigned’s immediate family; (iii) as a transfer by will or intestate succession to the undersigned’s immediate family; (iv) if the undersigned is a partnership or corporation or similar entity, as a distribution to partners or stockholders of the undersigned; in the case of each of clauses (i), (ii), (iii) and (iv) so long as the transferees agree in writing to be bound by the terms of this Letter Agreement; or (v) if the undersigned becomes or may become subject to the reporting requirements of Section 16 of the Exchange Act, enter into written trading plans designed to comply with Rule 10b5-1(c) of the Exchange Act, provided that no sales or other dispositions may occur under such plans during the 180-day restricted period.

In furtherance of the foregoing, the Company, and any duly appointed transfer agent for the registration or transfer of the securities described herein, are hereby authorized to decline to make any transfer of securities if such transfer would constitute a violation or breach of this Letter Agreement.

                The undersigned hereby represents and warrants that the undersigned has full power and authority to enter into this Letter Agreement. All authority herein conferred or agreed to be

2

conferred and any obligations of the undersigned shall be binding upon the successors, assigns, heirs or personal representatives of the undersigned.

                The undersigned understands that, if (a) the Underwriting Agreement (other than the provisions thereof which survive termination) shall terminate or be terminated prior to payment for and delivery of the Common Stock proposed for sale thereunder, (b) the Company notifies J.P. Morgan Securities Inc. in writing that it does not intend to proceed with the Public Offering, or (c) the initial closing of the Public Offering does not occur on or prior to December 31, 2007 the undersigned shall be released from all obligations under this Letter Agreement.  The undersigned understands that the Underwriters are entering into the Underwriting Agreement and proceeding with the Public Offering in reliance upon this Letter Agreement.

                This Letter Agreement shall be governed by and construed in accordance with the laws of the State of New York, without regard to the conflict of laws principles thereof.

	Very truly yours,
Name of Stockholder:
By:
Name:
Title:

3

EX-4.2

Exhibit 4.2

		COMMON STOCK
NUMBER	QUARK PHARMACEUTICALS, INC.	SEE REVERSE FOR CERTAIN DEFINITIONS
QP	INCORPORATED UNDER THE LAWS OF THE STATE OF CALIFORNIA	CUSIP 747663 50 8
	THIS CERTIFIES that
	is the owner of
	FULLY PAID AND NON-ASSESSABLE SHARES OF THE COMMON STOCK, PAR VALUE $0.001 PER SHARE, OF
	QUARK PHARMACEUTICALS, INC.
	transferable on the books of the Corporation in person or by duly authorized attorney upon surrender of this Certificate properly endorsed. This Certificate is not valid until countersigned by the Transfer Agent and registered by the Registrar.
	WITNESS the facsimile signatures of the Corporation’s duly authorized officers.
	DATED:
	CHIEF EXECUTIVE OFFICER	SECRETARY

Countersigned and Registered:
MELLON INVESTOR SERVICES LLC
	Transfer Agent
By	and Registrar
	Authorized Signature

The following abbreviations, when used in the inscription on the face of this certificate, shall be construed as though they were written out in full according to applicable laws or regulations:

TEN COM	—as tenants in common	UNIF GIFT MIN ACT—	Custodian
TEN ENT	—as tenants by the entireties		(Cust)                    (Minor)
JT TEN	—as joint tenants with right of		under Uniform Gifts to Minors
	survivorship and not as tenants		Act
	in common		(State)
		UNIF TRANS MIN ACT—	Custodian (until age       )
			(Cust)
			under Uniform Transfers
			(Minor)
			to Minors Act
			(State)

Additional abbreviations may also be used though not in the above list.

For value received,              hereby sell, assign and transfer unto

PLEASE INSERT SOCIAL SECURITY OR OTHER

IDENTIFYING NUMBER OF ASSIGNEE

(PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS, INCLUDING POSTAL ZIP CODE, OF ASSIGNEE)
	shares
of the common stock represented by the within Certificate, and do hereby irrevocably constitute and appoint
	Attorney
to transfer the said stock on the books of the within named Corporation with full power of substitution in the premises.
Dated

NOTICE:	THE SIGNATURE TO THIS ASSIGNMENT MUST CORRESPOND WITH THE NAME AS WRITTEN UPON THE FACE OF THE CERTIFICATE IN EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY CHANGE WHATEVER.
SIGNATURE(S) GUARANTEED:
	THE SIGNATURE(S) MUST BE GUARANTEED BY AN ELIGIBLE GUARANTOR INSTITUTION (BANKS, STOCKBROKERS, SAVINGS AND LOAN ASSOCIATIONS AND CREDIT UNIONS WITH MEMBERSHIP IN AN APPROVED SIGNATURE GUARANTEE MEDALLION PROGRAM), PURSUANT TO S.E.C. RULE 17Ad-15.

KEEP THIS CERTIFICATE IN A SAFE PLACE. IF IT IS LOST, STOLEN, MUTILATED OR DESTROYED, THE CORPORATION WILL REQUIRE A BOND OF INDEMNITY AS A CONDITION TO THE ISSUANCE OF A REPLACEMENT CERTIFICATE.

EX-5.1

Exhibit 5.1

Robert J. Brigham

(650) 843-5053

rbrigham@cooley.com

June 25, 2007

Quark Pharmaceuticals, Inc.

6501 Dumbarton Circle

Fremont, CA  94555

Ladies and Gentlemen:

You have requested our opinion with respect to certain matters in connection with the filing by Quark Pharmaceuticals, Inc., a California corporation (the “Company”), of a Registration Statement on Form S-1 No. 333-141682 (the “Registration Statement”) with the U.S. Securities and Exchange Commission covering an underwritten public offering of up to 5,750,000 shares of common stock, par value $0.001 per share, including 750,000 shares of common stock for which the underwriters have been granted an over-allotment option (the “Shares”). All of the Shares are to be sold by the Company as described in the Registration Statement and the related Prospectus.

In connection with this opinion, we have examined and relied upon (a) the Registration Statement and related Prospectus, (b) the Company’s Amended and Restated Articles of Incorporation and Amended and Restated Bylaws, as currently in effect, and (c) the originals or copies certified to our satisfaction of such records, documents, certificates, memoranda and other instruments as in our judgment are necessary or appropriate to enable us to render the opinion expressed below. As to certain factual matters, we have relied upon a certificate of officers of the Company and have not sought to independently verify such matters. Our opinion is expressed only with respect to the general corporation laws of the State of California.

On the basis of the foregoing, and in reliance thereon, we are of the opinion that the Shares, when sold and issued in accordance with the Registration Statement and related Prospectus, will be validly issued, fully paid and non-assessable.

We consent to the reference to our firm under the caption “Legal Matters” in the Prospectus included in the Registration Statement and to the filing of this opinion as an exhibit to the Registration Statement.

Sincerely,

Cooley Godward Kronish LLP

By:	/s/ Robert J. Brigham
Robert J. Brigham

EX-10.21

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

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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, 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.

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(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.

1.6A “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.

1.7A “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

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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

2.1UNIVERSITY 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.

2.2Notwithstanding 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.

2.3LICENSEE 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.

2.4LICENSEE 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.

2.5LICENSEE 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.

2.6Subject 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

3.1LICENSEE 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.

3.2In 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

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(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

4.1For 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).

4.2In 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, [ * ].

4.3Only 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.

4.4Royalty 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,

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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.

4.5Any 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.

4.6In 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

5.1LICENSEE 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.

5.2LICENSEE, 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)[ * ].

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

ARTICLE 6

PATENT MAINTENANCE, ENFORCEMENT AND DEFENSE

6.1Subject 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.

6.2UNIVERSITY 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.

6.3LICENSEE 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.

6.4LICENSEE 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.

6.5LICENSEE, 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.

6.6LICENSEE 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

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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

7.1During 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.

7.2Confidential 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.

7.3Notwithstanding 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

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ARTICLE 8

REPRESENTATIONS, WARRANTIES AND COVENANTS

8.1Each 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.

8.2Each 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.

8.3UNIVERSITY 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

9.1LICENSEE 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.

9.2For 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.

9.3Except 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

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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

12.1This 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.

12.2Notwithstanding 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

13.1Either 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.

13.2LICENSEE 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.

13.3Upon 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, 4^th Floor

P. O. Box 741

Nes Ziona, Israel 74106

ATTN: Daniel Zurr, President & CEO

FAX: 011-972-8-940-6476

ARTICLE 16

MISCELLANEOUS PROVISIONS

16.1This 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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16.2The 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.

16.3The 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.

16.4LICENSEE 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.

16.5The 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.

16.6This 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

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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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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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(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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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, 4^th 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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SCHEDULE III

BUDGET FOR UNIVERSITY RESEARCH PROGRAM

for the program of studies of Pifithrin-a
(September 1, 1999 – August 31, 2002)

Year 1
[ * ]	[ * ]
[ * ]	[ * ]
[ * ]	[ * ]
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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 Biotech, 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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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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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.

1.6A “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.

1.7A “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

2.1UNIVERSITY 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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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.

2.2Notwithstanding 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.

2.3LICENSEE 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.

2.4LICENSEE 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.

2.5LICENSEE 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.

2.6Subject 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

3.1LICENSEE 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.

3.2in 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.

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(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

4.1For 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;

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(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).

4.2In 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, [ * ].

4.3Only 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.

4.4Royalty 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.

4.5Any 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.

4.6In 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

5.1LICENSEE 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

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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.

5.2LICENSEE, 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)[ * ].

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

ARTICLE 6

PATENT MAINTENANCE, ENFORCEMENT AND DEFENSE

6.1Subject 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

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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.

6.2LICENSEE 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.

6.3LICENSEE 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.

6.4LICENSEE 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

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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.

6.5LICENSEE, 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.

6.6LICENSEE 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

7.1During 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

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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.

7.2Confidential 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.

7.3Notwithstanding 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

8.1Each 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.

8.2Each 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.

8.3UNIVERSITY 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.

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ARTICLE 9

INDEMNIFICATION, PRODUCT LIABILITY

9.1LICENSEE 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.

9.2For 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.

9.3Except 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.

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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

12.1This 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.

12.2Notwithstanding 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

13.1Either 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.

13.2LICENSEE 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.

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13.3Upon 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

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In the case of LICENSEE:

Quark Biotech, Inc.

c/o QBI Enterprises, Ltd.

Weizmann Scientific Park

Building 3, 4^th Floor

P.O. Box 741

Nes Ziona, Israel 74106

Attn: Daniel Zurr, President & CEO

FAX: 011-972-8-940-6476

ARTICLE 16

MISCELLANEOUS PROVISIONS

16.1This 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.

16.2The 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.

16.3The 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.

16.4LICENSEE 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.

16.5The 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.

16.6This 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	Date
Craig S. Bazzani, Comptroller
Attest	Date
Michele M. Thompson, Secretary
QUARK BIOTECH, INC.
By	Date
Dr. Daniel Zurr, President & CEO

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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

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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.

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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:

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EX-10.26

EXHIBIT 10.26

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DEED

AMENDMENT AND OPTION

This Deed of Amendment and Option (this “Amendment and Option”) is dated as of September 25, 2006 among ATUGEN AG, (“Atugen”), a corporation incorporated under the laws of Germany, Robert-Rössle-Str. 10, D13125 Berlin Germany, QUARK BIOTECH, INC. (“QBI”), a corporation incorporated under the laws of California, 6536 Kaiser Drive, Freemont CA 94555, USA, QBI ENTERPRISES LTD (“QEL”), a corporation organized under the laws of Israel, Weizman Science Park, P.O. Box 4071, Nes Ziona 70400, Israel (QBI and QEL collectively, “Quark”), and PFIZER INC. (“Pfizer”), a corporation incorporated under the laws of Delaware, 235 East 42^nd Street, New York, NY 10017, USA.

WHEREAS, Atugen owns certain patents and/or patent applications as well as related know-how, technology and scientific and technical information relating to siRNA molecules directed to silencing the RTP801 gene which have been licensed by Atugen to Quark pursuant to the Atugen License (as hereinafter defined);

WHEREAS, Pfizer and Quark will be entering into the Quark License (as hereinafter defined) relating to siRNA molecules directed to silencing the RTP801 gene under which Quark grants to Pfizer, inter alia, exclusive sublicenses under patents and related know-how, and scientific and technical information licensed by Atugen to Quark pursuant to the Atugen License;

WHEREAS, in connection with the Quark License, Pfizer has requested certain clarifications regarding the Atugen License; and

WHEREAS, in order to assure to Pfizer the full enjoyment of all rights to be granted to Pfizer under the Quark License, Pfizer desires to obtain an option to acquire under certain circumstances from Atugen certain licenses from Atugen relating to siRNA molecules directed to silencing the RTP801 gene.

NOW, THEREFORE, in consideration of the mutual covenants and agreements provided herein, the parties have executed this Amendment and Option:

I.Definitions. For purposes of this Amendment and Option the following definitions shall be applicable:

A.Save as otherwise provided herein, all terms defined in the License Agreement (as hereinafter defined) when used herein shall have their defined meanings as specified in the License Agreement.

B.“Atugen License” means the Collaboration Agreement, dated December 6, 2004, among Atugen, QBI and QEL, as amended by the Amendment dated May 25, 2006.

C.“Quark License” means the license agreement between QBI and Pfizer in the form set forth in Exhibit A, or such amended form upon which QBI and Pfizer may agree from time to time, subject to Section III C below, attached hereto and made a part hereof.

D.“License Agreement” means the license agreement between Atugen and Pfizer in the form set forth in Exhibit B, attached hereto and made a part hereof, as amended from time to time in accordance with its terms.

II.Grant of Option.Atugen hereby grants to Pfizer, and Pfizer hereby accepts, an option to acquire an exclusive license to the Atugen Existing IP and the Joint Program IP subject to the terms and conditions of the License Agreement. The terms of said license are those contained in the License Agreement which shall become effective as provided herein. The option granted hereunder shall be exercisable by Pfizer in the event the Atugen License is terminated or under any circumstances under which Quark shall no longer, pursuant to the Atugen License, have license rights to the Atugen Existing IP or the Joint Program IP. Upon the occurrence of such termination of the Atugen License or such loss of such license rights, Atugen shall promptly notify Pfizer, and, within thirty (30) days of receipt of such notice, Pfizer shall have the right, at its sole discretion, to exercise the option granted hereunder. The option shall be exercised by Pfizer by sending a notice to Atugen, stating Pfizer’s desire to exercise the option provided herein; thereafter Atugen and Pfizer shall promptly sign and deliver in duplicate the License Agreement, to be dated the date of such execution, whereupon the License Agreement shall become effective as of the date on which Quark shall have no longer any license rights to the Atugen Existing IP or the Joint Program IP.

III.Amendment of Atugen License and Approval and Terms of Quark License.

A.Notwithstanding to the contrary any provisions of the Atugen License, (i) Quark shall be deemed to be in full compliance with the provisions of the Atugen License by entering into and performing the Quark License in accordance with its terms, and (ii) Pfizer shall have no obligations or liability to Atugen or to Quark pursuant to the Atugen License.

B.Atugen hereby consents and agrees to the execution, delivery and performance by Quark and Pfizer of the Quark License. To the extent that any of the provisions of the Quark License are inconsistent or conflict with the terms of the Atugen License, the terms of the Quark License shall take precedence, and Atugen and Quark waive any such conflict. To the extent that any of the provisions of the Quark License are inconsistent or conflict with the terms of this Amendment and Option, the terms of this Amendment and Option shall take precedence, and QBI and Pfizer waive any such conflict.

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C.Pfizer and Quark agree not to amend or modify Sections 1.14 (Extended Royalty Term), 1.24 (Initial Royalty Term), 1.31 (Net Sales), 1.49 (Royalty Term), 5.1 to 5.13, 6.1 to 6.6 and 7.9 of the Quark License, and Quark agrees not to waive any right or interest it has under any such provision of the Quark License, in each case in any manner which would materially restrict, limit, impede or prejudice the benefits which Atugen is entitled under the Atugen Licence (as amended by this Amendment and Option) or the License Agreement in connection with the Quark License. Pfizer and Quark further agree to procure that no assign or successor in title at any time to their respective rights under the Quark Licence makes any such amendment or modification or, in the case of Quark, waiver. For clarity, the parties hereto agree that amendment, modification or waiver of any section of the Quark License that is not listed above in this Section III(C) would not materially restrict, limit, impede or prejudice the benefits which Atugen is entitled under the Atugen Licence (as amended by this Amendment and Option) or the License Agreement in connection with the Quark License.

D.Atugen and Quark agree not to amend or modify the Atugen License which would restrict, limit, impede or prejudice in a material manner the exercise by Pfizer of its rights under the Quark License, this Amendment and Option or the License Agreement.

E.Atugen and Quark hereby amend and clarify, with Pfizer’s consent, the Atugen License, as follows:

1.All licenses granted by Quark to Atugen under Section 6.1 of the Atugen License are hereby terminated and all obligations of Atugen pursuant to the Atugen License, whose lawful performance depends on Atugen having the continued benefit of any such license are also hereby terminated.

2.All intellectual property rights of Quark arising under the Atugen License have been and remain vested solely in QBI rather than QEL, which has been performing research and development services on behalf of QBI.

3.References in Sections 4.8.1 and 4.8.4 of the Atugen License to “best efforts” are hereby amended to be “commercially reasonable efforts.”

4.(a)Section 8.1.2 of the Atugen License is hereby deleted and replaced by the following wording:

“For Products that are developed and/or sold by sub-licensees, Atugen shall be entitled to receive a royalty of [ * ] of the Sublicense Royalties. For purposes of this Section, and in the case where Pfizer Inc. is the sublicensee, the Sublicense Royalties shall be the payments due from Pfizer Inc. to Quark under Sections 5.7 and/or 5.8, subject to Sections 5.9 to 5.12 inclusive and under Section 7.9, of the sublicence from Quark to Pfizer Inc.”

(b)In Section 8.2.2 of the Atugen License, the words “…necessary to commercialize such Party’s Products (the “Royalty Offset”) against the royalties payable by the

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commercializing Party to the other Party…” shall be deleted and replaced with the words “…necessary to commercialize such Party’s Products (the “Royalty Offset”) against the royalties payable by the Royalty Paying Party under Sections 8.1.1 or 8.1.2…”.

(c)In Section 8.2.3 of the Atugen License, the percentage figure of [ * ] shall be replaced by the percentage figure of [ * ].

(d)In Section 8.3 of the Atugen License, the percentage and percentage figure of [ * ] shall be replaced by the percentage and percentage figure of [ * ] in respect of the first milestone payment to be made by Pfizer to QBI pursuant to Section 5.1 of the Quark License and by the percentage and percentage figure of [ * ] in respect of all other milestone payments to be made by Pfizer to QBI pursuant to Sections 5.1 to 5.5 inclusive of the Quark License. For clarity, no payments shall be due to Atugen arising out of payments made under Sections 4.8 to 4.12 inclusive of the Quark License.

(e)The “Products” definition in Section 1 of the Atugen License is hereby deleted and replaced by the following:

“‘Products’ means RNAi products that are (i) based on the Atugen Existing IP or discovered, developed or produced using the Atugen Existing IP, (ii) based on the Quark Existing IP and (iii) directed to the 801 gene.”

5.The second sentence of Section 12 of the Atugen License is hereby amended to read in full as follows:  “The arbitration shall be conducted in London, England, according to the rules of the London Court of International Arbitration (“LCIA”) and the laws of England.”

6.Atugen consents to Quark’s delegation to Pfizer, in accordance with the Quark License, of responsibility and control over the prosecution and enforcement of the Joint Patents (as defined in the Atugen License) which are currently being prosecuted by Quark. Atugen shall not have the right or obligation to enforce Atugen Existing IP or the Joint Patents relating to the QBI Products; provided, however, that Quark shall pay to Atugen [ * ] of any damages, settlements, accounts of profits or other financial compensation received by Quark pursuant to Section 7.9 of the Quark License.

7.So long as the Quark License remains in effect, Quark shall be deemed to have satisfied the Development Milestones of Section 11.4 of the Atugen License (as defined in the Atugen License). If the Quark License terminates for any reason, then:

(a)The sole remaining Development Milestone under the Atugen License applicable to Quark shall be to [ * ] within [ * ] from termination of the Quark License (and all other Development Milestones shall be cancelled); and

(b)If Quark thereafter grants a sublicense under the Atugen License, there shall be no Development Milestones, but Quark and the new sublicensee(s) shall remain

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obligated to use commercially reasonable efforts to develop a QBI Product (as defined in the Atugen License).

IV.Atugen Warranties. Atugen hereby warrants to Pfizer that:

A.Other than the Atugen License, Atugen has not entered into any agreement with any other person or firm granting any rights or licenses to the Atugen Existing IP or the Joint Program IP to conduct activities within the scope of the licenses granted to Pfizer in Sections 3.1 and 3.2 of the License Agreement.

B.Atugen has the corporate power and authority to execute and deliver this Amendment and Option and to perform its obligations hereunder, and the execution, delivery and performance of this Amendment and Option by Atugen has been duly and validly authorized and approved by proper corporate action on the part of Atugen.

C.The Atugen License is in full force and effect. To Atugen’s knowledge, all payments to date required to be made under the Atugen License by Quark have been made.

D.Schedules A1, A2 and A3 to the License Agreement contains a complete listing of all of the patents and patent applications owned or controlled by Atugen or any of its Affiliates relating to siRNA molecules directed to silencing of the RTP801 gene which have been licensed to Quark under the Atugen License.

V.Pfizer Warranties. Pfizer hereby warrants to Atugen that:

A.Pfizer has the corporate power and authority to execute and deliver this Amendment and Option and to perform its obligations hereunder, and the execution, delivery and performance of this Amendment and Option by Pfizer has been duly and validly authorized and approved by proper corporate action on the part of Pfizer.

B.Other than the Quark License, Pfizer has not entered into any agreement with Quark in relation to the Atugen Existing IP or the Joint Program IP.

VI.Pfizer and Quark Warranty. Pfizer and Quark hereby jointly and severally warrant to Atugen that no agreements, other than the Quark License in the form set forth in Exhibit A, exist between them, and that such form is a complete and accurate copy of the agreement to be entered into between them.

VII.Term and Termination. Sections I, VII and VIII of this Amendment and Option shall be effective as of the date first set forth above. The remaining Sections of this Amendment and Option shall be effective as of the later of the date first set forth above and the date which the Quark Licence comes into full force and effect. This Amendment and Option shall terminate if for any reason the Quark License has not (a) been executed within [ * ] following the date first set forth above and become effective by [ * ], or (b) the Quark License has been terminated. Except in the event of such termination, this Amendment and Option shall remain in effect. In addition, upon [ * ] notice to Quark and Atugen, Pfizer shall have the right, at its sole discretion, to terminate all of its rights and obligations under this Amendment and Option, without

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prejudice to any rights or obligations which have accrued hereunder prior to the effective date of such termination. The provisions of Section III(E)(7)(a) above shall survive the termination of this Amendment and Option.

VIII.Miscellaneous.

A.Force Majeure. No party shall be liable for failure of or delay in performing obligations set forth in this Amendment and Option, and no party shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of such party.

B.Assignment. This Amendment and Option shall not be assignable by any party without the prior consent of the other, except that any party may assign this Amendment and Option, in whole or in part, (i) to any affiliate of such party, provided, that in all cases the assigning party shall remain responsible for all obligations hereunder if its affiliate shall fail to perform hereunder, (ii) to any successor to substantially all of such party’s business or assets, (iii) to a third party in circumstances where such party is required to, or reasonably believes based on advice of counsel, that it will be required to, divest any of the Licensed Products (as defined in the Quark License) in order to comply with applicable laws or the order of any governmental authority as a result of a merger or acquisition, or (iv) by Atugen, QBI or QEL to a permitted assignee of the Atugen License.

C.Governing Law. This Amendment and Option shall be governed by the laws of England in all respects of validity, construction and performance thereof. The parties submit to the non-exclusive jurisdiction of the English courts.

D.Notices. Any notice, consent, approval reports, requests and communication hereunder this Amendment and Option shall be in writing sent by registered airmail or by facsimile (confirmed by such registered mail) and addressed as follows:

If to Pfizer:	If to Atugen:
Pfizer Inc.	Atugen AG
235 East 42nd Street	Robert-Rössle-Str. 10
New York, N.Y. 10017	D13125 Berlin Germany
Attention: General Counsel	Attention: Thomas Christély
Fax: 212-808-8924	Fax: +49 30 9489 2801
If to Quark:
Quark Biotech Inc.	QBI Enterprises Limited
6536 Kaiser Drive	Weizman Science Park
Freemont, CA 94555	P.O. Box 4071
Attention: Daniel Zurr, Ph.D.	Nes Ziona 70400, Israel
Fax: (510) 402-4021	Attention: Daniel Zurr, Ph.D.
	Fax: 972-8.940.6476

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All notices shall be deemed to be effective five days after posting if sent by registered post, and upon delivery as indicated on the facsimile activity report if sent by facsimile. In case any party changes its address at which notice is to be received, written notice of such change shall be given without delay to the other party.

E.Entire Agreements, Amendments. This Amendment and Option (together with the Schedule and Exhibits hereto and all other agreements referred to herein or in said Exhibits) sets forth the entire agreement and understanding among the parties hereto as to the subject matter hereof and supercedes all agreements or understandings, verbal or written, made among Atugen, QBI, QEL and Pfizer before the date hereof with respect to the subject matter hereof. None of the terms or this Amendment and Option shall be amended, supplemented or modified except in writing signed by the parties hereto.

F.Severability. If and solely to the extent that any provision of this Amendment and Option shall be invalid or unenforceable, or shall render this Amendment and Option to be unenforceable or invalid, such offending provision shall be of no effect and shall not effect the validity of the remainder of this Amendment and Option or any of its provisions; provided, however, the parties shall use their respective reasonable efforts to renegotiate the offending provisions to best accomplish the original intentions of the parties.

G.Waivers. Any term or condition of this Amendment and Option may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party or parties waiving such term or condition. The waiver by any party of any term or condition of this Amendment and Option or the failure on the part of any party, on one or more instances, to enforce any of the provisions of this Amendment and Option or to exercise any right or privilege, shall not be deemed or construed to be a waiver of such term or condition for any similar instance in the future or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Amendment and Option shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation or agreement.

H.Binding Effect. This Amendment and Option shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

I.Counterparts. This Amendment and Option may be executed in any two or more counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall constitute one and the same document.

J.Headings. Headings in this Amendment and Option are included herein for ease of reference only and shall have no legal effect. References to Sections, Schedules and Exhibits are to Sections, Schedules and Exhibits of this Amendment and Option unless otherwise specified.

K.Publicity. No party hereto shall make any public announcements regarding the terms of this Amendment and Option or events or performance hereunder except as may be required by a

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party to comply with any legal requirements or as the parties may agree in writing. The parties hereby agree that a public announcement in the form of that set out in Exhibit C may be released by Atugen following execution and delivery of this Amendment and Option by the parties and the execution and delivery of the Quark License by Quark and Pfizer.

L.Third Party Rights. The Contracts (Rights of Third Parties) Act 1999 shall not apply to this agreement and no rights or benefits expressly or impliedly conferred by it shall be enforceable under that Act against the parties to it by any other person.

M.Waivers. Quark and Atugen each confirms that the other is in compliance in all respects with its obligations under the Atugen License and waives, in full and final satisfaction, any claims and entitlements whatsoever that it may have in respect of any breach by the other of any such obligation.

{Remainder of page intentionally left blank}

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IN WITNESS WHEREOF, the parties hereto have caused this Deed of Amendment and Option to be executed as of the date first written above by their duly authorized officers.

Executed as a Deed by		Executed as a Deed by
ATUGEN AG acting by its		PFIZER INC. acting by its
authorized signatory		authorized signatory
By:	/s/ T. Christely, /s/ K. Giese	By:	/s/ Lisa Ricciardi
Name: T. Christely, K. Giese		Name: Lisa Ricciardi
Title: CEO, CSO		Title: SVP Licensing & Development
Executed as a Deed by		Executed as a Deed by
QUARK BIOTECH, INC.		QBI ENTERPRISES, LTD.
acting by its authorized signatory		acting by its authorized signatory
By:	/s/ Daniel Zurr	By:	/s/ Daniel Zurr
Name: Daniel Zurr		Name: Daniel Zurr
Title: CEO		Title: CEO

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{EXHIBIT 10.27}

{This Exhibit 10.27 has been filed separately as an exhibit to the Quark Biotech, Inc. Registration Statement on Form S-1 in executed form.}

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EXHIBIT B

DEED

LICENSE AGREEMENT

This DEED OF LICENSE AGREEMENT (this “Agreement”), dated                  ,        (“Effective Date”), between ATUGEN AG (“Atugen”), a corporation incorporated under the laws of Germany, Robert-Rössle-Str. 10, D13125 Berlin, Germany, and PFIZER INC. (“Pfizer”), a corporation organized under the laws of Delaware, 235 East 42^nd Street, New York, New York 10017, USA.

WHEREAS, Atugen owns certain patents and/or patent applications as well as related know-how, technology and scientific and technical information relating to siRNA molecules directed to silencing the RTP801 gene; and

WHEREAS, Pfizer desires to acquire from Atugen an exclusive license under said patents, applications, know-how, technology and scientific and technical information, and Atugen is agreeable to granting such license pursuant to the terms of this Agreement.

NOW, THEREFORE, Pfizer and Atugen have executed this Agreement:

ARTICLE 1

DEFINITIONS

For purposes of this Agreement, the following definitions shall be applicable:

1.1“Affiliate” means any entity directly or indirectly controlled by, controlling, or under common control with, a party to this Agreement, but only for so long as such control shall continue. For purposes of this definition, “control” (including, with correlative meanings, “controlled by”, “controlling” and “under common control with”) of an entity means possession, direct or indirect, of  (a) the power to direct or cause direction of the management and policies of such entity (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), or (b) at least 50% of the voting securities (whether directly or pursuant to any option, warrant or other similar arrangement) or other comparable equity interests of such entity.

1.2“Amendment and Option” means the Amendment and Option, dated as of September 25, 2006, among Atugen, Pfizer and Quark and QEL, of which this License Agreement is Exhibit B attached thereto.

1.3“Atugen Background Technology” means any and all inventions, discoveries, methods

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and processes, improvements, Know-How, technical information, data or other technology that is heretofore or hereafter discovered, conceived, made, developed and/or reduced to practice by Atugen or its Affiliates, or owned in whole or in part by, or licensed (with a right to sublicense) to Atugen or its Affiliates and relates to: (i) [ * ], as well as any and all intellectual property rights therein, including without limitation Patent Rights, copyright, trademark or trade secret rights. Atugen Background Technology includes, without limitation, the Patent Rights as of December 6, 2004 as identified in Schedule Al. The term Atugen Background Technology does not include the Atugen Program IP.

1.4“Atugen Existing IP” means the Atugen Background Technology and the Atugen Program IP.

1.5“Atugen License” means the Collaboration Agreement, dated December 6, 2004, among Atugen, Quark and QEL, as amended by (i) the Amendment to Collaboration Agreement, dated May 25, 2006 and (ii) the Amendment and Option.

1.6“Atugen Program IP” means certain stabilized, chemically modified siRNA molecule(s) directed to silencing the human 801 gene and the mouse 801 gene that have been developed by Atugen prior to December 6, 2004 and certain lipids and liposome based formulations, as identified in Schedule A2 hereto, and any and all intellectual property rights therein, including, without limitation, the Patent Rights identified in Schedule A2, copyright, trade-mark or trade secret rights.

1.7“Commercially Reasonable Efforts” means those efforts and resources that Pfizer would use were it developing or commercializing its own pharmaceutical products that are of similar market potential as the Licensed Products, taking into account product labeling or anticipated labeling, present and future market potential, past performance, [ * ], medical and clinical considerations, present and future regulatory environment and competitive market conditions, all as measured by the facts and circumstances at the time such efforts are due.

1.8“Drug Product” means the Product formulated (such as e.g. using liposome-based Atugen Background Technology) for administration to man.

1.9“Joint Program IP” means all inventions, discoveries, Know-How, trade secrets, Patent Rights, methods, information, data, or materials that are first made, invented, discovered or reduced to practice by either Atugen or Quark/QEL in the conduct of the Joint Research Program or the Joint Development Program, as defined in the Atugen License. The Joint Program IP shall include, without limitation, the Patent Rights directed to

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specific anti-801 siRNAs, as set forth in Schedule A3.

1.10“Know-How” means unpatented technical and other information, including information comprising or relating to concepts, discoveries, inventions, data, designs, formulae, ideas, methods, models, assays, research plans, procedures, designs for experiments and tests and results of experimentation and testing (including results of research or development) processes (including manufacturing processes, specifications and techniques), laboratory records, chemical, pharmacological, toxicological, clinical, analytical and quality control data, trial data, case report forms, data analyses, reports or summaries and information contained in submissions to, and information from, ethical committees and regulatory authorities.

1.11“Licensed Products” means Products and Drug Products for the treatment of human diseases other than cancer.

1.12“Net Sales” means nets sales of Pfizer, its Affiliates and sublicenses as defined in the Quark License.

1.13“Patent Rights” means 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.

1.14“Pfizer Quarter” means each of the four (4) thirteen (13) week periods (i) with respect to the United States, commencing on January 1 of any year, and (ii) with respect to any country other than the United States, commencing on December 1 of any year.

1.15“Products” means RNAi products that are (i) based on the Atugen Existing IP or discovered, developed or produced using the Atugen Existing IP, (ii) based on the Quark Existing IP and (iii) directed to the 801 gene.

1.16“QEL” means QBI Enterprises Ltd.

1.17“Quark” means Quark Biotech, Inc.

1.18“Quark License” means the License Agreement between Pfizer and Quark in the form

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attached as Exhibit A to the Agreement and Option.

1.19“Quark Existing IP” means the present and future Patent Rights and Know-How owned by Quark and directed to [ * ] and methods of treatment of diseases using these, including but not limited to rights to patents and patent applications listed in Schedule B.

ARTICLE 2

LICENSE

2.1Subject to the terms of this Agreement, Atugen hereby grants to Pfizer an exclusive, royalty bearing, world-wide license, with the right to sublicense as set forth in Section 2.2, under the Atugen Existing IP and the Joint Program IP to develop, make, have made, use, sell, offer for sale and import Licensed Products.

2.2The granting and acceptance of the above license is subject to the following conditions:

(a)Pfizer shall pay all future costs connected with the development, regulation and commercialization of the Licensed Products, including but not limited to the costs of complying with applicable government testing, approvals and regulations; and

(b)Pfizer shall use Commercially Reasonable Efforts with respect to the development, registration and commercialization of the Licensed Products.

(c)Pfizer shall have the right to grant sublicenses hereunder; provided, however, Pfizer shall remain fully responsible for all its obligations under this Agreement.

(d)Upon the expiration of the term with respect to each country as provided in Article 7 Pfizer shall have a fully paid up license to all Atugen Existing IP and Joint Program IP with respect to such country.

ARTICLE 3

ROYALTIES AND MILESTONES

3.1Notwithstanding the fact that the Atugen License is no longer in effect, or that Quark and QEL no longer have license rights to the Atugen Existing IP or the Joint Program IP pursuant to the Atugen License, as applicable, Pfizer shall pay to Atugen the following percentages of the amounts payable by Pfizer to Quark under the terms of the Quark License:

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(a)[ * ] of the initial milestone payment to which Quark is or would be entitled under Section 5.1 of the Quark License to the extent such relates to Licensed Products; and

(b)[ * ] of all other milestone payments to which Quark is or would be entitled under Sections 5.1, 5.2, 5.3, 5.4 and/or 5.5 of the Quark License to the extent such relate to Licensed Products, excluding the initial milestone payment referred to in article 3.1(a) above; and

(c)[ * ] of the royalty payments to which Quark is or would be entitled under Sections 5.7 and/or 5.8, subject to Sections 5.9 to 5.12 inclusive, of the Quark License to the extent such relate to Licensed Products.

3.2All of the amounts specified in Section 3.1 shall be computed as specified in the Quark License and shall be otherwise subject to all of the provisions of the Quark License. Any such amounts paid or due to Atugen prior to termination of the Atugen License, or Quark and QEL no longer having license rights to the Autgen Existing IP or the Joint Program IP pursuant to the Atugen License, as applicable, shall not be subject to the provisions of Section 3.1, and Atugen shall have no claims against Pfizer regarding such amounts. Nothing herein shall affect Atugen’s right to its share of the milestone and royalty payments received by Quark from Pfizer under the Quark License prior to the date hereof, as set forth in the Atugen License.

ARTICLE 4

ACCOUNTING AND PROCEDURES FOR PAYMENTS

Payments hereunder shall be subject to the following provisions:

4.1Sales between or among Pfizer or its Affiliates shall not be subject to royalties under Section 3; royalties shall only be calculated upon bona fide Net Sales to an independent third party.

4.2Pfizer shall make royalty payments (payable under Sections 3.1 and 3.2) to Atugen on Net Sales with respect to each Pfizer Quarter within [ * ] after the end of each such period,

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and each payment shall be accompanied by a report identifying the Licensed Products, Net Sales, and the amount payable to Atugen, as well as computation thereof. Said reports shall be kept confidential by Atugen and not disclosed to any other party other than Atugen’s accountants and Atugen’s governing board, and such accountants and board members shall be obligated to keep such information confidential.

4.3All payments hereunder shall be made by electronic transfer in immediately available funds via either a bank wire transfer, an ACH (automated clearing house) mechanism, or any other means of electronic funds transfer, at Pfizer’s election, to such bank accounts as Atugen shall designate in writing at least five (5) Business Days before the payment is due. All payments under this Agreement shall bear interest from the date due until paid at a rate equal to the [ * ]. All payments shall be computed and paid in United States dollars. For the purpose of determining the amount of royalty payments due for the relevant Pfizer Quarter, the amount of Net Sales in any foreign currency shall be converted into United States Dollars in a manner consistent with the methodology used to prepare Pfizer’s audited financial statements for external reporting purposes.

4.4If any of the payments made by Pfizer hereunder become subject to withholding taxes under the laws of any jurisdiction, Pfizer shall deduct and withhold the amount of such taxes for the account of Atugen to the extent required by law, all such amounts payable to Atugen shall be reduced by the amount of taxes deducted and withheld, and Pfizer shall pay the amounts of such taxes to the proper governmental authority in a timely manner and promptly transmit to Atugen an official tax certificate or other evidence of such tax obligations, together with proof of payment from the relevant governmental authority of all amounts deducted and withheld sufficient to enable Atugen to claim such payment of taxes.

4.5Pfizer shall, and shall cause its Affiliates and sublicensees to, keep full and accurate books and records setting forth gross sales, Net Sales, and amounts payable to Atugen. Pfizer shall permit Atugen, at Atugen’s expense, by independent qualified public accountants employed by Atugen and acceptable to Pfizer, to examine such books and records at any reasonable time, but not later than [ * ] following the rendering of any such reports, accountings and payments. The foregoing right of review may be exercised only once with respect to each such periodic report and payment. Such accountants may be required by Pfizer to enter into a reasonably acceptable confidentiality agreement, and in no event shall such accountants disclose to Atugen any information other than such as relates to the accuracy of reports and payments made or due hereunder. The opinion of said independent accountants regarding such reports, accountings and payments shall be binding on the parties hereto. Atugen shall bear the cost of any such examination; provided that if the examination shows an underpayment of royalty payments of more than [ * ] of the amount due for the applicable period, then Pfizer shall promptly reimburse Atugen for all costs incurred in connection with such examination. Pfizer shall promptly pay to Atugen the amount of any underpayment of royalty payments (plus interest as provided in Section 4.3 above) revealed by an examination and review. Any overpayment of royalty payments by Pfizer revealed by an examination shall be fully

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creditable against future royalty payments due under Section 3.1.

ARTICLE 5

DISCLOSURE

Except as required by law, neither party shall (i) disclose to any third party any financial or other terms or conditions of this Agreement nor (ii) originate any publicity, news release or public announcement, written or oral, whether to the public, press, stockholders or otherwise, communicating the economic terms of this Agreement, or any of its specific terms or conditions, without the express prior consent of the other party which shall not be unreasonably withheld or delayed.

ARTICLE 6

PATENTS

6.1Atugen and Pfizer shall cooperate in connection with the continued prosecution and maintenance by Atugen or Pfizer, as the case may be, of the Patent Rights listed on Schedules A1, A2 and A3 which identifies which party shall be responsible for the prosecution and maintenance of such Patent Rights. Each party shall pay all prosecution and maintenance costs for the full life of the Patent Rights for which it is responsible. Neither party shall abandon any Patent Rights without at least [ * ] prior written notice to the other. If either chooses to abandon such Patent Rights, the other party shall have the option to [ * ] such Patent Rights [ * ] and to continue the prosecution and maintenance of such Patent Rights and related applications [ * ]. Each party shall have reasonable access to all documentation, filings and communications to or from the respective patent offices and shall, upon request, be kept advised as to the status of all pending applications to the extent pertaining to Patent Rights licensed hereunder. Each party, its agents and attorneys will give due consideration to all suggestions and comments of the other party regarding any aspect of such patent prosecutions.

6.2If any claim relating to the Patent Rights licensed hereunder becomes within any country the subject of a judgment, decree or decision of a court, tribunal, or other authority of competent jurisdiction, which judgment, decree, or decision is or becomes final (there being no further right of review) and adjudicates the validity, enforceability, scope, or infringement of the same, the construction of such claim in such judgment, decree or decision shall be followed thereafter in such country in determining whether any product is licensed hereunder, not only as to such claim but also as to all other claims in such country to which such construction reasonably applies. If at any time there are two or more conflicting final judgments, decrees, or decisions with respect to

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the same claim, the decision of the higher tribunal shall thereafter control, but if the tribunal be of equal rank, then the final judgment, decree, or decision more favorable to such claim shall control unless and until the majority of such tribunals of equal rank adopt or follow a less favorable final judgment, decree, or decision, in which event the latter shall control.

6.3Each of the parties will promptly notify the other in the event of any potential infringement of the Patent Rights licensed hereunder by any third party or any claims of alleged infringement by Pfizer or Atugen with respect to the manufacture, use, sale, offer for sale or importation of Licensed Products. Pfizer shall have the right, but not the obligation, to defend or institute litigation in connection therewith, and any such litigation shall be at Pfizer’s expense; provided, however Atugen shall be entitled to receive [ * ] of any amounts to which Quark is or would be entitled under Section 7.9 of the Quark License. Atugen, upon request of Pfizer, agrees to join in any such litigation at Pfizer’s expense and to cooperate reasonably with Pfizer. If Pfizer fails to defend any action for alleged infringement by Pfizer or Atugen with respect to the manufacture, use, sale, offer for sale or importation of Licensed Products, Atugen shall have the right (but not the obligation) upon [ * ] prior notice to Pfizer, at Atugen’s expense, to defend any such litigation. Atugen shall not have the right to enforce any potential infringement of the Patent Rights licensed hereunder relating to the Licensed Products.

ARTICLE 7

TERM

This Agreement shall be effective as of the Effective Date and, unless earlier terminated as provided herein, shall remain in effect with respect to each country until the longer of (1) the expiration of the last to expire of the Patent Rights included within Atugen Existing IP or Joint Program IP with claims embracing the Licensed Products sold in such country and (2) other than with respect to the United States, a period of ten (10) years from the date of first commercial sale of the Licensed Products in such country. The provisions of Articles 1, 4, 5, 9 and 10 shall survive the expiration or termination of this Agreement, and the provisions of Section 2.2(d) shall survive expiration of this Agreement.

ARTICLE 8

TERMINATION

8.1THIS AGREEMENT SHALL TERMINATE AS FOLLOWS:

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(a)At any time Pfizer, upon [ * ] notice to Atugen, shall have the right, for any reason and at Pfizer’s sole discretion, to terminate this Agreement, whereupon this Agreement shall terminate [ * ] after the date of such notice, and all rights granted hereunder to Pfizer shall terminate.

(b)Any default by Pfizer of its payment obligations hereunder that shall have continued for [ * ] after notice thereof was provided to Pfizer by Atugen; provided, that, in the event of a good faith payment dispute, such [ * ] cure period shall be extended until the [ * ] following the date on which such dispute is resolved; provided, further, that Pfizer shall pay Atugen any amounts not in dispute.

(c)If either Pfizer or Atugen breaches or defaults (other than payment obligation under Article 3) in the performance or observance of any of the provisions which are material to this Agreement taken as a whole, and such breach or default is not cured within [ * ] after the giving of notice by the other party specifying such breach or default, the other party shall have the right to terminate this Agreement forthwith.

8.2TERMINATION OF THIS AGREEMENT FOR ANY REASON SHALL BE WITHOUT PREJUDICE TO ATUGEN’S RIGHT TO RECEIVE ALL PAYMENTS ACCRUED UNDER SECTION 3 HEREOF PRIOR TO THE EFFECTIVE DATE OF SUCH TERMINATION AND ANY OTHER REMEDIES WHICH EITHER PARTY MAY OTHERWISE HAVE.

ARTICLE 9

INDEMNIFICATION

9.1Pfizer agrees to indemnify, defend and hold harmless Atugen, its Affiliates and its and their directors, officers, agents and employees (the “Atugen Parties”) from and against any and all Losses (as hereinafter defined) incurred, suffered or sustained by the Atugen Parties from any claims, actions, suits, proceedings, liabilities or obligations arising out of or resulting from the development (including clinical trials), marketing, manufacture, use, processing, packaging, sale, offer for sale, importation, distribution of any Licensed Product, in each case by Pfizer, its Affiliates or sublicensees. The foregoing indemnity shall not apply to the extent that any Loss arises from or is the result of gross negligence or intentional misconduct on the part of the

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Atugen Parties. The foregoing indemnity shall also be subject to the provisions of Section 9.2.

9.2In the event any third party asserts any claim in respect to any matter to which the indemnification in Section 9.1 relates, the Atugen Parties shall not make any admission concerning such claim, but shall promptly notify Pfizer of the claim, and Pfizer shall be entitled, but not obliged, to manage and control, at its sole expense, the defense of the claim and its settlement. The benefit of any indemnity by Pfizer under this Agreement in respect of any claim shall not apply to the Atugen Parties if any admission made by such party or any failure by such party to notify Pfizer of the claim materially prejudices the defense of such claim. If Pfizer elects to defend such claim, it shall give prompt notice to Atugen. If Pfizer does not give such notice and does not proceed diligently to defend the Atugen Parties within twenty (20) days after receipt of notice of the claim, Pfizer shall be bound by any defense or settlement made by the Atugen Parties and shall reimburse the Atugen Parties for its expenses related to the defense or settlement of the third party claim. If Pfizer elects to defend the claim and gives notice to Atugen and proceeds diligently to defend the Atugen Parties, then the Atugen Parties shall not settle any claim for which it is seeking indemnification without the prior consent of Pfizer. The Atugen Parties shall, if requested by Pfizer, and at Pfizer’s expense, cooperate in all reasonable respects in the defense of such a third party claim which is being managed and controlled by Pfizer. The Atugen Parties may, at its option and expense, be represented by counsel of its own choice in any action or proceeding arising out of such claim; provided, however, Pfizer shall not be liable for any litigation costs or expenses incurred without its consent, by the Atugen Parties, where such action or proceeding is under the control and management of Pfizer.

9.3Any indemnification hereunder shall be made net of any insurance proceeds recovered by the Atugen Parties; provided, however, that if, following the payment of the Atugen Parties of any amount under this Section 9, such Atugen Party recovers any insurance proceeds in respect of the claim for which such indemnification payment was made, the Atugen Party shall promptly pay an amount equal to the amount of such proceeds (but not exceeding the amount of such indemnification payment) to Pfizer.

9.4For purposes of this Section 9, “Losses” shall mean any and all damages, fines, fees, penalties, judgments, deficiencies, losses and expenses (including without limitation interest, court costs, reasonable fees of attorneys, accountants and other experts or other expenses of litigation or other proceedings or of any claim, default or assessment).

ARTICLE 10

MISCELLANEOUS

10.1Force Majeure. No party shall be liable for failure of or delay in performing obligations set forth in this Agreement, and no party shall be deemed in breach of its obligations, if such failure or delay is due to natural disasters or any causes reasonably beyond the control of such party.

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10.2Assignment. This Agreement may not be assigned or otherwise transferred by either party without the prior written consent of the other party; provided, however, subject to this Section 10.2, either party may, without such consent, assign this Agreement and its rights and obligations hereunder in whole or in part: (i) to any of its respective Affiliates so long as such party shall remain jointly and severally liable with such Affiliate in respect of all obligations so assigned; (ii) in connection with the transfer or sale of all or substantially all of its assets or stock, or in the event of its merger or consolidation or similar transaction; or (iii) if such party or its Affiliates is required to, or reasonably believes that it will be required to, divest any of the Licensed Products or a competing product in order to comply with law or the order of any governmental authority as a result of a merger or acquisition. Any purported assignment in violation of this Section 10.2 shall be void. Subject to this Section 10.2, any permitted assignee shall assume all obligations of its assignor under this Agreement.

10.3Governing Law. This Agreement shall be governed by the English law in all respects of validity, construction and performance thereof. The parties submit to the non-exclusive jurisdiction of the courts of England and Wales.

10.4Notices. Any notice, consent, approval reports, requests communication hereunder this Agreement shall be in writing sent by registered airmail, postage prepaid, or by telex or facsimile (confirmed by such registered mail) and addressed as follows:

If to Pfizer:	If to Atugen:
Pfizer Inc. 235 East 42nd Street New York, New York 10017-5703 USA	Atugen AG Robert-Rössle-Str. 10 Berlin, Germany
Fax: 212-808-8924	Fax: +49 30 9489 2801
Attention: General Counsel	Attention: Thomas Christély

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All notices shall be deemed to be effective on the date of mailing. In case any party changes its address at which notice is to be received, notice of such change shall be given without delay to the other party.

10.5Entire Agreements; Amendments. This Agreement, together with the Amendment and Option, sets forth the entire agreement and understanding between the parties hereto as to the subject matter hereof. None of the terms or this Agreement shall be amended, supplemented or modified except in writing signed by the parties hereto.

10.6Severability. If and solely to the extent that any provision of this Agreement shall be invalid or unenforceable, or shall render this entire Agreement to be unenforceable or invalid, such offending provision shall be of no effect and shall not effect the validity of the remainder of this Agreement or any of its provisions; provided, however, the parties shall use their respective reasonable efforts to renegotiate the offending provisions to best accomplish the original intentions of the parties.

10.7Waivers. Any term or condition of this Agreement may be waived at any time by the party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the party or parties waiving such term or condition. Neither the waiver by any party of any term or condition of this Agreement nor the failure on the part of any party, on one or more instances, to enforce any of the provisions of this Agreement or to exercise any right or privilege, shall be deemed or construed to be a waiver of such term or condition for any similar instance in the future or of any subsequent breach hereof. All rights, remedies, undertakings, obligations and agreements contained in this Agreement shall be cumulative and none of them shall be a limitation of any other remedy, right, undertaking, obligation or agreement.

10.8Binding Effect. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective heirs, successors and permitted assigns.

10.9Further Assurances. Following the date hereof, Atugen and Pfizer shall, and shall cause each of their respective Affiliates to, from time to time, execute and deliver such additional instruments, documents, conveyances or assurances and take such other actions as shall be necessary or otherwise reasonably requested by Pfizer or Atugen, to confirm and assure the rights and obligations provided for in this Agreement, and render effective the consummation of the transactions contemplated thereby.

10.10Third Party Beneficiaries. None of the provisions of this Agreement shall be for the benefit of or enforceable by any third party including, without limitation, any creditor of either party hereto. No third party shall obtain any right under any provision of this Agreement or shall by reasons of any such provision make any claim in respect of any debt, liability or obligation (or otherwise) against either party hereto.

[ * ] = 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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10.11Counterparts. This Agreement may be executed in any two or more counterparts, each of which, when executed, shall be deemed to be an original and all of which together shall constitute one and the same document.

10.12Headings. Headings in this Agreement are included herein for ease of reference only and shall have no legal effect. References to Sections and Schedules are to Sections and Schedules of this Agreement unless otherwise specified.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed as of the date first written above by their duly authorized officers.

EXECUTED AS A DEED BY	EXECUTED AS A DEED BY
ATUGEN AG ACTING BY ITS	PFIZER INC. ACTING BY ITS
AUTHORIZED SIGNATORY	AUTHORIZED SIGNATORY
By:	By:
Name:	Name:
Title:	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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Schedule A1 – Atugen Background Technology

PUBLICATION NO.	APPLICATION NOS.	FILING DATE	PROSECUTING PARTY
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]

[ * ] = 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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PUBLICATION NO.	APPLICATION NOS.	FILING DATE	PROSECUTING PARTY
[ * ]	[ * ]	[ * ]	[ * ]

[ * ] = 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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Schedule A2 – Atugen Program IP

PUBLICATION NO.		APPLICATION NOS.		FILING DATE		PROSECUTING PARTY
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]		[ * ]		[ * ]		[ * ]
[ * ]	[ * }		[ * }		[ * }		[ * }
[ * }	[ * }		[ * }		[ * }		[ * }

**Italicized documents in ( )  are claimed as priority.

[ * ] = 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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Schedule B – Quark Existing IP

Publication/Patent No.	Application No.	Filing date	Prosecuting Party
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]
[ * ]	[ * ]	[ * ]	[ * ]

[ * ] = 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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