Confidential
        Treatment Requested. Confidential portions of this document have been redacted
        and have been separately filed with the Commission.

      


      *****
        Confidential material redacted and filed separately with the
        Commission.



      LICENSE
        AND DEVELOPMENT AGREEMENT

       

      THIS
        LICENSE AND DEVELOPMENT AGREEMENT
        is
        entered into as of the 26th
        day of
        February, 2003 (the “Effective
        Date”)
        by and
        between XTL BIOPHARMACEUTICALS LTD. (“XTL”),
        and
        B&C BIOPHARM CO., LTD. (“B&C”)

       

      RECITALS

       

      WHEREAS,
        B&C
        has certain intellectual property rights and know-how relating to the B&C
        Compounds (as defined herein); and

       

      WHEREAS,
        XTL
        desires to obtain an exclusive license to such intellectual property rights
        and
        know-how, and B&C desires to grant such a license on the terms and
        conditions set forth herein.

       

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

       

      ARTICLE
        1.

       

      DEFINITIONS

       

      As
        used
        herein, the following terms shall have the following meanings:

       

      1.1.  “Affiliate”shall
        mean any company or entity controlled by, controlling, or under common control
        with a party hereto and shall include without limitation any company 50%
        or more
        of whose voting stock or participating profit interest is owned or controlled,
        directly or indirectly, by a party, and any company which owns or controls,
        directly or indirectly, 50% or more of the voting stock of a party.

       

      1.2.  “Asia”
        shall
        mean those countries set forth on Schedule
        A.

       

      1.3.  “B&C
        Compounds”
        shall
        mean the compounds referred to by B&C as *****.

       

      1.4.  “FDA”
        shall
        mean the United States Food and Drug Administration or any other governmental
        agency of a country within the Licensed Territory having responsibilities
        comparable to those of the United States Food and Drug
        Administration.

       

      1.5.  “Field”
        shall
        mean all therapeutic uses against HCV.

       

      1.6.  “HCV”
        shall
        mean the Hepatitis C virus.

       

      1.7.  “Licensed
        Know-How”
        shall
        mean (a) tangible or intangible know-how; (b) trade secrets,
        inventions (whether or not patentable); (c) data; (d) preclinical
        and
        clinical results; (e) other information; and (f) any physical,
        chemical or biological material and any replication or any part of such
        material; limited, however, to that which is necessary or useful for the
        development, manufacture, use or sale of Licensed Product, and which B&C
        owns, controls or has a license (with the right to sublicense) on or after
        the
        Effective Date.

       

      
        
           

        

        
           

          
            

          

        

        
          
            *****
              Confidential material redacted and filed separately with the
              Commission.

             

             

          

        

      

      1.8.  “Licensed
        Patents”
        shall
        mean all patents, both foreign and domestic, including without limitation
        all
        substitutions, extensions, reissues, re-examinations, renewals and inventors
        certificates and all patent applications (including provisionals, divisionals,
        continuations and continuations-in-part), which B&C owns, controls or has a
        license (with the right to sublicense) on or after the Effective Date, that
        would be infringed by the development, manufacture, use, import, offer for
        sale
        or sale of Licensed Product in the Field in the Licensed Territory, including
        without limitation those patents and any patents issuing on those patent
        applications listed on Schedule C
        hereto.

       

      1.9.  “Licensed
        Product”shall
        mean any product incorporating a B&C Compound.

       

      1.10.  “Licensed
        Technology”
        shall
        mean the Licensed Patents and the Licensed Know-How.

       

      1.11.  “Licensed
        Territory”
        shall
        mean the Rest of the World and Japan.

       

      1.12.  “Net
        Royalty Payments”shall
        mean the royalty payments actually received by XTL from its sublicensees
        for
        sales of Licensed Product, net of any amounts XTL shall be required to pay
        to
        third parties with respect to such sales.

       

      1.13.  “Net
        Sales”
        shall
        mean all revenues actually received by XTL, its Affiliates or its sublicensees
        from the sale of Licensed Product, after deduction for transportation charges,
        commissions, discounts, credits allowed for defective or returned or recalled
        goods and other allowances (actually paid or allowed, including but not limited
        to, prompt payment and volume discounts, charge backs from wholesalers),
        insurance and sales and other taxes based on sales prices when included in
        gross
        sales, but not including taxes assessed on income derived from such sales.
        

       

      1.14.  “Net
        Sublicense Payments”
        shall
        mean license fees, milestones and similar payments, other than royalty payments,
        actually received by XTL from its sublicensees, but excluding (a) payments
        made
        to XTL if said payments are designed to pay for research and development
        costs
        to be incurred under, and then actually incurred after the date of, the
        agreement under which said payments are made and (b) equity investments in
        XTL.
        These payments shall be on amounts net of any payments XTL shall be required
        to
        make to third parties with respect to such license fees, milestones and other
        similar payments. By way of illustration, if XTL receives $100 in license
        fees
        from a sublicensee of the B&C Compounds, and XTL is required to pay $10 to
        third parties, XTL shall pay $***** to B&C (*****).

       

      1.15.  “Phase
        I Clinical Trials”shall
        mean the initial human studies for a Licensed Product required by FDA to
        ascertain safety of the Licensed Product.

       

      1.16.  “Phase
        III Clinical Trials”
        shall
        mean the expanded human studies necessary for filing with, and (if successful)
        approval of marketing by, FDA of a Biologics License Application or New Drug
        Application (or corresponding application, registration or certification
        outside
        of the United States) for a Licensed Product.

       

      1.17.  “Rest
        of the World”shall
        mean all the countries of the world excluding Asia.

       

      
        
           

        

        
          2

          
            

          

        

        
          
             *****
              Confidential material redacted and filed separately with the
              Commission.
               

               

            

          

        

      

      1.18.  “Valid
        Claim”
        shall
        mean a patent claim contained in an issued and unexpired patent which has
        not
        lapsed or been declared invalid or unenforceable by a court in a decision
        which
        is unappealable or not appealed.

       

      ARTICLE
        2.

       

      LICENSES;
        DEVELOPMENT AND COMMERCIALIZATION

       

      2.1.  GRANT
        BY B&C TO XTL.

       

      (a)  Subject
        to the terms of this Agreement, B&C hereby grants to XTL an exclusive
        license, with the right to sublicense, under the Licensed Technology to make,
        have made, use, sell, offer to sell and import Licensed Product in the Field
        within the Licensed Territory.

       

      (b)  B&C
        hereby agrees to grant a license, with the right to sublicense, under the
        Licensed Technology to XTL, a third party or a separate entity formed by
        the
        parties, as may be agreed by the parties pursuant to Section
        2.2(b)
        with
        respect to development and commercialization of Licensed Product in the
        countries of Asia, excluding Japan and Korea.

       

      2.2.  DEVELOPMENT
        AND COMMERCIALIZATION OF LICENSED PRODUCT. 

       

      (a)  As
        between the parties, B&C shall retain all development and commercialization
        rights to the B&C Compounds in Korea and shall be solely responsible for all
        costs associated with any such efforts; provided that (i) all clinical studies
        conducted by B&C or its Affiliates of products incorporating B&C
        Compounds shall be designed by B&C in collaboration with XTL, (ii) B&C
        shall keep XTL informed of the ongoing progress of all such clinical studies
        on
        a current basis, (iii) B&C shall promptly provide XTL with complete data
        from such clinical studies and (iv) upon the written request of XTL, B&C
        shall promptly provide XTL with all data from pre-clinical studies of B&C
        Compounds which XTL has chosen for clinical development, including, without
        limitation, toxicity, pharmacokinetics and biological activity data. XTL
        shall
        have the right to use such data solely for its submissions seeking regulatory
        or
        marketing approval of B&C Compounds outside of Korea.

       

      (b)  Within
        the countries of Asia, but excluding Japan and Korea, (i) XTL and B&C shall
        jointly develop and commercialize Licensed Product in the Field, (ii) the
        parties shall license the B&C Compounds to a third party for development and
        commercialization in the Field, or (iii) XTL and B&C shall form a separate
        entity to develop and commercialize B&C Compounds in the Field, as mutually
        agreed and as may be required or advisable due to legal and tax requirements.
        In
        each case, B&C and XTL shall equally share all costs for development and
        commercialization of products incorporating B&C Compounds in all such
        countries as well as all revenues received therefrom.

       

      (c)  XTL
        shall
        be responsible for the development and commercialization of Licensed Product
        in
        the Field in the Licensed Territory, either on its own or by licensing to
        or
        collaborating with one or more third parties; provided that (i) XTL shall
        keep
        B&C informed on a current basis of the ongoing progress of all clinical
        studies conducted by XTL or its Affiliates of products incorporating B&C
        Compounds, (ii) XTL shall promptly provide B&C with complete data from such
        clinical studies and (iii) upon the written request of B&C, XTL shall
        promptly provide B&C with all data from pre-clinical studies of B&C
        Compounds which B&C has chosen for clinical development in Korea, including,
        without limitation, toxicity, pharmacokinetics and biological activity data.
        B&C shall have the right to use such data solely for its submissions seeking
        regulatory or marketing approval of B&C Compounds in Korea.

       

      
        
           

        

        
          3

          
            

          

        

        
           *****
            Confidential material redacted and filed separately with the
            Commission.
             

             

          


      

      (d)  In
        Japan,
        B&C shall receive annual payments equal to 50% of all revenues derived by
        XTL from the development and commercialization of products incorporating
        a
        B&C Compound for so long as the composition of matter of the B&C
        Compound is covered by a Valid Claim of a Licensed Patent in Japan; provided
        that no such payments shall be made until XTL has offset 50% of all costs
        incurred in the development and commercialization of such products.

       

      (e)  In
        the
        Rest of the World, the costs of development and commercialization shall be
        fully
        borne by XTL.

       

      (f)  Solely
        for purposes of clarification, the parties’ respective rights under this
Section
        2.2
        are
        summarized on Schedule
        D
        attached
        hereto.

       

      2.3.  DUE
        DILIGENCE.
        Subsequent to XTL’s filing of an Investigational New Drug Application with the
        FDA, or comparable foreign filing, for a Licensed Product, XTL and its
        Affiliates and any sublicensees for the Licensed Product shall use commercially
        reasonable efforts to develop and commercialize the Licensed Product. The
        parties hereby agree that XTL’s due diligence obligations in this Section
        2.3
        shall be
        deemed to be fully satisfied upon XTL’s and its Affiliates and sublicensees
        spending, in the aggregate, at least U.S. $500,000 per year on the development
        and commercialization of the Licensed Product.

       

      2.4.  ADDITIONAL
        B&C COMPOUNDS SUPPLY AND SUPPORT.

       

      (a)  Additional
        B&C Compounds.
        From the
        Effective Date until May 21, 2004, B&C shall keep XTL informed of any
        meaningful developments related to any compound in the ***** set forth on
        Schedule
        B
        which
        shows potential activity against HCV, and shall promptly provide XTL with
        a
        report for each such compound, which will include all relevant data regarding
        its activity against HCV. If XTL determines in good faith that one or more
        such
        compound(s) show(s) adequate therapeutic index and display pharmacokinetic
        properties, XTL shall promptly notify B&C of its determination, and, upon
        such notification, (i) B&C shall promptly supply to XTL at least 5
        grams of each such compound and, to the extent not already provided to XTL,
        related HPLC, mass spectrometry and chemical structure information and (ii)
        Schedule
        B
        shall be
        deemed to be automatically amended to reflect the addition of such compound
        as a
        B&C Compound. From the Effective Date until May 21, 2004, B&C shall
        maintain an active program to develop analogs of *****.

       

      (b)  Supply
        of B&C Compounds for Additional Studies.
        Upon any
        request by XTL for additional quantities of any B&C Compound or other
        compound owned or licensed by B&C to be used by XTL as a negative control,
        for toxicological, pharmacological or other non-clinical studies, B&C shall
        use best efforts to (i) satisfy any such request within one month of the
        request, and (ii) promptly supply XTL with sufficient chemical synthesis
        information to enable XTL to manufacture or have manufactured the requested
        compound. XTL’s request shall state the intended use for such additional
        quantities of B&C Compounds or other compounds, and XTL warrants that the
        B&C Compounds or other compounds will be used solely for the stated uses.
        XTL shall reimburse B&C for its direct reasonable costs incurred in
        supplying such additional quantities to XTL, such costs not to exceed a price
        of
        US $4,000 per 50 grams.

       

      
        
           

        

        
          4

          
            

          

        

        
          
            *****
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              Commission.

             

             

          

        

      

      (c)  Development
        Support.
        B&C
        shall support XTL’s development of the B&C Compounds as set forth on
Schedule
        E.

       

      2.5.  NONCOMPETITION.
        During
        the term of this Agreement, B&C shall not, directly or indirectly, e.g., as
        a consultant, agent, principal, partner, joint venturer, or stockholder,
        develop
        or commercialize any products incorporating B&C Compounds in the Field or
        grant any licenses to third parties for the development or commercialization
        of
        any products incorporating B&C Compounds in the Field, except as permitted
        under Section
        2.2(a)
        for the
        development and commercialization of B&C Compounds in Korea or Section
        2.2(b)
        as
        agreed to by the parties with respect to the development and commercialization
        of B&C Compounds in Asia (excluding Japan and Korea).

       

      2.6.  RIGHT
        OF FIRST NEGOTIATION.
        Until
        the third anniversary
        of the Effective Date, B&C shall notify XTL in writing of any new compounds
        owned or licensed by B&C that have potential activity in the Field
        (“New
        Compounds”)
        and
        shall provide XTL with (1) all HPLC, mass spectrometry and chemical structure
        information for each such compound and (ii) 5 grams of each New Compounds
        for
        XTL’s initial evaluation. Upon notice from XTL at any time within 120 days after
        XTL’s receipt of 5 grams of a New Compound and the required information with
        respect to such compound, XTL and B&C shall enter into good faith
        negotiations to enter into an exclusive license to XTL to make, have made,
        use,
        sell, offer to sell and import products incorporating the New Compound in
        the
        Field within the Licensed Territory. The terms for such license shall be
        no less
        favorable to XTL than those contained herein.

       

      ARTICLE
        3.

       

      COMMERCIAL
        TERMS

       

      3.1.  LICENSE
        FEE. XTL
        shall
        pay to B&C a license fee of US $***** (the “License Fee”), payable within 30
        days of the Effective Date after B&C has complied with, provided that
        B&C has theretofore complied with its obligations under items 1, 2 and 3 of
        Schedule
        E.

       

      3.2.  MILESTONES.
        As
        nonrefundable advances against the royalties payable to B&C pursuant to
Section
        3.3,
        XTL
        shall make payments to B&C in connection with the following
        milestones:

       

      

        
          	
                  Milestone

                	 	
                  Payment

                
	
                  *****

                	
                   

                	
                  U.S.
                    $*****

                
	
                   

                	
                   

                	
                   

                
	
                  *****

                	
                   

                	
                  U.S.
                    $*****

                
	
                   

                	
                   

                	
                   

                
	
                  *****

                	
                   

                	
                  U.S.
                    $*****

                
	
                   

                	
                   

                	
                   

                
	
                  *****

                	
                   

                	
                  U.S.
                    $*****

                


        

      

      

      

      
        
           

        

        
          5

          
            

          

        

        
          
            *****
              Confidential material redacted and filed separately with the
              Commission.

             

             

          

        

      

      3.3.  ROYALTIES.
        XTL
        shall
        pay to B&C within 90 days after the end of each calendar year, royalties on
        Net Sales in each country within the Rest of the World where the composition
        of
        matter of the B&C Compounds incorporated in the Licensed Product is covered
        by a Valid Claim of a Licensed Patent, as follows:

       

      (a)  If
        sales
        of Licensed Product are made by XTL or an XTL Affiliate (either directly
        or
        indirectly through a distributor), ***** of Net Sales by XTL or its Affiliate;
        

       

      (b)  If
        sales
        of Licensed Product are made by a sublicensee of XTL, the lesser of (i) *****
        of
        Net Royalty Payments or (ii) ***** of Net Sales by such sublicensee;
        and

       

      (c)  *****
        of
        Net Sublicense Payments.

       

      3.4.  REDUCTION
        FOR MILESTONE PAYMENTS.
        XTL
        shall have the right to reduce the royalty payments due to B&C under
Section
        3.3
        to
        offset the full amount of the payments advanced by XTL to B&C pursuant to
Section
        3.2;
        provided, however, that the annual royalties otherwise payable pursuant to
        Section
        3.3
        shall
        not be reduced by more than *****. To the extent that any such advance payments
        made by XTL are not fully offset by a reduction in the royalty payments made
        by
        XTL for any year, XTL shall be entitled to carry forward the amount not so
        covered to subsequent years until the full amount of such advances is
        offset.

       

      3.5.  ROYALTY
        TERM.
        The
        royalties payable under Section 3.3
        shall be
        paid to B&C until the last to expire Licensed Patent, on a
        country-by-country basis.

       

      ARTICLE
        4.

       

      PAYMENTS;
        RECORDS; AUDIT

       

      4.1.  PAYMENTS;
        REPORTS.
        All
        amounts payable under this Agreement shall be paid in U.S. Dollars. Each
        payment
        of royalties by XTL shall be accompanied by a statement of the amount of
        Net
        Sales, Net Royalty Payments and Net Sublicensee Payments received during
        such
        period, and all other information necessary to determine the appropriate
        amount
        of such payments.

       

      4.2.  EXCHANGE
        RATE.
        The rate
        of exchange to be used in computing the amount of currency equivalent in
        United
        States Dollars due hereunder shall be made at the average rate of exchange
        quoted for the final 20 business days of the royalty period by Citibank (or
        its
        successor) in New York City.

       

      4.3.  RECORDS
        AND AUDIT.
        During
        the term of this Agreement and for a period of two years thereafter, XTL
        shall
        keep complete and accurate records in sufficient detail to permit B&C to
        confirm the accuracy of all payments due hereunder. B&C shall have the right
        to retain an independent, certified public accountant, reasonably satisfactory
        to XTL, to audit such records to confirm XTL’s Net Sales, Net Royalty Payments
        and Net Sublicensee Payments; provided however, that
        such
        auditor shall not disclose XTL’s confidential information to B&C, except to
        the extent such disclosure is necessary to verify the amount of royalties
        due
        under this Agreement. Such audits may be exercised not more than once a year,
        within two years after the royalty period to which such records relate, upon
        reasonable advance notice to XTL and during normal business hours. B&C shall
        bear the full cost of any such audit unless the audit discloses a variance
        of
        more than 10% from the amounts previously paid by XTL for any royalty period.
        In
        such case, XTL shall bear the full cost of such audit.

       

      
        
           

        

        
          6

          
            

          

        

        
           *****
            Confidential material redacted and filed separately with the
            Commission.
             

             

          

        

      

      4.4.  WITHHOLDING
        OF TAXES.
        Any
        withholding of taxes levied by applicable tax law on the payments hereunder
        shall be borne by B&C and deducted by XTL from the sums otherwise payable by
        it hereunder for payment to the proper tax authorities on behalf of B&C. XTL
        agrees to cooperate with B&C in the event B&C claims exemption from such
        withholding or seeks application of a reduced withholding tax rate under
        any
        double taxation or other similar treaty or agreement from time to time in
        force,
        such cooperation to consist of providing receipts of payment of such withheld
        tax or other documents reasonably available to XTL. 

       

      ARTICLE
        5.

       

      OWNERSHIP;
        PATENTS

       

      5.1.  PATENT
        PROSECUTION. B&C
        shall have the responsibility for preparing, filing, prosecuting and maintaining
        the Licensed Patents and conducting any interferences, reexaminations or
        requesting reissues or patent term extensions with respect to the Licensed
        Patents. B&C shall keep XTL fully informed as to the status of such patent
        matters, including without limitation by providing XTL with the opportunity
        to
        review and comment on any documents which will be filed in any patent office
        and
        by providing XTL copies of any documents received by B&C from such patent
        offices including notices of all interferences, reexaminations, oppositions
        or
        requests for patent term extensions. XTL shall cooperate with and assist
        B&C
        in connection with such activities, at B&C’s request and expense. In the
        event that B&C declines or fails to prepare, file, prosecute or maintain any
        Licensed Patents, including patent applications, which, if filed, would be
        included in the Licensed Patents, B&C shall promptly, and in no event later
        than 90 days prior to any filing deadline, provide written notice to XTL.
        XTL
        shall have the right to assume such responsibilities at its own expense using
        counsel of its choice. In addition, B&C shall immediately notify XTL of any
        decision to abandon a Licensed Patent, in which case, XTL shall have the
        option,
        at its expense and with counsel of its choice, of continuing to prosecute
        any
        such pending patent application or of keeping the issued patent in force.
        XTL
        may fully credit any expenses incurred by XTL in assuming the responsibilities
        for these patent activities against the $***** payment set forth in Section
        3.2.
        

       

      5.2.  INFRINGEMENT
        OF LICENSED PATENTS BY THIRD PARTIES.

       

      (a)  Notice.
        Each
        party shall promptly notify the other in writing of any alleged or threatened
        infringement of the Licensed Patents which may adversely impact the rights
        of
        the parties hereunder, of which it becomes aware. The parties will meet to
        discuss the appropriate course of action, and may collaborate in pursuing
        such
        course of action.

       

      
        
           

        

        
          7

          
            

          

        

        
           *****
            Confidential material redacted and filed separately with the
            Commission.
             

             

          

        

      

      (b)  Enforcement
        Action. If
        the
        parties do not otherwise agree on a course of action, B&C shall have the
        first right, but not the obligation, to take appropriate action against any
        person or entity directly or contributorily infringing such Licensed Patent.
        B&C shall keep XTL reasonably informed of the progress of any such claim,
        suit or proceeding. In the event B&C fails to institute an infringement suit
        or take other reasonable action in response to an infringement in any country
        other than Korea within 30 days, XTL shall have the right to institute such
        claim, suit or proceeding or take other appropriate action, and may join
        B&C
        as party plaintiff, if appropriate. Regardless of which party brings the
        action,
        the other party hereby agrees to cooperate reasonably in any such effort,
        including if required to bring a legal action, the furnishing of a power
        of
        attorney and shall have the right to participate in such action at its own
        expense with its own counsel. Any recovery obtained by settlement or otherwise
        shall be disbursed as follows. Each party shall first recover any reasonable
        expenses incurred in such action (including counsel fees). Thereafter, the
        parties shall share any remaining recovery, with (i) 90% of such remaining
        recovery going to XTL and 10% to B&C with respect to actions in the Rest of
        the World and (ii) such remaining recovery being split 50%/50% between XTL
        and
        B&C with respect to actions in Asia (excluding Korea). Neither party shall
        enter into any settlement that affects the other party’s rights or interests
        without such other party’s written consent, which consent shall not be
        unreasonably withheld.

       

      5.3.  INFRINGEMENT
        OF THIRD PARTY PATENT RIGHTS.

       

      (a)  Licensed
        Territory.

       

      (i)  Joint
        Strategy. In
        the
        event that the manufacture, use or sale of Licensed Product becomes the subject
        of a claim of infringement of a patent, copyright or other proprietary right
        in
        the Licensed Territory, and without regard to which party is charged with
        said
        infringement, and the venue of such claim, the parties shall promptly confer
        to
        discuss the claim.

       

      (ii)  Defense.
        Unless
        the parties otherwise agree, XTL shall assume the primary responsibility
        for the
        conduct of the defense of any such claim in the Licensed Territory. In any
        event, B&C shall have the right, but not the obligation, to participate in
        any such suit at its sole option and at its own expense. Each party shall
        reasonably cooperate with the party conducting the defense of the claim
        including, if required to conduct such defense, furnishing a power of attorney.
        Neither party shall enter into any agreement, license or settlement that
        affects
        the other party’s rights or interests without such other party’s written
        consent, which consent shall not be unreasonably withheld.

       

      (b)  Asia
        (Excluding Japan and Korea). In
        the
        event that the manufacture, use or sale of Licensed Product becomes the subject
        of a claim of infringement of a patent, copyright or other proprietary right
        in
        Asia (excluding Japan and Korea), the parties shall promptly confer to discuss
        the claim, and the parties will cooperate with each other in the defense
        of any
        such claim. Neither party shall enter into any agreement, license or settlement
        that affects the other party’s rights or interests without such other party’s
        written consent, which consent shall not be unreasonably withheld

       

      
        
           

        

        
          8

          
            

          

        

        
           *****
            Confidential material redacted and filed separately with the
            Commission.
             

             

          

        

      

      (c)  Korea.
        In the
        event that the manufacture, use or sale of Licensed Product becomes the subject
        of a claim of infringement of a patent, copyright or other proprietary right
        in
        Korea, B&C shall assume the primary responsibility for the conduct of the
        defense of any such claim. In any event, XTL shall have the right, but not
        the
        obligation, to participate in any such suit at its sole option and at its
        own
        expense. Each party shall reasonably cooperate with the party conducting
        the
        defense of the claim including, if required to conduct such defense, furnishing
        a power of attorney. Neither party shall enter into any agreement, license
        or
        settlement that affects the other party’s rights or interests without such other
        party’s written consent, which consent shall not be unreasonably
        withheld.

       

      (d)  XTL
        Payment Credit Regarding Claims by Third Parties. XTL
        may
        fully credit against royalties otherwise due B&C under Section 3.3
        of this
        License Agreement, all payments made or expenses incurred by XTL under this
        Article
        5,
        including any royalties paid to third parties as a result of such claims.
        To the
        extent that any such payments or expenses incurred by XTL are not fully offset
        by a reduction in the royalty payments otherwise due B&C for any year, XTL
        shall be entitled to carry forward the amount so covered to subsequent years
        until the full amount of such payments and expenses is offset.

       

      ARTICLE
        6.

       

      CONFIDENTIALITY

       

      6.1.  CONFIDENTIALITY.
        Except
        as required by regulatory or governmental agencies, all proprietary information
        disclosed by either party to the other hereunder shall be received by the
        receiving party (including all appropriate employees, agents and independent
        contractors) in strictest confidence and used solely in furtherance of this
        Agreement, and shall be accorded the same degree of confidentiality and secrecy
        with which the receiving party holds its own most confidential information
        of a
        similar nature but in no event less than reasonable care. Such confidential
        information shall not be disclosed to any persons other than (a) employees
        or
        agents of the receiving party or independent contractors employed by the
        receiving party who have reasonable need for access to such information in
        connection with the receiving party’s performance under this Agreement and who
        are bound to the receiving party by a written agreement of confidentiality
        containing terms consistent with those contained in this Article
        6;
        and (b)
        governmental authorities, as required, to obtain necessary regulatory
        clearances. Information shall not be deemed to be proprietary information
        and
        such restrictions shall not apply to any such information (i) which is, or
        subsequently may become, within the knowledge of the general public, without
        the
        fault of the receiving party; (ii) which is known to the receiving party
        prior
        to the time of receipt thereof from the disclosing party, as shown by written
        records; (iii) which is proved to have been developed by the receiving party,
        independently and wholly without resort to the proprietary information of
        the
        disclosing party, as shown by written records; or (iv) which is subsequently
        rightfully obtained from sources other than the disclosing party and without
        confidential restriction in favor of the disclosing party.

       

      
        
           

        

        
          9

          
            

          

        

        
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      ARTICLE
        7.

       

      REPRESENTATIONS
        AND WARRANTIES

       

      7.1.  REPRESENTATIONS
        AND WARRANTIES OF B&C. 

       

      (a)  Corporate
        Power. B&C
        is duly organized and validly existing under the laws of Korea and has full
        corporate power and authority to enter into this Agreement and to carry out
        the
        provisions hereof.

       

      (b)  Due
        Authorization. B&C
        is duly authorized to execute and deliver this Agreement and to perform its
        obligations hereunder. The person executing this Agreement on B&C’s behalf
        has been duly authorized to do so by all requisite corporate
        action.

       

      (c)  Binding
        Agreement. This
        Agreement is a legal and valid obligation binding upon B&C and enforceable
        in accordance with its terms. The execution, delivery and performance of
        this
        Agreement by B&C 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 material law or regulation of any court, governmental
        body or administrative or other agency having jurisdiction over
        him.

       

      (d)  Grant
        of Rights. B&C
        has not, and will not during the term of this Agreement, grant any right
        to any
        third party which would conflict with the rights granted to XTL
        hereunder.

       

      (e)  Validity.
        B&C
        is aware of no action, suit or inquiry or investigation instituted by any
        governmental agency which questions or threatens the validity of this
        Agreement.

       

      (f)  Ownership.
        B&C
        owns or holds licenses to the Licensed Patents and Licensed Know-How and
        has
        sufficient rights and power to grant the licenses to XTL which it purports
        to
        grant herein.

       

      (g)  Third
        Party Rights. B&C
        has, as of the Effective Date, no knowledge of any third party patent right
        which would be infringed by the use or commercialization of the B&C
        Compounds as contemplated hereby.

       

      7.2.  REPRESENTATIONS
        AND WARRANTIES OF XTL.

       

      (a)  Corporate
        Power. XTL
        is
        duly organized and validly existing under the laws of the State of Israel
        and
        has full corporate power and authority to enter into this Agreement and to
        carry
        out the provisions hereof.

       

      (b)  Due
        Authorization. XTL
        is
        duly authorized to execute and deliver this Agreement and to perform its
        obligations hereunder. The person executing this Agreement on XTL’s behalf has
        been duly authorized to do so by all requisite corporate action.

       

      
        
           

        

        
          10

          
            

          

        

        
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      (c)  Binding
        Agreement. This
        Agreement is a legal and valid obligation binding upon XTL and enforceable
        in
        accordance with its terms. The execution, delivery and performance of this
        Agreement by XTL 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 material law or regulation of any court, governmental
        body or administrative or other agency having jurisdiction over it.

       

      (d)  Validity.
        XTL
        is
        aware of no action, suit, or inquiry or investigation instituted by any
        governmental agency which questions or threatens the validity of this
        Agreement.

       

      ARTICLE
        8.

       

      TERM;
        TERMINATION

       

      8.1.  TERM.
        Except
        as provided under Section 8.2
        below, the term of this Agreement shall commence upon the Effective
        Date
        and shall expire on the expiration date of the last to expire payment obligation
        under Section
        2.2(c)
        and
Article
        3,
        and,
        upon expiration of this Agreement, XTL shall have a fully paid, nonexclusive
        license to use any Licensed Technology then being used by XTL, solely for
        the
        purpose of developing, making, using and selling Licensed Product in the
        Field
        within the Licensed Territory. 

       

      8.2.  TERMINATION
        BY XTL. XTL
        may
        terminate this Agreement and the license granted herein, in its entirety
        or as
        to any particular Licensed Patent in a particular country, at any time, by
        providing B&C with 90 days prior written notice. In addition, XTL shall have
        the right to terminate this Agreement upon written notice to B&C in the
        event B&C is in material breach of any of its obligations hereunder, unless
        B&C cures the breach within 60 days after the date written notice thereof
        was given by XTL to B&C.

       

      8.3.  TERMINATION
        BY B&C.
        B&C
        shall have the right to terminate this Agreement upon written notice to XTL
        in
        the event XTL is in material breach of any of its payment obligations pursuant
        to Article
        3,
        unless
        XTL cures the breach within 60 days after the date written notice thereof
        was
        given by B&C to XTL. 

       

      8.4.  ACCRUED
        RIGHTS; SURVIVING OBLIGATIONS.
        Termination of this Agreement shall not affect any accrued rights of either
        party. The terms of Sections 2.6,
        4.3, 8.1, 8.6, 8.7, 10.1
        and
10.3
        and
Articles 6
        and 9
        of this
        Agreement shall survive termination of this Agreement. 

       

      8.5.  TERMINATION
        UPON BANKRUPTCY.
        XTL
        shall have the right to terminate this License Agreement immediately upon
        any of
        the following events: (i) B&C goes into liquidation, (ii) a receiver is
        appointed for all or a portion of the property or estate of B&C, (iii)
        B&C files a voluntary petition for bankruptcy or insolvency, (iv) a petition
        for bankruptcy or insolvency is filed against B&C, (v) B&C makes an
        assignment for the benefit of its creditors or (vi) B&C experiences an
        equivalent event.

       

      8.6.  INSOLVENCY.
        If,
        during the term of this Agreement, B&C becomes insolvent (that is, its total
        liabilities exceed its total assets), upon written notice from XTL and payment
        by XTL to B&C of U.S.$*****, minus all payments made by XTL to B&C
        pursuant to this Agreement, B&C agrees to grant and hereby grants a
        perpetual, irrevocable, fully paid, exclusive license to use any Licensed
        Technology then being used by XTL, solely for the purpose of developing,
        making,
        using and selling Licensed Product in the Field within the Licensed Territory.
        B&C shall notify XTL in writing within five days of becoming insolvent.
        Furthermore, B&C shall provide XTL with B&C’s balance sheet for each
        fiscal quarter within 30 days after the end of such quarter.

       

      
        
           

        

        
          11

          
            

          

        

        
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      8.7.  TERMINATION
        BY RECEIVER OR TRUSTEE.
        Concurrently with the termination of this Agreement by a
        bankruptcy/reorganization trustee or receiver on behalf of B&C, XTL shall
        automatically be granted, and B&C agrees to grant and hereby grants to XTL,
        a perpetual, irrevocable, fully paid, exclusive license to use any Licensed
        Technology then being used by XTL, solely for the purpose of developing,
        making,
        using and selling Licensed Product in the Field within the Licensed Territory,
        subject to payment by XTL to B&C of U.S.$*****, minus all payments made by
        XTL to B&C pursuant to this Agreement, within 60 days after the date XTL
        receives notice of such termination.

       

      ARTICLE
        9.

       

      INDEMNIFICATION

       

      9.1.  INDEMNIFICATION
        BY B&C.

       

      (a)  B&C
        shall defend, indemnify and hold harmless XTL and its Affiliates, and their
        respective officers, directors, agents, employees and representatives, from
        and
        against any and all third-party claims, suits, actions, demands, liabilities
        and
        expenses (“Claims”),
        including any attorneys’ fees and expenses of litigation related thereto,
        arising from any breach of B&C’s representations and warranties set forth in
Section
        7.1.
        B&C’s obligations under this Section
        9.1
        shall be
        in addition to any other remedies XTL may have elsewhere under this Agreement
        or
        at law or in equity with respect to such breach.

       

      (b)  B&C
        shall not settle any Claims for which it is obligated to indemnify XTL under
        this Section
        9.1
        without
        the prior written consent of XTL, which shall not be unreasonably
        withheld.

       

      9.2.  INDEMNIFICATION
        BY XTL. 

       

      (a)  XTL
        shall
        defend, indemnify and hold harmless B&C and its Affiliates, and their
        respective officers, directors, agents, employees and representatives, from
        and
        against any and all Claims, including any attorneys’ fees and expenses of
        litigation related thereto, arising from any breach of XTL’s representations and
        warranties set forth in Section
        7.2.
        XTL’s
        obligations under this Section
        9.2
        shall be
        in addition to any other remedies B&C may have elsewhere under this
        Agreement or at law or in equity with respect to such breach.

       

      (b)  XTL
        shall
        not settle any Claims for which it is obligated to indemnify B&C under this
Section
        9.2
        without
        the prior written consent of B&C, which shall not be unreasonably
        withheld.

       

      
        
           

        

        
          12

          
            

          

        

        
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            Commission.
             

             

          

        

      

      ARTICLE
        10.

       

      GENERAL
        PROVISIONS

       

      10.1.  GOVERNING
        LAW.
        This
        Agreement shall be governed and interpreted in all respects under the laws
        of
        the State of California, U.S.A. applicable to contracts entered into and
        wholly
        to be performed within the State of California by California residents
        (regardless of the choice of law principles of California or any other
        jurisdiction).

       

      10.2.  LEGAL
        COMPLIANCE.
        The
        parties shall review in good faith and cooperate in taking such actions to
        ensure compliance of this Agreement with all applicable laws.

       

      10.3.  ARBITRATION.  Any
        dispute under this Agreement shall be finally settled by binding arbitration,
        conducted in accordance with the Rules of Arbitration of the International
        Chamber of Commerce. The arbitration proceedings and all pleadings and written
        evidence shall be in the English language. Any written evidence originally
        in a
        language other than English shall be submitted in English translation
        accompanied by the original or a true copy thereof. The costs of the
        arbitration, including administrative and arbitrator’s fees, shall be shared
        equally by the parties. Each party shall bear its own costs and attorneys’ fees
        and witness’ fees. The prevailing party in any arbitration, as determined by the
        arbitration panel, shall be entitled to an award against the other party
        in the
        amount of the prevailing party’s costs and reasonable attorneys’ fees. The
        arbitration shall be held in San Francisco, California. 

       

      10.4.  NOTICES.
        All
        notices or other communications required or permitted to be made or given
        hereunder shall be deemed so made or given when hand-delivered or sent by
        confirmed facsimile, or two business days after delivery to a recognized
        overnight courier service, charges prepaid, and properly addressed to such
        other
        party as set forth below or at such other address as may be specified by
        either
        party hereto by written notice similarly sent or delivered. 

       

      All
        notices to XTL shall be addressed as follows:

       

      XTL
        Biopharmaceuticals Ltd.

      Kiryat
        Weizmann, P.O. Box 370

      Rehovot,
        Israel 76100

      Fax:
        972-8-940-5017

       

      All
        notices to B&C shall be addressed as follows:

       

      B&C
        Biopharm Co., Ltd.

      IAE
        Bldg., Yong-in

      P.O.
        Box
        25

      Kyungki-do
        449-600

      Korea

      Attention:
        *****

      Fax:
        82
        31 330 7718

       

      
        
           

        

        
          13

          
            

          

        

        
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      10.5.  FORCE
        MAJEURE.
        No party
        shall be liable for any delay or failure of performance to the extent such
        delay
        or failure is caused by circumstances beyond its reasonable control and that
        by
        the exercise of due diligence it is unable to prevent, provided that the
        party
        claiming excuse uses its best efforts to overcome the same.

       

      10.6.  ENTIRETY
        OF AGREEMENT.
        This
        Agreement sets forth the entire agreement and understanding of the parties
        relating to the subject matter contained herein and merges all prior discussions
        and agreements between them, and no party shall be bound by any representation
        other than as expressly stated in this Agreement or in a written amendment
        to
        this Agreement signed by authorized representatives of each of the
        parties.

       

      10.7.  NON-WAIVER.
        The
        failure of a party in any one or more instances to insist upon strict
        performance of any of the terms and conditions of this Agreement shall not
        be
        construed as a waiver or relinquishment, to any extent, of the right to assert
        or rely upon any such terms or conditions on any future occasion.

       

      10.8.  DISCLAIMER
        OF AGENCY.
        This
        Agreement shall not constitute any party the legal representative or agent
        of
        another, nor shall any party have the right or authority to assume, create,
        or
        incur any third party liability or obligation of any kind, express or implied,
        against or in the name of or on behalf of another except as expressly set
        forth
        in this Agreement.

       

      10.9.  SEVERANCE.
        If
        any
        provision of this Agreement is determined to be invalid or void, the remaining
        provisions shall remain in effect.

       

      10.10.  ASSIGNMENT.
        Except
        as otherwise provided herein, neither party may assign its rights or delegate
        its duties under this Agreement without the prior written consent of the
        other
        party, not to be unreasonably withheld; provided however, that
        XTL
        may assign this Agreement to any Affiliate or to any successor by merger
        or sale
        of substantially all of its business unit to which this Agreement relates
        in a
        manner such that the assignor will remain liable and responsible for the
        performance and observance of all its duties and obligations hereunder. Subject
        to the restrictions contained in the preceding sentence, this Agreement shall
        be
        binding upon the successors and assigns of the parties. Any attempted delegation
        or assignment not in accordance with this Section 10.10
        shall be
        void and have no force or effect.

       

      10.11.  HEADINGS.
        The
        headings contained in this Agreement have been added for convenience only
        and
        shall not be construed as limiting.

       

      10.12.  COUNTERPARTS.
        This
        Agreement may be executed in one or more counterparts, each of which shall
        be an
        original and all of which shall constitute together the same
        document.

       

      
        
          
             

          

           

        

        
          14

          
            

          

        

        
           

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      IN
        WITNESS WHEREOF, the parties hereto have duly executed this
        Agreement.

       

      
        	
                XTL
                  BIOPHARMACEUTICALS LTD.

                 

                 

                By:                                                                                                    

                (Signature)

                                                                                                                  

                (Printed
                  Name)

                                                                                                                  

                (Title)

                                                                                                                  

                (Date)
                  

              	
                B&C
                  BIOPHARM CO., LTD.

                 

                 

                
                  By:                                                                                                    
(Signature)

                                                                                                                  

                (Printed
                  Name)

                                                                                                           

                (Title)

                                                                                                           

                (Date)
                  

              


      

      
 

      
        
          
            


            


          

           

        

        
          15

          
            

          

        

        
           

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      SCHEDULE
        A

      Countries
        Included in Asia 

       

      


      
        	
                *****

              	 	 	 
	 	 	 	 
	 	 	 	 


      

       

      Note
        that
        confidential treatment has been requested and one page of material has been
        redacted from this Schedule A and filed separately with the
        Commission.

      
 

      
        
           

        

        
           

          
            

          

        

        
           

           *****
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            Commission.
             

             

          

        

      



      SCHEDULE
        B

      B&C
        Compounds

       

      *****

       

      


      Note
        that
        confidential treatment has been requested and one page of material has been
        redacted from this Schedule B and filed separately with the
        Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

           *****
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            Commission.
             

             

          

        

      



      SCHEDULE
        C

      Licensed
        Patents 

       

      *****

       

       

      Note
        that
        confidential treatment has been requested and one page of material has been
        redacted from this Schedule C and filed separately with the
        Commission.

       

      
        
           

        

        
           

          
            

          

        

        
           

           *****
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            Commission.
             

             

          

        

      



      SCHEDULE
        D

      Summary
        of Rights under Section 2.2

      


      


      
        	
                Territory

              	 	
                Rights
                  to B&C

                Compounds
                  in the Field

              	 	
                Responsibility
                  for Development and Commercialization

              	 	
                Financial
                  Terms

              
	
                World
                  excluding Asia

              	 	
                XTL
                  receives exclusive license to Licensed Technology

              	 	
                XTL

              	 	
                XTL
                  pays B&C according to Article 3

              
	
                Japan

              	 	
                XTL
                  receives exclusive license to Licensed Technology

              	 	
                XTL

              	 	
                XTL
                  and B&C equally share all costs and revenues

              
	
                Korea

              	 	
                B&C
                  retains all rights to B&C Compounds

              	 	
                B&C
                  with XTL collaboration on clinical study design

              	 	
                B&C
                  responsible for all costs and receives all revenues

              
	
                Asia
                  excluding Korea and Japan

              	 	
                XTL
                  and B&C

              	 	
                XTL
                  and B&C

              	 	
                XTL
                  and B&C equally share all costs and
                  revenues

              




      
        
           

        

        
           

          
            

          

        

        
           

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            Commission.
             

             

          

        

      



      SCHEDULE
        E

      B&C
        Development Activities 

       

      *****

       

      


      Note
        that
        confidential treatment has been requested and one page of material has been
        redacted from this Schedule E and filed separately with the Commission.