By
        FedEx

      


      Mr.
        Michael S. Weiss 

      Interim
        Chairman

      XTL
        Biopharmaceuticals Ltd

      Kiryat
        Weizmann

      Science
        Park, Building 3

      POB
        370,
        Rehovot 76100

      Israel

      


      Re: License
        Agreement dated June 2, 2004 between Cubist Pharmaceuticals,
        Inc. and
        XTL Biopharmaceuticals Ltd.(“the Agreement)   

      


      Dear
        Michael:

      


      This
        Letter of Understanding sets forth the understanding between Cubist
        Pharmaceuticals, Inc. (“Cubist”) and XTL Biopharmaceuticals Ltd. (“XTL”)
        regarding accelerated transfer of activities from XTL to Cubist *****. 
        In
        addition to the terms enumerated below, Cubist and XTL each agree to release
        and
        discharge the other party from any and all potential or actual claims of
        whatever nature, known to both parties and existing as of the date of this
        Letter of Understanding.

      


      Cubist
        and XTL hereby agree as follows:

      


      
        	1.  	
                By
                  August 5, 2005, XTL shall: a)
                  transfer to Cubist all physical
                  materials (including, but not limited to, cell lines, clones,
                  reference standards, antigens for assay development, retained clinical
                  samples, and samples from stability testing of formulated
                  material);
                  b) transfer to Cubist all reports (including, but not limited to,
                  PK
                  studies in hydrodynamic model, report on media optimization); and
                  c)
                  assign to Cubist all contracts and regulatory documents (including,
                  but
                  not limited to, the IND application and contracts with *****, *****,
                  *****, clinical sites and/or clinical investigators, and *****),
                  including
                  all rights and obligations thereunder, each to the extent solely
                  related
                  to the development of HepeX-B. In addition, XTL shall complete
                  by August
                  5, 2005 all ongoing collaboration activities (including, but not
                  limited
                  to, *****).

              


      

      


      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      
        	2.  	
                XTL
                  shall transfer to Cubist by October 31, 2005, all remaining data
                  and
                  original documentation (in any format, including, but not limited
                  to,
                  written and electronic formats) related to the development of HepeX-B
                  (including, but not limited to, electronic files, lab notebooks
                  and
                  printouts of raw data, Excel® files, and any data or documentation
                  relating to: testing of clinical samples, stability testing of
                  clinical
                  lots, development of cell-lines, development of reference standards,
                  or
                  development of assays used in clinical testing.). For clarification,
                  XTL
                  shall provide original documentation only if that documentation
                  is related
                  solely to HepeX-B; otherwise, XTL shall provide copies of the information
                  that is related to HepeX-B.  Throughout August, September
                  and October
                  of 2005, XTL shall dedicate ***** to perform the activities described
                  above in this Paragraph 3.

              


      

      


      
        	3.  	
                Cubist
                  shall reimburse XTL for its internal costs reasonably incurred
                  for
                  transferring the items referred to in Paragraphs 2 and 3. Such
                  costs shall
                  be treated as Designated Costs under Section 7.3 of the Agreement,
                  except
                  that such costs shall be reimbursed within fourteen (14) days of
                  completion to Cubist’s satisfaction of all activities described in
                  Paragraphs 2 and 3 above.

              


      

      


      
        	4.  	
                Cubist’s
                  reimbursement of XTL for its internal costs reasonably incurred
                  for
                  transferring the items referred to in Paragraph 3 shall not exceed
                  *****
                  ($*****). 

              


      

      


      
        	5.  	
                Cubist
                  shall reimburse XTL for Designated Costs paid by XTL to third party
                  vendors on or after July 1, 2005 within thirty (30) days of Cubist’s
                  receipt of an invoice from XTL. 

              


      

      


      
        	6.  	
                Cubist
                  shall not be required to make any Collaboration Support payments
                  contemplated by Section 7.1 of
                  the Agreement for the calendar year
                  2005.

              


      

      


      
        	7.  	
                Cubist
                  shall be entitled to credit $***** against any future royalties
                  owed to
                  XTL on the Net Sales and/or Net Sublicensing Revenues of HepeX-B,
                  as
                  contemplated by Section 10 of the
                  Agreement.

              


      

      


      Cubist
        and XTL each represent and warrant that: (1) it has the power and authority
        to
        execute and deliver this Letter of Understanding and to perform its obligations
        hereunder; (2) it has read and understood this Letter of Understanding; (3)
        it
        has had the opportunity to consult with counsel in connection with the review,
        drafting and negotiation of this Letter of Understanding; (4) it enters into
        this Letter of Understanding voluntarily; and (5) it has not been induced
        to
        enter into this Letter of Understanding by any promise or representation
        made by
        or on behalf of the other party, other than as expressly set forth in the
        terms
        of this Letter of Understanding.

      


      
        
          
          

        

        
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      This
        Letter of Understanding does not modify any terms or conditions of the
        Agreement, including the rights and obligations of the parties, provided
        that
        the Agreement shall be interpreted and enforced in accordance with the terms
        of
        this Letter of Understanding.

      


      Please
        indicate your agreement to the above terms and conditions by signing and
        dating
        both copies of this Letter of Understanding and returning one copy to
        me.

      


      Sincerely,

      


      


      *****

      *****

      CUBIST
        PHARMACEUTICALS, INC.

      


      


      


      Agreed
        and accepted 

      


      


      _________________________________

      Michael
        S. Weiss 

      Chairman

      XTL
        BIOPHARMACEUTICALS LTD.

       

      
        
          
          

        

        
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