Document:

<PAGE>
                                                                    Exhibit 10.6

                                                 BLAKE DAWSON WALDRON
                                                        LAWYERS
                                                 --------------------

                                  Rules of the
                              Marshall Edwards Inc
                               Share Option Plan

                                       |
                                       |
                                       |
                                       | 26 March 2001
                                       |
                                       |
                                       |
                  Blake Dawson Waldron |
              Level 37 Grosvenor Place |
                     225 George Street |
                       SYDNEY NSW 2000 |
             Telephone: (02) 9258 6000 |
                   Fax: (02) 0259 6999 |
                          MM 111559948 | REF. SJD.JG.12846476
                         (C) BLAKE DAWSON WALDRON 2001

<PAGE>
                                    CONTENTS

1.    INTERPRETATION AND OBJECT                                   1

      1.1   DEFINITIONS                                           1
      1.3   OBJECT OF PLAN                                        4

2.    ADMINISTRATION                                              4

      2.1   COMMITTEE'S AUTHORITY                                 4
      2.2   DETERMINATION OF ELIGIBILITY                          5
      2.3   DETERMINATION OF PRICE                                5
      2.4   DISPUTES                                              5
      2.5   DIRECTIONS FROM BOARD                                 5

3.    METHOD OF INVITATION                                        6

      3.1   INVITATIONS                                           6
      3.2   PARTICIPANT MAY APPLY                                 6

4.    APPLICATION FOR OPTIONS                                     7

      4.1   APPLICATION                                           7
      4.2   GRANT AND CERTIFICATE                                 7

5.    OPTION TO SUBSCRIBE                                         7

      5.1   EXERCISE                                              7
      5.2   NOTICE                                                7
      5.3   PAYMENT                                               8
      5.4   ALLOTMENT                                             8
      5.5   SHARE ALLOTTED UPON EXERCISE OF OPTION                8
      5.6   LAPSE                                                 8
      5.7   DEATH                                                 8
      5.8   TERMINATION OF EMPLOYMENT                             9
      5.9   BALANCE CERTIFICATE                                   9
      5.10  LISTING ON ASX                                        9
      5.11  NO ADDITIONAL RIGHTS                                  9

6.    ADJUSTMENTS                                                 9

      6.1   PARTICIPATION IN NEW ISSUES                           9
      6.2   NOTICE OF ENTITLEMENTS ISSUES                         9
      6.3   ADJUSTMENTS IN RESPECT OF A RIGHTS ISSUES            10
      6.4   PRO-RATA BONUS ISSUES                                10
      6.5   REORGANISATION OF CAPITAL                            10
      6.6   OTHER ADJUSTMENTS                                    10
      6.7   NOTICE OF ADJUSTMENT                                 10
      6.8   CUMULATIVE ADJUSTMENTS                               10
      6.9   ROUNDING                                             11

7.    DURATION OF THE PLAN                                       11

<PAGE>
                                       ii

     7.1  DISCRETIONARY                                11
     7.2  SUSPENSION                                   11
     7.3  NO PREJUDICE                                 11

8.   AMENDMENT OF THE PLAN                             11

     8.1  BY THE COMMITTEE                             11
     8.2  LISTING RULES                                11

9.   NOTICES AND CORRESPONDENCE                        11

     9.1  TO THE COMPANY                               11
     9.2  TO A PARTICIPANT                             12

10.  TRANSFER OF THE OPTION                            12

11.  MISCELLANEOUS                                     12

     11.1 RIGHTS OF EMPLOYEES                          12
     11.2 GOVERNING LAW                                12

SCHEDULE 1                                             13

<PAGE>

                              MARSHALL EDWARDS INC

              RULES OF THE MARSHALL EDWARDS INC SHARE OPTION PLAN

1.   INTERPRETATION AND OBJECT

1.1  DEFINITIONS

     In these Rules, the following definitions apply.

     ACCEPTANCE FORM means a form for the acceptance of the invitation made by
     the Committee to the Participant to participate in the Plan under clause
     3.1 in such form as is approved by the Committee from time to time;

     ASSOCIATED COMPANY means any entity that is, directly or indirectly through
     one or more intermediaries, controlled by, in control of, or under common
     control with, the Company.

     ASX means Australian Stock Exchange Limited.

     BOARD means the board of Directors of the Company from time to time.

     BUSINESS DAY means a day which is a "business day" for the purposes of the
     Listing Rules.

     CHANGE IN CONTROL shall be deemed to have occurred on:

     (a)   the date of the acquisition by any "person" (within the meaning of
           Section 13(d)(3) or 14(d)(2) of the Exchange Act), excluding the
           Company or Associated Company or any employee benefit plan sponsored
           by any of the foregoing, of beneficial ownership (within the meaning
           of Rule 13d-3 under the Exchange Act) of 50% or more of either (x)
           the then outstanding shares of common stock of the Company, or (y)
           the then outstanding voting securities entitled to vote generally in
           the election of Directors;

     (b)   the date the individuals who constitute the Board as of the effective
           date of the Plan (the "Incumbent Board) cease for any reason to
           constitute at least a majority of the members of the Board, provided
           that any individual becoming a Director subsequent to the effective
           date of the Plan whose election, or nomination for election by the
           Company's stockholders, was approved by a vote of at least a majority
           of the Directors then comprising the Incumbent Board (other than any
           individual whose nomination for election to Board membership was not
           endorsed by the Company's management prior to, or at the time of,
           such individual's initial nomination for election) shall be, for
           purposes of the Plan, considered as though such person were a member
           of the Incumbent Board; or

     (c)   the consummation of a merger, consolidation, recapitalization,
           reorganization, sale or disposition of all or a substantial portion
           of the Company's assets, a reverse stock split of outstanding voting
           securities, the issuance of shares of stock of the Company in
           connection with the acquisition of the stock or assets of another
           entity, provided, however, that a Change in Control shall not occur
           under this
<PAGE>
                                       2.

           clause (c) if consummation of the transaction would result in more
           than 50% of the total voting power represented by the voting
           securities of the Company (or, if not the Company, the entity that
           succeeds to all or substantially all of the Company's business)
           outstanding immediately after such transaction being beneficially
           owned (within the meaning of Rule 136d-3 promulgated pursuant to the
           Exchange Act) by at least 75% of the holders of outstanding voting
           securities of the Company immediately prior to the transaction, with
           the voting power of each such continuing holder relative to other
           such continuing holders not substantially altered in the transaction.

     CHANGE IN CONTROL PERIOD means:

     (a)   in relation to a Change in Control which will result in the Company
           ceasing to exist as a legal entity, a period before the day on which
           the Change of Control will occur, as determined by the Committee; and

     (b)   in relation to any other Change in Control, the 20 Business Days
           after the day on which the Change in Control occurred.

     COMMITTEE means the Board or, if a committee is appointed by the Board as
     contemplated by clause 2.1, that committee.

     COMPANY means Marshall Edwards Inc.

     DIRECTOR means a member of the Board.

     EMPLOYEE means:

     (a)   an employee (which, for the avoidance of doubt, includes a part time
           employee) or director resident in Australia;

     (b)   a consultant or contractor engaged by the Company or a Related Body
           Corporate who is resident in Australia and who has:

           (i)   worked for the Company or a Related Body Corporate for more
                 than one year; and

           (ii)  has received 80% of their income in the preceding year from the
                 Company or the Related Body Corporate; or

     (c)   a director, employee, consultant or contractor of any entity in the
           Group resident anywhere other than Australia.

     EXCHANGE ACT means the United States Securities Exchange Act of 1934, as
     amended.

     EXERCISE CONDITION means, in respect of an Option, one or more conditions
     which must be met before the Option may be exercised.

     EXERCISE PERIOD means, in respect of an Option, each of:

     (a)   each day which is after the Vesting Period and before the end of the
           Option Period; and
<PAGE>
                                       3.

     (b)   each Change in Control Period during the Option Period.

     EXERCISE PRICE means in respect of an Option, the subscription price on
     exercise of the Option determined in accordance with clauses 2.3 and 3.1 in
     relation to that Option (as adjusted under clause 6).

     GROUP means the Company and all Associated Companies and Related Bodies
     Corporate.

     HOLDER means in respect of an Option, the person registered as holder of
     the Option in the register of options maintained by the Company.

     LISTING RULES means the listing rules of ASX as they may apply to the
     Company from time to time.

     MARKET PRICE of a Share, in respect of a particular date, means, the price
     determined by the Committee to be the weighted average closing price of
     Shares sold on ASX on the 5 trading days immediately preceding that date
     (provided that if no Shares were sold on ASX during such 5 day period the
     Market Price of a Share shall be the amount determined by the Committee to
     be equal to the closing price of Shares sold on ASX on the last trading day
     on which Shares were traded).

     MINIMUM PRICE means $0.20 or such other amount as may be prescribed by the
     Listing Rules as the minimum exercise price for options.

     OPTION means an option to subscribe under the Plan for one fully paid Share
     (as adjusted under clause 6).

     OPTION CERTIFICATE means the certificate issued by the Company to a Holder
     in respect of an Option.

     OPTION PERIOD means, in respect of an Option, subject to clause 5.6, the
     period starting on the date on which the Company grants the Option and
     ending, unless another period is specified in the invitation made in
     relation to that Option under clause 3:

     (a)   on the fifth anniversary of that date; or

     (b)   at the end of any other period permitted by law that the Committee
           may from time to time determine for the purposes of this definition.

     PARTICIPANT means any Employee whom the Committee has decided under clause
     2.2 is eligible to participate in the Plan.

     PLAN means the Marshall Edwards Inc Share Option Plan established in
     accordance with these Rules.

     RECORD DATE has the meaning given to it by the Listing Rules.

     RELATED BODY CORPORATE has the meaning given to it in the Australian
     Corporations Law.

     SHARE means a share of common stock of the Company, par value $_ (as
     adjusted under clause 6).
<PAGE>
                                       4.

      VESTING PERIOD means, in respect of an Option, the period of two years
      after the date of grant or another period determined by the Committee
      (either generally or in a particular case).

1.2   RULES FOR INTERPRETING THIS DOCUMENT

      Headings are for convenience only, and do not affect interpretation. The
      following Rules also apply in interpreting this document, except where the
      context makes it clear that a Rule is not intended to apply.

      (a)   A reference to:

            (i)   legislation (including subordinate legislation) is to that
                  legislation as amended, re-enacted or replaced, and includes
                  any subordinate legislation issued under it;

            (ii)  a document or agreement, or a provision of a document or
                  agreement, is to that document, agreement or provision as
                  amended, supplemented, replaced or novated;

            (iii) a person includes any type of entity or body of persons,
                  whether or not it is incorporated or has a separate legal
                  identity, and any executor, administrator or successor in law
                  of the person; and

            (iv)  anything (including a right, obligation or concept) includes
                  each part of it.

      (b)   A singular word includes the plural, and vice versa.

      (c)   A word which suggests one gender includes the other genders.

      (d)   If a word is defined, another part of speech has a corresponding
            meaning.

      (e)   If an example is given of anything (including a right, obligation or
            concept), such as by saying it includes something else, the example
            does not limit the scope of that thing.

      (f)   A reference to "DOLLARS" or "$" is to Australian currency.

1.3   OBJECT OF PLAN

      The object of the Plan is to assist in the recruitment, reward, retention
      and motivation of Employees.

2.    ADMINISTRATION

2.1   COMMITTEE'S AUTHORITY

      The Board or a committee properly appointed by the Board may manage and
      administer the Plan for the Company and the Committee has all powers
      necessary to do so.
<PAGE>
                                       5.

2.2   DETERMINATION OF ELIGIBILITY

      The Committee may from time to time decide:

      (a)   that an Employee is eligible to participate in the Plan;

      (b)   (whether or not the Participant is already a Holder) the number of
            Options for which the Participant may at that time be invited to
            apply;

      (c)   the Exercise Conditions (if any) to be applicable to the Options for
            which the Participant may at that time be invited to apply.

      In making these determinations, the Committee must consider:

      (a)   the Employee's position with the Group and the services provided to
            the Group by the Employee;

      (b)   the Employee's record of employment or service with the Group;

      (c)   the Employee's potential contribution to the growth of the Group;
            and

      (d)   any other matters which tend to indicate the Employee's merit.

2.3   DETERMINATION OF PRICE

      When the Committee decides to invite a Participant to apply for an Option,
      it must, in its absolute discretion (but subject to clause 6), determine
      the Exercise Price per Share for that Option, but that price:

      (a)   unless the Committee otherwise determines either generally or in a
            particular case, must be at least equal to the Market Price of one
            Share at the date the Committee decides to invite the Participant to
            apply for the Option; and

      (b)   must not be less than the Minimum Price.

2.4   DISPUTES

      Any dispute or difference of any nature arising in relation to the Plan:

      (a)   must be referred to the Committee; and

      (b)   the Committee's decision on that dispute or difference is final and
            binding on the Company, the Participants and the Holders in all
            respects.

2.5   DIRECTION FROM BOARD

      The Board may at any time and from time to time:

      (a)   give directions to the Committee as to the manner of the exercise by
            the Committee of any of its discretions under these Rules or the
            Plan; and

      (b)   amend any of those directions,

<PAGE>
                                       6.

      and where the Board has given such a direction, the Committee must
      exercise the relevant discretion in accordance with that direction.

3.    METHOD OF INVITATION

3.1   INVITATIONS

      The Committee may from time to time give a Participant notice inviting the
      Participant to apply for Options and must include with the invitation an
      Acceptance Form and specify in the invitation:

      (a)   the Participant;

      (b)   the number of Options for which the Participant is invited to apply;

      (c)   the amount payable (if any) by the Participant as consideration for
            the Options and the terms of its payment (which may include the
            circumstances in which the Company must refund some or all of that
            amount);

      (d)   the Exercise Price for each Option;

      (e)   the Vesting Period for each Option;

      (f)   the Option Period for each Option;

      (g)   the Exercise Conditions (if any) determined by the Committee to be
            applicable in respect of each Option;

      (h)   the closing date for applying for each Option;

      (i)   how the Company will during the Option Period, within a reasonable
            period of the Participant so requesting, make available to the
            Participant, the current market price of Shares; and

      (j)   how the Participant is to apply for the Option

      An invitation under this clause 3.1 may be on such terms, whether in
      addition to or inconsistent with the terms of the Plan, as the Committee
      may in its absolute discretion determine.

3.2   PARTICIPANT MAY APPLY

      Where a Participant receives an invitation under clause 3.1, the
      Participant may apply for the Options specified in the invitation.
<PAGE>
                                       7.

4.       APPLICATION FOR OPTIONS

4.1      APPLICATION

         A Participant who wishes to apply for Options specified in an
         invitation made under clause 3 must on or before the closing date
         stated in the invitation (or any later date that the Company may allow
         either generally or in a particular case):

         (a)      do what is specified in the invitation in order to apply for
                  the Option; and

         (b)      execute the Acceptance Form, or arrange for the execution of
                  the Acceptance Form on the Participant's behalf and deliver it
                  to the Committee, and

         upon so accepting the Participant agrees to be bound by the Rules.

4.2      GRANT AND CERTIFICATE

         Upon receipt of a duly completed Acceptance Form, the Company must:

         (a)      grant the relevant Options to the Participant; and

         (b)      must issue to the Holder an Option Certificate in respect of
                  those Options.

5.       OPTION TO SUBSCRIBE

5.1      EXERCISE

         The Participant may exercise any Option granted to the Participant
         under clause 4.2 only:

         (a)      during an Exercise Period for the Option;

         (b)      by giving a notice and doing all the other things required by
                  clause 5.2 during that time; and

         (c)      if the Participant at the same time either:

                  (i)      exercises a number of Options so that the Company
                           will issue a minimum of a number of Shares or
                           multiple of a number that the Committee determines;
                           or

                  (ii)     exercises all the Options granted to the Participant
                           which the Participant is then entitled to exercise.

         The exercise of an Option does not prevent the exercise of any other
         Option.

5.2      NOTICE

         To exercise an Option the Participant must give a notice specifying
         that it exercises the Option to the Company accompanied by:

         (a)      the relevant Option Certificate; and
<PAGE>
                                       8.

         (b)      payment by bank cheque or postal order in favour of the
                  Company of the full amount of the Exercise Price.

         Exercise of an Option is only effective when the Company receives full
         value for the full amount of the Exercise Price.

5.3      PAYMENT

         All payments of the Exercise Price for an Option must be made by bank
         cheque or postal order made out in favour of the Company.

5.4      ALLOTMENT

         As soon as practicable after the exercise of an Option becomes
         effective, but subject to any timetable requirements under the Listing
         Rules, the Company must allot and issue to the Participant the Shares
         the subject of the Option. However, no Shares shall be issued under the
         Plan unless and until all applicable legal requirements have been
         complied with to the satisfaction of the Committee. The Committee shall
         have the right to condition the exercise of any Option on the
         Participant's undertaking in writing to comply with applicable legal
         requirements.

5.5      SHARE ALLOTTED UPON EXERCISE OF OPTION

         The Shares allotted and issued following exercise of an Option, upon
         allotment rank equally in all respects (including as to dividends the
         entitlement to which is determined after the allotment) with those then
         issued fully paid Shares which arc entitled to participate in full in
         any dividend and are subject to the constitution of the Company.

5.6      LAPSE

         Each Option lapses:

         (a)      on exercise of the Option under clause 5.2;

         (b)      if the Option is not exercised under clause 5.2 during the
                  Option Period, at the end of the Option Period;

         (c)      except as provided in clauses 5.7 and 5.8, if the Participant
                  ceases to be an Employee during the Option Period;

         (d)      if the Committee becomes aware of circumstances which, in the
                  reasonable opinion of the Committee indicate that the
                  Participant has acted fraudulently, dishonestly or in a manner
                  which is in breach of his or her obligations to the Company or
                  any Associated Company and the Committee (in its absolute
                  discretion) determines that the Option lapses; or

         (e)      pursuant to clause 6, if so determined by the Committee.

5.7      DEATH

         If the Participant dies before the end of the Option Period, with the
         written approval of the Committee in its absolute discretion, the
         Option may (but only at a time permitted by the approval and in
         accordance with any conditions specified in the approval) be
<PAGE>
                                       9.

         exercised by the legal personal representatives of the Participant in
         accordance with clause 5.1 and to the extent necessary for this to
         occur, the Option may be transferred to the legal personal
         representatives and does not lapse.

5.8      TERMINATION OF EMPLOYMENT

         If the Participant ceases to be an Employee before the end of the
         Option Period (other than by reason of the death of the Employee), the
         Committee may in its absolute discretion (on any conditions which it
         thinks fit) decide that the Option does not lapse under clause 5.6(c)
         but lapses at the time and subject to the conditions it may specify by
         notice to the Participant. In making a decision under this clause, the
         Committee may consider any relevant matter (including, without
         limitation, whether the Participant ceased to be an Employee by reason
         of retirement, ill-health, accident or redundancy).

5.9      BALANCE CERTIFICATE

         If the Participant exercises less than all of the Options referred to
         in an Option Certificate, the Committee must issue to the Holder an
         Option Certificate in respect of the Options not exercised at that
         time.

5.10     LISTING ON ASX

         The Shares to be issued to any Participant upon exercise of an Option
         will not be quoted on any stock exchange on which the Shares are quoted
         until the Option is exercised, at which time the Company must apply to
         ASX (and any other stock exchange on which the Shares are quoted),
         within 3 Business Days after the date of issue of the Shares, for, and
         will use its best endeavours to obtain, quotation for those Shares.

5.11     NO ADDITIONAL RIGHTS

         The Plan does not give a Participant any additional rights to
         compensation or damages as a result of the termination of employment or
         appointment.

6.       ADJUSTMENTS

6.1      PARTICIPATION IN NEW ISSUES

         The Holder of an Option may not participate in a new issue of
         securities by the Company unless the Holder exercises the Option and
         becomes the holder of Shares prior to the Record Date for that new
         issue of securities.

6.2      NOTICE OF ENTITLEMENTS ISSUES

         Where after the Vesting Period but during the Option Period of an
         Option, the Company makes a pro rata offer or invitation to holders of
         Shares of securities of the Company or any other entity, the Company
         must give the Holder notice not less than 9 Business Days before the
         Record Date to determine entitlements to receive that offer or
         invitation to enable the Holder to exercise the Option and receive that
         offer or invitation in respect of the Shares allotted on exercise of
         the Option.
<PAGE>
                                      10.

6.3      ADJUSTMENTS IN RESPECT OF A RIGHTS ISSUES

         Where after the Vesting Period and before the end of the Option Period
         the Company gives holders of Shares the right (pro-rata with existing
         shareholdings) to subscribe for additional securities and the Option is
         not exercised as contemplated in clause 6.2, the Exercise Price of that
         Option after the issue of those securities is adjusted in accordance
         with the formula set out in schedule 1.

6.4      PRO-RATA BONUS ISSUES

         Where during the Option Period of an Option, the Company makes a
         pro-rata bonus issue to holders of Shares and the Option is not
         exercised before the Record Date to determine entitlements to that
         bonus issue, the number of securities to be issued on exercise of that
         Option is the number of Shares before that bonus issue plus the number
         of securities which would have been issued to the Holder if the Option
         had been exercised before that Record Date.

6.5      REORGANISATION OF CAPITAL

         Where during the Option Period in respect of an Option there is a
         reorganisation of the capital of the Company (including a subdivision
         or consolidation and a return or cancellation of capital):

         (a)      the Company must comply with the Listing Rules applying to a
                  reorganisation of capital at the time of the reorganisation;
                  and

         (b)      the rights of a Holder will be changed to the extent necessary
                  to comply with the Listing Rules applying to a reorganisation
                  of capital at the time of the reorganisation.

6.6      OTHER ADJUSTMENTS

         Where the Committee believes that another event has occurred which
         should result in an adjustment to the terms of an Option, but the
         adjustment is not permitted by the Listing Rules, the adjustment must
         not be made unless ASX waives compliance with the Listing Rules in
         respect of that adjustment and the adjustment 1s made in accordance
         with the terms of that waiver.

6.7      NOTICE OF ADJUSTMENT

         The Company must give notice to Holders of any adjustment to the
         number, description or terms of securities which are to be issued on
         exercise of an Option or to the Exercise Price in accordance with the
         applicable Listing Rules.

6.8      CUMULATIVE ADJUSTMENTS

         Each adjustment provided for in clauses 6.3 to 6.6 (inclusive) is to be
         made in respect of each Option granted and unexercised at the time the
         relevant clause applies on each occasion during the Option Period of
         the Option that the relevant clause applies.
<PAGE>
                                      11.

6.9      ROUNDING

         Before an Option is exercised under clause 5.1, all adjustment
         calculations are to be carried out including all fractions (in relation
         to both the Shares and the Exercise Price of the Option), but on
         exercise the number of Shares issued is rounded down to the next lower
         whole number and the Exercise Price rounded up to the next higher cent.

7.       DURATION OF THE PLAN

7.1      DISCRETIONARY

         The Plan continues in operation until the Committee decides to
         terminate or discontinue it.

7.2      SUSPENSION

         The Committee may decide to suspend the operation of the Plan either
         for a fixed period or indefinitely and may also decide to end any
         period of suspension.

7.3      NO PREJUDICE

         Termination, discontinuation or suspension of the operation of the Plan
         for any reason, does not prejudice the accrued rights of Holders or
         Participants.

8.       AMENDMENT OF THE PLAN

8.1      BY THE COMMITTEE

         Subject to clause 8.2, the Committee may at any time and from time to
         time by resolution:

         (a)      amend all or any of these Rules or all or any of the rights or
                  obligations of the Participants or Holders or any of them; and

         (b)      formulate (and subsequently amend) special terms and
                  conditions, in addition to those set out in these Rules, to
                  apply to Participants employed in, resident in, or who are
                  citizens of, a particular jurisdiction.

8.2      LISTING RULES

         The Committee's exercise of its powers under clause 8.1 is subject to
         any restrictions or procedural requirements relating to the amendment
         of the terms of an employee incentive scheme or of issued options
         imposed by the Listing Rules applicable to the Plan or the Options, as
         the case may be, unless those restrictions or requirements are relaxed
         or waived by ASX or any of its delegates either generally or in a
         particular case or class of cases and either expressly or by
         implication.

9.       NOTICES AND CORRESPONDENCE

9.1      TO THE COMPANY

         Any notice required to be given by a Holder or Participant to the
         Company or the Committee or any correspondence from a Holder or
         Participant to the Company or the Committee in connection with the Plan
         must be in writing signed by (or on behalf of) the
<PAGE>
                                      12.

         person giving it and must be given to the principal place of business
         of the Company or any other address of which the Company gives notice.

9.2      TO A PARTICIPANT

         Any notice required to be given by the Company or the Committee to a
         Holder or Participant or any correspondence from the Company or the
         Committee to a Holder or Participant in connection with the Plan must
         be in writing and must be given or made by a person authorised by the
         Committee on behalf of the Company or the Committee to the place of
         employment of the relevant person or to the last address of that person
         given to the Company.

10.      TRANSFER OF THE OPTION

         Each Option is personal to the Participant and is not transferable,
         transmissible, assignable or chargeable, except as provided by rule 5.7
         or with the prior written consent of the Committee.

11.      MISCELLANEOUS

11.1     RIGHTS OF EMPLOYEES

         This Plan does not form part of any contract of employment between the
         Company or any Associated Company and any Eligible Employee and does
         not confer directly or indirectly on an Eligible Employee any legal or
         equitable rights whatsoever (other than rights as a participant under
         the Plan) against the Company.

11.2     GOVERNING LAW

         The terms and conditions of this plan shall be governed by and
         construed in accordance with the laws for the time being in force in
         the [State of Delaware].
<PAGE>
                                      13.

                                   SCHEDULE 1

O(1) = O - E [P - (S + D)]
             -------------
                 N + 1

where:

O(1) =   The new Exercise Price of the Option or the Minimum Price, whichever
         is the greater.

O =      The old Exercise Price of the Option.

E =      The number of Shares into which an Option is exercisable.

P =      The average closing price (excluding special crossings, overnight sales
         and exchange traded option exercises) on the Stock Exchange Automated
         Trading System provided for the trading of securities on ASX of Shares
         (weighted by reference to volume) during the 5 trading days before the
         ex rights date or ex entitlements date.

S =      The subscription price for one security under the rights or
         entitlements issue.

D =      The dividend due but not yet paid on existing Shares (except those to
         be issued under the rights or entitlements issue).

N =      Number of Shares with rights or entitlements that must be held to
         receive a right to one new security.<PAGE>

                                                                    EXHIBIT 10.7

                                                                       EXHIBIT A

                                 FORM OF WARRANT

                                 (NON-US PERSON)

THIS WARRANT AND THE SECURITIES ISSUABLE UPON THE EXERCISE OF THIS WARRANT HAVE
NOT BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE
TRANSFERRED EXCEPT (1) IN AN OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF
RULE 903 AND RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (3) PURSUANT TO
AN AVAILABLE EXEMPTION TO THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AS
EVIDENCED BY AN OPINION OF COUNSEL SATISFACTORY TO THE COMPANY, IN EACH CASE IN
ACCORDANCE WITH ALL APPLICABLE STATE AND OTHER SECURITIES LAWS.

THIS WARRANT AND THE SECURITIES ISSUABLE UPON EXERCISE OF THIS WARRANT HAVE NOT
BEEN REGISTERED UNDER THE SECURITIES ACT. THIS WARRANT MAY NOT BE EXERCISED BY
OR ON BEHALF OF ANY US PERSONS AND MAY BE EXERCISED ONLY IN AN OFFSHORE
TRANSACTION, UNLESS REGISTERED UNDER THE SECURITIES ACT OR UNLESS AN EXEMPTION
FROM SUCH REGISTRATION IS AVAILABLE. ANY HEDGING TRANSACTIONS INVOLVING THIS
WARRANT OR THE SECURITIES WHICH MAY BE ACQUIRED UPON EXERCISE HEREOF MAY NOT BE
CONDUCTED UNLESS IN COMPLIANCE WITH THE SECURITIES ACT.

THE HOLDER HEREOF, BY PURCHASING THIS WARRANT, AGREES FOR THE BENEFIT OF THE
COMPANY TO THE FOREGOING RESTRICTIONS AND THAT IT IS NOT A US PERSON.

PRIOR TO INVESTING IN THIS WARRANT OR THE SECURITIES ISSUABLE UPON THE EXERCISE
OF THIS WARRANT OR CONDUCTING ANY TRANSACTIONS IN THIS WARRANT OR THE SECURITIES
ISSUABLE UPON THE EXERCISE OF THIS WARRANT, INVESTORS ARE ADVISED TO CONSULT
PROFESSIONAL ADVISERS REGARDING THE ABOVE RESTRICTIONS ON TRANSFER AND OTHER
RESTRICTIONS REFERRED TO IN THE CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM
RELATING TO THE SHARES DATED [APRIL 17], 2002.

MAY __, 2002                                                              NO. __
                             MARSHALL EDWARDS, INC.

             (INCORPORATED UNDER THE LAWS OF THE STATE OF DELAWARE)

               WARRANT FOR THE PURCHASE OF SHARES OF COMMON STOCK

         FOR VALUE RECEIVED, MARSHALL EDWARDS, INC., a Delaware corporation (the
"Company"), hereby certifies that [_________] (the "Holder") is entitled,
subject to the provisions of this Warrant, to purchase from the Company, up to
[_______] fully paid and non-assessable shares of Common Stock at a price of
$4.00 per share (the "Exercise Price").

<PAGE>

         The term "Common Stock" means the Common Stock, par value $.00000002
per share, of the Company. The number of shares of Common Stock to be received
upon the exercise of this Warrant may be adjusted from time to time as
hereinafter set forth. The shares of Common Stock deliverable upon such
exercise, and as adjusted from time to time, are hereinafter referred to as
"Warrant Shares." The term "Company" means and includes the corporation named
above as well as (1) any immediate or more remote successor corporation
resulting from the merger or consolidation of such corporation (or any immediate
or more remote successor corporation of such corporation) with another
corporation, or (ii) any corporation to which such corporation (or any immediate
or more remote successor corporation of such corporation) has transferred its
property or assets as an entirety or substantially as an entirety.

         Upon receipt by the Company of evidence reasonably satisfactory to it
of the loss, theft, destruction or mutilation of this Warrant, and (in the case
of loss, theft or destruction) of reasonably satisfactory indemnification, and
upon surrender and cancellation of this Warrant, if mutilated, the Company shall
execute and deliver a new Warrant of like tenor and date. Any such new Warrant
executed and delivered shall constitute an additional contractual obligation on
the part of the Company, whether or not this Warrant so lost, stolen, destroyed
or mutilated shall be at any time enforceable by anyone.

         The Holder agrees with the Company that this Warrant is issued, and all
the rights hereunder shall be held subject to, all of the conditions,
limitations and provisions set forth herein.

1.                EXERCISE OF WARRANT. This Warrant may be exercised, in whole
or in part, at any time, or from time to time during the period commencing on
the date hereof and expiring 5:00 p.m. Eastern Time on November 30, 2003 (the
"Expiration Date"), by presentation and surrender of this Warrant to the Company
at its principal office, or at the office of its stock transfer agent, if any,
with the Warrant Exercise Form attached hereto duly executed and accompanied by
payment (either in cash or by certified or official bank check, payable to the
order of the Company) of the Exercise Price for the number of shares specified
in such form and instruments of transfer, if appropriate, duly executed by the
Holder or his or her duly authorized attorney. If this Warrant should be
exercised in part only, the Company shall, upon surrender of this Warrant for
cancellation, execute and deliver a new Warrant of like terms evidencing the
rights of the Holder thereof to purchase the balance of the shares purchasable
hereunder. Upon receipt by the Company of this Warrant, together with the
Exercise Price, at its office, or by the stock transfer agent of the Company at
its office, in proper form for exercise, the Holder shall be deemed to be the
holder of record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder. The Holder shall pay any and all
documentary stamp or similar issue or transfer taxes payable in respect of the
issue or delivery of shares of Common Stock on exercise of this Warrant.

2.                RESERVATION OF SHARES. The Company will at all times reserve
for issuance and delivery upon exercise of this Warrant all shares of Common
Stock or other shares of capital stock of the Company from time to time issuable
upon exercise of this Warrant. All such shares

<PAGE>

shall be duly authorized and, when issued upon such exercise, shall be validly
issued, fully paid and non-assessable and free of all preemptive rights.

3.                FRACTIONAL SHARES. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant, but the
Company shall pay the Holder an amount equal to the fair market value of such
fractional share of Common Stock in lieu of each fraction of a share otherwise
called for upon any exercise of this Warrant. For purposes of this Warrant, the
fair market value of a share of Common Stock shall be determined as follows:

                  (a)      If the Common Stock is listed on a National
Securities Exchange or admitted to unlisted trading privileges on such exchange
or listed for trading on the Nasdaq system or the Alternative Investment Market
of the London Stock Exchange, the current market value shall be the last
reported sale price of the Common Stock on such exchange or system on the last
business day prior to the date of exercise of this Warrant or, if no such sale
is made on such day, the average of the closing bid and asked prices for such
day on such exchange or system; or

                  (b)      If the Common Stock is not so listed or admitted, the
current market shall be the average of the closing bid and asked prices as
quoted by the OTC Bulletin Board; or

                  (c)      If the Common Stock is not so listed or admitted to
unlisted trading privileges, the current market value shall be the mean of the
last reported bid and asked prices reported by the National Quotation Bureau,
Inc. on the last business day prior to the date of the exercise of this Warrant;
or

                  (d)      If the Common Stock is not so listed or admitted to
unlisted trading privileges and bid and asked prices are not so reported, the
current market value shall be an amount, not less than book value thereof as at
the end of the most recent fiscal year of the Company ending prior to the date
of the exercise of the Warrant, determined in such reasonable manner as may be
prescribed by the Board of Directors of the Company.

4.                EXCHANGE, TRANSFER, ASSIGNMENT OR LOSS OF WARRANT. This
Warrant is exchangeable, without expense, at the option of the Holder, upon
presentation and surrender hereof to the Company or at the office of its stock
transfer agent, if any, for other Warrants of different denominations, entitling
the Holder or Holders thereof to purchase in the aggregate the same number of
shares of Common Stock purchasable hereunder. Upon surrender of this Warrant to
the Company or at the office of its stock transfer agent, if any, with an
Assignment Form annexed hereto duly executed and funds sufficient to pay any
transfer tax, subject to the provisions of Sections 7 and 11 hereof, the Company
shall, without charge, execute and deliver a new Warrant in the name of the
assignee named in such instrument of assignment (and in the event of a partial
transfer, a new Warrant to the Holder for the portion of such Warrant not
transferred) and this Warrant shall promptly be cancelled. This Warrant may be
divided or combined with other Warrants that carry the same rights upon
presentation hereof at the office of the Company or at the office of its stock
transfer agent, if any, together with a written notice specifying the names and
denominations in which new Warrants are to be issued and signed by the Holder
hereof.

<PAGE>

5.                RIGHTS OF THE HOLDER. The Holder shall not, by virtue hereof,
be entitled to any rights of a shareholder in the Company, either at law or in
equity, and the rights of the Holder are limited to those expressed in this
Warrant.

6.                ANTI-DILUTION PROVISIONS.

         6.1               Adjustment for Recapitalization, Reorganization,
Consolidation, Merger, Etc. In case (i) the outstanding shares of the Common
Stock shall be subdivided into a greater number of shares, (ii) a dividend or
other distribution in Common Stock shall be paid in respect of Common Stock,
(iii) the outstanding shares of Common Stock shall be combined into a smaller
number of shares thereof, or (iv) any shares of the Company's capital stock are
issued by reclassification of the Common Stock (including any reclassification
upon a consolidation or merger in which the Company is the continuing
corporation), the Exercise Price in effect immediately prior to such
subdivision, combination or reclassification or at the record date of such
dividend or distribution shall simultaneously with the effectiveness of such
subdivision, combination or reclassification or immediately after the record
date of such dividend or distribution be proportionately adjusted to equal the
product obtained by multiplying the Exercise Price by a fraction, the numerator
of which is the number of outstanding shares of Common Stock (on a fully diluted
basis) after giving effect to such combination, subdivision, reclassification or
dividend and the denominator of which is the number of outstanding shares of
Common Stock (on a fully diluted basis) outstanding immediately prior to such
combination, subdivision, reclassification or dividend.

         For purposes of this Warrant, "on a fully diluted basis" means that all
outstanding options, rights or Warrants to subscribe for shares of Common Stock
and all securities convertible into or exchangeable for shares of Common Stock
(such options, rights, Warrants and securities are collectively referred to
herein as "Convertible Securities") and all options or rights to acquire
Convertible Securities have been exercised, converted or exchanged.

         Whenever the Exercise Price per share is adjusted as provided in the
immediately preceding paragraph, the number of shares of Common Stock
purchasable upon conversion of the Warrant immediately prior to such Exercise
Price adjustment shall be adjusted, effective simultaneous with the Exercise
Price adjustment, to equal the product obtained (calculated to the nearest full
share) by multiplying such number of shares of Common Stock by a fraction, the
numerator of which is the Exercise Price per share in effect immediately prior
to such Exercise Price adjustment and the denominator of which is the Exercise
Price per share in effect upon such Exercise Price adjustment, which adjusted
number of shares of Common Stock shall thereupon be the number of shares of
Common Stock purchasable upon conversion of the Warrant until further adjusted
as provided herein.

         6.2                Adjustment for Reorganization, Consolidation,
Merger, Liquidation Etc. In case of any reorganization of the Company (or any
other corporation, the securities of which are at the time receivable on the
exercise of this Warrant) after the date hereof or in case after such date the
Company (or any such other corporation) shall consolidate with or merge into
another corporation or convey all or substantially all of its assets to another
corporation or liquidate, then, and in each such case, the Holder of this
Warrant upon the exercise thereof as provided in Section 1 at any time after the
consummation of such reorganization, consolidation,

<PAGE>

merger, conveyance or liquidation, shall be entitled to receive, in lieu of the
securities and property receivable upon the exercise of this Warrant prior to
such consummation, the securities or property to which such Holder would have
been entitled upon such consummation if such Holder had exercised this Warrant
immediately prior thereto; in each such case, the terms of this Warrant shall be
applicable to the securities or property receivable upon the exercise of this
Warrant after such consummation.

         6.3               No Dilution. The Company will not, by amendment of
its Certificate of Incorporation or through reorganization, consolidation,
merger, dissolution, issue or sale of securities, sale of assets or any other
voluntary action, avoid or seek to avoid the observance or performance of any of
the terms of this Warrant, but will at all times in good faith assist in the
carrying out of all such terms and in the taking of all such action as may be
necessary or appropriate in order to protect the rights of the Holder of this
Warrant against dilution or other impairment. Without limiting the generality of
the foregoing, while this Warrant is outstanding, the Company (a) will not
permit the par value, if any, of the shares of Common Stock receivable upon the
exercise of this Warrant to be above the amount payable therefor upon such
exercise and (b) will take all such action as may be necessary or appropriate in
order that the Company may validly and legally issue or sell fully paid and
non-assessable shares of Common Stock upon the exercise of this Warrant.

         6.4               Certificate as to Adjustments. In each case of an
adjustment in the number of shares of Warrant Shares receivable on the exercise
of this Warrant, the Company at its expense will promptly compute such
adjustment in accordance with the terms of this Warrant and prepare a
certificate executed by an executive officer of the Company setting forth such
adjustment and showing in detail the facts upon which such adjustment is based.
The Company will forthwith mail a copy of each such certificate to the Holder.

         6.5               Notices of Record Date, Etc.  In case:

                  (a)      the Company shall take a record of the holders of its
Common Stock for the purpose of entitling them to receive any dividend (other
than a cash dividend at the same rate as the rate of the last cash dividend
theretofore paid) or other distribution, or any right to subscribe for, purchase
or otherwise acquire any shares of stock of any class or any other securities,
or to receive any other right; or

                  (b)      of any capital reorganization of the Company, any
reclassification of the capital stock of the Company, any consolidation or
merger of the Company with or into another corporation, or any conveyance of all
or substantially all of the assets of the Company to another corporation; or

                  (c)      of any voluntary or involuntary dissolution,
liquidation or winding up of the Company, then, and in each such case, the
Company shall mail or cause to be mailed to each Holder of the Warrant at the
time outstanding a notice specifying, as the case may be, (i) the date on which
a record is to be taken for the purpose of such dividend, distribution or right,
and stating the amount and character of such dividend, distribution or right, or
(ii) the date on which such reorganization, reclassification, consolidation,
merger, conveyance, dissolution, liquidation or winding up is to take place, and
the time, if any, is to be fixed, as to which the holders of
<PAGE>

record of Common Stock (or such other securities at the time receivable upon the
exercise of the Warrant) shall be entitled to exchange their shares of Common
Stock (or such other securities) for securities or other property deliverable
upon such reorganization, reclassification, consolidation, merger, conveyance,
dissolution, liquidation or winding up. Such notice shall be mailed at least 20
days prior to the date therein specified and the Warrant may be exercised prior
to said date during the term of the Warrant.

7.                TRANSFER TO COMPLY WITH THE SECURITIES ACT. Notwithstanding
any other provision contained herein, this Warrant and any Warrant Shares have
not been and will not be registered under the Securities Act of 1933, as amended
(the "Securities Act"), or the securities laws of any state of the United States
and are therefore "restricted securities" within the meaning of Rule 144 under
the Securities Act. Accordingly, the Holder of this Warrant agrees that this
Warrant and the Warrant Shares may not be offered, sold, pledged or otherwise
transferred except (i) in an offshore transaction meeting the requirements of
Rule 903 and Rule 904 of Regulation S under the Securities Act, (ii) pursuant to
an effective registration statement under the Securities Act, or (iii) pursuant
to an available exemption from the registration requirements of the Securities
Act as evidenced by an opinion of counsel satisfactory to the Company, in each
case in accordance with all applicable State and other Securities Laws. The
Holder further agrees that this Warrant may not be exercised by or on behalf of
any US Persons and may be exercised only in an offshore transaction (as such
terms are defined in Regulation S), unless registered under the Securities Act
or unless an exemption from such registration is available, and that any hedging
transactions involving this Warrant or the Warrant Shares may not be conducted
unless in compliance with the Securities Act.

8.                LEGEND. Unless the shares of Warrant Shares have been
registered under the Securities Act, upon exercise of any of the Warrants and
the issuance of any of the shares of Warrant Shares, all certificates
representing such securities shall bear on the face thereof substantially the
following legend:

                  THE SHARES OF COMMON STOCK REPRESENTED BY THIS CERTIFICATE
                  HAVE NOT BEEN REGISTERED UNDER THE US SECURITIES ACT OF 1933,
                  AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED,
                  SOLD, PLEDGED OR OTHERWISE TRANSFERRED EXCEPT (1) IN AN
                  OFFSHORE TRANSACTION MEETING THE REQUIREMENTS OF RULE 903 AND
                  RULE 904 OF REGULATION S UNDER THE SECURITIES ACT, (2)
                  PURSUANT TO AN EFFECTIVE REGISTRATION STATEMENT UNDER THE
                  SECURITIES ACT, OR (3) PURSUANT TO AN AVAILABLE EXEMPTION FROM
                  THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT AS
                  EVIDENCED BY AN OPINION OF COUNSEL SATISFACTORY TO THE
                  COMPANY, IN EACH CASE IN ACCORDANCE WITH ALL APPLICABLE STATE
                  AND OTHER SECURITIES LAWS. HEDGING TRANSACTIONS INVOLVING THE
                  SHARES MAY NOT BE CONDUCTED UNLESS IN COMPLIANCE WITH THE
                  SECURITIES ACT.

<PAGE>

                  THE HOLDER HEREOF, BY PURCHASING THIS SECURITY, AGREES FOR THE
                  BENEFIT OF THE COMPANY TO THE FOREGOING RESTRICTIONS AND THAT
                  IT IS NOT A US PERSON.

                  PRIOR TO INVESTING IN THE SHARES OR CONDUCTING ANY
                  TRANSACTIONS IN THE SHARES, INVESTORS ARE ADVISED TO CONSULT
                  PROFESSIONAL ADVISERS REGARDING THE ABOVE RESTRICTIONS ON
                  TRANSFER AND OTHER RESTRICTIONS REFERRED TO IN THE
                  CONFIDENTIAL PRIVATE PLACEMENT MEMORANDUM RELATING TO THE
                  SHARES DATED [APRIL 17], 2002.

9.                NOTICES. All notices required hereunder shall be in writing
and shall be deemed given when delivered personally, by facsimile or overnight
delivery or within two days after mailing when mailed by certified or registered
mail, return receipt requested, to the Company at its principal office, or to
the Holder at the address set forth on the record books of the Company, or at
such other address of which the Company or the Holder has been advised by notice
hereunder.

10.               APPLICABLE LAW. The Warrant is issued under and shall for all
purposes be governed by and construed in accordance with the laws of the State
of Delaware, without giving effect to the choice of law rules thereof.

11.               SUCCESSORS AND ASSIGNS. This Warrant cannot be transferred or
assigned by the Holder without the prior written consent of the Company.

                          (SIGNATURE ON FOLLOWING PAGE)

<PAGE>

         IN WITNESS HEREOF, the Company has caused this Warrant to be signed on
its behalf, in its corporate name, by its duly authorized officer, all as of the
day and year first above written.

                                             MARSHALL EDWARDS, INC.

                                             By: _______________________________
                                                 Name:
                                                 Title:

<PAGE>

                              WARRANT EXERCISE FORM

The undersigned hereby irrevocably elects to exercise the rights contained
within the Warrant to the extent of purchasing ____________ shares of Common
Stock of Marshall Edwards, Inc., a Delaware corporation (the "Company"), and
hereby makes payment of $____________ in payment therefor. By its exercise
hereof, the undersigned confirms and agrees that (a) it is not a US Person (as
defined in Regulation S under the Securities Act of 1933,as amended) and is not
acting for the account or benefit of any US Person; and (b) it understands and
has complied and will comply with all applicable restrictions on the offer,
sale, pledge or other transfer of the shares of Common Stock of the Company as
set forth in the Warrant.

                                            ____________________________________
                                            Signature

                                            ____________________________________
                                            Signature, if jointly held

                                            ____________________________________
                                            Date

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00056-of-00352.parquet"}]]