Document:

CONFIDENTIAL TREATMENT
REQUESTED .  Confidential portions of this document have been redacted
and have been separately filed with the Commission.

    
      Exhibit 10.37

    

    

    
      Execution
Version

    

    

    AMENDED
AND RESTATED

    

    LICENSE
AGREEMENT

    

    By
and Between

    

    PRESIDIO
PHARMACEUTICALS, INC.

    

    And

    

    XTL
BIOPHARMACEUTICALS LTD.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

     

    TABLE OF
CONTENTS

     

    
      
        
          
            
              	 
      	 
      	 
      	
                      Page

                    
	 
      	 
      	 
      
	
                      Article
      I

                    	
                      Definitions

                    	
                      1

                    
	
                      Section
      1.1

                    	
                      “Additional
      Third Party Licenses”

                    	
                      1

                    
	
                      Section
      1.2

                    	
                      “Affiliate”

                    	
                      1

                    
	
                      Section
      1.3

                    	
                      “Assigned
      Contracts”

                    	
                      2

                    
	
                      Section
      1.4

                    	
                      “Bankruptcy
      Code”

                    	
                      2

                    
	
                      Section
      1.5

                    	
                      “Commercialization”
      or “Commercialize”

                    	
                      2

                    
	
                      Section
      1.6

                    	
                      “Commercially
      Reasonable Efforts”

                    	
                      2

                    
	
                      Section
      1.7

                    	
                      “Competing
      Product”

                    	
                      2

                    
	
                      Section
      1.8

                    	
                      “Confidential
      Information”

                    	
                      2

                    
	
                      Section
      1.9

                    	
                      “Control”
      or “Controlled”

                    	
                      2

                    
	
                      Section
      1.10

                    	
                      “Cover”,
      “Covering” or “Covered”

                    	
                      2

                    
	
                      Section
      1.11

                    	
                      “Derivative
      Compounds”

                    	
                      3

                    
	
                      Section
      1.12

                    	
                      “Development”
      or “Develop”

                    	
                      3

                    
	
                      Section
      1.13

                    	
                      “EMEA”

                    	
                      3

                    
	
                      Section
      1.14

                    	
                      “EU”

                    	
                      3

                    
	
                      Section
      1.15

                    	
                      “FDA”

                    	
                      3

                    
	
                      Section
      1.16

                    	
                      “Field”

                    	
                      3

                    
	
                      Section
      1.17

                    	
                      “Fiscal
      Year”

                    	
                      3

                    
	
                      Section
      1.18

                    	
                      “HCV”

                    	
                      3

                    
	
                      Section
      1.19

                    	
                      “HCV
      Field”

                    	
                      3

                    
	
                      Section
      1.20

                    	
                      “IND”

                    	
                      3

                    
	
                      Section
      1.21

                    	
                      “Know-How”

                    	
                      4

                    
	
                      Section
      1.22

                    	
                      “Licensed
      Compounds”

                    	
                      4

                    
	
                      Section
      1.23

                    	
                      “Licensed
      Patent Rights”

                    	
                      4

                    
	
                      Section
      1.24

                    	
                      “Licensed
      Product”

                    	
                      4

                    
	
                      Section
      1.25

                    	
                      “Licensed
      Technology”

                    	
                      4

                    
	
                      Section
      1.26

                    	
                      “Major
      EU Countries”

                    	
                      4

                    
	
                      Section
      1.27

                    	
                      “NDA”

                    	
                      4

                    
	
                      Section
      1.28

                    	
                      “Net
      Sales”

                    	
                      4

                    
	
                      Section
      1.29

                    	
                      “*****”

                    	
                      6

                    
	
                      Section
      1.30

                    	
                      “Party”
      or “Parties”

                    	
                      6

                    
	
                      Section
      1.31

                    	
                      “Pass-Through
      Costs”

                    	
                      6

                    
	
                      Section
      1.32

                    	
                      “Patent
      Rights”

                    	
                      6

                    
	
                      Section
      1.33

                    	
                      “Person”

                    	
                      6

                    
	
                      Section
      1.34

                    	
                      “Phase
      I Trial”

                    	
                      6

                    
	
                      Section
      1.35

                    	
                      “Phase
      II Trial”

                    	
                      6

                    
	
                      Section
      1.36

                    	
                      “Phase
      III Trial”

                    	
                      6

                    
	
                      Section
      1.37

                    	
                      “Regulatory
      Approval”

                    	
                      7

                    
	
                      Section
      1.38

                    	
                      “Regulatory
      Authority”

                    	
                      7

                    
	
                      Section
      1.39

                    	
                      “Regulatory
      Filings”

                    	
                      7

                    

            

          

        

      

    

    
       

      
        

      

    

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

    

      
        
           

        

        
          -i-

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            	
                                    Section
      1.40

                                  	
                                    “Royalty
      Term”

                                  	
                                    7

                                  
	
                                    Section
      1.41

                                  	
                                    “Senior
      Executives”

                                  	
                                    7

                                  
	
                                    Section
      1.42

                                  	
                                    “Series
      1 Compounds”

                                  	
                                    7

                                  
	
                                    Section
      1.43

                                  	
                                    “Series
      1 Licensed Products”

                                  	
                                    7

                                  
	
                                    Section
      1.44

                                  	
                                    “Series
      1 Patent Rights”

                                  	
                                    7

                                  
	
                                    Section
      1.45

                                  	
                                    “Series
      2-4 Compounds”

                                  	
                                    7

                                  
	
                                    Section
      1.46

                                  	
                                    “Series
      2-4 Licensed Products”

                                  	
                                    8

                                  
	
                                    Section
      1.47

                                  	
                                    “Series
      2-4 Patent Rights”

                                  	
                                    8

                                  
	
                                    Section
      1.48

                                  	
                                    “Series
      5-50 Compounds”

                                  	
                                    8

                                  
	
                                    Section
      1.49

                                  	
                                    “Sublicense
      Income”

                                  	
                                    8

                                  
	
                                    Section
      1.50

                                  	
                                    “Successful
      Completion”

                                  	
                                    9

                                  
	
                                    Section
      1.51

                                  	
                                    “Territory”

                                  	
                                    9

                                  
	
                                    Section
      1.52

                                  	
                                    “Third
      Party”

                                  	
                                    9

                                  
	
                                    Section
      1.53

                                  	
                                    “Valid
      Claim”

                                  	
                                    9

                                  
	
                                    Section
      1.54

                                  	
                                    “VivoQuest
      Asset Purchase Agreement”

                                  	
                                    9

                                  
	
                                    Section
      1.55

                                  	
                                    *****

                                  	
                                    9

                                  
	
                                    Section
      1.56

                                  	
                                    “VivoQuest
      License Agreement”

                                  	
                                    9

                                  
	
                                    Section
      1.57

                                  	
                                    “VivoQuest
      Licensed Patents”

                                  	
                                    9

                                  
	
                                    Section
      1.58

                                  	
                                    Additional
      Definitions

                                  	
                                    9

                                  
	
                                    Article
      II

                                  	
                                    Grant
      of License; Assigned Contracts; Exclusivity

                                  	
                                    10

                                  
	
                                    Section
      2.1

                                  	
                                    License
      Grant

                                  	
                                    10

                                  
	
                                    Section
      2.2

                                  	
                                    Assigned
      Contracts

                                  	
                                    10

                                  
	
                                    Section
      2.3

                                  	
                                    Exclusivity.

                                  	
                                    11

                                  
	
                                    Section
      2.4

                                  	
                                    Retained
      Rights; Other Limitations

                                  	
                                    11

                                  
	
                                    Section
      2.5

                                  	
                                    Section
      365(n) of the Bankruptcy Code

                                  	
                                    11

                                  
	
                                    Article
      III

                                  	
                                    Technology
      Transfer

                                  	
                                    12

                                  
	
                                    Section
      3.1

                                  	
                                    Technology
      Transfer

                                  	
                                    12

                                  
	
                                    Section
      3.2

                                  	
                                    Technology
      Transfer Committee; Decision-Making Authority.

                                  	
                                    12

                                  
	
                                    Article
      IV

                                  	
                                    Reports
      and Meetings; Diligence; Certain Regulatory and Manufacturing
      Activities

                                  	
                                    12

                                  
	
                                    Section
      4.1

                                  	
                                    Development
      Reports; Meetings.

                                  	
                                    12

                                  
	
                                    Section
      4.2

                                  	
                                    Commercially
      Reasonable Efforts

                                  	
                                    13

                                  
	
                                    Section
      4.3

                                  	
                                    Certain
      Regulatory and Manufacturing Activities

                                  	
                                    13

                                  
	
                                    Article
      V

                                  	
                                    Financial
      Provisions

                                  	
                                    14

                                  
	
                                    Section 5.1

                                  	
                                    License
      Payment

                                  	
                                    14

                                  
	
                                    
                                      Section 5.2

                                    

                                  	
                                    Milestone
      Payments for Series 1 Licensed Products

                                  	
                                    14

                                  
	
                                    Section 5.3

                                  	
                                    Royalties

                                  	
                                    16

                                  
	
                                    Section 5.4

                                  	
                                    Sublicense
      Income for Series 1 Licensed Products

                                  	
                                    16

                                  
	
                                    Section 5.5

                                  	
                                    Reduction
      for Lack of Patent Coverage.

                                  	
                                    17

                                  
	
                                    Section 5.6

                                  	
                                    Reduction
      for Pass-Through Costs Under Assigned Contracts and Additional Third Party
      Licenses

                                  	
                                    17

                                  
	
                                    Section 5.7

                                  	
                                    Priority
      of Reduction

                                  	
                                    18

                                  

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

    
      
         

        
          

        

      

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

    

    

    
      
        
           

        

        
          -ii-

          
            

          

        

        
           

        

      

    

     

    
      
        
          
            
              
                
                  
                    
                      
                        	
                                Section
      5.8

                              	
                                Offset
      for Payment of VivoQuest Pass-Through Costs

                              	
                                18

                              
	
                                Section
      5.9

                              	
                                Reports
      and Accounting.

                              	
                                19

                              
	
                                Section
      5.10

                              	
                                Currency
      and Method of Payments

                              	
                                19

                              
	
                                Section
      5.11

                              	
                                United
      States Dollars

                              	
                                19

                              
	
                                Section
      5.12

                              	
                                Tax
      Withholding

                              	
                                19

                              
	
                                Section
      5.13

                              	
                                Late
      Payments

                              	
                                20

                              
	
                                Section
      5.14

                              	
                                Blocked
      Payments

                              	
                                20

                              
	
                                Section
      5.15

                              	
                                Costs
      and Expenses

                              	
                                20

                              
	
                                Article
      VI

                              	
                                Intellectual
      Property Protection and Related Matters

                              	
                                20

                              
	
                                Section
      6.1

                              	
                                Prosecution
      and Maintenance of Licensed Patent Rights.

                              	
                                20

                              
	
                                Section
      6.2

                              	
                                Third
      Party Infringement.

                              	
                                21

                              
	
                                Section
      6.3

                              	
                                Claimed
      Infringement

                              	
                                22

                              
	
                                Section
      6.4

                              	
                                Patent
      Invalidity Claim

                              	
                                22

                              
	
                                Section
      6.5

                              	
                                Patent
      Marking

                              	
                                22

                              
	
                                Section
      6.6

                              	
                                Certain
      Limitations

                              	
                                22

                              
	
                                Article
      VII

                              	
                                Confidentiality

                              	
                                23

                              
	
                                Section
      7.1

                              	
                                Confidential
      Information

                              	
                                23

                              
	
                                Section
      7.2

                              	
                                Employee,
      Director, Consultant and Advisor Obligations

                              	
                                23

                              
	
                                Section
      7.3

                              	
                                Publicity.

                              	
                                24

                              
	
                                Section
      7.4

                              	
                                Term

                              	
                                24

                              
	
                                Article
      VIII

                              	
                                Representations
      and Warranties

                              	
                                24

                              
	
                                Section
      8.1

                              	
                                Representations
      of Authority

                              	
                                24

                              
	
                                Section
      8.2

                              	
                                Consents

                              	
                                24

                              
	
                                Section
      8.3

                              	
                                No
      Conflict

                              	
                                25

                              
	
                                Section
      8.4

                              	
                                Employee,
      Director, Consultant and Advisor Obligations

                              	
                                25

                              
	
                                Section
      8.5

                              	
                                Intellectual
      Property

                              	
                                25

                              
	
                                Section
      8.6

                              	
                                No
      Warranties

                              	
                                27

                              
	
                                Article
      IX

                              	
                                Term
      and Termination

                              	
                                28

                              
	
                                Section
      9.1

                              	
                                Term

                              	
                                28

                              
	
                                Section
      9.2

                              	
                                Termination
      For Material Breach

                              	
                                28

                              
	
                                Section
      9.3

                              	
                                Termination
      for Convenience

                              	
                                28

                              
	
                                Section
      9.4

                              	
                                Effect
      of Material Breach or Patent Validity Challenge by XTL or its
      Affiliates.

                              	
                                29

                              
	
                                Section
      9.5

                              	
                                Effects
      of Termination.

                              	
                                29

                              
	
                                Section
      9.6

                              	
                                Survival

                              	
                                31

                              
	
                                Article
      X

                              	
                                Dispute
      Resolution

                              	
                                31

                              
	
                                Section
      10.1

                              	
                                Referral
      to Senior Executives

                              	
                                31

                              
	
                                Section
      10.2

                              	
                                Mediation

                              	
                                32

                              
	
                                Section
      10.3

                              	
                                Arbitration.

                              	
                                32

                              
	
                                Section
      10.4

                              	
                                No
      Limitation

                              	
                                33

                              
	
                                Article
      XI

                              	
                                Miscellaneous
      Provisions

                              	
                                33

                              
	
                                Section
      11.1

                              	
                                Indemnification.

                              	
                                33

                              

                      

                    

                  

                

              

            

          

        

      

    

    

    
      
        
           

        

        
          -iii-

          
            

          

        

        
           

        

      

    

     

    
      
        
          	
                  Section 11.2

                	
                  Governing
      Law

                	
                  34

                
	
                  Section 11.3

                	
                  Assignment

                	
                  35

                
	
                  Section 11.4

                	
                  Entire
      Agreement; Amendments

                	
                  35

                
	
                  Section 11.5

                	
                  Notices

                	
                  35

                
	
                  Section 11.6

                	
                  Force
      Majeure

                	
                  36

                
	
                  Section 11.7

                	
                  Independent
      Contractors

                	
                  36

                
	
                  Section 11.8

                	
                  No
      Strict Construction

                	
                  36

                
	
                  Section 11.9

                	
                  Headings

                	
                  36

                
	
                  Section 11.10

                	
                  No
      Implied Waivers; Rights Cumulative

                	
                  36

                
	
                  Section 11.11

                	
                  Severability

                	
                  37

                
	
                  Section 11.12

                	
                  Execution
      in Counterparts

                	
                  37

                
	
                  Section 11.13

                	
                  No
      Third Party Beneficiaries

                	
                  37

                
	
                  Section 11.14

                	
                  No
      Consequential Damages

                	
                  37

                

        

      

    

    

    
      
        
           

        

        
          -iv-

          
            

          

        

        
           

        

      

    

     

    Exhibits:

     

    Exhibit A
– Assigned Contracts

    Exhibit B
– VivoQuest Agreements

    Exhibit C
– Series 1, 2, 3 and 4 Compounds in XTL Database and Other Records

    Exhibit D
– Series 1 Patent Rights as of the Original Effective Date and the Restatement
Date

    Exhibit E
– Series 2-4 Patent Rights as of the Original Effective Date and the Restatement
Date

    Exhibit F
– Press Release

    *****

    
       

      
        

      

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

    

    
      
         

      

      
        -v-

        
          

        

      

      
         

      

    

    AMENDED
AND RESTATED LICENSE AGREEMENT

     

    This
Amended and Restated License Agreement (this “Agreement”), dated
the 4th day of
August, 2008 (the “Restatement Date”),
is by and between Presidio Pharmaceuticals, Inc., a Delaware corporation (“PRESIDIO”), and XTL
Biopharmaceuticals Ltd., a public company limited by shares organized under the
laws of Israel (“XTL”).

     

    INTRODUCTION

     

    1.           XTL
owns or controls rights to Licensed Compounds, Licensed Patent Rights and
Licensed Technology (each as hereinafter defined).

     

    2.           PRESIDIO
is in the business of discovering, developing and marketing pharmaceutical
products.

     

    3.           Effective
as of March 19, 2008 (the “Original Effective
Date”), XTL and PRESIDIO entered into a License Agreement (the “Original License
Agreement”) pursuant to which XTL granted to PRESIDIO certain rights and
licenses to the Licensed Compounds, Licensed Patent Rights and Licensed
Technology to develop and commercialize certain products.

     

    4.           XTL
and PRESIDIO now desire to amend and restate the Original License Agreement in
its entirety with this Agreement to reflect the matters contemplated by XTL and
PRESIDIO as hereinafter set forth.

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, PRESIDIO and XTL agree as follows:

     

    Article
I

    Definitions

     

    When used
in this Agreement, each of the following terms shall have the meanings set forth
in this Article I:

     

    Section
1.1           “Additional Third Party
Licenses”.  Additional Third Party Licenses means licenses
under any Patent Rights of a Third Party (other than Licensed Patent Rights
licensed or sublicensed to PRESIDIO under the VivoQuest License Agreement or any
Assigned Contracts) which PRESIDIO and/or any of its Affiliates or Third Party
sublicensees reasonably determines are necessary for the Development and/or
Commercialization of a Licensed Compound or Licensed Product for use in the
Field in any country of the Territory.

     

    Section
1.2           “Affiliate”.  Affiliate
means, with respect to a Party, any Person that controls, is controlled by, or
is under common control with such Party.  For purposes of this Section
1.2, “control” shall refer to (a) in the case of a Person that is a corporate
entity, direct or indirect ownership of fifty percent (50%) or more of the stock
or shares having the right to vote for the election of directors of such Person,
and (b) in the case of a Person that is not a corporate entity, the possession,
directly or indirectly, of the power to direct, or cause the direction of, the
management or policies of such Person, whether through the ownership of voting
securities, by contract or otherwise.

     

    
      
         

      

      
        -1-

        
          

        

      

      
         

      

    

    Section
1.3           “Assigned
Contracts”.  Assigned Contracts means the agreements listed on
Exhibit
A.

     

    Section
1.4           “Bankruptcy
Code”.  Bankruptcy Code means 11 U.S.C §§ 101-1330, as
amended.

     

    Section
1.5           “Commercialization” or
“Commercialize”.  Commercialization or Commercialize means any
activities directed to producing or manufacturing for commercial distribution;
marketing, promoting, detailing or commercially distributing; importing, having
imported, exporting or having exported for commercial distribution; or selling
or offering to sell, a product.

     

    Section
1.6           “Commercially Reasonable
Efforts”.  Commercially Reasonable Efforts means the efforts
normally used by a United States biotechnology or pharmaceutical company with
resources similar to those of PRESIDIO to Develop or Commercialize a
pharmaceutical product or compound owned by it or to which it has rights, taking
into account its market potential and the stage in its development or product
life, relevant issues of safety and efficacy, product profile and labeling,
other medical and clinical considerations, difficulty in developing the product
or compound, competitiveness of the marketplace for the applicable product(s)
marketed or to be marketed, the proprietary position of the compound or product,
the regulatory structure involved, the potential profitability of the applicable
product(s) marketed or to be marketed, and other relevant factors affecting the
cost, risk and timing of Development and the total potential reward to be
obtained if a product is Commercialized.  Such efforts and resources
that are used by PRESIDIO’s Affiliates and Third Party sublicensees shall be
attributed to PRESIDIO for purposes of this Agreement.

     

    Section
1.7           “Competing
Product”.  Competing Product means any prescription
pharmaceutical product that is *****.

     

    Section
1.8           “Confidential
Information”.  Confidential Information means all Know-How and
other information (whether or not patentable) regarding a Party’s technology,
products, business or objectives, that is disclosed by such Party to the other
Party in the course of such Party’s performance of the Original License
Agreement or this Agreement.

     

    Section
1.9           “Control” or
“Controlled”.  Control or Controlled means, with respect to any
intellectual property right or other intangible property, the possession by a
Party or an Affiliate of a Party (whether by ownership or license, other than a
license granted pursuant to the Original License Agreement or this Agreement) of
the ability to grant access to, or a license or sublicense of, such rights or
property as contemplated under the Original License Agreement or this Agreement,
as applicable.

     

    Section
1.10         “Cover”, “Covering” or
“Covered”.  Cover, Covering or Covered means, as to Patent
Rights and a product, that, but for a license granted to a Party under a Valid
Claim of such Patent Rights, the Development or Commercialization of such
product would infringe such Valid Claim.

     

    
      
        

      

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

    

    

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

    

     

    Section
1.11         “Derivative
Compounds”.  Derivative Compounds means, with respect to any
Licensed Compound, any compounds actually chemically derived, in one or more
steps, by or on behalf of PRESIDIO, its Affiliates and/or Third Party
sublicensees from such Licensed Compound, provided that, compounds
derived by Third Party sublicensees or Third Party acquirers of PRESIDIO shall
not constitute Derivative Compounds if such compounds are so derived (i) prior
to the effective date of the grant by PRESIDIO of the sublicense to such
sublicensee or the acquisition by such acquirer, as evidenced by
contemporaneously prepared written records of such sublicensee or acquirer or
(ii) without any use, direct or indirect, of (A) proprietary know-how disclosed
to such Third Party in connection with the grant of the sublicense or the
acquisition, or (B) Licensed Compounds (including Derivative Compounds) on which
Development had previously been conducted by XTL or PRESIDIO, the results of
which prior Development are identified to such Third Party in connection with
the grant of the sublicense or the acquisition.

     

    Section
1.12         “Development” or
“Develop”.  Development or Develop means any research,
discovery, and preclinical and clinical drug development activities, including
without limitation test method development and stability testing, toxicology,
animal efficacy studies, formulation, quality assurance/quality control
development, statistical analysis, clinical studies, regulatory affairs, product
approval and registration, chemical development and manufacturing development,
packaging development and manufacturing and development documentation efforts in
support of development activities anywhere in the world.

     

    Section
1.13         “EMEA”.  EMEA
means the European Agency for the Evaluation of Medical Products, or any
successor agency thereof.

     

    Section
1.14         “EU”.  EU
means the European Union, as it may be constituted from time to
time.

     

    Section
1.15         “FDA”.  FDA
means the United States Food and Drug Administration, or any successor agency
thereof.

     

    Section
1.16         “Field”.  Field
means the prevention, treatment, palliation and/or control of any and all human
diseases and conditions, including without limitation the HCV
Field.

     

    Section
1.17         “Fiscal
Year”.  Fiscal Year means, with respect to a Party or any Third
Party sublicensee of a Party, the fiscal year of such Party or Third Party
sublicensee.

     

    Section
1.18         “HCV”.  HCV
means hepatitis C virus.

     

    Section
1.19         “HCV
Field”.  HCV Field means the prevention, treatment, palliation
and/or control of any and all HCV indications.

     

    Section
1.20         “IND”.  IND
means an Investigational New Drug application filed with the FDA.

     

    
      
         

      

      
        -3-

        
          

        

      

      
         

      

    

    Section
1.21         “Know-How”.  Know-How
means any know-how, expertise, discoveries, inventions, information, trade
secrets, data or materials, whether or not patentable, proprietary or embodied
in tangible form, including without limitation ideas, concepts, formulas,
methods, procedures, designs, technologies, compositions, plans, applications,
technical data, samples, biological or chemical materials, laboratory notebooks,
preclinical or clinical data, databases, designs, assays, protocols, analytical
systems, discovery tools, reports, Regulatory Filings and manufacturing
documentation.

     

    Section
1.22         “Licensed
Compounds”.  Licensed Compounds means (a) the Series 1
Compounds, and (b) the Series 2-4 Compounds.

     

    Section
1.23         “Licensed Patent
Rights”.  Licensed Patent Rights means (a) the Series 1 Patent
Rights, (b) the Series 2-4 Patent Rights, and (c) any other Patent Rights
Controlled by XTL or any of its Affiliates, as of the Original Effective Date or
during the term of the Original License Agreement or this Agreement, that Cover
any Licensed Technology and/or the Development and/or Commercialization of any
Licensed Compounds or Licensed Products.

     

    Section
1.24         “Licensed
Product”.  Licensed Product means any product that contains one
or more Licensed Compounds as an active ingredient.

     

    Section
1.25         “Licensed
Technology”.  Licensed Technology means any Know-How Controlled
by XTL or any of its Affiliates, as of the Original Effective Date or during
term of the Original License Agreement or this Agreement, relating to the
Development and/or Commercialization of Licensed Compounds or Licensed Products,
and all intellectual property rights therein.

     

    Section
1.26         “Major EU
Countries”.  Major EU Countries means any of the United
Kingdom, Germany, France, Italy and Spain.

     

    Section
1.27         “NDA”.  NDA
means an application submitted to a Regulatory Authority for marketing approval
of a product, including without limitation a New Drug Application filed with the
FDA and any foreign equivalent thereof.

     

    Section
1.28         “Net
Sales”.  Net Sales means, with respect to a Licensed Product,
the gross amount invoiced by PRESIDIO and/or its Affiliates, or by Third Party
sublicensees, as the case may be, in respect of sales of such Licensed Product
to unrelated Third Parties, in each case less the following
deductions:

     

     
(a)           Trade, cash
and/or quantity discounts actually allowed and taken with respect to such
sales;

     

     
(b)           Discounts paid
under discount prescription programs and reductions for coupon and voucher
programs;

     

     
(c)           Tariffs, duties,
excises, sales taxes, value-added taxes and other taxes imposed upon and paid by
PRESIDIO and/or one of its Affiliates, or by Third Party sublicensees, as the
case may be, with respect to the use, sale or importation of the Licensed
Product, to the extent that neither PRESIDIO nor any of its Affiliates is
entitled to a rebate, refund or credit for such amounts;

    
      
         

      

      
        -4-

        
          

        

      

      
         

      

    

     
(d)           Amounts repaid
or credited by reason of rejections, defects, recalls or returns or because of
chargebacks, refunds, rebates or retroactive price reductions;

     

     
(e)           Negotiated payments
made to private sector and government third party payors (e.g., PBMs, HMOs and
PPOs) and purchasers/providers (e.g., staff model HMOs, hospitals and clinics),
regardless of the payment mechanism, including without limitation rebate,
chargeback and credit mechanisms;

     

     
(f)            Freight,
insurance and other transportation charges incurred by PRESIDIO and/or its
Affiliates, or by Third Party sublicensees, as the case may be, in shipping a
Licensed Product to Third Parties;

     

     
(g)           Sales commissions and
inventory management fees paid to wholesalers and distributors to the extent
allocable to Licensed Products;

     

     
(h)           Amounts that are
written off as uncollectible and costs of collections; and

     

     
(i)            Gross
amounts received in respect of sales for test marketing, sampling or promotional
use, clinical trial purposes or compassionate or similar use.

     

    Such
amounts shall be determined from the books and records of PRESIDIO and/or its
Affiliates, or Third Party sublicensees, as the case may be, maintained in
accordance with generally accepted accounting principles applicable within a
particular country, consistently applied, including periodic adjustments to
reflect amounts actually incurred.

     

    In the
event the Licensed Product is sold as part of a Combination Product (as defined
below), the Net Sales from the Combination Product, for the purposes of
determining royalty payments, shall be determined on a country-by-country basis
by multiplying the Net Sales (as determined above) of the Combination Product in
each country, during the applicable royalty reporting period, by the fraction
A/(A+B), where A is the average net selling price of the Licensed Product when
sold separately in finished form in such country and B is the average net
selling price of the other active ingredient(s) included in the Combination
Product when sold separately in finished form in such country, in each case
during the applicable royalty reporting period or, if sales of both the Licensed
Product and the other active ingredient(s) did not occur in such country in such
period, then in the most recent royalty reporting period in which sales of both
occurred in such country.  In the event that such average net selling
price cannot be determined for both the Licensed Product and all other active
ingredient(s) included in such Combination Product for a country, Net Sales for
the purposes of determining royalty payments shall be calculated by multiplying
the Net Sales of the Combination Product in such country by the fraction of
C/(C+D) where C is the fair market value of the Licensed Product and D is the
fair market value of all other active ingredient(s) included in the Combination
Product.  In such event, PRESIDIO shall in good faith make a
determination of the respective fair market values of the Licensed Product and
all other active ingredient(s) included in the Combination Product, and shall
notify XTL of such determination and provide XTL with data to support such
determination.  XTL shall have the right to review such determination
of fair market values and, if XTL disagrees with such determination, to notify
PRESIDIO of such disagreement within ***** after PRESIDIO notifies XTL of such
determination.  If XTL notifies PRESIDIO that XTL disagrees with such
determination within such ***** period and if thereafter the Parties are
unable to agree in good faith as to such respective fair market values, then
such matter shall be resolved as provided in Article X.  If XTL does
not notify PRESIDIO that XTL disagrees with such determination within such
***** period, such determination shall be conclusive and binding on the
Parties.

    
       

    

    
      
        
          
             

          

          
            -5-

            
              

            

          

          
             

          

        

      

       

      As used
above, the term “Combination Product”
means any pharmaceutical product that includes both (x) a Licensed Product and
(y) other active ingredient(s).

    

     

    Section
1.29        *****.

     

    Section
1.30         “Party” or
“Parties”.  Party means PRESIDIO or XTL; Parties means PRESIDIO
and XTL.

     

    Section
1.31         “Pass-Through
Costs”.  Pass-Through Costs means amounts payable to Third
Parties pursuant to (a) the Assigned Contracts attached hereto as Exhibit A, (b) the
VivoQuest License Agreement attached hereto as Exhibit B, and/or (c)
Additional Third Party Licenses, including without limitation upfront payments
or similar acquisition costs to obtain such licenses; in the case of each of the
foregoing clauses (a), (b) and (c), with respect to the Development and/or
Commercialization of Licensed Compounds or Licensed Products.

     

    Section
1.32         “Patent
Rights”.  Patent Rights means the rights and interest in and to
all issued patents and pending patent applications in any country in the
Territory, including without limitation all utility models, utility model
applications, provisionals, divisionals, substitutions, continuations,
continuations-in-part, continuing prosecution applications, patents of addition,
requests for continued examination, reexaminations, supplementary protection
certificates, extensions, registrations or confirmation patents, and reissues
thereof.

     

    Section
1.33         “Person”.  Person
means any natural person or any corporation, company, partnership, joint
venture, firm or other entity, including without limitation a
Party.

     

    Section
1.34         “Phase I
Trial”.  Phase I Trial means a clinical study of a Licensed
Product in human volunteers or patients with the endpoint of determining initial
tolerance, toxicity, safety and/or pharmacokinetic information.

     

    Section
1.35         “Phase II
Trial”.  Phase II Trial means a dose exploration, dose
response, duration of effect, kinetic/dynamic relationship and preliminary
efficacy and safety clinical study of a Licensed Product in
patients.

     

    Section
1.36         “Phase III
Trial”.  Phase III Trial means a pivotal clinical study of a
Licensed Product in patients designed to confirm with statistical significance
the efficacy and safety of a Licensed Product performed to provide a sufficient
basis for an application for Regulatory Approval of such Licensed
Product.

     

    
      
        

      

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

    

    
      
         

      

      
        -6-

        
          

        

      

      
         

      

    

    Section
1.37         “Regulatory
Approval”.  Regulatory Approval means the approvals (including
any applicable governmental price and reimbursement approvals), licenses,
registrations or authorizations of Regulatory Authorities necessary for the
commercial manufacture and sale of a product in a country or
territory.

     

    Section
1.38         “Regulatory
Authority”.  Regulatory Authority means a federal, national,
multinational, state, provincial or local regulatory agency, department, bureau
or other governmental entity with authority over the testing, manufacture, use,
storage, import, promotion, marketing or sale of a product in a country or
territory.

     

    Section
1.39         “Regulatory
Filings”.  Regulatory Filings means any filing or application
with any Regulatory Authority with respect to a Licensed Compound or Licensed
Product, including without limitation any INDs or its foreign equivalent,
Regulatory Approvals, and correspondence with the relevant Regulatory
Authorities, as well as minutes of any material meetings, telephone conferences
or discussions with the relevant Regulatory Authorities.

     

    Section
1.40         “Royalty
Term”.  Royalty Term means, with respect to each Licensed
Product in each country of the Territory, the period commencing upon first
commercial sale of such Licensed Product in such country and ending upon the
later of (a) the expiration of the last-to-expire Valid Claim under the Licensed
Patent Rights Covering such Licensed Product in such country, or (b) ***** years
following first commercial sale of such Licensed Product in such
country.  For avoidance of doubt, the Royalty Term shall be determined
on a country-by-country and Licensed Product-by-Licensed Product
basis.

     

    Section
1.41         “Senior
Executives”.  Senior Executives means, with respect to
PRESIDIO, the Chief Executive Officer (or a senior executive designated by such
officer) and, with respect to XTL, the Chief Executive Officer (or a senior
executive designated by such officer).

     

    Section
1.42         “Series 1
Compounds”.  Series 1 Compounds means (a) the compounds claimed
or disclosed in the Series 1 Patent Rights, (b) the compounds identified as
“Series 1 Compounds” on Exhibit C, and (c)
Derivative Compounds of any compound set forth in either of the foregoing
clauses (a) and (b); in the case of each of clauses (a), (b) and (c) above,
regardless of whether or not any such compound has been synthesized by XTL
and/or its Affiliates.

     

    Section
1.43         “Series 1 Licensed
Products”.  Series 1 Licensed Products means Licensed Products
that contain any Series 1 Compound(s).

     

    Section
1.44         “Series 1 Patent
Rights”.  Series 1 Patent Rights means (a) the Patent Rights
set forth on Exhibit
D, (b) counterparts of the Patent Rights set forth on Exhibit D in any
country of the Territory, and (c) all Patent Rights claiming priority from the
Patent Rights described in either of the foregoing clauses (a) and (b) in any
country of the Territory.

     

    Section
1.45         “Series 2-4
Compounds”.  Series 2-4 Compounds means (a) any and all
compounds claimed or disclosed in any Series 2-4 Patent Right, (b) the compounds
identified as “Series 2, 3 or 4 Compounds” on Exhibit C, and (c)
Derivative Compounds of any compound set forth in either of the foregoing
clauses (a) and (b); in the case of each of clauses (a), (b) and (c) above,
regardless of whether or not any such compound has been synthesized by XTL
and/or its Affiliates.

    
      

    

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

     

    
      
        
           

        

        
          -7-

          
            

          

        

        
           

        

      

    

    

    Section
1.46         “Series 2-4 Licensed
Products”.  Series 2-4 Licensed Products means Licensed
Products that contain any Series 2-4 Compound(s).

     

    Section
1.47         “Series 2-4 Patent
Rights”.  Series 2-4 Patent Rights means (a) the Patent Rights
set forth on Exhibit
E, (b) counterparts of the Patent Rights set forth on Exhibit E in any
country of the Territory, and (c) all Patent Rights claiming priority from the
Patent Rights described in either of the foregoing clauses (a) and (b) in any
country of the Territory.

     

    Section
1.48         “Series 5-50
Compounds”.  Series 5-50 Compounds means any and all compounds
claimed or disclosed in any Patent Rights licensed or acquired by XTL from
VivoQuest under the VivoQuest Asset Purchase Agreement or VivoQuest License
Agreement, excluding the Series 1 Compounds and the Series 2-4
Compounds.

     

    Section
1.49         “Sublicense
Income”.  Sublicense Income means, subject to Section 5.4, all
amounts received by PRESIDIO and/or its Affiliates from Third Parties in
connection with the sublicensing or licensing to such Third Parties of rights
under Licensed Patent Rights and/or Licensed Technology to Develop and/or
Commercialize any Series 1 Licensed Products, including without limitation all
license fees, milestone payments and royalties, but excluding any of the
following amounts received by PRESIDIO and/or its Affiliates from such Third
Parties:

     

     
(a)           Amounts
received as the purchase price for PRESIDIO’s and/or its Affiliates’ debt or
equity securities, except to the extent such amounts exceed the fair market
value of such debt or equity securities;

     

      (b)           Amounts
received for bona fide research and development activities undertaken for, or in
collaboration with, such Third Parties, except to the extent such amounts exceed
reasonable and customary funding amounts for such activities (e.g., cost
reimbursement or reasonable FTE-based funding);

     

     
(c)           Amounts
received for bona fide co-promotion and other commercial activities undertaken
for, or in collaboration with, such Third Parties, except to the extent such
amounts exceed reasonable and customary funding amounts for such activities
(e.g., fees calculated and paid as cost reimbursement, reasonable per-detail
fees or reasonable FTE-based funding);

     

     
(d)           In the
event such license or sublicense is structured as a profit-sharing arrangement,
PRESIDIO’s and its Affiliates’ share of revenue amounts that are offset by
PRESIDIO’s and its Affiliates’ share of costs in the profit-share calculation
(i.e., only PRESIDIO’s and its Affiliates’ share of net profits, as opposed to
gross revenues, shall constitute Sublicense Income hereunder); and

     

     
(e)           Amounts
received to cover Pass-Through Costs payable by PRESIDIO and/or its Affiliates
under this Agreement, including without limitation any Pass-Through Costs owed
by XTL to VivoQuest which are payable by PRESIDIO under Section 5.8 and any
Pass-Through Costs payable by PRESIDIO pursuant to any Assigned Contracts and
Additional Third Party Licenses.

     

    
      
         

      

      
        -8-

        
          

        

      

      
         

      

    

     

    Section
1.50         “Successful
Completion”.  Successful Completion means (a) with respect to a
Phase I Trial for a Licensed Product, the completion of such Phase I Trial with
data that PRESIDIO determines is satisfactory to progress such Licensed Product
to a Phase II Trial, and (b) with respect to a Phase III Trial for a Licensed
Product, the completion of such Phase III Trial with data that (i) achieves the
primary endpoint of such Phase III Trial or (ii) that PRESIDIO reasonably
determines is suitable for inclusion as a pivotal trial in an NDA for such
Licensed Product to a Regulatory Authority.

     

    Section
1.51         “Territory”.  Territory
means all countries of the world.

     

    Section
1.52         “Third
Party”.  Third Party means any person or entity other than a
Party or any of its Affiliates.

     

    Section
1.53         “Valid
Claim”.  Valid Claim means, on a country-by-country basis, a
claim of (a) an issued patent that (i) has not expired; (ii) has not been
disclaimed; (iii) has not been cancelled or superseded, or if cancelled or
superseded, has not been reinstated; and (iv) has not been revoked, held
invalid, or otherwise declared unenforceable or not allowable by a tribunal or
patent authority of competent jurisdiction over such claim in such country from
which no further appeal has or may be taken; or (b) a patent application that
has been pending less than ***** years from the earliest date from which such
patent application claims priority and which claim has not been cancelled,
withdrawn or abandoned or finally rejected by an administrative agency action
from which no appeal can be taken.

     

    Section
1.54         “VivoQuest Asset Purchase
Agreement”.  VivoQuest Asset Purchase Agreement means the asset
purchase agreement, dated as of August 11, 2005, between XTL Biopharmaceuticals
Inc. and VivoQuest Inc. (including any successor-in-interest, “VivoQuest”), attached
hereto as Exhibit
B.

     

    Section
1.55         *****.

     

    Section
1.56         “VivoQuest License
Agreement”.  VivoQuest License Agreement means the license
agreement, dated as of August 11, 2005, between XTL and VivoQuest, attached
hereto as Exhibit
B.

     

    Section
1.57         “VivoQuest Licensed
Patents”.  VivoQuest Licensed Patents means the “Licensed
Patents” as defined in the VivoQuest License Agreement.

     

    Section
1.58         Additional
Definitions.  Each of the following definitions is set forth in
the section of this Agreement indicated below:

     

    
      

    

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

     

    
      
        
           

        

        
          -9-

          
            

          

        

        
           

        

      

    

     

    
      
        
          	
                  Definitions

                	
                  Section

                
	
                  Agreement

                	
                  Preamble

                
	
                  Apath
      License Agreement

                	
                  Exhibit
      A

                
	
                  Breaching
      Party

                	
                  9.2

                
	
                  Combination
      Product

                	
                  1.28

                
	
                  CPR

                	
                  10.2

                
	
                  ICDR

                	
                  10.3(a)

                
	
                  Indemnified
      Party

                	
                  11.1(c)

                
	
                  Indemnifying
      Party

                	
                  11.1(c)

                
	
                  Invalidity
      Claim

                	
                  6.4

                
	
                  Knowledge

                	
                  8.5

                
	
                  Original
      Effective Date

                	
                  Preamble

                
	
                  Original
      License Agreement

                	
                  Preamble

                
	
                  PRESIDIO

                	
                  Preamble

                
	
                  Restatement
      Date

                	
                  Preamble

                
	
                  Retained
      Liabilities

                	
                  11.1(b)

                
	
                  Severed
      Clause

                	
                  11.11

                
	
                  Technology
      Transfer Period

                	
                  3.1

                
	
                  TTC

                	
                  3.2

                
	
                  Validity
      Challenge

                	
                  9.4(b)

                
	
                  VivoQuest

                	
                  1.54

                
	
                  XTL

                	
                  Preamble

                

        

      

    

    

    Article
II

    Grant of License; Assigned
Contracts; Exclusivity

    

    Section
2.1           License
Grant.  Subject to the terms and conditions of this Agreement,
XTL hereby grants to PRESIDIO an exclusive (even as to XTL), royalty-bearing
right and license under the Licensed Patent Rights and Licensed Technology, with
the right to grant sublicenses, to Develop and Commercialize Licensed Compounds
and Licensed Products in the Field in the Territory.  Each sublicense
granted hereunder shall be pursuant to a written agreement that is consistent
with the terms and conditions of this Agreement, provided that further
sublicenses granted by any Third Party sublicensee to any of its affiliates
shall not be required to be pursuant to written agreements (the term
“affiliates” as used in this sentence shall mean, with respect to a Third Party
sublicensee, any Person that controls, is controlled by, or is under common
control with such Third Party sublicensee, with “control” having the meaning
provided in Section 1.2).  PRESIDIO shall provide a copy of each such
sublicense agreement entered into by PRESIDIO promptly following its execution;
provided that, PRESIDIO shall
be entitled to redact from the copy of such sublicense agreement provided to XTL
terms that are not related to the determination of payments due to XTL under
this Agreement or the consistency of such sublicense agreement with the terms
and conditions of this Agreement; provided further that, such copies of
sublicense agreements provided by PRESIDIO to XTL shall constitute Confidential
Information of PRESIDIO hereunder.

     

    Section
2.2           Assigned
Contracts.  As of the Original Effective Date, XTL shall, and
shall cause its Affiliates to, assign to PRESIDIO, and PRESIDIO shall assume,
all of XTL’s or the applicable Affiliate’s rights and obligations under the
Assigned Contracts, provided, that XTL shall remain
responsible for the Retained Liabilities.  XTL shall, and shall cause
its Affiliates to, take all reasonable further actions and execute all
assignments or other documents requested by PRESIDIO as may be necessary or
desirable to accomplish the foregoing assignments to PRESIDIO and to vest in
PRESIDIO the rights set forth in this Section 2.2.

     

    
      
         

      

      
        -10-

        
          

        

      

      
         

      

    

    Section
2.3           Exclusivity.

     

     
(a)           During the
period commencing as of the Original Effective Date and continuing through the
term of this Agreement, neither XTL nor any of its Affiliates shall, or shall
license, permit or assist any Third Party to, use any of the Series 1 Compounds,
the Series 2-4 Compounds, the Series 5-50 Compounds, any Derivative Compounds of
the foregoing, or any other materials or Know-How licensed or acquired by XTL
from VivoQuest, for any Development or Commercialization purpose relating or
directed to the HCV Field in the Territory.

     

     
(b)           During the
period commencing as of the Original Effective Date and continuing through the
term of this Agreement, neither XTL nor any of its Affiliates shall, or shall
license, permit or assist any Third Party to, Develop or Commercialize any
Competing Product in the Territory; provided, however, that in the event
that, after the Original Effective Date, a Third Party acquires XTL, then such
Third Party shall not be bound by the restrictions provided in this Section
2.3(b), and no Patents or Know-How owned or Controlled by such Third Party shall
be or become subject to the licenses granted herein, provided, that such Third Party
acquirer does not access or use any Licensed Compounds or Licensed Technology,
or practice any invention Covered by any Licensed Patent Rights, in connection
with such activities.

     

    Section
2.4           Retained Rights; Other
Limitations.  Without limiting Section 8.5(a), the rights
granted to PRESIDIO herein, including without limitation the license granted to
PRESIDIO in Section 2.1, as pertaining to Licensed Patent Rights and Licensed
Technology that are Controlled, but are not owned, by XTL, shall be limited by
any rights retained by Third Parties, or other limitations or conditions on
XTL’s sublicensee’s rights to such Licensed Patent Rights and Licensed
Technology.  As of the Original Effective Date and the Restatement
Date, such retained rights and limitations consist solely of the rights retained
by the U.S. government pursuant to Section 2 of the VivoQuest License
Agreement.

     

    Section
2.5           Section 365(n) of the
Bankruptcy Code.  All rights and licenses granted to PRESIDIO
under or pursuant to this Agreement are, and shall otherwise be, deemed to be,
for purposes of Section 365(n) of the Bankruptcy Code, licenses of rights to
“intellectual property” as defined under Section 101(35A) of the Bankruptcy
Code.  The Parties shall retain and may fully exercise all of their
respective rights and elections under the Bankruptcy Code.

     

    
      
         

      

      
        -11-

        
          

        

      

      
         

      

    

    Article
III

    Technology
Transfer

     

    Section
3.1           Technology
Transfer.  Without limiting the license granted to PRESIDIO
pursuant to Section 2.1, XTL acknowledges and agrees that XTL was obligated
under the Original License Agreement to deliver, and to cause XTL’s Affiliates
to deliver, to PRESIDIO, commencing promptly following the Original Effective
Date and for no additional consideration, (a) all Licensed Compounds and all
other chemical or biological materials owned or Controlled by XTL or any of its
Affiliates, that are necessary or useful for producing the Licensed Compounds or
otherwise practicing the Licensed Patent Rights or Licensed Technology, (b) all
patent files associated with the Licensed Patent Rights, including without
limitation the complete texts of all patents and patent applications and copies
of all office actions, office action responses and other official communications
received from, or filed with, all relevant patent offices, in each case, in the
possession or Control of XTL or any of its Affiliates, and (c) all Licensed
Technology, including without limitation all laboratory notebooks, preclinical
or clinical data, databases, designs, assays, protocols, analytical systems,
discovery tools, reports and manufacturing documentation relating to the
Development and/or Commercialization of any Licensed Compounds or Licensed
Products, in each case, in the possession or Control of XTL or any of its
Affiliates.  XTL was obligated to complete, and to cause XTL’s
Affiliates to complete, the delivery to PRESIDIO of all of the items listed in
each of the foregoing clauses (a), (b) and (c) within a period of three (3)
months following the Original Effective Date (the “Technology Transfer
Period”).  XTL was obligated to make ***** reasonably available
to PRESIDIO until May 31, 2008, and ***** reasonably available to PRESIDIO
*****, in each case to answer any questions or provide instruction concerning
the Licensed Compounds, Licensed Patent Rights, Licensed Technology and/or any
of the other items delivered to PRESIDIO pursuant to this Section
3.1.  During the Technology Transfer Period, XTL and its Affiliates
were obligated to take all such further reasonable actions as may be necessary
or desirable to accomplish the foregoing transfers to PRESIDIO and to put
PRESIDIO in actual possession of the foregoing information and
materials.

     

    Section
3.2           Technology Transfer
Committee; Decision-Making Authority.

     

     
(a)           Within
***** days following the Original Effective Date, the Parties shall establish a
technology transfer committee (the “TTC”) to facilitate
and oversee the technology transfer activities set forth in Section 3.1 during
the Technology Transfer Period.  The TTC shall consist of no more than
two (2) representatives from each Party, each of whom shall be appointed by the
Senior Executive of the applicable Party.  Each Party shall designate
one such representative to serve as the co-chair of the TTC.  Unless
otherwise agreed by the Parties, the TTC shall remain in effect solely during
the Technology Transfer Period.

     

     
(b)           The TTC
shall have decision-making authority with respect to any technical matter
relating to the technology transfer activities under Section 3.1, but shall have
no authority to amend the scope of the licenses granted to PRESIDIO under the
Original License Agreement or under this Agreement or amend any other
contractual rights or obligations of either Party under the Original License
Agreement or under this Agreement.  All decisions of the TTC shall be
made by consensus of the TTC co-chairs.  If the TTC co-chairs are
unable to reach consensus with respect to a particular matter within its
purview, the matter shall be referred to the Senior Executives for
resolution.  If the Senior Executives are unable to resolve such
matter within ***** days following such referral, the matter shall be
resolved pursuant to Article X.

     

    Article
IV

    Reports and Meetings;
Diligence; Certain Regulatory and Manufacturing Activities

     

    Section
4.1           Development Reports;
Meetings.

     

    
      
        

      

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

    

    
      
         

      

      
        -12-

        
          

        

      

      
         

      

    

     
(a)           Within
***** prior to the first commercial launch of the first Licensed Product by
PRESIDIO and/or any of its Affiliates or Third Party sublicensees, PRESIDIO
shall provide to XTL a written report summarizing the activities undertaken by
PRESIDIO, its Affiliates and Third Party sublicensees during the immediately
preceding six (6) month period (or such shorter period as may be applicable with
respect to the first and last such report) in connection with the Development
and Commercialization of Licensed Products.

     

     
(b)           Prior to
the first commercial launch of the first Licensed Product hereunder, PRESIDIO
shall, upon reasonable request by XTL, at no cost to PRESIDIO, meet with XTL, no
more frequently than on a semi-annual basis and at PRESIDIO’s corporate
headquarters (or by telephone), to discuss generally the reports provided to XTL
under the foregoing Section 4.1(a).

     

     
(c)           After the
first commercial launch of the first Licensed Product by PRESIDIO and/or any of
its Affiliates or Third Party sublicensees, PRESIDIO’s reporting obligations
shall be limited to those set forth in Section 5.9(a) below.

     

     
(d)           Notwithstanding
any of the foregoing, in the event that XTL is acquired by, or otherwise becomes
an Affiliate of, a Person that is engaged in Development and/or
Commercialization activities relating or directed to the HCV Field, PRESIDIO’s
obligations under Section 4.1(a), Section 4.1(b) and Section 6.1(c) shall
terminate.

     

    Section
4.2           Commercially Reasonable
Efforts.  PRESIDIO shall use Commercially Reasonable Efforts to
Develop and Commercialize at least one Licensed Product for the prevention,
treatment, palliation and/or control of any HCV indication in the United States,
the EU and Japan.  For purposes of clarity, PRESIDIO shall be deemed
to have used Commercially Reasonable Efforts hereunder with respect to its
Development and Commercialization activities in the EU if PRESIDIO Develops and
Commercializes at least one Licensed Product for the prevention, treatment,
palliation and/or control of any HCV indication in any ***** of the Major
EU Countries.  Notwithstanding anything to the contrary in this
Agreement, however, XTL’s sole and exclusive remedy, and PRESIDIO’s sole and
exclusive liability, for any breach by PRESIDIO of such obligation to exercise
Commercially Reasonable Efforts shall be for XTL to exercise any right that XTL
may have to terminate this Agreement as provided in Section 9.2.

     

    Section
4.3           Certain Regulatory and
Manufacturing Activities.  As between the Parties, PRESIDIO
shall be responsible, at its expense, for all Development and Commercialization
activities conducted by PRESIDIO and/or its Affiliates or Third Party
sublicensees, including without limitation:

     

     
(a)           Filing
applications for, and obtaining and maintaining, any necessary Regulatory
Approvals with respect to the Development and/or Commercialization of Licensed
Compounds or Licensed Products.  As between the Parties, PRESIDIO
shall own all Regulatory Filings with respect to Licensed Compounds and/or
Licensed Products filed by or on behalf of PRESIDIO and/or its Affiliates or
Third Party sublicensees; and

     

    
      
        

      

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

       

    

    
      
         

      

      
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(b)           Manufacturing,
or having manufactured by a Third Party manufacturer, all preclinical, clinical
and commercial supply of Licensed Products, including without limitation
Licensed Compounds and/or other components necessary for such Licensed
Products.

     

    Article
V

    Financial
Provisions

     

    Section
5.1           License
Payment.  The Parties acknowledge and agree that a one-time,
non-refundable license payment of Three Million Nine Hundred Forty Thousand
Dollars ($3,940,000) was previously paid by PRESIDIO to XTL pursuant to Section
5.1 of the Original License Agreement.  In addition to the foregoing
payment, in consideration of the execution and delivery of this Agreement,
PRESIDIO shall make the following non-refundable payments to XTL on or before
the dates indicated for payment: (i) within seven (7) days following the
Restatement Date, PRESIDIO shall pay XTL Five Hundred Thousand Dollars
($500,000), and (ii) on or before September 26, 2008, PRESIDIO shall pay XTL One
Million Five Hundred Thousand Dollars ($1,500,000).

     

    Section
5.2           Milestone Payments for
Series 1 Licensed Products.  Subject to Sections 5.4, 5.5(a),
5.6, 5.7 and 5.8(b), within ***** after achievement of each of the following
milestone events with respect to Series 1 Licensed Products by PRESIDIO or any
of its Affiliates, PRESIDIO shall make the indicated one-time milestone payment
to XTL; provided,
however, that where a portion of a milestone payment is payable by XTL to
VivoQuest as indicated in the parenthetical clauses included in the table below,
such amount (that is, such portion of the total milestone payment) shall be
payable by PRESIDIO to XTL within ***** after the achievement of the relevant
milestone event, except that the amount so payable upon the achievement of the
milestone event indicated in row (h) in the table below shall be payable by
PRESIDIO to XTL within ***** after the achievement of the relevant milestone
event.  *****

     

    
      
        

      

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

    

     

    
      
        
        

      

      
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                                *****

                              	
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                                *****

                              	
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                                *****

                              	
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                                *****

                              	
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                                *****

                              	
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                                *****

                              
	 	 	 
	
                                *****

                              	
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                                *****

                              	
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                                *****

                              	
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                                *****

                              	
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                                *****

                              	
                                *****

                              	
                                *****

                              

                      

                    

                  

                

              

            

          

        

      

    

     

    Each of
the milestone payments payable pursuant to this Section 5.2 upon achievement of
the corresponding milestone event shall be payable (x) only once, under either
Column A or Column B above (but not both), irrespective of how many
Licensed Products are Developed or Commercialized hereunder, (y) only upon
achievement of the corresponding milestone event by PRESIDIO and/or its
Affiliates, and not by any Third Party sublicensee of PRESIDIO or any of its
Affiliates, except as and to the extent required by Section 5.8(a) and (z) with
respect to the milestone payments set forth in clauses (a), (b), (c), (d), (e),
(f) and (g) of the table above, subject to the limitations set forth in Section
5.4.  In addition to the foregoing, the milestone payments above shall
be reduced if PRESIDIO enters into an agreement with one or more Third Parties
pursuant to which PRESIDIO grants such Third Party(ies) a sublicense or license
under the Licensed Patent Rights and/or Licensed Technology to Develop and
Commercialize any Series 1 Licensed Product in any of the countries indicated
immediately below.  Such reduction shall be given effect prior to any
reduction of the above milestones payments as provided in Section 5.5 and
Section 5.6 of this Agreement.  Such reduction shall be in an amount
equal to the percentage of the applicable milestone payment indicated below in
connection with the grant of the foregoing rights in the specified country:
*****.  Such reductions
shall only be applied to milestone payments that are payable in connection with
milestone events that are achieved after the execution and delivery of the
relevant agreement(s) between PRESIDIO and such Third Party(ies) and shall not
be given retroactive effect.

     

    
      
        

      

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

    

     

    
      
        
           

        

        
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    Section
5.3           Royalties.  During
the Royalty Term applicable to sales of each Licensed Product in each country of
the Territory, PRESIDIO shall pay to XTL the royalties set forth in Section
5.3(a) or 5.3(b) below, as applicable, with the amount of such royalties
calculated as a percentage of worldwide Net Sales of such Licensed Product
during each Fiscal Year of PRESIDIO.

     

     
(a)           Royalties for Series 1
Licensed Products.  Subject to Sections 5.5(b), 5.6, 5.7 and
5.8(b), PRESIDIO shall pay XTL the following royalty with respect to Net Sales,
generated during the applicable Royalty Term, of each Series 1 Licensed Product
(on a product-by-product basis) by PRESIDIO and/or its Affiliates (but not by
any Third Party sublicensee of PRESIDIO or any of its Affiliates) during each
Fiscal Year of PRESIDIO:

     

    
      
        
          
            	
                    Annual Worldwide Net Sales of 

                    Series 1 Licensed Product

                  	 	
                    Percentage of

                    Incremental Net Sales Amount

                  	 
	 
      	 	 	 
	
                    *****

                  	 	 	
                    *****

                  	 
	 
      	 	 	 	 
	
                    *****

                  	 	 	
                    *****

                  	 
	 
      	 	 	 	 
	
                    *****

                  	 	 	
                    *****

                  	 
	 
      	 	 	 	 
	
                    *****

                  	 	 	
                    *****

                  	 

          

        

      

    

     

    *****.

     

     
(b)           Royalties for Series 2-4
Licensed Products.  PRESIDIO shall pay XTL a royalty of (i)
***** of Net Sales by PRESIDIO and/or its Affiliates of a Series 2-4
Licensed Product during any period that such Series 2-4 Licensed Product is
Covered by a Valid Claim of any Licensed Patent Right, and (ii) ***** of
Net Sales by any Third Party sublicensee of PRESIDIO and/or its Affiliates of a
Series 2-4 Licensed Product during any period that such Series 2-4 Licensed
Product is Covered by a Valid Claim of any Licensed Patent Right.

     

     
(c)           Royalties Payable Only
Once.  The obligation to pay royalties is imposed only once
with respect to Net Sales of the same unit of a Licensed Product.

     

    Section
5.4           Sublicense Income for Series
1 Licensed Products.  Subject to Section 5.8(a), PRESIDIO shall
pay XTL the following percentage of Sublicense Income, with respect to the
Development and/or Commercialization of any Series 1 Licensed Product by a Third
Party sublicensee, which Sublicense Income is received by PRESIDIO and/or its
Affiliates during Royalty Term applicable to such Series 1 Licensed Product in
the country(ies) in which the activities giving rise to the Sublicense Income
payment to PRESIDIO and/or its Affiliates occur:

     

    (a)           *****

     

    (b)           *****

    
      

    

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

     

    
      
        
           

        

        
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    Notwithstanding
Section 5.2 and the foregoing provisions of this Section 5.4, and subject to the
remaining provisions of this paragraph, PRESIDIO’s obligations to pay XTL (A)
milestone payments upon the achievement by PRESIDIO or its Affiliates of the
milestone events designated (a), (b), (c), (d), (e), (f) and (g) in the table in
Section 5.2 and (B) payments pursuant to this Section 5.4 based on Sublicense
Income comprised of upfront payments (that is, payments due in connection with
the execution and delivery of a sublicense that are not contingent on the
occurrence of other events or achievements) or milestone payments other than
milestone payments based on the achievement by a Third Party sublicensee of
sales milestones (i.e., the achievement of specified levels of sales of Series 1
Licensed Products and not, *****.  Notwithstanding the limitation on
PRESIDIO’s payment obligations described in this Section, the amounts provided
in Section 5.8 shall remain due and payable in full in accordance with the terms
set forth in Section 5.8.

    

    Section
5.5           Reduction for Lack of Patent
Coverage.

     

    (a)           Each
of the milestone payments payable by PRESIDIO pursuant to Section 5.2 above
shall be reduced by ***** in the event that the first Series 1 Licensed Product
with respect to which the corresponding milestone event is achieved is not
Covered by a Valid Claim of any Licensed Patent Rights at the time of such
achievement; provided that if the same milestone event is subsequently achieved
with one or more Series 1 Licensed Products that are Covered by a Valid Claim of
a Licensed Patent Right at the time of such achievement, then the remainder of
such milestone payment (i.e., the ***** not previously paid) shall then become
payable hereunder.

     

    (b)           The
royalty rate set forth in Section 5.3(a) above payable by PRESIDIO with respect
to Net Sales by PRESIDIO and/or its Affiliates of any Series 1 Licensed Product
for use in the Field in any country in the Territory shall be reduced to *****
of Net Sales during any portion of the Royalty Term for such Series 1 Licensed
Product in which such Series 1 Licensed Product in such country is not Covered
by a Valid Claim of any Licensed Patent Rights.

     

    Section
5.6           Reduction for Pass-Through
Costs Under Assigned Contracts and Additional Third Party
Licenses.  As between the Parties, PRESIDIO shall be
responsible for paying all Pass-Through Costs required to be paid under the
Assigned Contracts and any Additional Third Party Licenses; provided, however, that, PRESIDIO shall
have the right to reduce the milestone and royalty payments payable by PRESIDIO
under Sections 5.2 and 5.3(a) above ***** of all such Pass-Through Costs
payable by PRESIDIO hereunder, provided, that, in no event
shall any single milestone or royalty payment payable by PRESIDIO under Section
5.2 or 5.3(a) with respect to any Series 1 Licensed Product be reduced by more
than fifty percent (50%) of the amount otherwise due to XTL under Section 5.2 or
5.3(a).  For the avoidance of doubt, no reduction shall be applied by
PRESIDIO under this Section 5.6 with respect to the Sixty Thousand Dollars
($60,000) required to be paid under the Apath License Agreement as a
“Retroactive Fee” (as defined in the Apath License Agreement), it being
understood that the amount of such Retroactive Fee has been accounted for in the
calculation of the upfront license payment set forth in Section
5.1.

     

    
      

    

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

      
        
           

        

        
          -17-

          
            

          

        

        
           

        

      

    Section
5.7           Priority of
Reduction.  In the event that the reductions provided for in
Sections 5.5 and 5.6 would otherwise both be applicable to a milestone or
royalty payment payable by PRESIDIO under Section 5.2 or 5.3(a), then only the
reduction in Section 5.5 shall apply to such milestone or royalty
payment.

     

    Section
5.8           Offset for Payment of
VivoQuest Pass-Through Costs.  As between the Parties, XTL
shall be responsible for maintaining the VivoQuest License Agreement in full
force and effect and for paying all amounts due to VivoQuest
thereunder.  Anything in this Agreement to the contrary
notwithstanding, in addition to (but subject to PRESIDIO’s offset rights as
provided below) any other amounts that may be payable hereunder:

     

    (a)           If,
at any time, Pass-Through Costs are owed by XTL to VivoQuest under the VivoQuest
License Agreement as a result of the Development and/or Commercialization of
Series 1 Licensed Products by a Third Party sublicensee of PRESIDIO or any of
its Affiliates (but not by PRESIDIO or any of its Affiliates), then PRESIDIO
shall pay XTL the amount of the Pass-Through Costs owed by XTL to VivoQuest;
provided, however, that PRESIDIO shall
have the right to offset such amount paid by PRESIDIO against any amounts
otherwise payable, concurrently or subsequently, by PRESIDIO to XTL under
Section 5.4.

     

    (b)           If
any amount payable by PRESIDIO to XTL under Section 5.2 or Section 5.3(a) is
less than the corresponding Pass-Through Costs that are owed by XTL to VivoQuest
under the VivoQuest License Agreement as a result of the Development and/or
Commercialization of Series 1 Licensed Products by PRESIDIO and/or any of its
Affiliates (but not by a Third Party sublicensee of PRESIDIO or any of its
Affiliates), then PRESIDIO shall pay XTL the difference between (i) the amount
paid by PRESIDIO under Section 5.2 or Section 5.3(a), and (ii) the amount of the
Pass-Through Costs owed by XTL to VivoQuest.

     

    (c)           PRESIDIO
shall be obligated to pay XTL any Pass-Through Costs that are owed by XTL to
VivoQuest under the VivoQuest License Agreement as a result of the Development
and/or Commercialization of Series 2-4 Licensed Products by PRESIDIO and/or any
of its Affiliates or Third Party sublicensees.

     

    (d)           In
the event that any Pass-Through Costs set forth in any of the foregoing clauses
(a) through (c) are payable by PRESIDIO under such provisions or any
Pass-Through Costs referenced in the parenthetical clauses in Column A of the
table in Section 5.2 are owed by XTL to VivoQuest, (i) *****

     

    Section
5.9           Reports and
Accounting.

     

    (a)           Reports;
Payments.  PRESIDIO shall deliver to XTL, within ***** days
after the end of each calendar quarter, a good faith estimate of the royalties
and Sublicense Income that will be paid to XTL for such calendar quarter
(excluding any estimate of royalties which may be payable by PRESIDIO under
Section 5.3(b)(ii) with respect to Net Sales of Series 2-4 Licensed Products by
Third Party sublicensees of PRESIDIO and/or its Affiliates), and, within
***** days after the end of each calendar quarter, reasonably detailed
written accountings of Net Sales and Sublicense Income of Licensed Products that
are subject to payment obligations to XTL for such calendar
quarter.  Such quarterly reports shall indicate (i) gross sales, Net
Sales, gross amounts received from Third Party sublicensees, and Sublicense
Income on a Licensed Product-by-Licensed Product and country-by-country basis,
and (ii) the calculation of payment amounts owed to XTL from such Net Sales and
Sublicense Income.  When PRESIDIO delivers such accounting to XTL,
PRESIDIO shall also deliver all amounts due under Sections 5.3 and 5.4 to XTL
for the calendar quarter.

     

    
      

    

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

     

    
      
        
           

        

        
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    (b)           Audits by
XTL.  PRESIDIO shall keep, and shall require its
Affiliates and
Third Party sublicensees to keep, records of the latest ***** years relating to
gross sales, Net Sales, gross amounts received from Third Party sublicensees,
and Sublicense Income, in each case as applicable, and all information relevant
under Sections 5.2, 5.3, 5.4, 5.6, 5.7 and 5.8.  For the sole purpose
of verifying amounts payable to XTL, XTL shall have the right no more than once
each calendar year, at XTL’s expense, to have XTL’s independent certified public
accountants review such records in the location(s) where such records are
maintained by PRESIDIO and/or its Affiliates or, with respect to records of
Third Party sublicensees, either at PRESIDIO’s premises or the premises of such
Third Party sublicensees, in each case as may be designated by PRESIDIO, upon
***** prior notice and during regular business hours.  Results of
such review shall be made available to PRESIDIO.  If the review
reflects an underpayment to XTL, such underpayment shall be promptly remitted to
XTL, together with interest calculated in the manner provided in Section
5.13.  If the underpayment is equal to or greater than ***** of
the aggregate amount that was otherwise due for any calendar year, PRESIDIO
shall promptly reimburse XTL for the reasonable costs incurred in connection
with such review.  If the review reflects an overpayment to XTL, such
overpayment shall be promptly refunded by XTL to PRESIDIO.

     

    Section
5.10         Currency and Method of
Payments.  All payments under this Agreement shall be made in
United States dollars by transfer to such bank account as XTL may designate from
time to time.  Any royalties or portions of Sublicense Income due
hereunder with respect to amounts in currencies other than United States dollars
shall be payable in their United States dollar equivalents, calculated using the
average applicable interbank transfer rate determined by reference to the
currency trading rates published by The Wall Street
Journal (Western U.S. edition) over all business days of the calendar
quarter to which the report under Section 5.9(a) relates.

     

    Section
5.11         United States
Dollars.  All dollar ($) amounts specified in this Agreement
are United States dollar amounts.

     

    Section
5.12         Tax
Withholding.  If withholding taxes are payable with respect to
payments to XTL hereunder, PRESIDIO may withhold the required amount and pay it
to the appropriate governmental authority.  PRESIDIO will withhold
only such amounts as are required to be withheld by law in the country from
which payment is being made.  PRESIDIO shall submit to XTL a copy of
the remittance voucher and reasonably satisfactory evidence of payment of the
corresponding taxes with the applicable royalty report, if possible, or within
***** days thereafter.  PRESIDIO will make reasonable efforts and will
reasonably cooperate with XTL and provide such information and records as XTL
may reasonably require in connection with XTL obtaining any applicable reduction
or exemption from withholding tax from tax authorities in any
country.

     

    
      
        

      

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

    

    
      
         

      

      
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    Section
5.13          Late Payments.
PRESIDIO shall pay interest to XTL on the aggregate amount of any payment that
is not paid on or before the date such payment is due under this Agreement at a
rate per annum equal to *****.

     

    Section
5.14          Blocked Payments. In
the event that, by reason of applicable laws or regulations in any country, it
becomes impossible or illegal for PRESIDIO or its Affiliates to transfer, or
have transferred on its behalf, royalties or other payments to XTL, such
royalties or other payments shall be deposited in local currency in the relevant
country to the credit of XTL in a recognized banking institution designated by
XTL or, if none is designated by XTL within a period of ***** days,
in a recognized banking institution selected by PRESIDIO or its
Affiliates.

     

    Section
5.15          Costs and Expenses.
Except as otherwise expressly set forth herein, each Party shall bear its own
costs and expenses incurred in connection with the performance of its
obligations hereunder.

     

    Article
VI

    Intellectual Property
Protection and Related Matters

     

    Section
6.1           Prosecution and Maintenance
of Licensed Patent Rights.

     

    (a)          
Right to Prosecute and
Maintain. As between the Parties, PRESIDIO shall have the first right to
file and prosecute patent applications and maintain patents within the Licensed
Patent Rights. Subject to Section 6.6 below, PRESIDIO shall use Commercially
Reasonable Efforts to file and prosecute patent applications and maintain
patents within the Licensed Patent Rights in the United States, Canada, the
Major EU Countries and Japan in a manner that is intended to provide optimal
protection for any Licensed Products that PRESIDIO may Develop and/or
Commercialize in such countries, including without limitation seeking claims of
reasonably broad scope, to the extent permitted under applicable law.
Notwithstanding the foregoing, in the event that PRESIDIO decides to abandon or
discontinue the filing, prosecution or maintenance of any non-provisional patent
application or patent within the Licensed Patent Rights in any such country,
then PRESIDIO shall notify XTL of such determination reasonably in advance of
any loss of rights by XTL with respect to such patent application or patent.
Thereafter, XTL shall have the right, upon written notice to PRESIDIO, to file,
prosecute and maintain such non-provisional patent applications and patents, in
its name and at its own expense, which patent applications and patents shall no
longer be deemed “Licensed Patent Rights” under this Agreement. Notwithstanding
anything in this Agreement to the contrary, XTL’s sole and exclusive remedy, and
PRESIDIO’s sole and exclusive liability, for any decision by PRESIDIO not to
file, prosecute and/or maintain any patent applications or patents hereunder
shall be for XTL to assume such filing, prosecution and maintenance activities
with respect to such patent applications or patents pursuant to this Section
6.1.

     

    
      

    

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

     

    
      
        
        

      

      
        -20-

        
          

        

      

      
        
        

      

    

     

    (b)          
Disclosure of New
Inventions. XTL shall, and shall cause its Affiliates to, disclose to
PRESIDIO any and all new inventions or other Know-How that (i) would constitute
subject matter with respect to which a patent application within the Licensed
Patent Rights may be filed hereunder or would otherwise constitute Licensed
Technology hereunder, and (ii) becomes Controlled by XTL or any of its
Affiliates at any time during the period commencing as of the Original Effective
Date and continuing through the term of this Agreement. XTL shall, and shall
cause its Affiliates to, disclose such inventions or other such Know-How to
PRESIDIO within ***** days after such Control exists, including without
limitation reasonably detailed information with respect to such inventions or
other such Know-How to enable PRESIDIO to obtain appropriate patent protection
with respect to such inventions or other Know-How.

     

    (c)          
Cooperation.
Subject to Section 4.1(d), each Party agrees to cooperate with the other Party
with respect to the filing and prosecution of patent applications and
maintenance of patents within the Licensed Patent Rights pursuant to this
Section 6.1, including without limitation:

     

    (i)          
the execution of all such documents and instruments and the performance of such
acts as may be reasonably necessary in order to permit the other Party to file
and prosecute patent applications or maintain patents as provided for in Section
6.1(a);

     

    (ii)          making
its employees, agents and consultants reasonably available to the other Party
(or to the other Party’s authorized attorneys, agents or representatives), to
the extent reasonably necessary to enable such other Party to file and prosecute
patent applications or maintain patents as provided for in Section 6.1(a);
and

     

    (iii)        
to provide the other Party with copies of all material official communications
received from, or filed with, the relevant patent offices pertaining to the
filing and prosecution of patent applications and maintenance of patents as
provided for in Section 6.1(a).

     

    Section
6.2           Third Party
Infringement.

     

    (a)          
Notifications of Third
Party Infringement. Each Party agrees to notify the other Party when it
becomes aware of any infringement of the Licensed Patent Rights or
misappropriation of Licensed Technology, or the reasonable probability of such
infringement or misappropriation, arising from or relating to the development,
manufacture, offer for sale, sale, import or other use of any Third Party
product.

     

    (b)          
Infringement
Action. PRESIDIO shall decide whether to institute an infringement suit
or take other appropriate action that it believes is reasonably required to
protect the Licensed Patent Rights or Licensed Technology from such infringement
or misappropriation. In the event that PRESIDIO brings an action pursuant to
this Section 6.2(b), XTL shall cooperate with PRESIDIO to the extent reasonably
requested by PRESIDIO, including without limitation joining the suit if
requested by PRESIDIO and necessary or desirable.

     

    (c)          
Costs. PRESIDIO
shall assume and pay all of its own and XTL’s out-of-pocket costs incurred in
connection with any litigation or proceedings described in this Section 6.2;
provided, however, that if XTL elects to
be represented in such litigation or proceedings by separate counsel, XTL shall
assume and pay for all of its own out-of-pocket costs incurred in connection
with such litigation or proceedings.

     

    
      

    

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

     

    
      
        
        

      

      
        -21-

        
          

        

      

      
        
        

      

    

     

    (d)          
Recoveries. Any
recovery obtained by PRESIDIO as a result of any action or proceeding described
in this Section 6.2, or from any counterclaim or similar claim asserted in a
proceeding described in Section 6.3, by settlement or otherwise, shall be
applied in the following order of priority:

     

    (i)          
first, to reimburse PRESIDIO for all litigation costs in connection with such
proceeding paid by PRESIDIO and not otherwise recovered; and

     

    (ii)          second,
the remainder of the recovery shall be paid *****.

     

    Section
6.3           Claimed Infringement.
In the event that a Party becomes aware of any claim that the Development or
Commercialization of Licensed Products infringes Patent Rights or
misappropriates the Know-How of any Third Party, such Party shall promptly
notify the other Party.

     

    Section
6.4           Patent Invalidity
Claim. If a Third Party at any time asserts a claim that any Licensed
Patent Right is invalid, unenforceable and/or otherwise not infringed (an “Invalidity Claim”),
whether as a defense in an infringement action brought by PRESIDIO pursuant to
Section 6.2 or in an action brought against PRESIDIO or XTL referred to in
Section 6.3, PRESIDIO shall have the right to prepare and formulate all
responses to, and defend and settle, such Invalidity Claim. XTL shall cooperate
with PRESIDIO with respect to such activities upon reasonable request by
PRESIDIO.

     

    Section
6.5           Patent Marking.
PRESIDIO agrees to comply with any applicable patent marking statutes in each
country in which Licensed Products are sold by PRESIDIO and/or its
Affiliates.

     

    Section
6.6           Certain Limitations.
Without limiting the representations, warranties and covenants provided by XTL
pursuant to Section 8.5, the Parties acknowledge that PRESIDIO may not be
permitted to exercise all of the rights set forth in this Article VI with
respect to Licensed Patent Rights that are not owned by XTL. Under such
circumstances, XTL shall use reasonable efforts to obtain such rights for
PRESIDIO and XTL shall provide prompt written notice to PRESIDIO of any such
limitations on PRESIDIO’s rights under this Article VI. The existence of any
such limitations, or XTL’s inability to avoid or eliminate any such limitations
(provided XTL has used reasonable efforts to do so and subject to Section 8.5),
shall not constitute a breach of this Agreement by XTL.

     

    
      

    

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

     

    
      
        
        

      

      
        -22-

        
          

        

      

      
        
        

      

    

     

    Article
VII

    Confidentiality

     

    Section
7.1           Confidential
Information. All Confidential Information disclosed by a Party to the
other Party during the period commencing on the Original Effective Date and
continuing through the term of this Agreement shall not be used by the receiving
Party except in connection with the activities contemplated by this Agreement,
shall be maintained in confidence by the receiving Party (except to the extent
disclosure is reasonably necessary for Development and/or Commercialization of
Licensed Products, for the filing, prosecution and maintenance of Patent Rights
or to enforce the provisions of this Agreement), and shall not otherwise be
disclosed by the receiving Party to any other person, firm, or agency,
governmental or private (except as set forth Sections 7.2 or 7.3), without the
prior written consent of the disclosing Party, except to the extent that the
Confidential Information:

     

    (a)          
was known or used by the receiving Party prior to its date of disclosure to the
receiving Party; or

     

    (b)          
either before or after the date of the disclosure to the receiving Party is
lawfully disclosed to the receiving Party by sources other than the disclosing
Party rightfully in possession of the Confidential Information; or

     

    (c)          
either before or after the date of the disclosure to the receiving Party becomes
published or generally known to the public through no fault or omission on the
part of the receiving Party; or

     

    (d)          
is independently developed by or for the receiving Party without reference to or
reliance upon the Confidential Information; or

     

    (e)          
is required to be disclosed by the receiving Party to comply with applicable
laws, regulations or rules, to defend or prosecute litigation or to comply with
legal process, provided that the receiving
Party provides prior written notice of such disclosure to the disclosing Party
and only discloses Confidential Information of the other Party to the extent
necessary for such legal compliance or litigation purpose.

     

    Section
7.2           Employee, Director,
Consultant and Advisor Obligations. PRESIDIO and XTL each agrees that it
and its Affiliates shall provide Confidential Information received from the
other Party only to the receiving Party’s respective (a) employees, directors,
consultants and advisors, and to the employees, directors, consultants and
advisors of the receiving Party’s Affiliates, who have a need to know such
Confidential Information to assist the receiving Party in fulfilling its
obligations under this Agreement, and (b) existing and prospective investors,
acquirers, lenders, sublicensees, collaborators and Third Party contractors
engaged in the Development and/or Commercialization of Licensed Compounds or
Licensed Products, or in connection with such Party’s financing activities;
provided that PRESIDIO and XTL
shall each remain responsible for any failure by any Person included in the
foregoing clauses (a) and (b) to treat such Confidential Information as required
under Section 7.1.

     

    
      
        
        

      

      
        -23-

        
          

        

      

      
        
        

      

    

     

    Section
7.3           Publicity.

     

    (a)          
Upon execution of this Agreement, the Parties shall issue a mutually agreed
joint press release announcing the execution of this Agreement, a copy of which
is attached hereto as Exhibit F. During the
term of this Agreement, neither Party nor its Affiliates shall disclose this
Agreement or make any public announcement, press release, filing or other
disclosure concerning the existence, terms and conditions of this Agreement
without the other Party’s prior written consent (which consent shall not be
unreasonably withheld, conditioned or delayed), except (i) as set forth in
Section 7.3(b) below, (ii) as required to comply with applicable laws,
regulation or rules (including without limitation any rules of the United States
Securities and Exchange Commission or similar regulatory agency, stock exchange
or securities trading institution of such other jurisdictions whose laws may
apply to a Party), or (iii) to existing and prospective investors, acquirers,
lenders and other Third Parties in connection with such Party’s financing
activities, provided, that each such Third
Party is bound to treat such information as confidential. If a Party is required
to make any such disclosure under applicable law, regulation or rule, such Party
shall provide the other Party with a copy of the proposed text of any such
written disclosure or the proposed content of any non-written disclosure,
sufficiently in advance (to the extent practicable or permitted under applicable
law, regulation or rule) of the scheduled release or disclosure thereof to
afford the other Party a reasonable opportunity to review and comment upon such
proposed disclosure and/or obtain confidential treatment with respect to such
proposed disclosure.

     

    (b)          
Notwithstanding the foregoing, (i) PRESIDIO and/or any of its Affiliates and
Third Party sublicensees shall have the right to disclose, in private
communications, public announcements, press releases, filings or other
disclosures, information concerning or related to its or their Development and
Commercialization activities with respect to Licensed Products hereunder, and
(ii) each Party and/or any of such Party’s Affiliates and/or, with respect to
PRESIDIO, Third Party sublicensees, shall have the right to disclose information
that is the same or substantially similar to information that has previously
been disclosed under this Section 7.3; in the case of each of the foregoing
clauses (i) and (ii), without having to grant the other Party the opportunity to
review and comment on such proposed disclosure or obtain such other Party’s
prior written consent.

     

    Section
7.4           Term. All obligations
of confidentiality imposed under this Article VII shall expire ***** years
following termination or expiration of this Agreement.

     

    Article
VIII

    Representations and
Warranties

     

    Section
8.1           Representations of
Authority. PRESIDIO and XTL each represents and warrants to the other
that it had, as of the Original Effective Date, and has, as of the Restatement
Date, full right, power and authority to enter into the Original License
Agreement and this Agreement, respectively, and to perform its respective
obligations under the Original License Agreement and this Agreement,
respectively.

     

    Section
8.2           Consents. PRESIDIO
and XTL each represents and warrants that, as of the Original Effective Date and
the Restatement Date, all necessary consents, approvals and authorizations of
all government authorities and other Persons required to be obtained by such
Party in connection with the execution, delivery and performance of the Original
License Agreement and this Agreement, respectively, have been
obtained.

     

    
      

    

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

     

    
      
        
        

      

      
        -24-

        
          

        

      

      
        
        

      

    

     

    Section
8.3           No Conflict. PRESIDIO
and XTL each represents and warrants that, as of the Original Effective Date and
the Restatement Date, the execution and delivery of the Original License
Agreement and this Agreement and the performance of such Party’s obligations
hereunder (a) do not conflict with or violate any requirement of applicable laws
or regulations, and (b) do not conflict with, violate or breach or constitute a
default of, or require any consent under, any contractual obligations of such
Party, except such consents as have been obtained as of the Original Effective
Date or the Restatement Date, as applicable.

     

    Section
8.4           Employee, Director,
Consultant and Advisor Obligations. PRESIDIO and XTL each represents and
warrants that, as of the Original Effective Date and the Restatement Date, each
of its and its Affiliates’ employees, directors, consultants and advisors has
executed an agreement or has an existing obligation under law obligating such
employee, director, consultant or advisor to maintain the confidentiality of
Confidential Information to the extent required under Article VII.

     

    Section
8.5           Intellectual
Property. XTL represents, warrants and covenants to PRESIDIO that, as of
the Original Effective Date and the Restatement Date (unless otherwise
specifically stated below):

     

    (a)          
VivoQuest has assigned to XTL all right, title and interest in and to the
VivoQuest Licensed Patents, a complete and accurate list of which VivoQuest
Licensed Patents are included on Exhibit D and Exhibit E. XTL is the
sole and exclusive owner (subject to Section 2.4) of all right, title and
interest in and to the VivoQuest Licensed Patents and the other Patent Rights
set forth on Exhibit
D and Exhibit
E, and is the sole and exclusive owner of all right, title and interest
in and to, or has obtained exclusive rights to, the Licensed Compounds and
Licensed Technology;

     

    (b)          
Each of XTL’s and its Affiliates’ current and former employees, directors,
consultants and contractors has executed an agreement assigning to XTL or XTL’s
Affiliate all of its or his or her right, title and interest in and to any
inventions developed in the course of its or his or her employment or engagement
with XTL or XTL’s Affiliate, and such agreements are valid and binding on all
such current and former employees, directors, consultants and
contractors;

     

    (c)          
To the Knowledge of XTL, each patent and patent application included within the
Licensed Patent Rights sets forth a complete and accurate list of all
inventors;

     

    (d)          
XTL has the right to grant to PRESIDIO the rights and licenses to Licensed
Compounds, Licensed Patent Rights and Licensed Technology granted in this
Agreement;

     

    (e)          
XTL and its Affiliates have not granted, and during the term of this Agreement
XTL will not grant and will cause its Affiliates not to grant, any rights to any
Third Party (including without limitation VivoQuest or any of the counterparties
to any Assigned Contracts) which would conflict with the rights granted to
PRESIDIO hereunder;

     

    (f)          
None of the Licensed Patent Rights procured by XTL or its Affiliates and, to the
Knowledge of XTL, none of the Licensed Patent Rights procured by any Third Party
was fraudulently procured from the relevant governmental patent granting
authority;

     

    
      
        
        

      

      
        -25-

        
          

        

      

      
        
        

      

    

     

    (g)          
To the Knowledge of XTL, the practice of the Licensed Patent Rights and Licensed
Technology as contemplated under this Agreement does not violate the
intellectual property rights of any Third Party, and no claim, demand or suit
has been made, or proceeding initiated, nor is any such claim, demand, suit or
proceeding pending or threatened, that asserts the invalidity, misuse or
unenforceability of the Licensed Patent Rights or Licensed Technology;
*****;

     

    (h)          
To the Knowledge of XTL, none of the Licensed Patent Rights are being infringed,
nor is any Licensed Technology being misappropriated, by any Third
Party;

     

    (i)          
All necessary registration, maintenance and renewal fees for Licensed Patent
Rights have been paid on time, *****;

     

    (j)          
Exhibits D and
E provide a complete and accurate listing of the Licensed Patent Rights,
including without limitation the VivoQuest Licensed Patents, and XTL does not
own or otherwise Control any Patent Rights other than the Patent Rights listed
on Exhibits D and
E that claim or disclose any Licensed Compounds or Licensed
Technology;

     

    (k)          
Exhibit C
provides a complete and accurate listing of all Series 1 Compounds and Series
2-4 Compounds that are included in XTL’s and/or its Affiliates’ databases,
laboratory notebooks and/or other records, or that have otherwise been
identified, studied, screened or evaluated by XTL and/or its Affiliates,
regardless of whether or not such compounds have been synthesized by XTL or any
of its Affiliates;

     

    (l)          
*****;

     

    (m)          
Attached as Exhibits A
and B are all complete and accurate copies of all Third Party agreements
to which XTL or any XTL Affiliate was a party as of the Original Effective Date
(or, solely with respect to the Assigned Contracts, immediately prior to the
Original Effective Date) relating to the Licensed Compounds, Licensed Patent
Rights and/or Licensed Technology. Except for the VivoQuest License Agreement,
the VivoQuest Asset Purchase Agreement and Assigned Contracts, neither XTL nor
any XTL Affiliate, as of the Original Effective Date (or, solely with respect to
the Assigned Contracts, immediately prior to the Original Effective Date) and
the Restatement Date, was or is, as applicable, a party to, or is otherwise
bound by, any agreement pursuant to which any Third Party has any economic or
other interest with respect to the Development and/or Commercialization of the
Licensed Compounds or Licensed Products, or any ownership rights in any of the
Licensed Compounds, Licensed Patent Rights and/or Licensed
Technology;

     

    (n)          
The VivoQuest License Agreement, the VivoQuest Asset Purchase Agreement were as
of the Original Effective Date and are as of the Restatement Date, and all
Assigned Contracts were as of the Original Effective Date, in full force and
effect, and XTL and/or its Affiliates were or are, as applicable, in full
compliance with the terms of such agreements *****, no dispute existed or presently exists, as
applicable, nor has XTL received any notice of any such claim of breach or
dispute nor, to the Knowledge of XTL, is any such claim pending or threatened,
between XTL and the counterparty to any such agreement that would jeopardize any
of the rights or licenses granted to PRESIDIO under this Agreement, and, to the
Knowledge of XTL, there was and is, as applicable, no basis for any such claim
of breach or dispute;

     

    
      

    

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

     

    
      
        
        

      

      
        -26-

        
          

        

      

      
        
        

      

    

     

    (o)          
During the period commencing on the Original Effective Date and ending
continuing through the term of this Agreement, XTL shall, and shall cause its
Affiliates to, comply with all terms and conditions of, and shall not, and shall
cause its Affiliates not to, without the prior written consent of PRESIDIO,
amend, terminate, or make or waive any claims or rights under, or grant any
rights to VivoQuest or any other Third Party in connection with, the VivoQuest
License Agreement or the VivoQuest Asset Purchase Agreement, in any manner that
would adversely affect the rights granted to PRESIDIO under this Agreement, or
take any action or fail to take any action that would give VivoQuest the right
to amend or terminate the VivoQuest License Agreement or the VivoQuest Asset
Purchase Agreement or would otherwise adversely affect the rights granted to
PRESIDIO under this Agreement;

     

    (p)          
As of the Original Effective Date, XTL and its Affiliates had obtained all
necessary consents to assign the Assigned Contracts to PRESIDIO
hereunder;

     

    (q)          
To the Knowledge of XTL, all written statements and other writings furnished by
XTL or its Affiliates pursuant to or in connection with the Original License
Agreement or this Agreement or the transactions contemplated thereby and hereby
are complete and accurate in all material respects. No representation or
warranty by XTL in the Original License Agreement contained, and no
representation or warranty by XTL in this Agreement contains, any untrue
statement of a material fact or omits to state any material fact necessary in
order to make any statement contained herein not misleading. To the Knowledge of
XTL, there is no fact, event or condition that would adversely affect PRESIDIO’s
rights under this Agreement that has not been set forth in this Agreement or
disclosed by XTL to PRESIDIO in writing; and

     

    (r)          
*****. 

     

    The term
“Knowledge” means the actual knowledge of ***** as of the Original Effective Date and ***** as of
the Restatement Date, as the case may be. For avoidance of doubt, anything to
the contrary herein notwithstanding, XTL makes no representations or warranties
with respect to any Derivative Compounds.

     

    Section
8.6           No Warranties. EXCEPT
AS OTHERWISE EXPRESSLY SET FORTH HEREIN, THE PARTIES MAKE NO REPRESENTATIONS AND
EXTEND NO WARRANTIES OF ANY KIND, EITHER EXPRESS OR IMPLIED, INCLUDING WITHOUT
LIMITATION ANY WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR
PURPOSE. IN PARTICULAR, PRESIDIO EXPRESSLY DISCLAIMS ANY REPRESENTATION OR
WARRANTY THAT ANY LICENSED COMPOUND OR LICENSED PRODUCT WILL BE SUCCESSFULLY
DEVELOPED OR COMMERCIALIZED.

     

    
      

    

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

     

    
      
        
        

      

      
        -27-

        
          

        

      

      
        
        

      

    

     

    Article
IX

    Term and
Termination

     

    Section
9.1           Term. This Agreement
became effective as of the Original Effective Date, may be terminated as set
forth in this Article IX, and otherwise remains in effect until the expiration
of all of PRESIDIO’s payments obligations pursuant to Article V. Upon expiration
of this Agreement, on a Licensed Product-by-Licensed Product and
country-by-country basis, the license granted to PRESIDIO under Section 2.1
shall convert to a non-exclusive, perpetual, fully paid-up, non-royalty-bearing
license.

     

    Section
9.2           Termination For Material
Breach. Upon any material breach of this Agreement by either Party (in
such capacity, the “Breaching Party”),
the other Party may terminate this Agreement by providing ***** days’ written notice to the Breaching
Party, specifying the material breach. The termination shall become effective at
the end of the ***** day period unless (a)
the Breaching Party cures such material breach during such ***** day
period or (b) if the material breach is not susceptible to cure within such
***** day period, the Breaching Party is
diligently pursuing a cure and effects such cure within an additional ***** days
after the end of such initial ***** day
period. Notwithstanding any of the foregoing, (x) if the non-Breaching Party
gives the Breaching Party notice pursuant to this Section 9.2 of a material
breach by such Breaching Party, and the Breaching Party notifies the
non-Breaching Party within the applicable cure period set forth in the
immediately preceding sentence that such Breaching Party disputes such basis for
termination pursuant to this Section 9.2, then this Agreement shall not
terminate unless and until the arbitrator issues a final award pursuant to
Article X upholding such basis for termination (or unless and until the
Breaching Party is no longer disputing such basis, if earlier) and within ***** days
thereafter the Breaching Party fails to comply with the terms of such final
award issued by the arbitrator, and (y) if any uncured material breach by
PRESIDIO of its diligence obligations under Section 4.2 is limited to only one
or two of the following territories, then XTL may terminate this Agreement
solely with respect to such territory or territories: (i) the EU, (ii) the
United States, and (iii) Japan. Both Parties shall perform all of their
respective obligations hereunder during the process of conducting any dispute
resolution hereunder, including without limitation, the payment of all
undisputed amounts as and when they become due and payable
hereunder.

     

    Section
9.3           Termination for
Convenience. PRESIDIO may terminate this Agreement at any time upon *****
days prior written notice to XTL for any or no reason.

     

    
      

    

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

     

    
      
        
        

      

      
        -28-

        
          

        

      

      
        
        

      

    

     

    Section
9.4           Effect of Material Breach or
Patent Validity Challenge by XTL or its Affiliates.

     

    (a)          
In the event that this Agreement is terminated by PRESIDIO pursuant to Section
9.2 above as a result of XTL’s uncured material breach (other than a material
breach by a Third Party acquirer of XTL, or by XTL or any of its Affiliates,
following an acquisition transaction resulting in a change of control of XTL or
of all or substantially all of its business or assets), then PRESIDIO shall have
the option of (i) actually terminating this license, in which case the
provisions of Section 9.5(c) shall apply and become effective, and pursuing any
remedies that may be available to it hereunder or at law, or (ii) not exercising
such termination right and continuing the licenses and this Agreement, in
accordance with the terms and conditions set forth herein, provided that (A) the
amounts that become due under Article V shall, as of the date of such waiver and
for the remainder of the term of this Agreement, be reduced by ***** (after
application of all other reductions and offsets that may be applicable);
provided that the amounts provided in Section 5.8 shall remain due and payable
in full in accordance with the terms set forth in Section 5.8 and (B) PRESIDIO
shall cease to have any further obligation pursuant to Article IV as of the date
of such waiver and for the remainder of the term of this Agreement.

     

    (b)          
If (i) XTL or any of its Affiliates intentionally initiates, or encourages or
knowingly provides assistance to any Third Party with respect to, any action
seeking a determination that any of the Licensed Patent Rights in any country
are invalid, unenforceable and/or not infringed (including without limitation a
request for reexamination of any Licensed Patent Rights or the institution of or
participation in any opposition, interference or similar administrative
proceeding adverse to the validity or enforceability of any Licensed Patent
Rights) (“Validity
Challenge”) or (ii) a Third Party acquirer of XTL, or XTL or any of its
Affiliates, following an acquisition transaction resulting in a change of
control of XTL or of all or substantially all of its business or assets,
materially breaches this Agreement and fails to cure the breach such that
PRESIDIO has the right to terminate this Agreement pursuant to Section 9.2
above, then (A) the license granted to PRESIDIO under Section 2.1 shall
automatically convert to a perpetual, fully paid-up, non-royalty-bearing
license; provided that the amounts provided in Section 5.8 shall remain due and
payable in full in accordance with the terms set forth in Section 5.8 and (B)
PRESIDIO shall cease to have any further obligation pursuant to Article IV or
Article V (other than Section 5.8 and, to the extent applicable to payments owed
to VivoQuest, Sections 5.9, 5.10 and 5.11).

     

    (c)          
The reduction of payments in connection with PRESIDIO’s election not to exercise
its termination right referenced above in Section 9.4(a)(ii) and in connection
with the license conversion referenced above in Section 9.4(b) is used for the
convenience of the Parties and is not intended to be a penalty to be paid by
XTL. The Parties acknowledge that there will be difficulties in proving the
amount and extent of PRESIDIO’s losses resulting from such uncured material
breach or Validity Challenge. The Parties also agree that the compensation
attributable to such reduction of payments is a reasonable pre-estimate of the
probable losses which would be suffered by PRESIDIO.

     

    Section
9.5           Effects of
Termination.

     

    (a)          
If this Agreement is terminated in its entirety by XTL as a result of PRESIDIO’s
uncured material breach pursuant to Section 9.2 above, or on a
territory-by-territory basis as a result of PRESIDIO’s uncured material breach
of its diligence obligations with respect to a territory as described in Section
9.2(y) above, then the following provisions shall be applicable:

     

    
      

    

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

     

    
      
        
        

      

      
        -29-

        
          

        

      

      
        
        

      

    

     

    (i)          
In each of the above instances of a termination of this Agreement, XTL shall
have the right to terminate the license granted by XTL to PRESIDIO under Section
2.1, subject to Section 9.6 below and, in the case of an uncured material breach
by PRESIDIO of its diligence obligations which breach is limited to only one or
two of the territories identified in Section 9.2(y), the termination shall be
limited to such territory(ies); and

     

    (ii)          PRESIDIO
shall return to XTL all Licensed Technology and other items delivered by XTL to
PRESIDIO pursuant to Section 3.1, to the extent such Licensed Technology and
other items remain in existence as of such termination; provided that PRESIDIO
shall not be required to return the Licensed Technology or other items delivered
by XTL to PRESIDIO pursuant to Section 3.1 if XTL terminates PRESIDIO’s rights
hereunder only in regard to certain territories and not the entire Territory as
provided in Section 9.2(y) above; and

     

    (iii)         PRESIDIO
shall not, directly or with or through its Affiliates, and subject to Section
9.6 below, Third Party sublicensees or other Third Parties, continue the
Commercialization of any Licensed Compounds or Licensed Products for a period of
***** following such termination, such restriction to apply to the entire
Territory if XTL
terminates the Agreement pursuant to Section 9.2, and, if such termination is
only applicable to certain territories, then such restriction shall apply only
to the territories to which such termination applies; provided that if, at the time
of such termination, PRESIDIO and/or any of its Affiliates and/or Third Party
sublicensees is engaged in the Commercialization of Licensed Products and has
commercial inventory (including work-in-process inventory) of Licensed Products,
PRESIDIO and/or such Affiliate(s) and/or Third Party sublicensee(s) may complete
the manufacture of any work-in-process inventory and continue to commercially
distribute and sell all such existing inventory following termination, subject
to PRESIDIO continuing to pay XTL all amounts due under this Agreement with
respect to such continuing Commercialization.

     

    (b)          
If this Agreement is terminated by PRESIDIO pursuant to Section 9.3, then the
following provisions shall be applicable:

     

    (i)          
The license granted by XTL to PRESIDIO under Section 2.1 shall terminate;
and

     

    (ii)          
PRESIDIO shall return to XTL all Licensed Technology and other items delivered
by XTL to PRESIDIO pursuant to Section 3.1, to the extent such Licensed
Technology and other items remain in existence as of such termination;
and

     

    (iii)          
PRESIDIO shall not, directly or with or through its Affiliates, Third Party
sublicensees or other Third Parties, continue the Development and
Commercialization of any Licensed Compounds or Licensed Products for a period of
***** following such
termination.

     

    (c)          
If this Agreement is terminated by PRESIDIO as described in Section 9.4(a)(i),
then the following provisions shall be applicable:

     

    
      

    

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

     

    
      
        
        

      

      
        -30-

        
          

        

      

      
        
        

      

    

     

    (i)          
The license granted by XTL to PRESIDIO under Section 2.1 shall terminate;
and

     

    (ii)          
PRESIDIO shall return to XTL all Licensed Technology and other items delivered
by XTL to PRESIDIO pursuant to Section 3.1, to the extent such Licensed
Technology and other items remain in existence as of such termination;
and

     

    (iii)          
PRESIDIO shall not, directly or with or through its Affiliates, Third Party
sublicensees or other Third Parties, continue the Commercialization of any
Licensed Compounds or Licensed Products for a period of ***** following such termination.

     

    (d)          
The license termination and other rights set forth in this Section 9.5 shall,
subject to Section 4.2, be in addition to any and all other remedies that XTL
may have in connection with such a termination of this Agreement.

     

    Section
9.6           Survival. Upon
expiration or termination of this Agreement for any reason, nothing in this
Agreement shall be construed to release either Party from any obligations that
accrue prior to the effective date of expiration or termination, and the
following provisions shall expressly survive any such expiration or termination:
Section 2.2, Section 2.5, Section 9.1, Section 9.4, Section 9.5, this Section
9.6 and Article V (solely as pertaining to payment obligations (a) that are due
and payable as of the effective date of termination or expiration, (b) that have
accrued prior to the date of termination or expiration but for which the payment
due date falls after the date of termination or expiration or (c) that become
payable after termination pursuant to Section 9.5(a)(iii)), Article VII, Article
X and Article XI. In addition, any sublicense granted by PRESIDIO and/or any of
its Affiliates to a Third Party under the license granted by XTL to PRESIDIO in
Section 2.1 shall survive expiration or termination of this Agreement, provided that such termination
did not arise out of the actions of such Third Party; provided further that the Third Party
continues to comply in all material respects with the terms and conditions of
such sublicense.

     

    Article
X

    Dispute
Resolution

     

    Section
10.1          Referral to Senior
Executives. Except as set forth in Section 3.2(b), any dispute arising
out of or relating to this Agreement shall first be referred to the Senior
Executives of both Parties for resolution. Such Senior Executives shall attempt
in good faith to resolve such dispute within ***** following such referral. If
the Senior Executives cannot resolve such dispute within such *****
period, then either Party may make a written demand for formal dispute
resolution pursuant to Section 10.2.

     

    
      
        

      

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

    

     

    
      
        
        

      

      
        -31-

        
          

        

      

      
        
        

      

    

     

    Section
10.2          Mediation. If the
Senior Executives are unable to resolve any dispute referred to them as set
forth in Section 10.1, such dispute shall then be referred to non-binding
mediation upon either Party’s written demand for formal dispute resolution. Such
mediation shall be conducted by an impartial mediator in accordance with The CPR
Mediation Procedure for Business Disputes (Revised 1998) of the CPR Institute
for Dispute Resolution (“CPR”). The Parties
shall select, by mutual agreement, a mediator who has had both training and
experience as a mediator of general corporate and commercial matters in the
biotechnology and/or pharmaceutical industry. If the Parties cannot agree upon
the selection of the mediator within ***** after
initiation thereof, the mediator shall be appointed by the President of the CPR
in accordance with the criteria set forth in the preceding sentence. Within
*****
after the selection of the mediator, the Parties and their respective
legal counsel will meet with the mediator for one mediation session of at least
four hours. If any dispute cannot be settled during such mediation session or
during any mutually agreed continuation of such session, either Party may give
to the mediator and the other Party written notice declaring the mediation
process at an end, and such dispute will be resolved by binding arbitration
pursuant to Section 10.3 below. The costs of any mediation pursuant to this
Section 10.2 will be shared equally by the Parties.

     

    Section
10.3          Arbitration.

     

    (a)          
If any dispute is not resolved by the Senior Executives pursuant to Section 10.1
or through mediation pursuant to Section 10.2, either Party may submit such
dispute to arbitration upon written notice to the other Party. Within ***** after
receipt of such notice, the Parties shall designate in writing a single
arbitrator to resolve the dispute; provided, however, that if the Parties
cannot agree on an arbitrator within such *****
period, the arbitrator shall be selected by the International Centre for
Dispute Resolution (the “ICDR”). The
arbitrator shall be a lawyer with biotechnology and/or pharmaceutical industry
legal experience, and shall not be an Affiliate, employee, consultant, officer,
director or stockholder of any Party.

     

    (b)          
Within *****
after the designation of the arbitrator, the arbitrator and the Parties
shall meet, at which time the Parties shall be required to set forth in writing
all disputed issues and a proposed ruling on the merits of each such
issue.

     

    (c)          
The arbitrator shall set a date for a hearing, which shall be no later than
***** after the submission of written proposals pursuant to Section 10.3(b), to
discuss each of the issues identified by the Parties. The Parties shall have the
right to be represented by counsel. Except as provided herein, the arbitration
shall be governed by the International Dispute Resolution Procedures of the
ICDR; provided,
however, that
the United States Federal Rules of Evidence shall apply with regard to the
admissibility of evidence and the arbitration shall be conducted by a single
arbitrator.

     

    (d)          
The arbitrator shall use his or her best efforts to rule on each disputed issue
within ***** after the completion of the
hearings described in Section 10.3(c). The determination of the arbitrator as to
the resolution of any dispute shall be binding and conclusive upon all Parties.
All rulings of the arbitrator shall be in writing and shall be delivered to the
Parties.

     

    (e)          
The (i) attorneys’ fees of the Parties in any arbitration, (ii) fees of the
arbitrator and (iii) costs and expenses of the arbitration shall be borne by the
Parties as determined by the arbitrator.

     

    
      

    

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

     

    
      
        
        

      

      
        -32-

        
          

        

      

      
        
        

      

    

     

    (f)          
Any arbitration pursuant to this Section 10.3 shall be conducted in New York,
New York. Any arbitration award may be entered in and enforced by any court of
competent jurisdiction.

     

    Section
10.4          No Limitation.
Nothing in Section 10.1, Section 10.2 or Section 10.3 shall be construed as
limiting in any way the right of a Party to seek an injunction or other
equitable relief with respect to any actual or threatened breach of this
Agreement or to bring an action in aid of arbitration. Should any Party seek an
injunction or other equitable relief, or bring an action in aid of arbitration,
then for purposes of determining whether to grant such injunction or other
equitable relief, or whether to issue any order in aid of arbitration, the
dispute underlying the request for such injunction or other equitable relief, or
action in aid of arbitration, may be heard by the court in which such action or
proceeding is brought.

     

    Article
XI

    Miscellaneous
Provisions

     

    Section
11.1          Indemnification.

     

    (a)          
PRESIDIO.
PRESIDIO agrees to defend XTL, its Affiliates and their respective directors,
officers, employees and agents at PRESIDIO’s cost and expense, and shall
indemnify and hold harmless XTL and its Affiliates and their respective
directors, officers, employees and agents from and against any liabilities,
losses, costs, damages, fees or expenses (including without limitation
reasonable attorneys’ fees) arising out of any Third Party claim relating to or
arising out of (i) any breach by PRESIDIO of any of its representations,
warranties or covenants pursuant to this Agreement, (ii) any failure by PRESIDIO
to make payment of any Pass-Through Costs which are payable by PRESIDIO under
this Agreement as a result of the Development and/or Commercialization of
Licensed Products by PRESIDIO or its Affiliates or Third Party sublicensees,
(iii) any liabilities and obligations of PRESIDIO under the Assigned Contracts
that arise after the Original Effective Date, excluding the Retained
Liabilities, (iv) any action by PRESIDIO in breach of this Agreement causing a
breach of the VivoQuest License Agreement, (v) any action by PRESIDIO causing a
breach of any Additional Third Party Agreements or any Assigned Contracts, or
(vi) the Development and/or Commercialization of a Licensed Product by PRESIDIO
or its Affiliates or Third Party sublicensees, in each case except to the extent
that such claim relates to or arises out of any breach by XTL of any of its
representations or warranties pursuant to this Agreement or any breach by XTL or
its Affiliates of the VivoQuest License Agreement, the VivoQuest Asset Purchase
Agreement or any Assigned Contract.

     

    (b)          
XTL. XTL agrees
to defend PRESIDIO, its Affiliates and their respective directors, officers,
employees and agents at XTL’s cost and expense, and shall indemnify and hold
harmless PRESIDIO and its Affiliates and their respective directors, officers,
employees and agents from and against any liabilities, losses, costs, damages,
fees or expenses (including without limitation reasonable attorneys’ fees)
arising out of (i) any Third Party claim relating to or arising out of (A) any
breach by XTL of any of its representations, warranties or covenants pursuant to
this Agreement, (B) any liabilities and obligations of XTL and/or its Affiliates
under the Assigned Contracts that have accrued prior to the Original Effective
Date (the “Retained
Liabilities”), or (C) without limiting the foregoing clauses (A) or (B),
or any of XTL’s representations, warranties or covenants in Section 8.5, any
breach by XTL or its Affiliates of the VivoQuest License Agreement, the
VivoQuest Asset Purchase Agreement or any Assigned Contract; (ii) any claim by
any existing or former employee, director, shareholder or consultant of XTL or
any of its Affiliates, or of VivoQuest, to any right, title or interest in any
of the Licensed Patent Rights, Licensed Compounds or Licensed Technology which,
if such claim were successful, would limit or impair any of the rights granted
hereunder to PRESIDIO; *****.

     

    
      
        
        

      

      
        -33-

        
          

        

      

      
        
        

      

    

     

    (c)          
Claims for
Indemnification. A Person entitled to indemnification under this Section
11.1 (an “Indemnified
Party”) shall give prompt written notification to the Person from whom
indemnification is sought (the “Indemnifying Party”)
of the commencement of any action, suit or proceeding relating to a Third Party
claim for which indemnification may be sought or, if earlier, upon the assertion
of any such claim by a Third Party (it being understood and agreed, however,
that the failure by an Indemnified Party to give notice of a third-party claim
as provided in this Section 11.1(c) shall not relieve the Indemnifying Party of
its indemnification obligation under this Agreement except and only to the
extent that such Indemnifying Party is actually damaged as a result of such
failure to give notice). Within ***** after
delivery of such notification, the Indemnifying Party may, upon written notice
thereof to the Indemnified Party, assume control of the defense of such action,
suit, proceeding or claim with counsel reasonably satisfactory to the
Indemnified Party. If the Indemnifying Party does not assume control of such
defense, the Indemnified Party shall control such defense. The Party not
controlling such defense may participate therein at its own expense; provided that, if the
Indemnifying Party assumes control of such defense and the Indemnified Party
reasonably concludes, based on advice from counsel, that the Indemnifying Party
and the Indemnified Party have conflicting interests with respect to such
action, suit, proceeding or claim, the Indemnifying Party shall be responsible
for the reasonable fees and expenses of counsel to the Indemnified Party solely
in connection therewith; provided, however, that in no event
shall the Indemnifying Party be responsible for the fees and expenses of more
than one counsel for all Indemnified Parties. The Party controlling such defense
shall keep the other Party advised of the status of such action, suit,
proceeding or claim and the defense thereof and shall consider recommendations
made by the other Party with respect thereto. The Indemnified Party shall not
agree to any settlement of such action, suit, proceeding or claim without the
prior written consent of the Indemnifying Party, which shall not be unreasonably
withheld, delayed or conditioned. The Indemnifying Party shall not agree to any
settlement of such action, suit, proceeding or claim or consent to any judgment
in respect thereof that does not include a complete and unconditional release of
the Indemnified Party from all liability with respect thereto or that imposes
any liability or obligation on the Indemnified Party without the prior written
consent of the Indemnified Party.

     

    Section
11.2          Governing Law. This
Agreement shall be construed and the respective rights of the Parties determined
(including the validity and applicability of the arbitration provision set forth
in Section 10.3, and the conduct of any arbitration, enforcement of any arbitral
award and any other questions of arbitration law or procedure arising
thereunder) according to the substantive laws of the State of New York, USA,
notwithstanding the provisions governing conflict of laws under such New York
law to the contrary.

     

    
      

    

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

     

    
      
        
        

      

      
        -34-

        
          

        

      

      
        
        

      

    

     

    Section
11.3          Assignment. Neither
XTL nor PRESIDIO may assign this Agreement in whole or in part without the
consent of the other, except if such assignment occurs in connection with the
merger, sale or transfer of all or substantially all of the business and assets
of XTL, on the one hand, or PRESIDIO, on the other, to which the subject matter
of this Agreement pertains. Notwithstanding the foregoing, any Party may assign
its rights (but not its obligations) pursuant to this Agreement in whole or in
part to an Affiliate of such Party, provided, that the assigning
Party shall remain primarily liable to the other Party for any breach of this
Agreement by such Affiliate.

     

    Section
11.4          Entire Agreement;
Amendments. This Agreement (including all exhibits and attachments
hereto) constitutes the entire agreement between the Parties with respect to the
subject matter hereof, and supersedes all previous arrangements with respect to
the subject matter hereof, whether written or oral, including without limitation
the Original License Agreement (except as set forth in Section 11.10 below). Any
amendment or modification to this Agreement shall be made in writing signed by
both Parties.

     

    Section
11.5          Notices. Any notice
required or provided for by the terms of this Agreement shall be in writing and
shall be (a) sent by registered or certified mail, return receipt requested,
postage prepaid, (b) sent via a reputable overnight or international express
courier service, (c) sent by facsimile transmission, or (d) personally
delivered, in each case properly addressed in accordance with the paragraph
below. The effective date of notice shall be the actual date of receipt by the
Party receiving the same.

     

    Notices
to XTL shall be addressed to:

     

    XTL
Biopharmaceuticals Ltd.

    711
Executive Blvd., Suite Q

    Valley
Cottage, NY 10989

    Attention:
Chief Executive Officer

    Facsimile
No.: 845-267-0926

     

    with a
copy to:

     

    Goodwin
Procter

    Exchange
Place

    Boston,
MA 02109

    Attention:
Christopher Denn

    Facsimile
No.: 617-523-1231

     

    Notices
to PRESIDIO shall be addressed to:

     

    Presidio
Pharmaceuticals, Inc.

    1700
Owens Street

    Suite
585

    San
Francisco, CA 94158

    USA

    Attention:
President and Chief Executive Officer

    Facsimile
No.: 415-986-2864

     

    
      
        
        

      

      
        -35-

        
          

        

      

      
        
        

      

    

     

    with a
copy to:

     

    WilmerHale

    60 State
Street

    Boston,
MA 02109

    USA

    Attention:
David E. Redlick, Esq.

    Facsimile
No.: 617-526-5000

     

    Any Party
may change its address by giving notice to the other Party in the manner herein
provided.

     

    Section
11.6          Force Majeure. No
failure or omission by a Party in the performance of any obligation of this
Agreement shall be deemed a breach of this Agreement or create any liability if
the same shall arise from any cause or causes beyond the reasonable control of
such Party, including, but not limited to, the following: acts of God; acts or
omissions of any government; any rules, regulations or orders issued by any
governmental authority or by any officer, department, agency or instrumentality
thereof; fire; storm; flood; earthquake; accident; war; terrorism; rebellion;
insurrection; riot; and invasion. The Party claiming force majeure shall notify
the other Party with notice of the force majeure event as soon as practicable,
but in no event longer than ***** after its occurrence, which notice shall
reasonably identify such obligations under this Agreement and the extent to
which performance thereof will be affected.

     

    Section
11.7          Independent
Contractors. It is understood and agreed that the relationship between
the Parties hereunder is that of independent contractors and that nothing in
this Agreement shall be construed as authorization for either XTL or PRESIDIO to
act as agent for the other.

     

    Section
11.8          No Strict
Construction. This Agreement has been prepared jointly and shall not be
strictly construed against any Party.

     

    Section
11.9          Headings. The
captions or headings of the sections or other subdivisions hereof are inserted
only as a matter of convenience or for reference and shall have no effect on the
meaning of the provisions hereof.

     

    Section
11.10 No Implied
Waivers; Rights Cumulative. No failure on the part of XTL or PRESIDIO to
exercise, and no delay in exercising, any right, power, remedy or privilege
under this Agreement, or provided by statute or at law or in equity or
otherwise, shall impair, prejudice or constitute a waiver of any such right,
power, remedy or privilege or be construed as a waiver of any breach of this
Agreement or as an acquiescence therein, nor shall any single or partial
exercise of any such right, power, remedy or privilege preclude any other or
further exercise thereof or the exercise of any other right, power, remedy or
privilege. For purposes of clarity, except as expressly set forth hereunder,
nothing in this Agreement (including without limitation the execution or
performance hereof) shall be construed as a waiver by either Party of any rights
or claims that such Party may have under the Original License Agreement arising
during the period commencing as of the Original Effective Date and ending on the
Restatement Date.

     

    
      

    

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

     

    
      
        
        

      

      
        -36-

        
          

        

      

      
        
        

      

    

     

    Section
11.11        Severability. If,
under applicable law or regulation, any provision of this Agreement is invalid
or unenforceable, or otherwise directly or indirectly affects the validity of
any other material provision(s) of this Agreement (such invalid or unenforceable
provision, a “Severed
Clause”), this Agreement shall endure except for the Severed Clause.
 The Parties shall consult one another and use reasonable efforts to agree
upon a valid and enforceable provision that is a reasonable substitute for the
Severed Clause in view of the intent of this Agreement.

     

    Section
11.12        Execution in
Counterparts.  This Agreement may be executed in counterparts,
each of which counterparts, when so executed and delivered, shall be deemed to
be an original, and all of which counterparts, taken together, shall constitute
one and the same instrument.

     

    Section
11.13        No Third Party
Beneficiaries.  No person or entity other than XTL, PRESIDIO
and their respective Affiliates and permitted assignees hereunder shall be
deemed an intended beneficiary hereunder or have any right to enforce any
obligation of this Agreement.

     

    Section
11.14        No Consequential
Damages.  NEITHER PARTY HERETO WILL BE LIABLE FOR INDIRECT,
INCIDENTAL, CONSEQUENTIAL, SPECIAL, EXEMPLARY OR PUNITIVE DAMAGES ARISING OUT OF
THIS AGREEMENT OR THE EXERCISE OF ITS RIGHTS HEREUNDER, OR FOR LOST PROFITS
ARISING FROM OR RELATING TO ANY BREACH OF THIS AGREEMENT, REGARDLESS OF ANY
NOTICE OF SUCH DAMAGES.  NOTHING IN THIS SECTION 11.14 IS INTENDED TO
LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF EITHER PARTY WITH
RESPECT TO THIRD PARTY CLAIMS.

     

    [Remainder of This Page Intentionally
Left Blank]

     

    
      
        
        

      

      
        -37-

        
          

        

      

      
        
        

      

    

     

    IN
WITNESS WHEREOF, the Parties have executed this Amended and Restated License
Agreement as of the Restatement Date.

     

    
      
        
          
            
              
                
                  
                    
                      
                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          
                                            
                                              	
                                                      PRESIDIO
      PHARMACEUTICALS, INC.

                                                    
	 
      
	
                                                      By:

                                                    	 	 
      
	 
      	 
      
	
                                                      Name:

                                                    	 	 
      
	 
      	 
      
	
                                                      Title:

                                                    	 	 
      
	 
      
	
                                                      XTL
      BIOPHARMACEUTICALS LTD.

                                                    
	 
      
	
                                                      By:

                                                    	 	 
      
	 
      	 
      
	
                                                      Name:

                                                    	 	 
      
	 
      	 
      
	
                                                      Title:

                                                    	 	 
      

                                            

                                          

                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

    
      
        
        

      

      
        -38-

        
          

        

      

      
        
        

      

    

     

    Exhibit
A

     

    Assigned
Contracts

     

    *****

     

    *****

    

    *****

     

    Copies
of the foregoing contracts have been provided by XTL to PRESIDIO as of the
Original Effective Date.

     

    
      

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
B

     

    VivoQuest
Agreements

     

    Copies
of the VivoQuest License Agreement and the VivoQuest Asset Purchase Agreement
have been provided by XTL to PRESIDIO as of the Original Effective
Date.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
C

     

    Series 1, 2, 3 and 4
Compounds in XTL Database and Other Records

     

    *****.

    

    
      

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
D

     

    Series 1 Patent Rights as of
the Original Effective Date

    and the Restatement
Date

     

    *****

     

    
      

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
E

     

    Series 2-4 Patent Rights as
of the Original Effective Date

    and the Restatement
Date

     

    *****

    

    
      

    

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

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

    Exhibit
F

     

    Press
Release

     

    See
attached.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    Exhibit
G

     

    *****

     

    *****

    

    
      

    

    * *****Confidential material redacted and filed separately
with the Commission.CONFIDENTIAL TREATMENT REQUESTED
..  Confidential portions of this document have been redacted and have
been separately filed with the Commission.

     

    Exhibit
10.43

     

    ASSET
PURCHASE AGREEMENT

     

    dated as
of

     

    March 18,
2009

     

    between

     

    XTL
BIOPHARMACEUTICALS LTD

     

    as
Buyer,

     

    and

     

    BIO-GAL
LIMITED

     

    as
Seller

    
       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      TABLE
OF CONTENTS

       

      
        
          
            
              
                
                  	
                          ARTICLE
      I

                        	 	
                          PURCHASE
      AND SALE OF ASSETS

                        	
                          1

                        
	
                          1.1

                        	 	
                          Purchase
      and Sale of Assets

                        	
                          1

                        
	
                          1.2

                        	 	
                          Assumption
      of Liabilities

                        	
                          1

                        
	
                          1.3

                        	 	
                          Retained
      Liabilities

                        	
                          2

                        
	
                          1.4

                        	 	
                          Purchase
      Price

                        	
                          2

                        
	
                          1.5

                        	 	
                          The
      Closing

                        	
                          3

                        
	
                          1.6

                        	 	
                          Further
      Assurances

                        	
                          4

                        
	 
      	 	 
      	 
      
	
                          ARTICLE
      II

                        	 	
                          REPRESENTATIONS
      AND WARRANTIES OF SELLER

                        	
                          4

                        
	
                          2.1

                        	 	
                          Organization,
      Qualification and Corporate Power

                        	
                          4

                        
	
                          2.2

                        	 	
                          Authorization
      of Transaction

                        	
                          4

                        
	
                          2.3

                        	 	
                          Noncontravention

                        	
                          5

                        
	
                          2.4

                        	 	
                          Absence
      of Changes

                        	
                          5

                        
	
                          2.5

                        	 	
                          Legal
      Proceedings

                        	
                          6

                        
	
                          2.6

                        	 	
                          Tax
      Matters

                        	
                          6

                        
	
                          2.7

                        	 	
                          Title
      to and Condition of Acquired Assets

                        	
                          6

                        
	
                          2.8

                        	 	
                          Intellectual
      Property.

                        	
                          6

                        
	
                          2.9

                        	 	
                          Brokers’
      Fees

                        	
                          8

                        
	 
      	 	 
      	 
      
	
                          ARTICLE
      III

                        	 	
                          REPRESENTATIONS
      AND WARRANTIES OF BUYER

                        	
                          9

                        
	
                          3.1

                        	 	
                          Organization
      and Corporate Power

                        	
                          9

                        
	
                          3.2

                        	 	
                          Authorization
      of the Transaction

                        	
                          9

                        
	
                          3.3

                        	 	
                          Noncontravention

                        	
                          9

                        
	
                          3.4

                        	 	
                          SEC
      Reports; Financial Statements

                        	
                          9

                        
	
                          3.5

                        	 	
                          Legal
      Proceedings

                        	
                          11

                        
	
                          3.6

                        	 	
                          Tax
      Matters

                        	
                          11

                        
	
                          3.7

                        	 	
                          Brokers’
      Fees

                        	
                          11

                        
	
                          3.8

                        	 	
                          Financial
      Capability

                        	
                          11

                        
	 
      	 	 
      	 
      
	
                          ARTICLE
      IV

                        	 	
                          CONDITIONS
      TO CLOSING

                        	
                          11

                        
	
                          4.1

                        	 	
                          Conditions
      to Obligations of Buyer

                        	
                          11

                        
	
                          4.2

                        	 	
                          Conditions
      to Obligations of Seller

                        	
                          11

                        
	 
      	 	 
      	
                           
      

                        
	
                          ARTICLE
      V

                        	 	
                          COVENANTS

                        	
                          12

                        
	
                          5.1

                        	 	
                          Proprietary
      Information

                        	
                          12

                        
	
                          5.2

                        	 	
                          Tax
      Matters

                        	
                          12

                        
	
                          5.3

                        	 	
                          Sharing
      of Data

                        	
                          12

                        
	
                          5.4

                        	 	
                          Certain
      Actions

                        	
                          12

                        
	 
      	 	 
      	
                           
      

                        
	
                          ARTICLE
      VI

                        	 	
                          DEFINITIONS

                        	
                          13

                        
	 
      	 	 
      	 
      
	
                          ARTICLE
      VII

                        	 	
                          MISCELLANEOUS

                        	
                          16

                        
	
                          7.1

                        	 	
                          Survival
      of Representations and Warranties; Limitations

                        	
                          16

                        
	
                          7.2

                        	 	
                          No
      Third Party Beneficiaries

                        	
                          16

                        

                

              

            

          

        

      

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

      
        
          
            
              	
                      7.3

                    	 	
                      Entire
      Agreement

                    	
                      16

                    
	
                      7.4

                    	 	
                      Succession
      and Assignment

                    	
                      17

                    
	
                      7.5

                    	 	
                      Counterparts
      and Facsimile Signature

                    	
                      17

                    
	
                      7.6

                    	 	
                      Headings

                    	
                      17

                    
	
                      7.7

                    	 	
                      Notices

                    	
                      17

                    
	
                      7.8

                    	 	
                      Governing
      Law

                    	
                      18

                    
	
                      7.9

                    	 	
                      Amendments
      and Waivers

                    	
                      18

                    
	
                      7.10

                    	 	
                      Severability

                    	
                      18

                    
	
                      7.11

                    	 	
                      Expenses

                    	
                      18

                    
	
                      7.12

                    	 	
                      Specific
      Performance

                    	
                      18

                    
	
                      7.13

                    	 	
                      Confidentiality

                    	
                      18

                    

            

          

        

      

      

      EXHIBITS

      

      
        
          	
                  Exhibit
      A

                	
                  Acquired
      Assets

                
	
                  Exhibit
      B

                	
                  Form
      of Bill of Sale

                
	
                  Exhibit
      C

                	
                  Form
      of Assignment and Assumption
Agreement

                

        

      

      

      SCHEDULES

      

      Disclosure
Schedules

      
        
           

        

        
          -ii–

          
            

          

        

        
           

        

      

      ASSET
PURCHASE AGREEMENT

       

      This
ASSET PURCHASE AGREEMENT   (this “Agreement”), entered
into as of March 18, 2009, is by and between XTL Biopharmaceuticals Ltd., a
public company limited by shares organized under the laws of the State of Israel
(“Buyer”), and
Bio-Gal Limited, a private company limited by shares organized under the laws of
Gibraltar (“Seller”).  Capitalized
terms used in this Agreement shall have the meanings ascribed to them in
Article VII.

       

      WHEREAS, Buyer desires to
purchase from Seller, and Seller desires to sell to Buyer, certain of the assets
of Seller on the terms and subject to the conditions set forth
herein;

       

      WHEREAS, Seller is party to
the Research and License Agreement, dated as of January 7, 2002, as amended from
time to time (the "Yeda License"),
between Mor Research Applications Ltd., an Israeli corporation and Yeda Research
and Development Company Ltd., an Israeli corporation (collectively, “Yeda”) ;

       

      WHEREAS, Seller has performed
certain research and development studies in relation to the subject matter of
the Yeda License, as more fully detailed in Appendix A attached
hereto (the "Clinical
Studies"; the Yeda License and the Clinical Studies shall herein after
collectively be referred to herein as the "Seller's
Assets");

       

      WHEREAS, Seller wishes to
transfer, convey and assign all of its rights and benefits under the Acquired
Assets, and Buyer wishes to acquire the Acquired Assets and assume
all  of Seller’s obligations under the Yeda License; and

       

      NOW, THEREFORE, in
consideration of the premises, and the covenants, promises, representations and
warranties set forth herein, and for other good and valuable consideration (the
receipt and sufficiency of which are hereby acknowledged by the parties),
intending to be legally bound hereby, the Parties agree as follows:

       

      ARTICLE
I

       

      PURCHASE
AND SALE OF ASSETS

       

      1.1           Purchase and Sale of
Assets.  At the Closing, upon and subject to the terms and
conditions of this Agreement, (a) Buyer shall purchase from Seller, and
Seller shall sell, transfer, convey, assign and deliver to Buyer, all of its
right, title and interest in, to and under the Acquired Assets, in each case
free and clear of all Liens, by delivery of one or more Bills of Sale in
substantially the form set forth in Exhibit B
hereto, and an Assignment and Assumption Agreement in substantially the form set
forth in Exhibit C hereto
and such other instruments of transfer and title as Buyer may otherwise
reasonably request, in each case in form and substance reasonably acceptable to
Buyer and Seller, and (b) Seller shall deliver to Buyer, or otherwise put
Buyer in possession and control of, all of the Acquired Assets of a tangible
nature.

       

      1.2           Assumption of
Liabilities.  At the Closing, on the terms and subject to the
conditions set forth in this Agreement, Buyer shall assume, effective as of the
Closing, those Liabilities that arise out of the ownership or use by Buyer and
its Subsidiaries of, or the exercise by Buyer and its Subsidiaries of rights
under, the Acquired Assets (and that relate to periods) after the Closing
(collectively, the “Assumed Liabilities”)
and no other Liabilities.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      1.3           Retained
Liabilities.  Buyer shall not assume or be liable for any
Retained Liabilities.  “Retained Liabilities”
mean all Liabilities of Seller and its Subsidiaries other than Assumed
Liabilities, including all Liabilities in the following categories:

       

      (a)    Liabilities
that arise out of or relate to the ownership or use of, or the exercise of
rights under, the Acquired Assets by Seller and its Subsidiaries prior to the
Closing;

       

      (b)    Liabilities
in respect of any and all products sold and/or services performed by Seller and
its Subsidiaries prior to the Closing;

       

      (c)    Liabilities
in respect of a breach or nonperformance by or default of Seller or any of its
Subsidiaries occurring   prior to the Closing;

       

      (d)    Liabilities
arising out of, under or in connection with any Indebtedness of Seller or any of
its Subsidiaries;

       

      (e)    Liabilities
of Seller and its Subsidiaries in respect of any pending or threatened Action or
Proceeding or claim to the extent arising out of, relating to, or otherwise in
respect of the ownership or use of, or the exercise of rights under, the
Acquired Assets prior to the Closing; and

       

      (f)     Liabilities
relating to amounts required to be paid by Seller hereunder.

       

      1.4           Purchase
Price.

       

      (a)    The
aggregate purchase price to be paid by Buyer for the Acquired Assets shall be as
follows: (i) upon the Closing - the issuance to the Seller of ***** Ordinary
Shares, NIS 0.10 each, of the Buyer, representing *****% of the current issued
and outstanding share capital of the Buyer , for no consideration, and subject
to the terms and conditions herein (the "Initial Shares"), and
(ii) upon the Successful Completion of Phase 2 – the payment of an amount of
US$10,000,000 to the Seller (the "Milestone Payment").
The Milestone Payment shall be paid by the Buyer to the Seller within thirty
(30) days from the Successful Completion of the Phase2. Notwithstanding the
aforesaid, the Buyer may decide, at its sole and absolute discretion, to issue
to the Seller an additional amount of ***** Ordinary Shares, NIS 0.10 each of
the Buyer, for no consideration, in lieu for the payment of the Milestone
Payment (the "Additional Shares").
In the event that the Buyer did not issue the Additional Shares to the Seller
within such thirty (30) days from the Successful Completion of the Phase2, then
the Buyer will be obligated to make the Milestone Payment.

       

        
          

        

      

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

      

      
        
          
             

          

          
            -2–

            
              

            

          

          
             

          

        

      

       

      (b)  
Seller acknowledges that the Shares are being acquired pursuant to an exemption
from registration under the Securities Act of 1933, as amended (the “Securities Act”) and
that the Shares may be transferred only pursuant to an effective registration
statement or an exemption from registration under the Securities
Act.  Seller represents that it is familiar with Rule 144 under the
Securities Act.  Seller shall not be permitted to transfer any Shares
in the absence of an effective registration statement unless Seller has
furnished Parent with an opinion of counsel, reasonably satisfactory to Parent,
that such disposition does not require registration of such Shares under the
Securities Act.  It is agreed that Parent will not require opinions of
counsel for transfers made pursuant to Rule 144 if Parent is provided with any
certificates or other evidence of compliance with Rule 144 reasonably required
by it in connection with such transfer (including without limitation a copy of
the relevant Form 144).  In connection with a resale of Shares
pursuant to Rule 904 under the Securities Act, Purchaser shall provide
reasonable assistance to Seller in addressing any questions that may arise as to
the mechanics of transferring Shares in accordance with the requirements of such
rule and in issuing appropriate instructions to the transfer agent for the
Shares.  Seller acknowledges that securities transferred pursuant to
said Rule 904 continue to have the status of “restricted securities” and that
the certificates representing Shares transferred pursuant to such rule shall
continue to bear a restrictive legend.

       

      (c)  
It is understood that the certificates evidencing the Shares may bear a legend
to the following effect:

       

      THE
SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED.  SUCH SECURITIES MAY NOT BE SOLD,
PLEDGED, HYPOTHECATED OR TRANSFERRED IN THE ABSENCE OF AN EFFECTIVE REGISTRATION
STATEMENT WITH RESPECT THERETO OR AN APPLICABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTES OF SUCH ACT.

       

      (d)
 The certificates evidencing the Shares may also bear any legends required
by applicable blue sky laws.

       

      (e)  
The Buyer shall prepare and, as soon as practicable, but in no event later than
***** days from the Closing, file with the Commission a Registration Statement
covering the resale of all of the Initial Shares for an offering to be made on a
continuous basis pursuant to Rule 415. In the event that the Buyer shall issue
to the Seller the Additional Shares, the Buyer shall prepare and, as soon as
practicable, but in no event later than ***** days from such issuance, file with
the Commission a Registration Statement covering the resale of all of the
Additional Shares for an offering to be made on a continuous basis pursuant to
Rule 415.

       

      1.5           The
Closing.  The Closing shall take place at the offices of Kantor
& Co. in Ramat Gan, Israel, within three (3) days from the date all the
conditions to Closing set out in Article IV have been fulfilled.  All
transactions at the Closing shall be deemed to take place simultaneously, and no
transaction shall be deemed to have been completed and no documents or
certificates shall be deemed to have been delivered until all other transactions
are completed and all other documents and certificates are delivered. In the
event that the conditions to closing set out in Article IV are not met or waived
by September 30, 2009, unless extended by mutual agreement of the parties, this
Agreement shall be deemed terminated and shall cease to have any legal effect as
between the parties hereto.

       

      
        

      

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

      

        
          
             

          

          
            -3–

            
              

            

          

          
             

          

        

      1.6           Further
Assurances.  At any time and from time to time after the
Closing, without further consideration  Seller shall execute and
deliver such other instruments of sale, transfer, conveyance and assignment and
take such actions as Buyer may reasonably request to more effectively transfer,
convey and assign to Buyer, and to confirm Buyer’s rights to, title in and
ownership of, the Acquired Assets and to place Buyer in actual possession and
operating control thereof, including the furnishing of information and execution
of any documents the filing or recordation of which with governmental
authorities, including the United States Patent and Trademark Office, is
prerequisite to the statutory establishment or recordation of assignment of the
Patent Rights.

       

      ARTICLE
II

       

      REPRESENTATIONS
AND WARRANTIES OF SELLER

       

      Seller
represents and warrants to Buyer that, except as set forth in the Disclosure
Schedule, the statements contained in this Article II are true and correct
as of the Closing, except to the extent such representations and warranties are
specifically made as of a particular date (in which case such representations
and warranties will be true and correct as of such date).  The
Disclosure Schedule shall be arranged in sections and subsections corresponding
to the numbered and lettered sections and subsections contained in this Article
II; provided that an
item disclosed in any Section or subsection of the Disclosure Schedule shall be
deemed to have been disclosed for each other Section or subsection of this
Agreement to the extent the relevance is reasonably inferable on the face of
such disclosure.

       

      2.1           Organization, Qualification
and Corporate Power.  Seller is a private company limited by
shares duly organized and validly existing under the laws of
Gibraltar.  Seller has all requisite corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it.  Seller is duly qualified, licensed or admitted
to do business and is in good standing as a foreign corporation in each
jurisdiction in which the ownership, use, licensing or leasing of the Acquired
Assets held by it, or the conduct of its business, makes such qualification,
licensing or admission necessary.

       

      2.2           Authorization of
Transaction.  Seller has all requisite power and authority to
execute and deliver this Agreement and each Ancillary Agreement to which it is a
party and to perform its obligations hereunder and thereunder.  The
execution and delivery by Seller of this Agreement and each Ancillary Agreement
to which it is a party, the performance by Seller of obligations under this
Agreement and each Ancillary Agreement to which it is a party and the
consummation by Seller of the transactions contemplated hereby and thereby have
been duly and validly authorized by all necessary corporate action on the part
of Seller.  This Agreement and each Ancillary Agreement to which
Seller is a party has been duly and validly executed and delivered by Seller and
constitutes a valid and binding obligation of Seller, enforceable against Seller
in accordance with their terms, subject to applicable bankruptcy, insolvency,
reorganization, moratorium and similar laws affecting creditors’ rights and
remedies generally, and subject, as to enforceability, to general principles of
equity.

       

      
        
           

        

        
          -4–

          
            

          

        

        
           

        

      

      2.3           Noncontravention.  Neither
the execution and delivery by Seller of this Agreement or any Ancillary
Agreement to which Seller is a party, nor the consummation by Seller of the
transactions contemplated hereby or thereby, following the obtaining the
approval of the Seller's Shareholders and the Seller's directors, will
(a) conflict with or violate any provision of the certificate or articles
of incorporation, bylaws or other organizational or charter documents of Seller,
(b) require on the part of Seller any notice to or filing with, or any
permit, authorization, consent or approval of, any Governmental Entity,
(c) conflict with, result in a breach of, constitute (with or without due
notice or lapse of time or both) a default under, result in the acceleration of
obligations under, create in any party the right to terminate, modify or cancel,
or require any notice, consent or waiver under, any Contract or instrument to
which Seller is a party or by which Seller is bound or to which any of the
Acquired Assets is subject, (d) result in the imposition of any Lien upon
any Acquired Assets or (e) violate any order, writ, injunction, decree,
statute, rule or regulation applicable to Seller or any of the Acquired
Assets.

       

      2.4           Absence of
Changes.  As of the date of this Agreement, except as required
by this Agreement or the Ancillary Agreements:

       

      (a)    no
Bankruptcy Event has occurred with respect to Seller or any of its
Subsidiaries;

       

      (b)    neither
Seller nor any Subsidiary of Seller has entered into, terminated, amended in any
material respect, or granted any material waiver (or agreed or made any
commitment to enter into terminate, amend in any material respect or grant any
material waiver) under any Contract that constitutes (or would, but for such
action, constitute) part of the Acquired Assets;

       

      (c)    neither
Seller nor any Subsidiary of Seller has entered into, approved or resolved to
enter into any Contract involving (i) the sale, disposition, license or transfer
of any of the Acquired Assets or (ii) any material restriction on the future use
of the Acquired Assets;

       

      (d)    neither
Seller nor any Subsidiary of Seller has sold, transferred, disposed of, waived
any right to, or leased to any other Person, mortgaged, pledged or incurred or
suffered to exist any Lien on any asset and property that constitutes or, but
for such action, would constitute an Acquired Asset;

       

      (e)    Seller
nor any Subsidiary of Seller has failed to pay or otherwise satisfy any material
Liability presently due and payable, except such Liabilities which are being
contested in good faith by appropriate means or procedures and which, both
individually and in the aggregate, are immaterial in amount;

       

      (f)     except
as otherwise set forth in Section 2.8(c),
Seller and each of its Subsidiaries has taken all action reasonably necessary or
appropriate to procure, maintain, renew, extend or enforce all Patent Rights,
including submission of required documents or fees during the prosecution of
patent applications for such Patent Right; and

       

      
        
           

        

        
          -5–

          
            

          

        

        
           

        

      

      (g)    neither
Seller nor any Subsidiary of Seller has entered into or approved any agreement,
commitment, arrangement or understanding, to do, permit, engage in or cause or
having the effect of any of the foregoing.

       

      2.5           Legal
Proceedings.  There is no Action or Proceeding pending or, to
Seller’s knowledge, threatened against, relating to or affecting any of the
Acquired Assets or which in any manner challenges or seeks to prevent, enjoin,
alter or materially delay the transactions contemplated by this Agreement or any
of the Ancillary Agreements.  Seller and its Subsidiaries have not
received any written notice and otherwise do not have any knowledge of any writ,
judgment, decree, injunction or similar requirement or binding obligation or
order of any governmental or regulatory authority (in each such case whether
preliminary or final) relating to or affecting, in any material respect, any of
the Acquired Assets.

       

      2.6           Tax
Matters.  Seller is not delinquent in the payment of any
material Tax related to the Acquired Assets or for which liability would be
imposed on Buyer and no deficiencies for any such Tax have been threatened,
claimed, proposed or assessed against Acquired Assets.  Seller has not
received any written notification from any  Taxing Authority regarding
any issues that:  (a) are currently pending before such Taxing
Authority (including any sales or use Tax Authority) regarding the Acquired
Assets, or (b) have been raised by such Taxing Authority and not yet
finally resolved, in each case relating to the Acquired Assets.  No
Tax Return of Seller relating to the Acquired Assets is under audit by any
Taxing Authority, and any such past audits (if any) have been completed and
fully resolved and all Taxes and any penalties or interest determined by such
audit to be due from Seller have been paid in full to the applicable Taxing
Authorities.  No Tax Liens are currently in effect against any
Acquired Assets other than liens that arise by operation of law for Taxes not
yet due and payable.

       

      2.7           Title to and Condition of
Acquired Assets.  Seller owns or has an exclusive license to
each of the Acquired Assets to be sold, transferred, conveyed, assigned or
delivered by Seller hereunder, free and clear of all Liens.  Upon
execution and delivery by Seller to Buyer of the instruments of sale,
assignment, transfer and conveyance, Buyer will become the true and lawful
licensee of, and will receive exclusive license rights or ownership, the
Acquired Assets, free and clear of all Liens.

       

      2.8           Intellectual
Property.

       

      (a)    Section 2.8(a) of the
Disclosure Schedule provides a complete and accurate listing of all Patent
Rights that are registered or filed or assigned or owned in the name of Seller,
alone or jointly with others, in each case, enumerating specifically the
applicable filing or registration number, title, jurisdiction in which filing
was made or from which registration issued, date of filing or issuance, names of
all current applicant(s) and registered owners(s), as applicable.  All
assignments of Patent Rights to Seller or any of its Subsidiaries have been
properly executed and recorded.  None of Seller or any of its
Subsidiaries own or have any rights to any Patent Rights other than the Patent
Rights listed on Section 2.8(a) of the
Disclosure Schedule that claim or disclose any Related Know-How.

       

      
        
           

        

        
          -6–

          
            

          

        

        
           

        

      

      (b)    To
Seller’s best knowledge (i) all issued patents in the Patent Rights are valid
and enforceable, (ii) there are no material defects of form in the preparation
or filing of the Patent Rights, (iii) the patent applications in the Patent
Rights are being diligently prosecuted, and (iv) all necessary registration,
renewal, maintenance and other payments that are or have become due with respect
to Patent Rights have been timely paid by or on behalf of
Seller.  None of the Patent Rights procured by Seller or any of its
Subsidiaries and, to Seller’s knowledge, none of the Patent Rights procured by
any third party was fraudulently procured from the relevant governmental patent
granting authority.

       

      (c)    To
Seller’s best knowledge, each patent and patent application included within the
Patent Rights sets forth a complete and accurate list of all
inventors.  There are no inventorship challenges, opposition or
nullity proceedings or interferences declared, commenced or provoked with
respect to any Patent Rights, or to Seller’s knowledge,
threatened.  Seller has complied with its duty of candor and
disclosure to the United States Patent and Trademark Office and any relevant
foreign patent office with respect to all patent and trademark applications
filed by or on behalf of Seller and Seller has not made any material
misrepresentation in such applications.  Seller does not have
knowledge of any information that would (i) preclude Seller from having clear
title to any Patent Right, (ii) adversely affect the validity or enforceability
of any issued patents included in the Patent Rights, or (iii) adversely affect
the patentability of any pending patent applications included in the Patent
Rights.

       

      (d)    Seller
has the sole and exclusive license to the Patent Rights under the Yeda License
and is the sole and exclusive owner of the Related Know-How, free and clear of
any Liens.

       

      (e)    Seller
has taken reasonable measures to protect the proprietary nature of Patent Rights
and Related Know-How, and to maintain in confidence all trade secrets and
confidential information comprising a part thereof.  Seller has
complied in all material respects with all applicable contractual and legal
requirements pertaining to information privacy and security.  No
complaint relating to an improper use or disclosure of, or a breach in the
security of, any such information has been made or, to Seller’s knowledge,
threatened against Seller.  To Seller’s knowledge, there has been no:
(i) unauthorized disclosure of any material third party proprietary or
confidential information in the possession, custody or control of Seller, or
(ii) material breach of the security procedures of Seller wherein confidential
information has been disclosed to a third person.

       

      (f)     To
Seller’s best knowledge, neither the practice of the Patent Rights and Related
Know-How, nor the development or commercialization of a product based on the
Patent Rights and Related Know-How, infringes or violates, or constitutes a
misappropriation of, any intellectual property rights of any third party. To
Seller’s knowledge, no claim, demand or suit has been made, or proceeding
initiated, nor is any such claim, demand, suit or proceeding pending or
threatened, that asserts the invalidity, misuse or unenforceability of any of
the Patent Rights or Related Know-How.  Section 2.8(f)
of the Disclosure Schedule lists any complaint, claim or notice, or threat of
any of the foregoing (including any notification that a license under any patent
is or may be required), received by Seller or any of its Subsidiaries alleging
any such infringement, violation or misappropriation and any request or demand
for indemnification or defense received by Seller or any of its Subsidiaries
from any third party; and Seller has provided to Buyer copies of all such
complaints, claims, notices, requests, demands or threats, as well as any legal
opinions, studies, market surveys and analyses relating to any alleged or
potential infringement, violation or misappropriation.

       

      
        
           

        

        
          -7–

          
            

          

        

        
           

        

      

      (g)    To
Seller’s best knowledge, none of the Patent Rights are being infringed or
violated, nor is any Related Know-How being misappropriated, by any Person
(including, without limitation, any current or former employee or consultant of
Seller or any of its Subsidiaries).  Seller has provided to Buyer
copies of all correspondence, analyses, legal opinions, complaints, claims,
notices or threats concerning the infringement, violation or misappropriation of
any of the Patent Rights or Related Know-How.

       

      (h)    Section 2.8(h) of the
Disclosure Schedule provides a complete and accurate list of all third party
agreements to which Seller or any of its Subsidiaries is a party as of the date
hereof relating to the Patent Rights and/or Related Know-How.  Except
for the agreements listed on Section 2.8(h) of the
Disclosure Schedule, neither Seller nor any of its Subsidiaries is a party to,
or is otherwise bound by, any agreement pursuant to which any third party has
any economic or other interest with respect to the development and/or
commercialization of a product based on the Patent Rights and Related Know-How,
or any ownership rights in any of the Patent Rights and/or Related
Know-How.

       

      (i)     Section  2.8(i)
of the Disclosure Schedule identifies each license, covenant or other agreement
pursuant to which Seller (or any Subsidiary described in Section 2.8(e))
has assigned, transferred, licensed, distributed
or otherwise granted any right or access to any Person, or covenanted not to
assert any right, with respect to the Patent Rights or Related
Know-How.

       

      (j)     Seller’s
and each of its Subsidiaries’ current and former employee, directors,
consultants and contractors has executed a valid and binding written agreement
expressly assigning to Seller or Subsidiary all right, title and interest in any
inventions, whether or not patentable, and works of authorship, invented,
created, developed, conceived and/or reduced to practice in the course of his or
her employment or engagement with Seller or such Subsidiary, and all
intellectual property rights therein, and has waived all moral rights therein to
the extent legally permissible.

       

      (k)    All
Seller's representations and warranties set out in this Section 2.8 above relate
to the period from January 7, 2002 and until the Closing.

       

      2.9           Brokers’
Fees.  Seller has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.

       

      
        
           

        

        
          -8–

          
            

          

        

        
           

        

      

      ARTICLE
III

       

      REPRESENTATIONS
AND WARRANTIES OF BUYER

       

      Buyer
represents and warrants to Seller that the statements contained in this Article
III are true and correct as of the date of this Agreement.

       

      3.1           Organization and Corporate
Power.  Buyer is a public company limited by shares duly
organized and validly existing under the laws of the State of
Israel.  Buyer has all requisite corporate power and authority to
carry on the businesses in which it is engaged and to own and use the properties
owned and used by it.

       

      3.2           Authorization of the
Transaction.  Buyer has all requisite power and authority to
execute and deliver this Agreement and the Ancillary Agreements and to perform
its obligations hereunder and thereunder, subject to the Shareholders
Approval.  The execution and delivery by Buyer of this Agreement and
the Ancillary Agreements and the consummation by Buyer of the transactions
contemplated hereby and thereby have been duly and validly authorized by all
necessary corporate action on the part of Buyer, subject to the Shareholders
Approval.  This Agreement has been duly and validly executed and
delivered by Buyer and constitutes a valid and binding obligation of Buyer,
enforceable against it in accordance with its terms.

       

      3.3           Noncontravention.  Neither
the execution and delivery by Buyer of this Agreement or the Ancillary
Agreements, nor the consummation by Buyer of the transactions contemplated
hereby or thereby, subject to the the Shareholders Approval, will
(a) conflict with or violate any provision of the Articles of Incorporation
by laws or other organizational or charter documents of Buyer, (b) require
on the part of Buyer any filing with, or permit, authorization, consent or
approval of, any Governmental Entity, (c) conflict with, result in breach
of, constitute (with or without due notice or lapse of time or both) a default
under, result in the acceleration of obligations under, create in any party any
right to terminate, modify or cancel, or require any notice, consent or waiver
under, any Contract or instrument to which Buyer is a party or by which it is
bound or to which any of its assets is subject, or (d) violate any order,
writ, injunction, decree, statute, rule or regulation applicable to Buyer or any
of its properties or assets.

       

      3.4           SEC Reports; Financial
Statements.  Buyer has filed all reports required to be filed
by it under the Securities Act of 1933 and the Securities Exchange Act of 1934,
including pursuant to Section 13(a) or 15(d) thereof, for the twelve months
preceding the date hereof (or such shorter period as Seller was required by law
to file such reports) (the “SEC
Reports”).  As of their respective dates, the SEC Reports
complied in all material respects with the requirements of the Securities Act of
1933 and the Securities Exchange Act of 1934 and the rules and regulations of
the Securities and Exchange Commission promulgated thereunder, and none of the
SEC Reports, when filed, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein, in light of the circumstances under which
they were made, not misleading. The financial statements of Seller included in
the SEC Reports comply in all material respects with applicable accounting
requirements and the rules and regulations of the Securities and Exchange
Commission with respect thereto as in effect at the time of
filing.  Such financial statements have been prepared in accordance
with U.S. generally accepted accounting principles applied on a consistent basis
during the periods involved, except as may be otherwise specified in such
financial statements or the notes thereto, and fairly present in all material
respects the financial position of Seller and its consolidated Subsidiaries as
of and for the dates thereof and the results of operations and cash flows for
the periods then ended subject to, in the case of any unaudited interim
financials, normal year-end adjustments.

       

      
        
           

        

        
          -9–

          
            

          

        

        
           

        

      

      3.5           Legal
Proceedings.  There is no Action or Proceeding pending or, to
Buyer’s knowledge, threatened against, relating to or affecting any of the
Buyer's material assets or which in any manner challenges or seeks to prevent,
enjoin, alter or materially delay the transactions contemplated by this
Agreement or any of the Ancillary Agreements.  Buyer and its
Subsidiaries have not received any written notice and otherwise do not have any
knowledge of any writ, judgment, decree, injunction or similar requirement or
binding obligation or order of any governmental or regulatory authority (in each
such case whether preliminary or final) relating to or affecting, in any
material respect, any of its material assets.

       

      3.6           Tax
Matters.  Buyer is not delinquent in the payment of any
material Tax related to its material assets and no deficiencies for any such Tax
have been threatened, claimed, proposed or assessed against any of its material
assets.  Buyer has not received any written notification from any
Taxing Authority regarding any issues that: (a) are currently pending
before such Taxing Authority (including any sales or use Tax Authority)
regarding any of its material assets, or (b) have been raised by such
Taxing Authority and not yet finally resolved, in each case relating to any of
its material assets.  No Tax Return of Seller relating to any of its
material assets is under audit by any Taxing Authority, and any such past audits
(if any) have been completed and fully resolved and all Taxes and any penalties
or interest determined by such audit to be due from Seller have been paid in
full to the applicable Taxing Authorities.  No Tax Liens are currently
in effect against any of Buyer's material assets other than liens that arise by
operation of law for Taxes not yet due and payable.

       

      3.7           Brokers’
Fees.  Buyer has no liability or obligation to pay any fees or
commissions to any broker, finder or agent with respect to the transactions
contemplated by this Agreement.

       

      3.8           Financial Capability.
Upon the fulfillment of the Financial Condition (defined below), Buyer will have
sufficient funds required in order to perform the current plan in relation to
the Acquired Assets, limited to the Phase 2a trial in Israel.

       

      3.9           Limitation on
Representation. The Buyer is acquiring the Acquired Assets AS IS, subject
only to the representations and warranties set out herein and any documents
provided by Seller to Buyer prior hereto.

       

      
        
          
          

        

        
          -10–

          
            

          

        

        
          
          

        

      

       

      ARTICLE
IV

       

      CONDITIONS
TO CLOSING

       

      4.1           Conditions to Obligations of
Buyer.  The obligation of Buyer to consummate the transactions
contemplated by this Agreement is subject to the satisfaction of the following
conditions:

       

      (a)    the
representations and warranties of Seller set forth in Article II shall be
true and correct in all material respects as of the date of  the
Closing.;

       

      (b)    Seller
shall have performed or complied with its agreements and covenants required to
be performed or complied with under this Agreement as of or prior to the
Closing;

       

      (c)    no
Action or Proceeding shall be pending or threatened wherein an unfavorable
judgment, order, decree, stipulation or injunction would (i) prevent
consummation of the transactions contemplated by this Agreement, (ii) cause
the transactions contemplated by this Agreement to be rescinded following
consummation or (iii) affect adversely the right of Buyer to own, operate
or control any of the Acquired Assets;

       

      (d)    Seller
shall have delivered to Buyer documents evidencing the release or termination of
all Liens on the Acquired Assets, if any;

       

      (e)    Seller
shall have executed and delivered to Buyer each Ancillary Agreement to which it
is a party;

       

      (f)     Seller
shall have received the consent of Yeda to the transfer and assignment of all
the rights and obligations under the Yeda License (the "Yeda
Consent");

       

      (g)    Buyer
shall have completed a fundraising of an amount not less than ***** (the "Financing
Condition");

       

      (h)    Buyer's
shareholders shall have approved the grant of the Shares to the Seller (the
"Shareholders
Approval"); and

       

      (i)     Buyer
shall have received such other certificates and instruments as it shall
reasonably request in connection with the Closing.

       

      4.2           Conditions to Obligations of
Seller.  The obligation of Seller to consummate the
transactions contemplated by this Agreement to be consummated at the Closing is
subject to the satisfaction of the following conditions:

       

      (a)    the
representations and warranties of Buyer set forth in Article II shall be
true and correct in all material respects as of the date of this
Agreement;

       

      
        

      

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

       

      
        
           

        

        
          -11–

          
            

          

        

        
           

        

      

      (b)    no
Action or Proceeding shall be pending wherein an unfavorable judgment, order,
decree, stipulation or injunction would (i) prevent consummation of the
transactions contemplated by this Agreement or (ii) cause the transactions
contemplated by this Agreement to be rescinded following consummation, and no
such judgment, order, decree, stipulation or injunction shall be in effect;
and

       

      (c)    Buyer
shall have provided to the Seller, or counsel to the Seller, written
confirmation of (i) fulfillment of the Financing Condition, and (ii) receipt of
the Shareholders Approval.

       

      (d)    Buyer
shall have delivered to Seller each Ancillary Agreement to which it is a
party.

       

      (e)    Seller
Shareholders shall have approved the consummation of this
Agreement.

       

      ARTICLE
V

       

      COVENANTS

       

      5.1           Proprietary
Information.  From and after the Closing, Seller shall not
disclose or make use of (except to pursue their rights under this Agreement or
the Ancillary Agreements), and shall cause all of their respective Affiliates
not to disclose or make use of, any knowledge, information or documents of a
confidential nature or not generally known to the public with respect to the
Acquired Assets, Buyer or its business, except to the extent that such
knowledge, information or documents shall have become public knowledge other
than through improper disclosure by Seller or any of its
Affiliates.

       

      5.2           Tax
Matters.  Each party to this Agreement shall pay any Taxes,
including without limitation value-added Taxes, deed excise stamps and similar
charges, relevant to its part in the purchase and sale of the Acquired Assets in
exchange for the issuance of the Shares contemplated by this Agreement.
Notwithstanding the aforesaid, Seller shall be liable for any withholding tax,
if applicable, on the issuance of the Shares to the Seller.

       

      5.3           Sharing of
Data.  Promptly upon request by Buyer made at any time
following the date hereof, Seller shall authorize the release to Buyer of all
files pertaining to the Acquired Assets that are held by any federal, state,
county or local authorities, agencies or instrumentalities.

       

      5.4           Certain
Actions.  Neither Seller nor any of its Affiliates shall
intentionally initiate, or encourage or knowingly provide assistance to any
third party with respect to, any action seeking a determination that any of the
Patent Rights in any country are invalid, unenforceable and/or not infringed
(including without limitation a request for reexamination of any Patent Rights
or the institution of or participation in any opposition, interference or
similar administrative proceeding adverse to the validity or enforceability of
any Patent Rights).

       

      
        
           

        

        
          -12–

          
            

          

        

        
           

        

      

      5.5           Phase 2 Clinical
Trial. The Buyer shall utilize reasonable best efforts to commence a
Phase 2 clinical trial using the Acquired Assets.

       

      ARTICLE
VI

       

      DEFINITIONS

       

      For
purposes of this Agreement, each of the following terms shall have the meaning
set forth below.

       

      “Action or Proceeding”
means any action, suit, complaint, petition, investigation, proceeding,
arbitration, litigation or governmental or regulatory authority investigation,
audit or other proceeding, whether civil, regulatory, quasi-criminal or
criminal, in law or in equity, or before any arbitrator or governmental or
regulatory authority, including any Bankruptcy Event.

       

      “Acquired Assets”
shall mean all of the following, which shall be set out in Exhibit
A:

       

      (a)    Assignment
of any and all rights under the Yeda License;

       

      (b)    Laboratory
Books; and

       

      (c)    Related
Know-How

       

       “Affiliate” means, as
applied to any Person, any other Person directly or indirectly controlling,
controlled by or under common control with, that Person, whether through
ownership of voting securities or by Contract or otherwise.

       

      “Ancillary Agreements”
shall mean the Bills of Sale and Assignment and Assumption Agreement,
substantially in form of Exhibits B and
C, respectively, and other transfer documents executed and delivered
pursuant to Section 1.1.

       

      “Assumed Liabilities”
shall have the meaning given to such term in Section 1.2.

       

      “Bankruptcy Event”
shall mean, with respect to any Person, any of the following:

       

      (1)  the
taking of any of the following actions by such Person pursuant to or within the
meaning of:

       

      (A)  the
commencement of a voluntary case;

       

      (B)  the
consent to the entry of an order for relief against it in an involuntary
case;

       

      (C)  the
consent to the appointment of a Custodian of it or for any substantial part of
its property; or

       

      (D)  the
making of a general assignment for the benefit of its creditors;

       

      
        
           

        

        
          -13–

          
            

          

        

        
           

        

      

      (2)  the
entry by a court of competent jurisdiction of an order or decree under any
Bankruptcy Law that:

       

      (A)     is
for relief against such Person in an involuntary case;

       

      (B)  appoints
a Custodian of such Person or for any substantial part of its property;
or

       

      (C)  orders
the winding up or liquidation of such Person.

       

      “Bankruptcy Law” means
any Israeli, US or Gibraltar law for the relief of debtors.

       

       “Buyer” shall have the
meaning set forth in the first paragraph of this Agreement.

       

      “Closing” shall mean
the closing of the transactions contemplated by this Agreement as of the date
hereof, following achievement of all the conditions to Closing set out in
Article IV.

       

      “Contract” shall mean
any contract (including leases, subleases, licenses, sublicenses), commitment,
agreement or other business arrangement (whether oral or written).

       

      “Custodian” means any
receiver, trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.

       

      “Damages” shall mean
any and all losses, Liabilities, damages (including, without limitation,
consequential, special, indirect, exemplary or punitive damages, lost profits or
any multiple of damages), claims, awards, judgments, diminution in value, costs
and expenses.

       

      “Disclosure Schedule”
shall mean the disclosure schedule provided by Seller to Buyer on the date
hereof and accepted in writing by Buyer.

       

      “Governmental Entity”
shall mean any court, arbitrational tribunal, administrative agency or
commission or other governmental or regulatory authority or agency.

       

      “Indebtedness” of any
Person means all obligations of such Person (a) for borrowed money, (b)
evidenced by notes, bonds, debentures or similar instruments, (c) for the
deferred purchase price of goods or services, (d) under capital leases, and (e)
in the nature of a guarantee of any of the obligations described in clauses (a)
through (d) above of any other Person.

       

      “Laboratory Notebooks”
means all scientific and technical records primarily related to the Clinical
Studies including, without limitation, laboratory notebooks, logs, reports,
documentation, databases, data collections, non-clinical or pre-clinical data,
raw or experimental data, analytical results and research records.

       

      “Liability” means all
Indebtedness, obligations and other liabilities of a Person, whether absolute or
contingent (or based upon any contingency), known or unknown, fixed or
otherwise, due or to become due, whether or not accrued or paid, and whether
required or not required to be reflected in financial statements under U.S.
generally accepted accounting principles.

       

      
        
           

        

        
          -14–

          
            

          

        

        
           

        

      

      “Lien” means any
mortgage, pledge, assessment, security interest, lease, lien, easement, license,
covenant, condition, levy, charge, option, equity, adverse claim or restriction
or other encumbrance of any kind, or any conditional sale Contract, title
retention Contract or other Contract to give any of the foregoing, except for
any restrictions on transfer generally arising under any applicable federal or
state securities law.

       

      "Phase 2" means either
(i) a regulated by the Ministry of Health in Israel clinical trial in Israel, or
(ii) an FDA regulated clinical trial, with Erythropoietin for the treatment
of multiple myeloma patients which has the purpose of assessing efficacy as well
as safety.

       

      “Patent Rights” means
the rights and interest in and to all issued patents and pending patent
applications in any country, including without limitation all utility models,
utility model applications, provisionals, divisionals, substitutions,
continuations, continuations-in-part, continuing prosecution applications,
patents of addition, requests for continued examination, reexaminations,
supplementary protection certificates, extensions, registrations or confirmation
patents, and reissues thereof, all in relation to the patents which are under
the Yeda License.

       

      “Parties” shall mean
Buyer and Seller.

       

      “Person” shall mean
(i) any individual, (ii) any corporation, general partnership, limited
partnership, limited liability partnership, trust, company (including any
limited liability or joint stock company) or other organization or entity, or
(iii) any Governmental Entity.

       

      “Related Know How”
means any know-how, expertise, discoveries, inventions, information, trade
secrets, data or materials, whether or not patentable, proprietary or embodied
in tangible form, including without limitation ideas, concepts, formulas,
methods, procedures, designs, technologies, compositions, plans, applications,
technical data, samples, biological or chemical materials, laboratory notebooks,
clinical and pre-clinical data, databases, designs, assays, protocols,
analytical systems, discovery tools, reports, filings and applications with
regulatory authorities and manufacturing documentation, in each case, owned by
Seller (or any of its Subsidiaries party to an Ancillary Agreement) and
primarily relating to any product based on the Patent Rights and the Clinical
Studies, and all intellectual property rights therein.

       

       “Seller” shall have
the meaning given to such term in the first paragraph of this
Agreement

       

       “Seller Patent Rights”
means (a) the Patent Rights described in Section 2.8(a)
of the Disclosure Schedule, (b) counterparts of the Patent Rights set forth
in Section 2.8(a)
of the Disclosure Schedule in any country, (c) all Patent Rights claiming
priority from the Patent Rights described in the foregoing clauses (a) and (b),
and (d) any other Patent Rights owned by Seller or any of its Subsidiaries
that claim or disclose any Related Know-How, or the development or
commercialization of any compound or product based on the Patent Rights and
Related Know-How.

       

      “Subsidiary”, with
respect to any Person, means any other Person, whether or not existing on the
date hereof, in which the specified Person directly or indirectly through
subsidiaries or otherwise, beneficially owns at least fifty percent (50%) of
either the equity interest or voting power of or in such other Person or
otherwise controls such other Person.

       

      
        
           

        

        
          -15–

          
            

          

        

        
           

        

      

      "Successful
Completion of Phase2" means that the results from the Phase 2 clinical trial in
Israel enable the filing for a higher follow-on clinical trial with Erythropoietin for the treatment
of multiple myeloma patients.

       

      “Taxes” shall mean all
taxes, charges, fees, levies or other similar assessments or liabilities,
including income, gross receipts, ad valorem, premium, value-added, excise, real
property, personal property, sales, use, transfer, withholding, employment,
unemployment, insurance, social security, business license, business
organization, environmental, workers compensation, payroll, profits, license,
lease, service, service use, severance, stamp, occupation, windfall profits,
customs, duties, franchise and other taxes imposed by the United States of
America or any state, local or foreign government, or any agency thereof, or
other political subdivision of the United States or any such government, and any
interest, fines, penalties, assessments or additions to tax resulting from,
attributable to or incurred in connection with any tax or any contest or dispute
thereof.

       

      “Taxing Authority”
shall mean the United States Internal Revenue Service, the Israeli taxing
authority, or the taxing authority of any other jurisdiction.

       

      “Tax Returns” shall
mean all reports, returns, declarations, statements or other information
required to be supplied to a Taxing Authority in connection with
Taxes.

       

      ARTICLE
VII

       

      MISCELLANEOUS

       

      7.1           Survival of Representations
and Warranties; Limitations.  All of the representations and
warranties of Seller and Buyer contained in this Agreement or the Ancillary
Agreements or contained or incorporated or referred to in the certificates and
instruments delivered in connection herewith or therewith shall survive until
the second anniversary of the Closing.  Notwithstanding anything to
the contrary set forth in this Agreement, in no event shall the maximum
aggregate Liability of a party hereto under this Agreement for any Damages
arising from, relating to or otherwise in connection with any misrepresentation
hereunder, breach of any warranty hereunder, breach of any covenant hereunder or
otherwise (other than Damages arising from, relating to or otherwise in
connection with such party’s fraud, willful misconduct or knowing
misrepresentation) exceed the Purchase Price.

       

      7.2           No Third Party
Beneficiaries.  This Agreement shall not confer any rights or
remedies upon any person other than the Parties and their respective successors
and permitted assigns.

       

      7.3           Entire
Agreement.  This Agreement (including the documents referred to
herein) constitutes the entire agreement between the Parties and supersedes any
prior understandings, agreements, or representations by or between the Parties,
written or oral, with respect to the subject matter hereof.

       

      
        
           

        

        
          -16–

          
            

          

        

        
           

        

      

      7.4           Succession and
Assignment.  This Agreement shall be binding upon and inure to
the benefit of the Parties named herein and their respective successors and
permitted assigns. No Party may assign any of its rights or delegate any of its
performance obligations hereunder without the prior written approval of the
other Party.  Any purported assignment of rights or delegation of
performance obligations in violation of this Section 7.4 is
void.

       

      7.5           Counterparts and Facsimile
Signature.  This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.  This Agreement
may be executed by facsimile signature.

       

      7.6           Headings.  The
section headings contained in this Agreement are inserted for convenience only
and shall not affect in any way the meaning or interpretation of this
Agreement.

       

      7.7           Notices.  All
notices, requests, demands, claims and other communications hereunder shall be
in writing.  Any notice, request, demand, claim or other communication
hereunder shall be deemed duly delivered four business days after it is sent by
registered or certified mail, return receipt requested, postage prepaid, or one
business day after it is sent for next business day delivery via a reputable
nationwide overnight courier service, in each case to the intended recipient as
set forth below:

       

      
        
          
            
              
                
                  
                    	
                            If to Buyer:

                             

                            XTL
      Biopharmaceuticals Ltd.

                            Building
      3, Kiryat Weizmann Science Park, Rehovot, Israel 76100

                            Attention:  Chief
      Executive Officer

                            Facsimile
      No.: +972-8-930-0659

                          	 	
                            Copy to:

                             

                            Kantor
      & Co., 14 Abba Hillel Silver, Ramat Gan 52506, Israel

                             

                            Attention:  Ronen
      Kantor, Adv.

                            Facsimile
      No.:  +972-3-6133372

                          
	 
      	 	 
      
	
                            If to Seller:

                             

                            Bio-
      Gal Limited

                             

                            Valmet
      Nominees Ltd.

                            Suites
      7B & 8B, 50 Town Range

                            Gibraltar

                            Attention:  President
      and Chief Executive Officer

                            Facsimile
      No.:  [___________]

                          	 	
                            Copy to:

                             

                            Salomon
      Tessone, Adv.

                            Beit
      America

                            37
      King Shaul Avenue

                            Tel-Aviv

                            Attention:
      Salomon Tessone, Adv.

                            Facsimile
      No.:
+972-3-6969705.

                          

                  

                

              

            

          

        

      

       

      
        
           

        

        
          -17–

          
            

          

        

        
           

        

      

      Any Party
may give any notice, request, demand, claim or other communication hereunder
using any other means (including personal delivery, expedited courier, messenger
service, telecopy, ordinary mail, or electronic mail), but no such notice,
request, demand, claim or other communication shall be deemed to have been duly
given unless and until it actually is received by the Party for whom it is
intended.  Any Party may change the address to which notices,
requests, demands, claims and other communications hereunder are to be delivered
by giving the other Party notice in the manner herein set forth.

       

      7.8           Governing
Law.  All matters arising out of or relating to this Agreement
and the transactions contemplated hereby (including without limitation its
interpretation, construction, performance and enforcement) shall be governed by
and construed in accordance with the laws of the State of Israel, without giving
effect to any choice or conflict of law provision or rule.

       

      7.9           Amendments and
Waivers.  The Parties may mutually amend any provision of this
Agreement at any time prior to the Closing.  No amendment or waiver of
any provision of this Agreement shall be valid unless the same shall be in
writing and signed by each of the Parties.  No waiver by any Party
with respect to any default, misrepresentation, or breach of warranty or
covenant hereunder shall be deemed to extend to any prior or subsequent default,
misrepresentation, or breach of warranty or covenant hereunder or affect in any
way any rights arising by virtue of any prior or subsequent such
occurrence.

       

      7.10      
   Severability.  Any
term or provision of this Agreement that is invalid or unenforceable in any
situation in any jurisdiction shall not affect the validity or enforceability of
the remaining terms and provisions hereof or the validity or enforceability of
the offending term or provision in any other situation or in any other
jurisdiction.  If the final judgment of a court of competent
jurisdiction declares that any term or provision hereof is invalid or
unenforceable, the Parties agree that the court making the determination of
invalidity or unenforceability shall have the power to limit the term or
provision, to delete specific words or phrases, or to replace any invalid or
unenforceable term or provision with a term or provision that is valid and
enforceable and that comes closest to expressing the intention of the invalid or
unenforceable term or provision, and this Agreement shall be enforceable as so
modified.

       

      7.11          Expenses.  Each
Party shall bear its own costs and expenses (including legal fees and expenses)
incurred in connection with this Agreement and the transactions contemplated
hereby.

       

      7.12           Specific
Performance.  Each Party acknowledges and agrees that the other
Party would be damaged irreparably in the event any of the provisions of this
Agreement are not performed in accordance with their specific terms or otherwise
are breached.  Accordingly, each Party agrees that the other Party
shall be entitled to an injunction or other equitable relief to prevent breaches
of the provisions of this Agreement and to enforce specifically this Agreement
and the terms and provisions hereof in any action instituted in any court of the
United States or any state thereof having jurisdiction over the Parties and the
matter, in addition to any other remedy to which it may be entitled, at law or
in equity.

       

      7.13           Confidentiality.  This
Agreement, the Ancillary Agreements and the contents hereof and thereof are
confidential and, except for the disclosure hereof or thereof on a confidential
basis to a Party’s officers, directors, employees, accountants, attorneys and
other professional advisors retained by such Party in connection with the
transactions contemplated hereby or as otherwise required by law, may not be
disclosed in whole or in part to any Person without the prior written consent of
the other Party.

       

      
        
           

        

        
          -18–

          
            

          

        

        
           

        

      

      [remainder of page
intentionally left blank]

       

      
        
           

        

        
          -19–

          
            

          

        

        
           

        

      

      IN
WITNESS WHEREOF, the Parties have executed this Agreement as of the date first
above written.

       

      
        
          
            
              
                	 
      	
                        BUYER:

                      
	 
      	 
      
	 
      	
                        XTL
      Biopharmaceuticals Ltd.

                      
	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	 
      	
                        Name:

                      
	 
      	 
      	
                        Title:

                      
	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	 
      	
                        Name:

                      
	 
      	 
      	
                        Title:

                      
	 
      	 
      
	 
      	
                        SELLER:

                      
	 
      	 
      
	 
      	
                        Bio
      Gal Limited

                      
	 
      	 
      
	 
      	
                        By:

                      	 
      
	 
      	 
      	
                        Name:

                      
	 
      	 
      	
                        Title:

                      

              

            

          

        

      

      

      Signature
Page to Asset Purchase Agreement

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      EXHIBIT
A

      

      List
of Acquired Assets

      

      
        	
                 
      

              	
                1.

              	
                Assumption
      of the Research and License Agreement dated as of January 7, 2002, as
      amended from time to time, between Mor Research Applications Ltd., Yeda
      Research and Development Company Ltd., and Bio-Gal
  Limited.

              

      

      

      
        	
                 
      

              	
                2.

              	
                Clinical
      Research Data and Publications set out
below:

              

      

       

      Lifshitz
L, Prutchi-Sagiv S, Avneon M, Gassmann M, Mittelman M, Neumann D. Non-erythroid
activities of erythropoietin: Functional effects on murine dendritic
cells. Mol Immunol. 2008 Nov 21.

       

      Prutchi
Sagiv S, Lifshitz L, Orkin R, Mittelman M and Neumann D. Dendritic Cells as a
Novel Target for Immuno-modulation by Erythropoietin; Exp Hematol. 2008
Dec;36(12):1682-90.

       

      Katz O,
Yeyni L, Lifshitz L, Pruchi-Sagiv S, Gassmann M, Mittelman M, Neumann D.
Erythropoietin enhances immune responses in mice. Eur J Immunol; 2007; 37(6): p.
1584-93.

       

      Prutchi-Sagiv
S, Golishevsky N, Oster H, Katz O, Cohen A, Naparstek E, Neumann D, and
Mittelman M.; Erythropoietin treatment in advanced multiple myeloma is
associated with improved immunological functions: could it be beneficial in
early disease? Br J Haematol; 2006; 135:660-672.

       

      Katz O,
Barzilay E, Skaat A, Herman A, Mittelman M, Neumann D.Erythropoietin
induced tumour mass reduction in murine lymphoproliferative models. Acta
Haematol. 2005;114(3):177-9.

       

      Mittelman
M, Zeidman A, Kanter P, Katz O, Oster H, Rund D, Neumann D.Erythropoietin
has an anti-myeloma effect - a hypothesis based on a clinical observation
supported by animal studies. Eur J Haematol. 2004
Mar;72(3):155-65.

       

      Mittelman
M., Neumann D., Peled A., Kanter P. and Haran- Ghera N. (2001).Erythropoietin
induces tumor regression and antitumor immune responses in murine myeloma
models. PNAS, vol. 98 : 9 . 5181 - 5186

       

      
        
           

        

        
          A-1

          
            

          

        

        
           

        

      

       

      Prutchi-Sagiv
S, Neumann D, and Mittelman M. Erythropoietin as an Immunotherapeutic Agent: New
Uses for an Old Drug? Med Hypotheses Res; 2005; 2:
587-596.

       

      Prutchi
Sagiv S., Mittelman M., Neumann D. Erythropoietin – a hematopoietic hormone with
emerging diverse activities; 2005 The Handbook of Biological Active Peptides.
Abba J
Kastin, Elsevier, p 1393-1400

       

      Oster H,
Hoffman M, Prutchi-Sagiv S, Neumann D, Mittelman M.  Erythropoietin
in clinical practice: current use, effect on survival, and future directions.
Isr Med Assoc J.; 2006 Oct;8(10):703-6.

       

      Mittelman
M, Oster H, Katz O, Prutchi Sagiv S, Hoffman M, Neumann D. Does erythropoietic
treatment influence the survival of patients with multiple myeloma? Focus on
Anaemia in Cancer; 2006; vol 7, issue 1, 25-27.

       

      
        
           

        

        
          A-2

          
            

          

        

        
           

        

      

      EXHIBIT
B

      

      Form
of Bill of Sale

      

      This Bill of Sale dated
March  __ , 2009
is executed and delivered by Bio Gal Limited, a private company limited by
shares organized under the laws of Gibraltar (“Seller”), to XTL
Biopharmaceuticals Ltd., a public company limited by shares organized under the
laws of the State of Israel (“Buyer”) pursuant to
the Asset Purchase Agreement, dated March __, 2009, by and
between Seller and Buyer (the “Agreement”).  Capitalized
terms used herein but not defined herein shall have the meanings given such
terms in the Agreement.

       

      WHEREAS,
pursuant to the Agreement, Seller has agreed to sell, transfer, convey, assign
and deliver to Buyer certain assets of Seller, and Buyer has agreed to assume
certain of the liabilities of Seller, in each case as set forth in the
Agreement.

       

      NOW,
THEREFORE, in consideration of the mutual promises set forth in the Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Seller hereby agrees as follows:

       

      1.           Seller
hereby sells, transfers, conveys, assigns and delivers, as of the
Closing,  to Buyer, its successors and assigns, to have and to hold
forever, all right, title and interest in, to and under all of the Acquired
Assets.

       

      2.           Seller
hereby covenants and agrees that it will, at any time and from time to time
after the Closing, without further consideration , execute and deliver such
other instruments of sale, transfer, conveyance and assignment and take such
actions as Buyer may reasonably request to more effectively transfer, convey and
assign to Buyer, and to confirm Buyer’s rights to, title in and ownership of,
the Acquired Assets and to place Buyer in actual possession and operating
control thereof, to assist Buyer in exercising all rights with respect thereto
and to carry out the purpose and intent of the Agreement.

       

      3.           Seller
does hereby irrevocably constitute and appoint Buyer, its successors and
assigns, its true and lawful attorney, with full power of substitution, in its
name or otherwise, and on behalf of Seller, or for its own use, to claim,
demand, collect and receive at any time and from time to time any and all of the
applicable Acquired Assets, and to prosecute the same at law or in equity and,
upon discharge thereof, to complete, execute and deliver any and all necessary
instruments of satisfaction and release.

       

      4.           Seller,
by its execution of this Bill of Sale, and Buyer, by its acceptance of this Bill
of Sale, each hereby acknowledges and agrees that neither the representations
and warranties nor the rights, remedies or obligations of any party under the
Agreement shall be deemed to be enlarged, modified or altered in any way by this
instrument.

       

      5.           Nothing
in this Bill of Sale, whether expressed or implied, is intended or shall be
construed to confer upon or give any person, other than the parties hereto and
the parties entitled to indemnification pursuant to the Agreement, any rights,
remedies or other benefits under or by reason of this Bill of Sale.

       

      
        
           

        

        
          A-3

          
            

          

        

        
           

        

      

       

      6.           This
Bill of Sale is being delivered pursuant to the Agreement and shall be construed
consistently therewith.

       

      IN
WITNESS WHEREOF, Seller and Buyer have caused this instrument to be duly
executed under seal as of and on the date first above written.

       

      
        
          
            
              	 
      	
                      Bio
      Gal Limited.

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    

            

          

        

      

      

      
        
          
            	
                    ACCEPTED:

                  
	 
      
	
                    XTL
      Biopharmaceuticals Ltd.

                  
	 
      
	
                    By:

                  	 
      
	 
      	
                    Name:

                  
	 
      	
                    Title:

                  

          

        

      

       

      
        
           

        

        
          A-4

          
            

          

        

        
           

        

      

      EXHIBIT
C

      

      Form
of Assignment and Assumption Agreement

       

      This
Assignment and Assumption Agreement dated March              ,
2009, is made by XTL Biopharmaceuticals Ltd., a public company limited by shares
organized under the laws of the State of Israel (“Buyer”), in favor of
Bio Gal Limited, a private company limited by shares organized under the laws of
Gibraltar (“Seller”) pursuant to
the Asset Purchase Agreement, dated March               ,
2009, by and between Buyer and Seller (the “Agreement”).  Capitalized
terms used herein but not defined herein shall have the meanings given such
terms in the Agreement.

       

      WHEREAS,
pursuant to the Agreement, Seller has agreed to sell, transfer, convey, assign
and deliver to Buyer the Acquired Assets; and

       

      WHEREAS,
in partial consideration therefore, the Agreement requires Buyer to assume the
Assumed Liabilities;

       

      NOW,
THEREFORE, in consideration of the mutual promises set forth in the Agreement
and other good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, Buyer hereby agrees as follows:

       

      1.           Buyer
hereby assumes the Assumed Liabilities.

       

      2.           Buyer
does not hereby assume or become liable for any liabilities or obligations
(whether known or unknown, whether absolute or contingent, whether liquidated or
unliquidated, whether due or to become due, and whether claims with respect
thereto are asserted before or after the Closing) of Seller and its Subsidiaries
which are not Assumed Liabilities.

       

      3.           Nothing
herein shall be deemed to deprive Buyer of any defenses, set-offs or
counterclaims which Seller may have had or which Buyer shall have with respect
to any of the Assumed Liabilities (the “Defenses and
Claims”).  Seller hereby transfers, conveys and assigns to
Buyer all Defenses and Claims and agrees to reasonably cooperate with Buyer to
maintain, secure, perfect and enforce such Defenses and Claims, including the
signing of any documents, the giving of any testimony or the taking of any such
other action as is reasonably requested by Buyer in connection with such
Defenses and Claims.

       

      4.           Buyer,
by its execution of this Assignment and Assumption Agreement, and Seller, by its
acceptance of this Assignment and Assumption Agreement, each hereby acknowledges
and agrees that neither the representations and warranties nor the rights,
remedies or obligations of either party under the Agreement shall be deemed to
be enlarged, modified or altered in any way by this instrument.

       

      5.           Nothing
in this Assignment and Assumption Agreement, whether express or implied, is
intended or shall be construed to confer upon or give to any person, other than
the parties hereto and the parties entitled to indemnification pursuant to the
Agreement, any rights, remedies or other benefits under or by reason of this
Assignment and Assumption Agreement.

       

      
        
           

        

        
          C-1

          
            

          

        

        
           

        

      

       

      6.           This
Assignment and Assumption Agreement is being delivered pursuant to the Agreement
and shall be construed consistently therewith.  In the event of any
conflict, inconsistency or discrepancy between this Assignment and Assumption
Agreement and the Agreement, the Agreement shall govern, control and
prevail.

       

      IN
WITNESS WHEREOF, Buyer and Seller have caused this instrument to be duly
executed under seal as of and on the date first above written.

       

      
        
          
            
              	 
      	
                      XTL
      Biopharmaceuticals Ltd.

                    
	 
      	 
      
	 
      	
                      By:

                    	 
      
	 
      	 
      	
                      Name:

                    
	 
      	 
      	
                      Title:

                    

            

          

        

      

      

      
        
          
            
              
                
                  
                    	
                            ACCEPTED:

                          
	 
      
	
                            Bio
      Gal Limited.

                          
	 
      
	
                            By:

                          	 
      
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          
	 
      	 
      
	
                            By:

                          	 
      
	 
      	
                            Name:

                          
	 
      	
                            Title:

                          

                  

                

              

            

          

        

      

      
        
           

        

        
          C-2

          
            

          

        

        
           

        

      

      DISCLOSURE
SCHEDULES

       

      See
Attached.

       

      
        
           

        

        
          S-1

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