Document:

XTL
        Biopharmaceuticals LTD.

      

      INTERNATIONAL
        EMPLOYEE STOCK OPTION PLAN

      

      

      

      A.
        NAME
        AND PURPOSE

      

      

      1. Name
        and Purpose:
        XTL
        Biopharmaceuticals Ltd. sponsors this plan, as amended
        from
        time to
        time, which shall be known as the "XTL Biopharmaceuticals Ltd. 1999
        International Employee Stock Option Plan" (the "Plan"). The purpose and intent
        of the Plan is to provide incentives to officers, employees and consultants
        of
        non-Israeli subsidiaries of XTL Biopharmaceuticals Ltd. (hereinafter, together
        with their subsidiaries, the "Companies") by providing them with opportunities
        to purchase Common A Shares, nominal value 0.20 New Israeli Shekels each
        ("Shares"), of the parent company of the Companies, XTL Biopharmaceuticals
        Ltd.
        (the "Parent").

      

      2. Definitions: 

      

      2.1 "Code"
        means the Internal Revenue Code of 1986, as amended.

      

      2.2 "Incentive
        Stock Option" means an "incentive stock option" within the meaning of Section
        422 of the Code.

      

      2.3 "Nonqualified
        Stock Option" means an Option that is not an Incentive Stock
        Option.

      

      2.4 "Ten-Percent
        Stockholder" means an Eligible Grantee, who, at the time an Incentive Stock
        Option is to be granted to such Eligible Grantee, owns (within the meaning
        of
        Section 422(b)(6) of the Code) stock possessing more than ten percent (10%)
        of
        the total combined voting power of all classes of stock of the Company, a
        parent
        or a subsidiary within the meaning of Sections 424(e) and 424(f), respectively,
        of the Code.

       

      B.
        GENERAL TERMS AND CONDITIONS OF THE PLAN

      

      3. Administration: 

      

      3.1 The
        Plan
        will be administered by the Board of Directors of the Parent (the "Board")
        or by
        a committee appointed by the Board (the "Committee"), which, if appointed,
        will
        consist of such number of Directors of the Parent as may be fixed, from time
        to
        time, by the Board. If a Committee is not appointed, the term Committee,
        whenever used herein, shall mean the Board. The Board shall appoint the members
        of the Committee, may from time to time remove members from, or add members
        to,
        the Committee and shall fill vacancies in the Committee however
        caused.

      

      3.2 The
        Committee shall select one of its members as its Chairman and shall hold
        its
        meetings at such times and places as it shall determine. Actions taken by
        a
        majority of the members of the Committee, at a meeting at which a majority
        of
        its members is present, or acts reduced to or approved in writing by all
        members
        of the Committee, shall be the valid acts of the Committee. The Committee
        may
        appoint a Secretary, who shall keep records of its meetings and shall make
        such
        rules and regulations for the conduct of its business as it shall deem
        advisable.

      

      3.3 Subject
        to the general terms and conditions of this Plan, the Committee shall have
        the
        full authority in its sole and absolute discretion, from time to time and
        at any
        time, to determine (i) the persons ("Grantees") to whom options to
        purchase
        Shares ("Option(s)") shall be granted, (ii) the number of Shares to
        be
        covered by each Option, (iii) the time or times at which the same
        shall be
        granted, (iv) the price, vesting schedule and conditions on which
        such
        Options may be exercised and on which such Shares shall be paid for, and/or
        (v) interpret or construe the Plan or make determinations with respect
        to
        any other matter which is necessary or desirable for, or incidental to, the
        administration of the Plan. In determining the number of Shares covered by
        the
        Option to be granted to each Grantee, the Committee may consider, among other
        things, the Grantee's salary and the duration of the Grantee's employment
        by the
        Parent.

      

      
        
           

        

        
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      3.4 The
        Committee may, from time to time, adopt such rules and regulations for carrying
        out the Plan as it may deem necessary. No member of the Board or of the
        Committee shall be liable for any act or determination made in good faith
        with
        respect to the Plan or any Option granted thereunder.

      

      3.5 The
        interpretation and construction by the Committee of any provision of the
        Plan or
        of any Option thereunder shall be final and conclusive unless otherwise
        determined by the Board, in which event the Board's determination shall be
        final
        and conclusive.

      

      4. Eligible
        Grantees:
        The
        Committee, at its discretion, may grant Options to any officer, director
        or
        consultant of the Parent or its subsidiaries, provided that such person is
        not
        an employee of the Parent resident in Israel, provided, however, that Incentive
        Stock Options shall be granted only to employees of the Parent or its
        subsidiaries. Anything in this Plan to the contrary notwithstanding, all
        grants
        of Options to Directors and Office Holders -"Nosei Misra" -
        as such
        term is defined in the Israeli Companies Ordinance (New Version), 1983, as
        amended from time to time (the "Companies Ordinance") - shall be authorized
        and implemented only in accordance with the provisions of the Companies
        Ordinance. The grant of an Option to a Grantee hereunder, shall neither entitle
        such Grantee to participate, nor disqualify him from participating, in any
        other
        grant of options pursuant to this Plan or any other stock option plan of
        the
        Parent. 

      

      5. Grant
        of Options and Issuance of Shares: Subject
        to any applicable law, the effective date of the grant of an Option (the
        "Date
        of Grant") shall be the date specified by the Committee in its determination
        relating to the award of such Option. The Committee shall promptly give the
        Grantee written notice of the grant of an Option, and the Grantee shall execute
        an agreement evidencing such grant and the rights and obligations of the
        Grantee
        and the Company with respect to such Option Agreement (the "Option
        Agreement").

      

      6. Reserved
        Shares:
        The
        Parent has reserved 168,000 authorized but unissued Shares for purposes of
        the
        Plan,
        and for
        other stock
        option
        plans
        of
        the Parent,
        subject
        to adjustments as provided in Section 11 hereof. All Shares under
        the Plan,
        in respect of which the right hereunder of a Grantee to purchase the same
        shall,
        for any reason, terminate, expire or otherwise cease to exist, shall again
        be
        available for grant through Options under the Plan.

      

      
        7. Grant
          of Options:

      

      7.1 The
        Committee in its discretion may award to Grantees Options to purchase Shares
        in
        the Parent available under the Plan. 

      

      7.2 The
        Option Agreement shall state, inter alia, the number of Shares covered thereby,
        the dates when the Option may be exercised, the exercise price, and such
        other
        terms and conditions as the Committee at its discretion may prescribe, provided
        that they are consistent with this Plan.

      

      7.3 Options
        granted thereunder shall be for such term as the Committee shall determine,
        provided that (i) no Incentive Stock Option shall be execrable after the
        expiration of ten (10) years from the date it is granted (five (5) years
        in the
        case of an Incentive Stock Option granted to a Ten-Percent Stockholder) and
        (ii)
        no Nonqualified Stock Option shall be exercisable after the expiration of
        ten
        (10) years and one (1) day from the date it is granted. The Committee may,
        subsequent to the granting of any Option, extend the term thereof but in
        no
        event shall the term as so extended exceed the maximum term provided for
        in the
        preceding sentence. 

      

      7.4 The
        schedule pursuant to which such Options shall vest, and the Grantee shall
        be
        entitled to pay for, and acquire, the Shares, shall be determined by the
        Committee at its sole discretion.
        Unless
        the Committee decides otherwise, no Options granted hereunder will be
        exercisable prior to (1)
        the
        registration of the Parent’s Shares for trading on the Tel Aviv Stock Exchange
        or on any other exchange,
        or (2)
        the consolidation or the merger of the Parent with or into another corporation,
        or the acquisition of all of the Parent's outstanding share capital by a
        third
        party.
        Vesting
        of Options granted hereunder will continue only during periods when the
        employer-employee
        or
        other
        service-provider relationship
        exist
        between the relevant Company and the Grantee. For the purposes of this paragraph
        7.4, the
        employer-employee
        or
        other
        service-provider relationship
        will not
        be deemed to exist with regard to periods during which the Grantee is on
        an
        unpaid leave of absence from the Company.

      

      
        
           

        

        
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      8. Exercise
        Price:
        The
        exercise price per Share covered by each Option shall be determined by the
        Committee in its sole and absolute discretion; provided, however:

      

      8.1 In
        the
        case of an Incentive Stock Option granted to any Eligible Grantee other than
        a
        Ten-Percent Stockholder, the per Share exercise price shall be no less than
        100%
        of the Fair Market Value per Share on the date of the grant.

      

      8.2 In
        the
        case of a Nonqualified Stock Option granted to any Grantee other than a
        Ten-Percent Stockholder, the per Share exercise price shall be no less than
        85%
        of the Fair Market Value per Share on the date of the grant.

      

      8.3 In
        the
        case of an Incentive Stock Option granted to any Ten-Percent Stockholder,
        the
        per Share exercise price shall be no less than 110% of the Fair Market Value
        per
        Share on the date of the grant.

      

      8.4 In
        no
        event shall the exercise price of an Option be less than the nominal value
        of
        the Shares into which such Option is exercisable.

      

      8.5 Subject
        to the foregoing, the Committee may reduce the exercise price of any outstanding
        Nonqualified Stock Option. In the event of such amendment, the Date of Grant
        of
        such Option shall thereafter be considered to be the date of such amendment;
        provided,
        however,
        that
        for purposes of vesting, the Option shall continue to be exercisable based
        on
        the terms set forth in the original Option Agreement.

      

      8.6 For
        the
        purposes hereof, "Fair Market Value" means the fair market value of the Shares
        as determined by the Committee; provided,
        however,
        that
        (A) if the Shares are admitted to trading on a national securities exchange,
        Fair Market Value on any date shall be the last sale price reported for the
        Shares on such exchange on such date or on the last date preceding such date
        on
        which a sale was reported, (B) if the Shares are admitted to quotation on
        the
        National Association of Securities Dealers Automated Quotation System ("NASDAQ")
        or other comparable quotation system and have been designated as a National
        Market System ("NMS") security, Fair Market Value on any date shall be the
        last
        sale price reported for the Shares on such system on such date or on the
        last
        day preceding such date on which a sale was reported, or (C) if the Shares
        are
        admitted to quotation on NASDAQ and have not been designated as a NMS Security,
        Fair Market Value on any date shall be the average of the closing bid and
        closing asked prices of the Shares on such system on such date.

       

      8.7 Notwithstanding
        any other provision of the Plan to the contrary, the aggregate Fair Market
        Value
        (determined as of the date of grant) of the Shares with respect to which
        Incentive Stock Options granted to a Grantee by the Parent or any parent
        or
        subsidiary of the Parent are exercisable for the first time shall not exceed
        $100,000 in any calendar year; provided,
        however,
        that
        any Option designated as an Incentive Stock Option under the Plan or any
        portion
        thereof that exceeds the foregoing limit or that is otherwise disqualified
        as an
        incentive stock option by operation of Section 422(d) or any other provision
        of
        the Code, shall be treated as a Nonqualified Stock Option for purposes of
        the
        Plan.

      

      9. Exercise
        of Options:

      

      9.1 Options
        shall be exercisable pursuant to the terms under which they were awarded
        and
        subject to the terms and conditions of this Plan and the Option
        Agreement.

      

      9.2 The
        exercise of an Option shall be made by a written notice of exercise (the
        "Notice
        of Exercise") delivered by the Grantee to the Parent at its principal executive
        office, specifying the number of Shares to be purchased and accompanied by
        the
        payment therefor, and containing such other terms and conditions as the
        Committee shall prescribe from time to time. An Option may be exercised in
        whole
        or in part to the extent exercisable under the Plan and Option
        Agreement.

      

      9.3 Anything
        herein to the contrary notwithstanding, but without derogating from the
        provisions of Section 10 hereof, if any Option has not been exercised
        and
        the Shares covered thereby not paid for within ten (10) years after the Date
        of
        Grant (or any shorter period set forth in the Option Agreement), such Option
        and
        the right to acquire such Shares shall terminate, and all interests and rights
        of the Grantee in and to the same shall ipso facto expire.

       

      
        
           

        

        
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      9.4 Each
        payment for Shares shall be in respect of a whole number of Shares, and shall
        be
        effected in cash or by a cashier's check payable to the order of the Parent,
        or
        such other method of payment acceptable to the Parent. 

      

      10. Termination
        of Employment:

      

      10.1 In
        the
        event that a Grantee ceases, for any reason, to be employed by the Companies,
        all Options theretofore granted to such Grantee shall terminate as
        follows,
        subject
        to the provisions of 7.4 above
        and 11.3
        below:

      

      (a) All
        Options which are not vested and not exercisable at the time of the cessation
        of
        employment shall terminate immediately.

      

      (b) If
        the
        Grantee ceases to be employed by reason of such Grantee's death or "Disability"
        (as hereinafter defined), such Options (to the extent exercisable at the
        time of
        the Grantee's cessation of employment) shall be exercisable by the Grantee,
        Grantee's legal representative, estate of other person to whom the Grantee's
        rights are transferred by will or by laws of descent or distribution at any
        time
        until thirty (30) days after the Initial Public Offering of the Parent’s shares
        (“IPO”) (but in no event after the expiration date of such Option), and shall
        thereafter terminate. In
        the
        event of Disability,
        the Committee will be authorized, at its sole discretion, to decide that
        the
        Grantee is entitled to continue to benefit from the Plan, with or without
        being
        subject to additional terms or restrictions. For
        purposes hereof, Disability shall mean a physical or mental impairment
        constituting a permanent and total disability within the meaning of
        Section 22(e)(3) of the Code.

      

      (c) If
        the
        Grantee ceases to be employed for any other reason, such Options (to the
        extent
        exercisable at the time of the Grantee's cessation of employment) shall be
        exercisable at any time until the end of six (6) months from the cessation
        of
        the Employees employment (but in no event after the expiration date of such
        Option), and shall thereafter terminate; provided,
        however,
        that if
        the Grantee dies within such six (6) months period, such Options (to the
        extent
        exercisable at the time of the Grantee's termination of employment) shall
        be
        exercisable by the Grantee's legal representative, estate or other person
        to
        whom the Grantee's rights are transferred by will or by laws of descent or
        distribution at any time until the end of six (6) months from the Employee's
        death (but in no event after the expiration date of such Option), and shall
        thereafter terminate.

       

      (d) Notwithstanding
        the aforesaid in Section 10.1(c) above, if the Grantee’s termination of
        employment is due to (i) breach of the Grantee’s fiduciary duties towards
        any of the Companies, or (ii) breach of the Grantee’s duty of care towards
        any of the Companies, or (iii) the Grantee has committed any flagrant
        criminal offense, or (iv) the Grantee has committed a fraudulent act
        towards any of the Companies, or (v) the Grantee caused intentionally,
        by
        act or omission, any financial damage to any of the Companies, all the Options
        whether vested or not shall ipso
        facto
        expire
        immediately and be of no legal effect. For
        the
        purposes of this Section 10.1(d), the date of termination of employment
        shall be the date on which the termination notice is sent to the Grantee,
        or the
        date on which the resignation notice is sent to the employer, as the case
        may
        be,
        regardless of the actual date of cessation of work.

       

      (e) Notwithstanding
        the aforesaid, if the Grantee ceases to be a full-time employee of any of
        the
        Companies and becomes a part-time employee, such Options (to the extent
        exercisable at the time the Grantee ceases to be a full-time employee of
        any of
        the Companies) shall be exercisable for a period of six
        (6)
        months following
        such cessation of the full-time employment, and shall thereafter terminate.
        All
        Options that are not vested at the time of cessation of the full-time employment
        shall ipso
        facto
        expire
        and be of no legal effect.

       

      (f) If
        a
        Grantee should retire
        (as such
        term is defined by the Committee at its sole and absolute
        discretion) he
        shall,
        subject to the approval of the Committee, continue to enjoy such rights,
        if any,
        under the Plan and on such terms and conditions, with such limitations and
        subject to such requirements as the Committee in its discretion may
        determine.

      

      10.2 Whether
        the cessation of employment of a particular Grantee is for reason of
“Disability” for the purposes of paragraph 10.1(b) hereof or by virtue of
“retirement” for purposes of paragraph 10.1(f) hereof, or is a termination
        of employment other than by reason of such Disability or retirement, or is
        for
        reasons as set forth in paragraph 10.1(d) hereof, shall be finally
        and
        conclusively determined by the Committee in its absolute
        discretion.

      

      
        
           

        

        
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      10.3 Notwithstanding
        the foregoing provisions of Section 10.1, the Committee may provide,
        either
        at the time an Option is granted or thereafter, that such Option may be
        exercised after the periods provided for in Section 10.1, but in no
        event
        beyond the term of the Option.

      

      11. Adjustment
        Upon Changes in Capitalization

      

      11.1 Subject
        to any required action by the shareholders of the Parent, the number of Shares
        covered by each outstanding Option, and the number of Shares which have been
        authorized for issuance under the Plan but as to which no Options have yet
        been
        granted or which have been returned to the Plan upon cancellation or expiration
        of an Option, as well as the price per share of Shares covered by each such
        outstanding Option, shall be proportionately adjusted for any increase or
        decrease in the number of issued Shares resulting from a stock split, reverse
        stock split, stock dividend, combination or reclassification of the Shares
        or
        the payment of a stock dividend (bonus shares) with respect to the Shares
        or any
        other increase or decrease in the number of issued Shares effected without
        receipt of consideration by the Parent; provided,
        however,
        that
        conversion of any convertible securities of the Parent shall not be deemed
        to
        have been "effected without receipt of consideration." Such adjustment shall
        be
        made in the sole and absolute discretion of the Committee, whose determination
        in that respect shall be final, binding and conclusive. Except as expressly
        provided herein, no issuance by the Parent of shares of stock of any class,
        or
        securities convertible into shares of stock of any class, shall affect, and
        no
        adjustment by reason thereof shall be made with respect to, the number or
        price
        of Shares subject to an Option. 

      

      11.2 Any
        such
        adjustment in the Shares or other securities subject to outstanding Incentive
        Stock Options (including any adjustments in the purchase price) shall be
        made in
        such manner as not to constitute a modification as defined by Section
        424 (h) (3) of the Code and only to the extent otherwise permitted
        by
        Sections 422 and 424 of the Code.

       

      11.3 In
        the
        event of the proposed dissolution or liquidation of the Parent, the Committee
        shall notify each Grantee at least fifteen (15) days prior to such proposed
        action. To the extent it has not been previously exercised, each Option will
        terminate immediately prior to the consummation of such proposed action.
        

      

      11.4 If
        upon
a
        merger,
        consolidation, reorganization, recapitalization or the like
        with or
        into another corporation, the
        shares of the Company shall be exchanged for other securities of a successor
        corporation or a parent or subsidiary of such successor corporation (the
        “Successor Entity”),
        then,
each
        Option shall, at the sole and absolute discretion of the Committee,
        either:

       

      (a) be
        substituted for options to purchase shares of either the Company or Successor
        Entity,
        and
        appropriate adjustments shall be made in the purchase price per share to
        reflect
        such exchange;
        or

      

      (b)
         be
        assumed by the Successor Entity such that the Employee may exercise the Options
        for such
        number of shares of either
        the Company or Successor Entity
        or
        amount of other securities thereof, and appropriate adjustments shall be
        made in
        the purchase price per share to reflect such exchange.

      

      11.5 In
        the
        event of sale of substantially all the assets of the Company, as a result
        of
        which the proceeds to the Company are cash or cash equivalent, the non vested
        Options granted to a Grantee, which are to be vested within three (3) months
        following such sale, will immediately vest and be exercisable. Following
        the
        completion of such sale, the Company will notify the Grantee, in writing,
        twenty-one (21) days prior to the payment of any dividend, and the Grantee
        will
        be entitled to exercise the Options, in order to receive the dividend, at
        any
        time from the receipt of notice from the Company and until seven (7) days
        prior
        to the payment of such dividend.

      

      

      
        
           

        

        
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      12. Non-Transferability: 

      

      

      No
        Option
        shall be assignable or transferable by the Grantee to whom granted otherwise
        than by will or the laws of descent and distribution, and an Option may be
        exercised during the lifetime of the Grantee only by such Grantee or by such
        Grantee's guardian or legal representative. The terms of such Option shall
        be
        binding upon the beneficiaries, executors, administrators, heirs and successors
        of such Grantee.

      

      13.
        Terms and Amendment of the Plan:

      

      13.1 The
        Plan
        shall expire on June 1, 2009 (except as to Options outstanding on
        that
        date).

      

      13.2 Subject
        to applicable laws, the Board may, at any time and from time to time, terminate
        or amend the Plan in any respect. In no event may any action to amend or
        terminate the Plan of the Parent alter or impair the rights of a Grantee,
        without his consent, under any Option previously granted to him.

      

      14. Tax
        Consequences:
        All tax
        consequences arising from the grant or exercise of any Option, from the payment
        for, or the subsequent disposition of, Shares covered thereby or from any
        other
        event or act (of the Parent or the Grantee) hereunder, shall be borne solely
        by
        the Grantee, and the Grantee shall indemnify the Parent and hold it harmless
        against and from any and all liability for any such tax or interest or penalty
        thereon, including without limitation, liabilities relating to the necessity
        to
        withhold, or to have withheld, any such tax from any payment made to the
        Grantee.

      

      15. Restricted
        Stock:

      

      15.1 The
        Shares issuable upon exercise of the Options granted herein will be "restricted
        securities" under the Securities Act of 1933 and the regulations promulgated
        hereunder (the "Act") and may not be resold absent registration under the
        Act or
        an available exemption thereunder. In the event that an owner of Shares issued
        pursuant to this Plan effects a sale or transfer of such Shares under an
        available exemption under the Act, such owner shall, before effecting such
        sale
        or transfer, (i) notify the Parent in writing of the proposed disposition
        and
        the name of the proposed transferees, (ii) furnish the Parent with an opinion
        of
        counsel satisfactory in form and content to the Parent, and (iii) furnish
        the
        Parent with an agreement in writing from the transferee pursuant to which
        such
        transferee agrees to be bound by the provisions contained herein and in the
        Option Agreement, or (iv) the Parent shall have waived, expressly and in
        writing, its rights under clauses (i), (ii) and (iii) of this
        subsection.

      

      
        
           

        

        
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      15.2 The
        Shares issuable upon exercise of the Options granted herein, once any such
        Option is exercised and the Shares issued, will be subject to a lock-up for
        180
        days (or for such longer period as may be requested by the Parent's underwriter
        or underwriters) following the date immediately subsequent to the first date
        of
        the effectiveness of the first underwritten public offering of any of the
        Parent's securities. In connection with any subsequent underwritten public
        offering of the Parent's securities, the Shares issuable upon exercise of
        the
        Options granted herein, once any such Option is exercised and the Shares
        issued,
        will be subject to a lock-up for 120 days (or such longer period as may be
        requested by the Parent's underwriter or underwriters) following the date
        immediately subsequent to the first date of the effectiveness of such public
        offering. During such periods, if the owner of the option Shares is not
        participating in such public offering, the owner of the option Shares will
        not
        be allowed to sell or transfer, or offer to sell or transfer, any Shares
        without
        the prior written consent of the Parent's underwriter or
        underwriters.

       

      16. Miscellaneous:

      

      16.1 Continuance
        of Employment:
        Neither
        the Plan nor the grant of an Option thereunder shall impose any obligation
        on
        the Parent to continue the employment of any Grantee, and nothing in the
        Plan or
        in any Option granted pursuant thereto shall confer upon any Grantee any
        right
        to continue in the employ of the Parent, or restrict the right of the Parent
        to
        terminate such employment at any time.

       

      16.2 Governing
        Law; Regulations and Approvals:

      

      16.2.1 The
        Plan
        and all instruments issued thereunder or in connection therewith, shall be
        governed by, and interpreted in accordance with, the laws of the State of
        Israel.

      

      16.2.2 The
        obligation of the Parent to sell or deliver Shares with respect to Options
        granted under the Plan shall be subject to all applicable laws, rules and
        regulations and the obtaining of all such approvals by governmental agencies
        as
        may be deemed necessary or appropriate by the Committee.

      

      16.2.3 Subject
        to Section 9, the Board may make such changes as may be necessary or appropriate
        to comply with the rules and regulations of any government authority or to
        obtain for Optionees granted Incentive Stock Options the tax benefits under
        the
        applicable provisions of the Code and regulations promulgated
        thereunder.

      

      16.2.4 Each
        Option is subject to the requirement that, if at any time the Committee
        determines, in its absolute discretion, that the listing, registration or
        qualification of Shares issuable pursuant to the Plan is required by any
        securities exchange or under any state or federal law, or the consent or
        approval of any state or federal law, or the consent or approval of any
        governmental regulatory body is necessary or desirable as a condition of,
        or in
        connection with, the grant of an Option or the issuance of Shares, no Options
        shall be granted or payment made or Shares issued, in whole or in part, unless
        listing, registration, qualification, consent or approval has been effected
        or
        obtained free of any conditions that are not acceptable to the
        Committee.

      

      16.3 Application
        of Funds:
        The
        proceeds received by the Parent from the sale of Shares pursuant to Options
        granted under the Plan will be used for general corporate purposes of the
        Parent.

      

      16.4 Multiple
        Agreements:
        The
        terms of each Option may differ from other Options granted under the Plan
        at the
        same time, or at any other time. The Committee may also grant more than one
        Option to a given Grantee during the term of the Plan, either in addition
        to, or
        in substitution for, one or more Options previously granted to that Grantee.
        The
        grant of multiple Options may be evidenced by a single Option Agreement or
        multiple Option Agreements, as determined by the Committee.

       

      16.5 Non-Exclusivity
        of the Plan:
        The
        adoption of the Plan by the Board shall not be construed as amending, modifying
        or rescinding any previously approved incentive arrangement or as creating
        any
        limitations on the power of the Board to adopt such other incentive arrangements
        as it may deem desirable, including, without limitation, the granting of
        stock
        options otherwise than under the Plan, and such arrangements may be either
        applicable generally or only in specific cases.

      

      16.6 Withholding
        of Taxes:
        The
        Parent shall have the right to deduct from any payment of cash to any Optionee
        an amount equal to the income taxes and other amounts required by law to
        be
        withheld with respect to any Option. Notwithstanding anything to the contrary
        contained herein, if an Optionee is entitled to receive Shares upon exercise
        of
        an Option, the Parent shall have the right to require such Optionee, prior
        to
        the delivery of such Shares, to pay to the Parent the amount of any income
        taxes
        and other amounts that the Parent is required by law to withhold. With respect
        to any Incentive Stock Options granted under this Plan, if the Optionee makes
        a
        disposition, within the meaning of Section 424(c) of the Code and regulations
        promulgated thereunder, of any Share or Shares issued to such Optionee pursuant
        to such Optionee's exercise of the Incentive Stock Option, and such disposition
        occurs within the two-year period commencing on the day after the date of
        grant
        of such Option or within the one-year period commencing on the day after
        the
        date of issuance of the Share or Shares to the Optionee pursuant to the exercise
        of such Option, such Optionee shall, within ten (10) days of such disposition,
        notify the Parent thereof and thereafter immediately deliver to the Parent
        any
        amount of income taxes and other amounts that the Parent informs the Optionee
        the Parent is required to withhold.

       

      
      

      
        
           

        

        
          -7-XTL
        Biopharmaceuticals LTD.

      

      2000
        DIRECTORS, CONSULTANTS AND EMPLOYEES SHARE OPTION PLAN

      

      A.
        NAME
        AND PURPOSE

      

      

      1.Name:
        This
        plan, as amended from time to time, shall be known as the “XTL
        Biopharmaceuticals Ltd. 2000 Directors, Consultants and Employee Share Option
        Plan” (the “Plan”).

      

      2. Purpose:
        The
        purpose and intent of the Plan is to provide incentives to the directors,
        consultants and employees of XTL Biopharmaceuticals Ltd. (the "Company")
        and its
        subsidiaries by providing them with options to purchase Ordinary Shares,
        nominal
        value 0.02 New Israeli Shekels each (the "Shares"), of the Company.

      

      B.
        GENERAL TERMS AND CONDITIONS OF THE PLAN

      

      3.    Administration: 

      

      3.1 The
        Plan
        will be administered by the Board of Directors of the Company (the "Board")
        or
        by a committee appointed by the Board (the "Committee"), which, if appointed,
        will consist of such number of Directors of the Company as may be fixed,
        from
        time to time, by the Board. If a Committee is not appointed, the term Committee,
        whenever used herein, shall mean the Board. The Board shall appoint the members
        of the Committee, may from time to time remove members from, or add members
        to,
        the Committee and shall fill vacancies in the Committee however
        caused.

      

      3.2 The
        Committee shall select one of its members as its Chairman and shall hold
        its
        meetings at such times and places as it shall determine. Actions taken by
        a
        majority of the members of the Committee, at a meeting at which a majority
        of
        its members is present, or acts reduced to or approved in writing by all
        members
        of the Committee, shall be the valid acts of the Committee. The Committee
        may
        appoint a Secretary, who shall keep records of its meetings and shall make
        such
        rules and regulations for the conduct of its business as it shall deem
        advisable.

       

      3.3 Subject
        to the general terms and conditions of this Plan, the Committee shall have
        the
        full authority in its sole and absolute discretion, from time to time and
        at any
        time, to determine (i) the persons ("Grantees") to whom options to
        purchase
        Shares ("Option(s)") shall be granted, (ii) the number of Shares to
        be
        covered by each Option, (iii) the time or times at which the same
        shall be
        granted, (iv) the schedule and conditions on which such Options may
        be
        exercised and on which such Shares shall be paid for, and/or (v) any
        other
        matter which is necessary or desirable for, or incidental to, the administration
        of the Plan. 

      

      3.4 The
        Committee may, from time to time, adopt such rules and regulations for carrying
        out the Plan as it may deem necessary. No member of the Board or of the
        Committee shall be liable for any act or determination made in good faith
        with
        respect to the Plan or any Option granted thereunder.

      

      3.5 The
        interpretation and construction by the Committee of any provision of the
        Plan or
        of any Option thereunder shall be final and conclusive unless otherwise
        determined by the Board.

      

      4.Eligible
        Grantees:
        The
        Committee, at its discretion, may grant Options to any employee of the Company
        (including officers, directors who are employees) or its subsidiaries. Anything
        in this Plan to the contrary notwithstanding, all grants of Options to Directors
        and Office Holders -"Nosei Misra" - as such term is defined
        in the
        Israeli Companies Ordinance (New Version), 1983, as amended from time to
        time
        (the "Companies Ordinance") - shall be authorized and implemented
        only in
        accordance with the provisions of the Companies Ordinance. The grant of an
        Option to a Grantee hereunder, shall neither entitle such Grantee to
        participate, nor disqualify him from participating, in any other grant of
        options pursuant to this Plan or any other stock option plan of the Company.
        

      

      
        
           

        

        
          -1-

          
            

          

        

        
           

        

      

       

      5.Grant
        of Options in Trust: 

      

      5.1
         Subject
        to Section 7.1 hereof, the effective date of the grant of an Option (the
        "Date
        of Grant") shall be the date specified by the Committee in its determination
        relating to the award of such Option. The Committee shall promptly give the
        Grantee written notice (the “Notice of Grant”) of the grant of an
        Option.

      

      5.2 Anything
        herein to the contrary notwithstanding, all Options granted under the Plan
        shall
        be granted by the Company to a trustee designated by the Board (the "Trustee"),
        the Trustee shall hold each such Option in trust (the "Trust") for the benefit
        of the Grantee in respect of whom such Option was granted (the "Beneficial
        Grantee"), and no Options shall be released from the Trust until the vesting
        of
        such Options pursuant to Section 7.2 hereof (the "Release Date").
        From and
        after the Release Date, upon the written request of any Beneficial Grantee,
        the
        Trustee shall release from the Trust the Options granted and exercise them
        on
        behalf of such Beneficial Grantee, by executing and delivering to the Company
        such instrument(s) as the Company may require, giving due notice of such
        release
        to such Beneficial Grantee, provided, however, that the Trustee shall not
        so
        release and exercise any such Options on behalf of the Beneficial Grantee
        unless
        the latter, prior to, or concurrently with, such release and exercise, provides
        the Trustee with evidence, satisfactory in form and substance to the Trustee,
        that all taxes and/or compulsory payments, if any, required to be paid upon
        such
        release and exercise have, in fact, been paid.

      

      6. Reserved
        Shares:
        The
        Company has reserved 187,000 authorized but unissued Shares for purposes
        of
        the Plan subject to adjustments as provided in Section 11 hereof.
        All
        Shares under the Plan, in respect of which the right hereunder of a Grantee
        to
        purchase the same shall, for any reason, terminate, expire or otherwise cease
        to
        exist, shall again be available for grant through Options under the
        Plan.

       

      7. Grant
        of Options:

      

      7.1 The
        Committee in its discretion may award to Grantees Options to purchase Shares
        in
        the Company available under the Plan. Options may be granted at any time
        after
        receipt of a pre-ruling from the Income Tax Authorities that the exercise
        of
        Options granted under the Plan will be subject to tax in accordance with
        the
        provisions of Section 102 of the Income Tax Ordinance [New Version]
        1961.

      

      7.2 The
        Notice of Grant shall state, inter alia, the number of Shares covered thereby,
        the schedule pursuant to which such Options shall vest, the Beneficial Grantee
        thereof shall be entitled to pay for, and acquire, the Shares, the exercise
        price, and such other terms and conditions as the Committee at its discretion
        may prescribe, provided that they are consistent with this Plan.

      

      7.3 Without
        derogating from the rights and powers of the Committee under Section 7.2
        hereof, unless otherwise specified in the Notice of Grant, each Option under
        the
        Plan shall be for a term of ten (10) years. 

      

      8. Exercise
        Price:
        The
        exercise price per Share covered by each Option shall be determined by the
        Committee in its sole and absolute discretion.

      

      9. Exercise
        of Options:

      

      9.1 Options
        shall be exercisable pursuant to the terms under which they were awarded
        and
        subject to the terms and conditions of the Plan.

      

      9.2 The
        exercise of an Option shall be made by a written notice of exercise (the
        "Notice
        of Exercise") delivered by the Trustee (after receipt of written instructions
        from the Beneficial Grantee) to the Company at its principal executive office,
        specifying the number of Shares to be purchased and accompanied by the payment
        therefor, and containing such other terms and conditions as the Committee
        shall
        prescribe from time to time.

      

      
        
           

        

        
          -2-

          
            

          

        

        
           

        

      

      9.3 Anything
        herein to the contrary notwithstanding, but without derogating from the
        provisions of Section 10 hereof, if any Option has not been exercised
        and
        the Shares covered thereby not paid for within ten (10) years after the Date
        of
        Grant (or any shorter period set forth in the Notice of Grant), such Option
        and
        the right to acquire such Shares shall terminate, all interests and rights
        of
        the Grantee in and to the same shall ipso facto expire, and, in the event
        that
        in connection therewith any Options are still held in the Trust as aforesaid,
        the Trust with respect thereto shall ipso facto expire and the Trustee shall
        thereafter hold such Options in an unallocated pool until instructed by the
        Company that some or all of such Options are again to be held in trust for
        one
        or more Grantees.

       

      9.4 Each
        payment for Shares shall be in respect of a whole number of Shares, and shall
        be
        effected in cash or by a cashier's check payable to the order of the Company,
        or
        such other method of payment acceptable to the Company. 

      

      10. Termination
        of Employment:

      

      10.1 In
        the
        event that a Grantee ceases, for any reason, to be employed by the Companies,
        all Options theretofore granted to such Grantee shall terminate as
        follows:

      

      (a) If
        the
        Grantee’s termination of employment is due to such Grantee’s death or
“Disability” (as hereinafter defined), such Option (to the extent exercisable at
        the time of the Grantee’s termination of employment) shall be exercisable by the
        Grantee’s legal representative, estate of other person to whom the Grantee’s
        rights are transferred by will or by laws of descent of distribution for
        a
        period of six (6) months following such termination of employment (but in
        no
        event after the expiration date of such Option), and shall thereafter terminate.
        For purposes hereof, Disability shall mean the inability, due to illness
        or
        injury, to engage in any gainful occupation for which the individual is suited
        by education, training or experience, which condition continues for at least
        six
        (6) months.

      

      (b) If
        the
        Grantee’s termination of employment is for any other reason, such Options (to
        the extent exercisable at the time of the Grantee's termination of employment)
        shall be exercisable for a period of thirty (30) days following such termination
        of employment, and shall thereafter terminate; provided,
        however,
        that if
        the Grantee’s dies within such thirty-day period, such Options (to the extent
        exercisable at the time of the Grantee's termination of employment) shall
        be
        exercisable by the Grantee's legal representative, estate or other person
        to
        whom the Grantee's rights are transferred by will or by laws of descent or
        distribution for a period of six (6) months following the Grantee’s death (but
        in no event after the expiration date of such Option), and shall thereafter
        terminate.

       

      10.2 Notwithstanding
        the foregoing provisions of Section 10.1, the Committee may provide,
        either
        at the time an Option is granted or thereafter, that such Option may be
        exercised after the periods provided for in Section 10.1, but in no
        event
        beyond the term of the Option.

      

      11. Adjustment
        Upon Changes in Capitalization

      

      11.1 Subject
        to any required action by the shareholders of the Company, the number of
        Shares
        covered by each outstanding Option, and the number of Shares which have been
        authorized for issuance under the Plan but as to which no Options have yet
        been
        granted or which have been returned to the Plan upon cancellation or expiration
        of an Option, as well as the price per share of Shares covered by each such
        outstanding Option, shall be proportionately adjusted for any increase or
        decrease in the number of issued Shares resulting from a stock split, reverse
        stock split, stock dividend, combination or reclassification of the Shares
        or
        the payment of a stock dividend (bonus shares) with respect to the Shares
        or any
        other increase or decrease in the number of issued Shares effected without
        receipt of consideration by the Company; provided,
        however,
        that
        conversion of any convertible securities of the Company shall not be deemed
        to
        have been "effected without receipt of consideration." Such adjustment shall
        be
        made by the Committee, whose determination in that respect shall be final,
        binding and conclusive. Except as expressly provided herein, no issuance
        by the
        Company of shares of stock of any class, or securities convertible into shares
        of stock of any class, shall affect, and no adjustment by reason thereof
        shall
        be made with respect to, the number or price of Shares subject to an Option.
        

      

      11.2 In
        the
        event of the proposed dissolution or liquidation of the Company, the Committee
        shall notify each Grantee at least fifteen (15) days prior to such proposed
        action. To the extent it has not been previously exercised, each Option will
        terminate immediately prior to the consummation of such proposed action.
        In the
        event of a consolidation or the merger of the Company with or into another
        corporation, each Option shall be assumed or an equivalent option shall be
        substituted by such successor corporation or a parent or subsidiary of such
        successor corporation.

       

      
        
           

        

        
          -3-

          
            

          

        

        
           

        

      

      12. Non-Transferability: 

      

      No
        Option
        shall be assignable or transferable by the Grantee to whom granted otherwise
        than by will or the laws of descent and distribution, and an Option may be
        exercised during the lifetime of the Grantee only by such Grantee or by such
        Grantee's guardian or legal representative. The terms of such Option shall
        be
        binding upon the beneficiaries, executors, administrators, heirs and successors
        of such Grantee.

      

      13.  Terms
        and Amendment of the Plan:

      

      13.1 The
        Plan
        was authorized by the Board on April 12, 2000, and shall expire on April
        12,
        2010 (except as to Options outstanding on that date), but such expiration
        shall
        not affect the instructions contained herein or in any applicable law with
        respect to the Options and Shares held in the Trust at such time of
        expiration.

      

      13.2 Subject
        to applicable laws, the Board may, at any time and from time to time, terminate
        or amend the Plan in any respect. In no event may any action of the Company
        alter or impair the rights of a Grantee, without his consent, under any Option
        previously granted to him.

      

      14. Tax
        Consequences:
        All tax
        consequences and/or obligations regarding other compulsory payment arising
        from
        the grant or exercise of any Option, from the payment for, or the subsequent
        disposition of, Shares covered thereby or from any other event or act (of
        the
        Company or the Grantee) hereunder, shall be borne solely by the Grantee,
        and the
        Grantee shall indemnify the Company and the Trustee and hold them harmless
        against and from any and all liability for any such tax (and compulsory payment,
        if any) or interest or penalty thereon, including without limitation,
        liabilities relating to the necessity to withhold, or to have withheld, any
        such
        tax (and compulsory payment, if any) from any payment made to the
        Grantee.

       

      15. Miscellaneous:

      

      15.1 Continuance
        of Employment:
        Neither
        the Plan nor the grant of an Option thereunder shall impose any obligation
        on
        the Company to continue the employment of any Grantee, and nothing in the
        Plan
        or in any Option granted pursuant thereto shall confer upon any Grantee any
        right to continue in the employ of the Company, or restrict the right of
        the
        Company to terminate such employment at any time.

      

      15.2 Governing
        Law: The
        Plan
        and all instruments issued thereunder or in connection therewith, shall be
        governed by, and interpreted in accordance with, the laws of the State of
        Israel.

      

      15.3 Application
        of Funds:
        The
        proceeds received by the Company from the sale of Shares pursuant to Options
        granted under the Plan will be used for general corporate purposes of the
        Company.

      

      15.4 Multiple
        Agreements:
        The
        terms of each Option may differ from other Options granted under the Plan
        at the
        same time, or at any other time. The Committee may also grant more than one
        Option to a given Grantee during the term of the Plan, either in addition
        to, or
        in substitution for, one or more Options previously granted to that Grantee.
        The
        grant of multiple Options may be evidenced by a single Notice of Grant or
        multiple Notices of Grants, as determined by the Committee.

       

      15.5 Non-Exclusivity
        of the Plan:
        The
        adoption of the Plan by the Board shall not be construed as amending, modifying
        or rescinding any previously approved incentive arrangement or as creating
        any
        limitations on the power of the Board to adopt such other incentive arrangements
        as it may deem desirable, including, without limitation, the granting of
        stock
        options otherwise than under the Plan, and such arrangements may be either
        applicable generally or only in specific cases.

      
      

      
        
           

        

        
          -4-

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