Document:

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

    

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

    

    

    

    RESEARCH
      AND LICENCE AGREEMENT

    

    By
      and
      Between

    

    YEDA
      RESEARCH AND DEVELOPMENT COMPANY LTD,

    a
      company
      duly incorporated and existing under the laws of the State of Israel, of P.O.Box
      29, Rehovot, Israel

    (hereinafter
      “Yeda”),

    of
      the
      one part,

    

    and

    

    XENOGRAFT
      TECHNOLOGIES LTD,

    a
      company
      duly registered and existing under the laws of the State of Israel,

    of
      Kiryat
      Weizmann, P.O. Box 370, Rehovot, Israel

    (hereinafter
      “the Corporation”),

    of
      the
      other part,

    

    WHEREAS
       in
      the
      course of research conducted at the Weizmann Institute of Science, Rehovot
      (hereinafter “the Institute”), ***** (hereinafter “*****”) has developed certain
      technology constituting the subject matter of the patent applications listed
      in
      the attachment hereto marked “A” and constituting an integral part hereof
(hereinafter
      collectively “the Existing Applications” and “the Existing
      Technology”); and

    

    WHEREAS
       the
      Corporation is interested in the performance of further research at the
      Institute under the supervision of *****
      in the
      field of the Existing Technology
      as specified in the research program attached hereto, marked
      “B”
      and
      forming an integral part hereof (hereinafter “the Research Program” and “the
      Research”); and

    

    WHEREAS
       certain
      of the Research has already been performed pursuant to the agreement dated
      as of
      September 1, 1992, between Yeda and Yeda Holdings, Inc; (hereinafter “the YH
      Agreement”);

    

    WHEREAS in
      consideration of the Corporation’s undertakings hereunder and the fulfilment
      thereof, Yeda is willing, subject to and in accordance with the terms and
      conditions of this Agreement, to procure the continuance of the performance
      of
      the Research at the Institute under the supervision of *****
      as
      aforesaid; and

    

    WHEREAS
       the
      Corporation is willing, subject to and in accordance with the terms and
      conditions of this Agreement, to finance the continuance of the performance
      of
      the Research; and

    

    WHEREAS pursuant
      to an agreement between the Institute of the first part, Yeda of the second
      part, and the scientists employed by the Institute (including
      *****)
      of the
      third part, all right, title and interest in the Existing Technology and in
      any
      information deriving from the performance of the Research vests and will vest
      in
      Yeda; and

    
       

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

    

    

    *****
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      Commission.

     

    WHEREAS subject
      to and in accordance with the terms and conditions of this Agreement, the
      Corporation wishes to receive, and Yeda is willing to grant the Corporation,
      an
      exclusive worldwide license for the use of the Existing Technology and of
      information deriving from the performance of the Research and Yeda Holdings
      Inc
      has waived all rights under the YH Agreement and has agreed to the grant of
      the
      said licence to the Corporation;

    

    NOW
      THEREFORE IT IS AGREED BY THE PARTIES HERETO AS FOLLOWS;

    

    
      	1.	
              Status
                of Recitals

            

    

    

    The
      recitals hereto form an integral part of this Agreement.

    

    
      	2.	
              Performance
                of Research

            

    

    

    
      
        	(a)	
                In
                  consideration of the sums to be paid by the Corporation pursuant
                  to
                  Paragraph 3 below and subject to the execution of such payments,
                  Yeda
                  undertakes to procure the continuance of performance of the Research
                  at
                  the Institute under the supervision of *****
                  during the period commencing on the effective date of this Agreement
                  and
                  ending on July 31, 1995, (hereinafter “the Research
                  Period”).

              

      

    

    

    
      
        	(b)	
                Subject
                  to Paragraphs 3(e)(ii) and 3(b) below, the Research shall be performed
                  in
                  accordance with the Research Program and within the framework of
                  the
                  budget attached thereto (hereinafter “the Research
                  Budget”).

              

      

    

    

    
      
        	(c)	
                If
                  ***** shall
                  cease to be available for the supervision of the performance of
                  the
                  Research, Yeda shall use its best efforts to find from among the
                  staff of
                  the Institute a replacement scientist acceptable to the Corporation
                  (such
                  acceptance not to be unreasonably
                  withheld)
                  but no undertaking to find such replacement is given by Yeda. Should
                  no
                  such acceptable replacement scientist be found within 60 (sixty)
                  days of
                  *****
                  becoming unavailable, then the Research Period and the performance
                  of
                  Research hereunder shall cease at the end of a further period of
                  60
                  (sixty) days, but without prejudice to any licence already then
                  granted
                  pursuant to this Agreement end the terms and provisions hereof
                  relating
                  thereto.

              

      

    

    

    
      
        	(d)	
                For
                  the avoidance of doubt, it is agreed that nothing in this Agreement
                  constitutes or shall constitute a warranty or representation by
                  Yeda that
                  any results will be achieved by the Research or that the Existing
                  Technology or any results achieved by the Research are or will
                  be
                  commercially exploitable or of any other
                  value.

              

      

    

    

    
      	3.	
              Funding
                of the Research

            

    

    

    
      	(a)	
              In
                consideration of Yeda’s undertaking to procure the performance of the
                Research, the Corporation undertakes to provide Yeda with funds to
                be used
                for financing the Research, as
                follows:

            

    

     

    
      
        	
              	(i)	
                $750,000
                  (seven hundred and fifty thousand United
                  States Dollars) in 3 (three) equal instalments payable at the commencement
                  of each quarter year during the period commencing June 1, 1993
                  and ending
                  February 28, 1994, (funds for the financing of the Research until
                  the data
                  hereof end until May
                  31, 1993 having been provided by Yeda Holdings Inc under the YH
                  Agreement);

              

      

    

    

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    

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

       

    

    
      
        	
              	(ii)	
                Subject
                  to achievement by January 31, 1994 of the milestones specified
                  in the
                  attachment hereto, marked “C” and forming an integral part hereof “C”
                  (hereinafter “the Milestones”), a further $1,500,000 (one million five
                  hundred thousand United
                  States Dollars) in 6 (six) equal instalments payable at the commencement
                  of each quarter year during the period commencing on March 1, 1994
                  and
                  ending on August 31, 1995.

              

      

    

    

    
      	(b)	
              It
                is understood that it may become necessary, having regard to the
                results
                obtained in the course of the performance of the Research and in
                order to
                expedite or facilitate progress therein or the achievement of the
                objects
                of the Research, to make variations in the Research Program and consequent
                reallocations of the Budget and it is agreed, upon the written, detailed
                and reasoned recommendation of *****,
                that such variations and/or reallocations shall be made,
                provided:

            

    

    

    
      
        	
              	(i)	
                that
                  in no event shall the Corporation be obliged, without its prior
                  written
                  consent, to increase the amount of funds which it is obliged to
                  provide to
                  Yeda hereunder or to accelerate the payment thereof;
                  and

              

      

    

    

    
      
        	
              	(ii)	
                that
                  reallocation from one major expense category in the Budget to another
                  such
                  category in excess of $30,000 in a quarter year shall require the
                  prior
                  written approval of the
                  Corporation.

              

      

    

    

    
      
        	(c)	
                Should
                  any of the Milestones not have been achieved by January 31, 1994,
                  the
                  Corporation shall have the right to terminate this Agreement by
                  service of
                  written notice an Yeda, by no later than February 28, 1994. Upon
                  service
                  of such notice, the Licence granted hereunder shall terminate and
                  the
                  Corporation shall be released of any obligations to make any payment
                  pursuant to Para 3(a)(ii) above. If such notice shall not have
                  been served
                  by February 28, 1994, then the Agreement shall continue in full
                  force and
                  effect and the performance of the Research shall continue in accordance
                  with the Research Program, with any modifications thereto that
                  may be
                  recommended by ***** and accepted by the
                  Corporation.

              

      

    

    

    
      
        	(d)	
                The
                  parties agree that in the event of a dispute between them as to
                  whether
                  the Milestones shall have been achieved, the matter shall be resolved
                  by
                  majority vote of the Founding Members of the Scientific Advisory
                  Board to
                  be established by the parties and which shall advise in connection
                  with
                  the scientific aspects of the performance of this Agreement. Unless
                  otherwise agreed by the parties, the Founding Members of the Scientific
                  Advisory Board shall be *****. If any of the Founding Members of
                  the
                  Scientific Advisory Board should resign or not be available for
                  any
                  reason, the surviving Founding Members shall be competent to resolve
                  the
                  said dispute by majority vote. The Founding Members of the Scientific
                  Advisory Hoard shall be requested to make their determination by
                  no later
                  than February 15, 1994. If the votes of the Founding Members participating
                  in such determination are tied, the Milestones shall be deemed
                  not to have
                  been achieved. 

              

      

    

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    

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

       

    

    Nothing
      herein shall prevent the parties from adding additional members to the
      Scientific Advisory Board after prior consultation between them, but the
      resolution of the said dispute shall be according to the vote of the Founding
      Members only as aforesaid.

    

    
      	4.	
              Reporting
                by Yeda

            

    

    

    
      	
              (a)

            	
              Yeda
                will submit to the Corporation a detailed written report on the progress
                of the Research in each 6 month period during the Research Period,
                within
                30 days of the end of each such 6 month period, and written report
                summarising the results of the Research within 60 days of the end
                of the
                Research Period. In addition, Yeda will submit to the Corporation
                an
                interim written report on the progress of the Research in the first
                half
                of each such 6 month period, such report to contain a general outline
                of
                progress in the Research made in that first half and to be provided
                within
                30 days of the end of such first half. Further, prompt written reports
                will be submitted by Yeda on significant breakthroughs in
                the Research and the authorized scientific representatives of the
                Corporation shall be given the opportunity, from time to time, and
                at
                mutually convenient times, to discuss the progress of the Research
                with
                *****.

            

    

    

    
      	
              (b)

            	
              Further,
                Yeda shall submit to the corporation, with respect to each 3 (three)
                month
                period of the Research Period, a financial report setting forth the
                monies
                received and expended in connection with the Research during such
                3
                (three) month period. Each report as aforesaid shall be submitted
                to the
                Corporation not later than 45 (forty-five) days after the end of
                the
                period covered by such report. Charges in respect of indirect Research
                expenditures shall be made at the rate of *****%
                of direct expenses incurred. Within 90 days of the end of each year
                during
                the Research Period or within 90 days of the Corporation’s written
                request, whichever is the later, Yeda shall provide the Corporation
                with a
                written report from the CPA acting as Yeda's outside auditor, certifying
                the Research expenditures incurred in the said
                year.

            

    

    

    
      	
              (c)

            	
              Reports
                already made under the YH Agreement shall be deemed to have been
                made
                hereunder and the Corporation acknowledges receipt
                thereof.

            

    

    

    
      	5.	
              Title

            

    

    

    
      	
              (a)

            	
              Subject
                to the licence granted to the Corporation in terms hereof, it is
                hereby
                agreed that all right, title and interest, in and to the Existing
                Technology and any products, inventions, materials, methods, processes,
                techniques, knowhow, data, information and other results which are
                discovered or which accrue in the course of, or which arise or stem
                from
                the performance of the Research (hereinafter “the Program Technology”) as
                well as in and to any drawings, plans, diagrams, specifications and
                other
                documents in any way embodying the Existing Technology or the Program
                Technology (the Existing Technology, the Program Technology and all
                said
                drawings, plans, diagrams, specifications and other documents being
                referred to hereinafter collectively as “the Technology”), shall vest in
                Yeda exclusively. At the request of Yeda from time to time, the
                Corporation shall take and shall procure the taking of all acts necessary
                to give formal effect to the aforegoing provisions of this Paragraph
                5.

            

    

    

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    

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

      
        	
                (b)

              	
                With
                  45 (forty-five) days of receipt of any report from Yeda under paragraph
                  4(a) above, the Corporation shall be entitled to advise Yeda by
                  notice in
                  writing that the Corporation has no interest in obtaining e licence
                  from
                  Yeda to all or any of the Technology contained in the said report,
                  whereupon such specified Technology (hereinafter “the Excluded
                  Technology”) shall not be included in the licence granted hereunder, the
                  Corporation shall maintain the Excluded Technology in strict confidence
                  and shall not thereafter make any use thereof, and Yeda shall be
                  entirely
                  free to deal with the Excluded Technology as it deems fit by way
                  of grant
                  of license to a third party or otherwise howsoever. In this Agreement
                  below, the term “the Licensed Technology” shall mean all the Technology
                  disclosed in the Existing Applications and in the reports submitted
                  by
                  Yeda pursuant to Paragraph 4(a) above, except the Excluded
                  Technology.

              

      

    

    

    
      	6.	
              Patents

            

    

    

    
      	
              (a)

            	
              At
                the initiative of either party, the parties shall consult with one
                another
                regarding the filing of patent applications in respect of any portion
                of
                the Licensed Technology including, but without limitation, the timing
                of
                the filing of such applications and the contents thereof. Following
                such
                consultations, Yeda shall, at the Corporation’s written request, file and
                prosecute applications as aforesaid. The Corporation confirms that
                it will
                seek patent protection for all patentable Licensed Technology in
                at least
                the countries listed in Appendix D. The applications filed under
                the YH
                Agreement are included in Attachment A and shall be deemed applications
                filed by Yeda at the request of the Corporation pursuant to this
                subparagraph (a).

            

    

     

    
      	(b)	
              (i)           
                All
                patent applications to be filed by Yeda in terms of sub-paragraph
                (a)
                above, shall be filed in the name of Yeda or should the law so require,
                in
                the name of the inventor and then assigned to Yeda. The Corporation
                shall
                bear all costs and fees incurred by Yeda in the preparation, filing,
                prosecution, maintenance and the like of all patent applications
                filed in
                accordance with the provisions of sub-paragraph (a) above and in
                the
                maintenance of all patents issuing therefrom. In addition, the Corporation
                agrees to reimburse Yeda for all costs and fees incurred by Yeda
                until the
                date hereof (to the extent not already reimbursed by then) in connection
                with the filing and prosecution of the Existing Applications listed
                in
                Attachment “A” hereto up to a maximum of *****
                and to bear all costs incurred by Yeda after the date hereof in the
                further prosecution, maintenance and the like of the Existing Applications
                and in the maintenance of all
                patents
                issuing therefrom. Yeda hereby acknowledges receipt of *****
                under the YH Agreement in reimbursement of patent costs and fees
                incurred
                by Yeda in connection with the filing and prosecution of the Existing
                Applications.

            

    

    

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    

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

       

    

    
      	
            	(ii)	
              At
                the request of the Corporation, Yeda shall take such action as shall
                be
                available to protect or to sue for infringement of any patent which
                shall
                have issued from any of the patent applications referred to in or
                filed
                pursuant to subparagraph
                (b)(i) above and Yeda may also take such action at its own initiative
                and
                without the Corporation’s request. However, before initiating any such
                action, Yeda shall advise the Corporation in writing of its intention
                to
                do so and the Corporation shall have the right *****
                of
                receipt of such notice, to elect by notice in writing to Yeda that
                such
                action be treated as being taken at the Corporation’s request and/or to
                become a party in such action. In any action taken at the Corporation’s
                request (or so treated), counsel representing Yeda (and the Corporation.
                should the Corporation wish to become a party to the action) shall
                be
                selected by the Corporation, with Yeda's written approval (not to
                be
                unreasonably withheld) and Yeda
                confirms that the firm of *****
                is
                acceptable to it for action in the USA. All costs involved in any
                action
                taken at the Corporation's request (or so treated or in which the
                Corporation has elected to become a party), (including, inter alia,
                legal
                casts and other sums awarded to the counter-party in such action)
                shall be
                borne by the Corporation exclusively. Any recovery in any such action
                financed by the Corporation shall first be applied to cover costs
                and
                thereafter divided *****
                to
                the Corporation and ***** to
                Yeda. All costs involved
                in
                any such action taken by Yeda without the Corporation’s request (or not
                being an action so treated or not being an action in which the Corporation
                has elected to become a party as aforesaid), including any costs
                or other
                sums awarded to the counter party, shall be borne by Yeda exclusively,
                the
                conduct
                and discontinuance of such action shall be matters entirely within
                Yeda’s
                discretion and any recovery in any such action shall be retained
                by Yeda
                in full. The Corporation shall cooperate with Yeda in pursuing any
                actions
                undertaken under this sub-paragraph
                (b)(ii).

            

    

    

    
      	
              (c)

            	
              For
                the removal of doubt, it is agreed - without derogating from the
                provisions of subparagraph (a) above, that the provisions of the
                said
                subparagraph shall not prevent Yeda from filing patent applications
                with
                respect to any portion of the Licensed Technology (in addition to
                those
                filed by it at the Corporation’s written request pursuant to the said
                subparagraph), it being agreed:

            

    

    

    
      	
            	(aa)	
              that
                at least *****
                days before filing any such patent application. Yeda shall send the
                Corporation written notice of its intention to do
                so;

            

    

    

    
      	
            	(bb)	
              that
                within *****
                days of receipt of such written notice, the Corporation shall be
                entitled
                to advise Yeda in writing that it wishes such patent application
                to be
                filed and treated in all respects as an application filed at the
                Corporation's request, pursuant to subparagraph (a)
                above;

            

    

    

    
      	
            	(cc)	
              that
                should the Corporation not send such notice as aforesaid,
                then:

            

    

    

    
      	(1)  	
              the
                subject-matter of such application shall thereupon be deemed Excluded
                Technology;

            

    

    
      	(2)  	
              all
                costs and fees incurred in connection with the preparation, filing,
                maintenance, prosecution, protection and the like of such patent
                applications and patents issuing therefrom shall be borne by Yeda
                exclusively; and

            

    

    

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    

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

       

    

    
      	(3)  	
              the
                Corporation shall not be entitled to cause Yeda to take any action
                whatsoever for the protection of or for infringement of patents issuing
                on
                such patent applications, the taking of any such action shall be
                entirely
                within Yeda’s discretion, the costs of any such action, as well as any
                costs and other sums awarded to any counter-party in such action,
                shall be
                paid by Yeda exclusively and any recovery in any such action shall
                be
                retained by Yeda.

            

    

    

    
      	
              (d)

            	
              The
                Corporation agrees to pay any amount due to Yeda pursuant to sub-paragraph
                (b) above within 30 (thirty) days of Yeda's first written request
                supported by invoice or other appropriate
                document.

            

    

    

    
      	
              (e)

            	
              Nothing
                herein contained shall be deemed to be a warranty by Yeda that the
                Existing Applications or any of them or any patent applications relating
                to the Licensed Technology or any portion thereof will be granted,
                or that
                any patents obtained on any of the said patent applications, if obtained,
                are or will be valid or will afford proper
                protection.

            

    

    

    
      
        	7.	
                Licensing

              

      

    

    

    
      	
              (a)

            	
              Subject
                to the terms and conditions hereinafter set forth, Yeda hereby grants
                the
                Corporation and the Corporation accepts, an exclusive worldwide licence
                (“the Licence”) (i) under the Licensed Patents (as hereinafter defined)
                (if any), and (ii) the Licensed Technology,
                to
                make, use, practise and sell the products and services covered in
                whole or
                in part by the claims of the Existing Applications and or of the
                other
                patent applications filed by Yeda at the request of the Corporation
                or
                treated as such as hereinbefore provided (whether or not patents
                including
                such claims issue on all or any of such applications) and/or the
                making,
                use and practice of which is covered in whole or in part by the claims
                of
                the said applications (whether or not patents including such claims
                issue
                on all of any of such applications) (the said products being referred
                to
                hereinafter as “the Products” and the said services being referred to
                hereinafter as “the Services”). The Licence includes the right to grant
                sublicences, subject to the provisions of subparagraph (c)
                below,

            

    

    

    
      	
              (b)

            	
              (i)

            	
              In
                this Agreement the term “Licensed Patents” shall mean the patents issuing
                on the Existing Applications or on patent applications filed by Yeda
                in
                accordance with the Corporation’s written request pursuant to Paragraph
                6(a) above or treated as such pursuant to Paragraph 6(c)
                above.

            

    

    

    
      	
            	(ii)	
              The
                Licence shall remain in force (if not previously terminated according
                to
                the provisions of this Agreement) with respect to any of the Products
                or
                Services in any country as follows:

            

    

    

    
      
        	
              	(aa)	
                in
                  a country where a Licensed Patent or Patents issues including claims
                  covering, in whole or in part, such Product or Service, until the
                  date of
                  expiry of the last of the Licensed Patents covering such Product
                  or
                  Service in such country to
                  expire;

              

      

    

    

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    

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

       

    

    
      	
            	(bb)	
              in
                any other country, the date of expiry of a period of ***** commencing
                on
                the first commercial transaction
                by
                the Corporation (or a permitted sub-licensee) involving
                sale
                of such Product or provision of such Service in such country. The
                Corporation shall notify Yeda in writing immediately upon the entering
                into of each such first commercial transaction, specifying its
                date.

            

    

    

    
      	
              (c)

            	
              Yeda
                recognizes that the Corporation contemplates the grant of a sublicence
                or
                sublicences as part of its plan for commercialization under the Licence,
                but the Corporation agrees that no sub-licence under the Licence
                may be
                granted by the Corporation without Yeda’s prior written consent,
                *****,
                it
                being
                agreed that Yeda’s consent may not be sought unless the proposed
                sublicence is for monetary consideration exclusively
                in a bona fide arms-length commercial transaction, is made by written
                agreement, the provisions of which are consistent with the terms
                of the
                Licence and contain, inter alia, the following terms and
                conditions:

            

    

    

    
      
        	
              	(i)	
                on
                  the termination of the Licence for any reason, the sublicence shall
                  expire
                  automatically;

              

      

    

    

    
      
        	
              	(ii)	
                the
                  party receiving the sublicence (hereinafter “the Sublicensee”) shall be
                  bound by provisions substantially similar to those in Paragraph
                  10 below
                  binding the Corporation (the obligations of the Sublicensee so
                  arising
                  being addressed also to Yeda
                  directly);

              

      

    

    

    
      
        	
              	(iii)	
                all
                  terms necessary to enable performance by the Corporation of its
                  obligations under Paragraphs 7(d)(iii) and 9(b)
                  hereof;

              

      

    

    

    
      
        	
              	(iv)	
                that
                  any act or omission by the Sublicensee which would have constituted
                  a
                  breach of this Agreement by the Corporation had it been the act
                  or
                  omission of the Corporation, shall constitute a breach of this
                  Agreement
                  by the Corporation;

              

      

    

    

    
      
        	
              	(v)	
                that
                  the sublicence shall not be assignable or further
                  sublicenseable;

              

      

    

    

    
      
        	
              	(vi)	
                that
                  a copy of the agreement granting the sublicence shall be made available
                  to
                  Yeda at least *****
                  prior to its execution.

              

      

    

    

    Notwithstanding
      the aforegoing, should Yeda refuse its consent to a sub-licence and the
      Corporation should contend that such refusal is unreasonable, the dispute
      between the parties shall be resolved by the Expert (as such expression is
      defined below) at the request of the Corporation made no later than *****
      days
      after receipt by the Corporation of Yeda’s said refusal. The Expert shall act as
      an expert and not as arbitrator and shall conduct the hearing of the dispute
      as
      he deems fit. His decision shall be binding on the parties. The Expert may
      order
      that the Expert's costs be borne by one of the parties or shared by them in
      such
      proportion as the Expert shall direct, and the parties shall comply with such
      order. The Expert shall be *****,
      or if
      he shall be unable or unwilling to act or continue to act in such capacity,
      the
      President for the time being of the Hebrew University of Jerusalem or, if he
      should be unable or unwilling to act or continue to act in such capacity, then
      the person nominated by him to act as the Expert.

    

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
       

    

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

         

        
          	(d)	
                  (i)           
                    In
                    this Agreement, the term “Net Sales” shall mean the total amount actually
                    received by the Corporation or a Sublicensee from the sale of
                    Products or
                    the provision of Services by it, provided that as to Products
                    sold or
                    Services provided other than at arms-length, the term “Net Sales” shall
                    mean the total amount that would have been due in an arms-length
                    transaction, according to the then current conditions for such
                    transaction
                    or - in the absence of such current conditions - according to
                    reasonable
                    conditions for such transaction, in all cases after deduction
                    of:

                

        

      

    

     

    
      	
            	(aa)	
              sales
                or service taxes (including value added faxes) to the extent applicable
                to
                such transaction and not collected separately from the counterparty
                to the
                transaction; and

            

    

    

    
      	
            	(bb)	
              credits
                or allowances, if any, actually granted on account of price adjustments,
                recalls, rejections or return of Products or Services previously
                sold or
                provided.

            

    

    

    
      	
            	(ii)	
              In
                consideration for the Licence, the Corporation shall pay Yeda a royalty
                of
                *****
                of
                all Net Sales received by the Corporation *****
                of
                all amounts received by the Corporation for or from the grant of
                sublicences and/or pursuant thereto (hereinafter “Sublicensing Receipts”),
                provided that on any Sublicensing Receipts received by the Corporation
                which are calculated on the basis of proceeds received by a Sublicensee
                from sales of Products or provision of Services by it, the royalty
                payable
                to Yeda by the Corporation shall be *****
                of
                such Sublicensing Receipts as aforesaid or the amount being *****
                of
                the Net Sales of the Sublicensee form the sales of Products or provision
                of Services generating such Sublicensing Receipts, which is the
                higher.

            

    

    

    
      	
            	(iii)	
              (aa)        
                Amounts
                payable to Yeda in terms of this Paragraph 7(d) shall be paid to
                Yeda on a
                quarterly basis and no later than *****
                days after the end of each calendar quarter, commencing with the
                first
                calendar quarter in which any Net Sales or Sublicensing Receipts
                are
                received.

            

    

    

    
      	
            	(bb)	
              All
                amounts payable to Yeda hereunder in respect of Net Sales or Sublicensing
                Consideration which are received by the Corporation or its Sublicencee
                in
                a currency other than Israeli currency shall be paid to Yeda in the
                same
                foreign currency to the extent permitted by law, and to the extent
                not, by
                payment of the equivalent amount of Israeli currency calculated at
                the
                representative rate of exchange last published by the Bank of Israel
                at
                the time of payment to Yeda. Amounts due to Yeda in respect of Net
                Sales
                or Sublicensing Consideration which are received by the Corporation
                or its
                Sublicencee in Israeli currency shall be linked to the Consumer Price
                Index published by the Israel Government’s Central Bureau of Statistics
                from the date payment is reached by the Corporation or its Sublicencee
                until it is due to Yeda (and thereafter subject to interest payments
                as
                provided in Paragraph 13(b)(v) below)
                .

            

    

    

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

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

     

    
      	
            	(cc)	
              The
                Corporation shall, within a period of *****
                days from the end of each calendar quarter commencing with the first
                calendar quarter in which any Net Sales or Sublicensing Receipts
                are
                received, submit to Yeda a full and detailed report, setting out
                all
                amounts owing to Yeda in respect of the quarter to which the report
                refers, and with full details (1) of payments received by the Corporation
                and Sublicensees constituting Net Sales or Sublicensing Receipts
                including, without derogating from the generality of the aforegoing,
                a
                breakdown of Net Sales according to country and identity of buyer,
                a
                breakdown of Sublicensing Receipts according to country and identity
                of
                Sublicencee, currency of the payments and date of receipt thereof;
                and (2)
                of any other matter necessary to enable the determination of the
                amounts
                payable hereunder.

            

    

    

    
      	
            	(dd)	
              The
                Corporation shall keep and shall cause Sublicensees to keep complete
                and
                correct books of account and records consistent with sound business
                and
                accounting principles and practices and in such form and in such
                details
                as to enable the determination of the amounts due to Yeda in terms
                hereof.
                The Corporation shall supply Yeda at the end of each year, commencing
                with
                the first year in which any amount is payable under this Paragraph
                7(d), a
                report certified by a Chartered Public Accountant in respect of the
                amounts due to Yeda pursuant to this Paragraph 7(d) in respect of
                the year
                covered by the said report, it being understood that insofar as such
                amounts relate to Net Sales of Sublicences, the
                said Chartered Public Accountant shall be entitled to rely in his
                report
                on certificates issued by other Chartered Public Accountants relating
                to
                such Net Sales, such certificates to be attached to the said
                report.

            

    

    

    
      	
            	(ee)	
              Yeda
                or its authorised representatives shall have the right at reasonable
                times
                up to *****
                per year during normal business hours to inspect the Corporation’s and
                Sublicensees’ books of accounts, records and other documentation to the
                extent relevant or necessary in or for the ascertaining or verification
                of
                the amounts due to Yeda under this Paragraph
                7(d).

            

    

    

    
      	8.	
              Development
                and Commercialization

            

    

    

    
      	
              (a)

            	
              It
                is understood and agreed that subject to termination of this Agreement
                and
                the Licence thereunder pursuant to Paragraph 3(d) above or to the
                other
                provisions of this Agreement, should the Corporation wish to have
                further
                research (beyond that to be performed at the Institute and to be
                funded
                pursuant to Paragraph 3 above) conducted outside the Corporation's
                own
                facilities with respect to all or any part of the Licenced Technology
                then
                such additional research shall be performed at the Institute, (to
                the
                extent that Yeda confirms the availability of the necessary facilities)
                under the supervision of *****,
                should he declare himself available, willing and able to perform
                such
                further research, provided that the cost of performing such research
                at
                the Institute (including the
                cost of acquisition of any necessary equipment), shall not be
                substantially more than such cost at a reputable institution which
                has
                declared itself willing to undertake the performance of such further
                research.

            

    

    

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

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

     

    
      	
              (b)

            	
              The
                Corporation undertakes to act diligently and to make reasonable efforts
                to
                expedite the commencement of commercial sale of the Products and
                commercial provision of the Services and without derogating from
                the
                generality of the aforegoing, the performance of necessary research,
                toxicological tests, pharmacological and efficacy tests, pre-clinical
                tests, clinical trials, the steps required for obtaining regulatory
                approvals from the US Food and Drug Administration and other regulatory
                authorities and the development of procedures and facilities for
                large-scale commercial production of the Products and provision of
                the
                Services. The Corporation further undertakes to continue to act diligently
                in the exercise of the Licence and to take all reasonable steps to
                maximize such exercise throughout the period of the
                Licence.

            

    

    

    
      	(c)	
              (i)            Should
                Yeda be of the opinion that the Corporation is in breach of its
                obligations pursuant to Paragraph 8(b) above with respect to the
                research,
                development and commercialization activities relating to any Product
                or
                Service, it may so advise the Corporation and notify the Corporation
                that
                unless certain steps are taken by the Corporation within a certain
                time as
                specified in the said notice,
                the Licence shall lapse. Should the Corporation not refer the matter
                to
                arbitration pursuant to subparagraph (ii) below nor take the said
                specified steps within the said specified time, the Licence and this
                Agreement shall thereupon
                terminate.

            

    

    

    
      	
            	(ii)	
              Should
                the Corporation not accept the terms of Yeda’s said notice, it shall be
                entitled, within 30 days of receipt of Yeda’s said notice, to advise Yeda
                that it does not accept the terms of the said notice and to refer
                the
                dispute for resolution by arbitration pursuant to Paragraph 14
                below.

            

    

    

    
      	9.	
              Reports
                by Corporation

            

    

    

    The
      Corporation will provide Yoda with full written reports on the progress and
      results of research, tests and trials conducted and all other actions taken
      by
      the Corporation pursuant to paragraph 8(c) above, such reports to be made on
      a
*****
      basis,
      within *****
      of the
      end of each *****
      period
      during the term of the Agreement. Further, written reports on significant
      developments in such activities shall be made by the Corporation to Yeda
      promptly.

    

    
      	10.	
              Confidentiality

            

    

    

    
      	
              (a)

            	
              The
                corporation shall use its reasonable best efforts to maintain the
                Technology in confidence, except and to the extent that it is in
                the
                public domain at the date of the signing hereof or becomes pert of
                the
                public domain thereafter other than through a violation by the Corporation
                of this undertaking of confidentiality and except that the Corporation
                shall be released from its obligation of confidentiality with regard
                to
                that portion of the Technology expressly released therefrom by Yeda
                by
                notice in writing. 

            

    

    

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

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

     

    Notwithstanding
      the foregoing, the Corporation may disclose to its personnel and to other third
      parties (including permitted Sublicencees) such confidential information as
      shall be necessary for the exercise by it of its rights hereunder or in the
      fulfilment of its obligations hereunder, provided that it shall bind such
      personnel and other third parties with a similar undertaking of confidentiality
      in writing. It is agreed, for the removal of doubt, that the aforegoing
      obligation of confidentiality shall not prevent the Corporation from disclosing
      the general net of the research and development activities engaged in pursuant
      to this Agreement.

    

    
      	
              (b)

            	
              In
                addition to and without derogating from the aforegoing, the Corporation
                undertakes not to make mention and not to allow Subliceneees to make
                mention of the names of Yeda or the Institute or *****
                in
                any advertising, sales literature, promotional material, other
                publications, private placement memoranda, public offering registration
                statements and the like, unless the prior written approval of Yeda
                thereto
                has been obtained (such approval not to be unreasonably withheld).
                Once an
                approval has been granted by Yeda to a certain form of words for
                use in a
                particular context. then the same form of words can be used again
                by the
                Corporation or by Sublicencees in the same context, without further
                approval from Yeda.

            

    

    

    
      	
              (c)

            	
              For
                the removal of doubt, nothing in subparagraphs (a) or (b) above contained
                shall be deemed to prevent the Corporation from mentioning the names
                of
                Yeda and/or the Institute or *****
                or
                to prevent the Corporation from disclosing any information where
                such
                mention or disclosure
                is to competent authorities for the purposes of obtaining approval
                or
                permission for the exercise of the License or is in the fulfilment
                of any
                legal duty owed to any competent authority. For the purpose of this
                paragraph, such mention in a private placement.
                memoranda or a public offering registration statement shall not be
                deemed
                fulfilment of a legal duty to a competent
                authority.

            

    

    

    
      	
              (d)

            	
              Yeda
                shall use its reasonable best efforts to maintain the Licenced Technology
                in confidence except and to the extent that it is in the public domain
                at
                the date of signing hereof or becomes part of the public domain thereafter
                other than through a violation by Yeda of this undertaking of
                confidentiality, and it being expressly agreed that Yeda shall have
                the
                tight to allow *****
                (and, with *****
                consent, *****
                students) publish articles relating to the Licenced Technology in
                scientific publications, provided that at least 60 days before the
                intended date of such publication, the text thereof shall be submitted
                to
                the Corporation in order to enable it to request the filing of patent
                application relating to the subject- matter of the article before
                the
                publication takes place and Yeda shall procure that such filing shall
                take
                place within 30 days of the Corporation's written request pursuant
                to
                Paragraph 6(a) above.

            

    

    

    
      	(e)	
              No
                termination of this Agreement, for whatever reason, shall release
                the
                Corporation from any of its obligations under this Paragraph 10 and
                such
                obligations shall survive termination as
                aforesaid.

            

    

    

    
      	11.	
              No
                Assignment

            

    

    

    Except
      as
      expressly provided herein, the Corporation may not assign all or any of its
      tights or obligations under this Agreement or arising therefrom without the
      prior written consent of Yeda.

    

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

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

     

    
      	12.	
              Indemnification

            

    

     

    The
      Corporation shall indemnify and hold harmless Yeda and WIS and the officers
      and
      employees of them from and against an loss, damage, liability and expense
      (including attorney fees and legal costs) arising out of or resulting from
      the
      exercise of the License, including the grant or exercise of Sublicences. This
      obligation shall survive the termination of this Agreement for
      any
      reason.

    

    
      	13.	
              Terms
                and Terminated

            

    

    

    
      	(a)	
              Unless
                previously terminated in accordance with the provisions hereof, this
                Agreement terminates upon expiry of the License specified in Paragraph
                7(b) above.

            

    

    

    
      	(b)	
              Without
                derogating from the parties’ rights hereunder or under another agreement
                or by law to any other or additional remedy or
                relief:

            

    

    

    
      
        	
              	(i)	
                Yeda
                  may terminate this Agreement by serving a written notice to that
                  effect on
                  the Corporation if the aggregate payment made under Paragraph 7(d)
                  above
                  in the seventh or any subsequent year of the term of the Licence
                  shall be
                  less than US $100,000 (one hundred thousand United States Dollars)
                  or if
                  commercial exercise of the Licence, once commenced,
                  shall cease thereafter for a period of 12 (twelve) months or
                  more.

              

      

    

    

    
      
        	
              	(ii)	
                Either
                  Yeda or the Corporation may terminate this Agreement and the Licence
                  hereunder by serving a written notice to that effect on the other,
                  upon or
                  after the winding up or insolvency of the other, or upon or after
                  the
                  commitment of a material breach hereof by the other (which breach
                  cannot
                  be cured or, if curable, has not been cured by the party in breach
                  within
                  45 (forty-five) days after receipt of a written notice for the
                  other party
                  in respect of such breach); and in such event this Agreement and
                  the
                  Licence hereunder shall be terminated forthwith upon receipt of
                  notice as
                  aforesaid. For the purposes of this Paragraph 13(b)(ii), “material breach”
                  shall not include the breaches governed by subparagraph (i) above,
                  but
                  shall include - without limitation - default in any payment payable
                  hereunder to Yeda, except that if the aggregate of amounts owing
                  by the
                  Corporation to Yeda at any time and in arrears shall not exceed
                  US $10,000
                  (ten thousand United States Dollars) and the Corporation shall
                  have
                  advised Yeda in good faith that it disputes its liability to pay
                  the said
                  amount setting out the reasons for such view and having
                  initiated
                  arbitration proceedings pursuant to Paragraph 14below
                  with respect to such dispute, then the existence of such debt shall
                  not
                  entitle Yeda to terminate this Agreement unless and until the arbitrator
                  has confirmed that all or any of the said amount is due to Yeda
                  and the
                  Corporation has failed, within 15 days of the arbitrator's award,
                  to
                  pay the amount due together with any interest and casts awarded
                  by the
                  arbitrator.

              

      

    

    

    
      
        	
              	(iii)	
                The
                  Corporation shall be entitled at any time after completion of the
                  financing by the Corporation of the Research Program pursuant to
                  the
                  provision of this Agreement, to terminate this Agreement and the
                  Licence
                  hereunder, by service of written notice to that effect on Yeda,
                  such
                  notice to be served at least 6 (six) months in advance of the desired
                  date
                  of termination.

              

      

    

    

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

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

       

      
        	
              	(iv)	
                Yeda
                  may terminate this Agreement by service of written notice on the
                  Corporation, if:

              

      

    

    

    
      	
            	(aa)	
              the
                total of equity funds invested in the Corporation by March 1994 shall
                be
                less than US $ 2 million: or 

            

    

    

    
      	
            	(bb)	
              an
                irrevocable letter of credit in Yeda’s favour on terms and conditions
                acceptable to Yeda and securing payment to Yeda of the funds due
                from the
                Corporation pursuant Paragraph 3(a)(i) above shall not have been
                issued by
                the date of signature hereof; or

            

    

    

    
      	
            	(cc)	
              the
                total of equity funds invested in the Corporation by March 1995 shall
                be
                less than US $ 7.5 million.

            

    

    

    
      	
            	(v)	
              (aa)         
                Except
                as otherwise expressly provided herein, payments of amounts due hereunder
                which are expressed in US Dollars shall be made by payment of the
                equivalent amount in Israeli currency calculated at the representative
                rate lest published by the Bank of Israel at the time of
                payment.

            

    

    

    
      	
            	(bb)	
              Where
                Yeda is liable to pay VAT on any amount payable to it hereunder the
                payer
                shall pay Yeda the amount of the VAT due together with the payment
                in
                respect of which it is due, against VAT invoice from
                Yeda.

            

    

    

    
      	
            	(vi)	
              Any
                amount payable hereunder by one of the parties to the other, which
                has not
                been paid by its due date of payment, shall bear interest from its
                due
                date of payment until the date of actual payment, as
                follows:

            

    

    

    
      	
            	(aa)	
              if
                it is payable in foreign currency (i.e. not Israeli currency), at
                the rate
                charged by Bank Leumi Le Israel B.M on loans to Israeli residents
                in that
                currency over the period of the arrears;
                or,

            

    

    

    
      	
            	(bb)	
              if
                it is payable in Israel currency, at the highest rate of interest
                charged
                by Bank Leumi Le Israel B.M on unapproved overdrafts in Israel currency
                over the period of the arears.

            

    

    

    
      	
              (c)

            	
              Upon
                the termination of this Agreement for whatever reason, the Corporation
                shall deliver to Yeda all tables, graphs, diagrams, specifications
                and
                other documentation in the Corporation’s possession containing the
                Licensed Technology.

            

    

    

    
      	
              (d)

            	
              The
                termination of this Agreement for any reason shall not relieve the
                parties
                of any obligations to make payments thereunder which shall have accrued
                prior to such termination.

            

    

    

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

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

     

    
      	
              (e)

            	
              (i)

            	
              Upon
                termination of this Agreement and the Licence thereunder pursuant
                to
                subparagraph (b) above, all rights in the Licensed Technology vested
                in
                the Corporation shall revert to Yeda, and the Corporation shall not
                thereafter be entitled to make any use of the Licensed
                Technology.

            

    

    

    
      	
            	(ii)	
              Upon
                termination of this Agreement by Yeda pursuant to subparagraphs (b)(1),
                (ii) or (iv) above or by the Corporation pursuant to subparagraph
                (iii)
                above or upon termination pursuant to Paragraphs 3(c) or 8(c)(ii)
                above,
                all rights, title and interest in any technology deriving from research
                and development activities performed by the Corporation in connection
                with
                the Licenced Technology shall vest in Yeda and the Corporation shall
                take
                all steps necessary to procure and perfect such
                vesting.

            

    

    

    
      	
              14.
                

            	
              Governing
                Law and Forum

            

    

    

    This
      Agreement shall be governed by the laws of Israel and any disputes arising
      in
      connection therewith (except those to be resolved by the Expert as hereinbefore
      provided) shall be resolved by arbitration by a single arbitrator in Israel
      in
      accordance with the Israel Arbitration Law as amended from time to time, such
      arbitrator to be agreed by the parties, or failing agreement within 15 days
      of a
      candidate first being proposed, to be appointed by the President of the Israel
      Bar Association at the request of either party. The arbitrator shall resolve
      the
      dispute in accordance with the substantive law and shall give the reasons for
      his award, but he shall not be bound by the rules of court procedure or the
      rules of evidence. The arbitrator shall be entitled, inter alia, to grant
      interim and/or interlocutory
      relief. The arbitrator shall be requested to issue his award with all due speed
      and i£ possible within 120 days of appointment of the arbitrator and the parties
      shall cooperate in expediting the arbitration. Any award of the arbitrator
      shall
      be enforceable in any competent court.

    

    
      	15.	
              Entire
                Agreement

            

    

    

    This
      Agreement constitutes the entire Agreement between the parties. Any addition
      or
      amendment thereto shall not be effective unless in writing signed by the
      authorised signatories of both parties.

    

    
      	16.	
              Notices

            

    

    

    
      	
              (a)

            	
              Notices
                to be given hereunder shall be given if available by telex or telecopier
                or, if neither of these is available, as required by Paragraph 16(b).
                If
                notice is sent by telex or telecopier, it shall be deemed to have
                been
                served 24 hours after transmission. All notices given by telex or
                telecopier shall be confirmed by letter despatched in the manner
                appearing
                in Paragraph 16(b) within 24 hours of
                transmission.

            

    

    

    
      	
              (b)

            	
              Any
                other notices to be given hereunder shall be served on a party by
                prepaid
                express registered letter (or nearest equivalent) to its address
                given
                herein or such other address as many from time to time be notified
                for
                this purpose and any notice so served shall he deemed to have been
                served
                7 (seven) days after the time at which it was posted and in proving
                such
                service it shall be sufficient to prove that the notice was properly
                addressed and posted,

            

    

    

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

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

     

    IN
      WITNESS WHEREOF the parties hereto have set their signatures as of the
      7th
      day of
      April, 1993.

    

    
      	
              For
                YEDA RESEARCH AND DEVELOPMENT COMPANY LTD.

            	
              For
                XENOGRAFT TECHNOLOGIES LTD.

            
	
               

               

              By:
                _______________________________

            	
               

               

              By:
                _______________________________

            
	
               

               

              Title:
                ______________________________

            	
               

               

              Title:
                ______________________________

            

    

     

    
      
        
        

      

      
        16

        
          

        

      

      
        
        

      

    

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

    
    

    APPENDIX
      A

    *****

    

    

    

    

    
      	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            

    

    

    *****

    

    *****

    

    *****

    

    *****

    

    
      	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            

    

    

    *****

    

    *****

    

    *****

    

    
      	
              *****

            	
              *****

            	
              *****

            
	
              *****

            	
              *****

            	
              *****

            

    

    

    

    Note
      that
      confidential treatment has been requested and one (1) page of material from
      this
      Appendix A has been omitted and filed separately with the
      Commission.

     

    
      
        
        

      

      
        17

        
          

        

      

      
        
        

      

    

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

     

    APPENDIX
      B

    *****

    

    
      	1.	
              *****

            

    

    

    
      	1.1.	
              *****

            

    

    

    
      	1.l.a(*)	
              *****
 
                
*****

            

    

    

    
      
        
          
            	l.l.b	
                    *****
 
***** 

                  

          

        

      

    

     

    
      
        	1.2.	
                
                  *****
 
***** 

                

              

      

    

     

    
      	1.3.	
              *****

            

    

    

    
      	1.3.a(*)	
              
                *****
 
*****.

              

            

    

     

    
      	1.3.b	
              *****
 
*****

            

    

     

    
      	1.4.	
              *****
 
*****

            

    

     

    
      	2.	
              *****

            

    

    

    
      	2.1.(*)	
              *****
 
*****

            

    

    

    *****

     

    
      
        
        

      

      
        18

        
          

        

      

      
        
        

      

    

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

     

    *****

    

    

    
      	
              *****

            	 	
              *****

            
	 	 	 
	
              *****

            	 	
              *****

            
	 	 	 
	 	 	 
	
              *****

            	 	
              *****

            
	 	 	 
	 	 	 
	 	 	 
	
              *****
                

            	
              *****

            	
              *****

            
	 	 	 
	 	 	 
	 	 	 
	
              *****

            	 	
              *****

            
	 	 	 
	
              *****

            	 	
              *****

            

    

     

     

    *****

    

    Note
      that
      confidential treatment has been requested and two pages of material from this
      Appendix B have been omitted and filed separately with the
      Commission.

    
       

       

      
        
          
          

        

        
          19

          
            

          

        

        
          
          

        

      

    

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

     

    ATTACHMENT
      “C”

    

    

    *****

    

    

    
      
        	1.	
                *****

              

      

    

    

    
      
        	2.	
                *****

              

      

    

    

    
      
        	3.	
                *****

              

      

    

    

    Note
      that
      confidential treatment has been requested and one (1) page of material from
      this
      Attachment C has been omitted and filed separately with the
      Commission.

    
       

       

      
        
          
          

        

        
          20

          
            

          

        

        
          
          

        

      

    

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

     

    ATTACHMENT
      “D”

    

    

    

    
      	1.  	
              *****

            

    

    
      	2.  	
              *****

            

    

    
      	3.  	
              *****

            

    

    
      	4.  	
              *****

            

    

    
      	5.  	
              *****

            

    

    
      	6.  	
              *****

            

    

    
      	7.  	
              *****

            

    

    
      	8.  	
              *****

            

    

    
      	9.  	
              *****

            

    

    
      	10.  	
              *****

            

    

    
      	11.  	
              *****

            

    

    

    

    Note
      that
      confidential treatment has been requested and one (1) page of material from
      this
      Attachment D has been omitted and filed separately with the
      Commission.

     

    
      
        
        

      

      
        21*****
        Confidential material redacted and filed separately with the
        Commission.

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

      

      Date:
        August 31, 1995

      

      
        	
                TO:
                  

              	
                Yeda
                  Research and Development Company
                  Ltd.

              

      

      P.O.
        Box
        95 

      Rehovot
        76100

      ATTENTION:
        MR. *****

      

      Dear
        Sirs,

      

      Re:
        Amendment
        of Research and License Agreement

      

      This
        letter, when counter-signed by an authorized representative of Yeda Research
        and
        Development Ltd. (“Yeda”) will constitute an agreement between Yeda and XTL
        Biopharmaceuticals Ltd. (formerly named Xenograft Technologies Ltd.-“XTL”) to
        extend the period of research under the Research and License Agreement entered
        into by Yeda and XTL on April 7, 1993 (the “R&L Agreement”) and otherwise to
        amend the R&L Agreement, as hereinafter provided (unless otherwise herein
        defined, all capitalized terms appearing herein having the meanings ascribed
        to
        them in the R&L Agreement):

      

      
        	1.	
                General

              

      

      

      
        	1.1.	
                XTL
                  has advised Yeda that XTL contemplates promoting certain of its
                  major
                  activities by allowing third parties to develop and manufacture
                  products
                  using the results, including the products, obtained by XTL as a
                  result,
                  inter
                  alia,
                  of the exercise by it of the License granted by Yeda to XTL under
                  the
                  R&L Agreement and, subject to compliance with the provisions of the
                  R&L Agreement (as
                  herein amended), including those governing the grant of sublicences,
                  Yeda
                  has no objection thereto. 

              

      

      

      
        	
                1.2.

              	
                XTL
                  wishes to modify and diversify the rates of royalties due to Yeda
                  under
                  the R&L Agreement as hereinafter provided and Yeda agrees
                  thereto.

              

      

      

      
        	
                1.3.

              	
                XTL
                  wishes to receive, and Yeda is willing to grant to XTL, a grace
                  period
                  prior to commencement of certain royalty payments under the R&L
                  Agreement, as hereinafter provided.

              

      

      

      
        	2.	
                Royalties

              

      

      

      
        	2.1.	
                Royalty
                  Rates

              

      

      

      Instead
        of the royalties payable as specified in Clause 7(d)(ii) of the R&L
        Agreement, and subject to Section 2.2 below, the royalties payable to Yeda
        by
        XTL in consideration of the Licence granted under the R&L Agreement, shall
        be as follows: 

      

      
        	
                2.1.1.

              	
                *****
                  percent) of Net Sales (as hereinafter defined) from sales by XTL
                  of
                  pharmaceutical products developed and/or made under and/or using
                  the
                  Licensed Patents and/or the Licensed Technology. “Net Sales” as used
                  herein shall have the meaning ascribed to the term in the R&L
                  Agreement, references therein to “the Products” being read as references
                  to the pharmaceutical products referred to
                  hereinbefore.

              

      

      

      
        
          
          

        

        
          1

          
            

          

        

        
          
          

        

      

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

         

      

      
        	
                2.1.2.

              	
                *****
                  percent) of all amounts received by XTL from third parties (except
                  the
                  amounts governed by Section 2.1.4 below) under or pursuant to agreements
                  allowing such third parties the use of results, including products,
                  developed and/or made
                  by XTL under and/or using the Licensed Patents and/or the Licensed
                  Technology, provided
                  that if XTL shall be obliged to pay a royalty of more than *****
                  per cent) on any such amounts to a third party pursuant to a bona
                  fide
                  arms-length agreement with such third party (“a third party royalty”),
                  then the rate of royalty payable to Yeda pursuant to this Section
                  2.1.2 on
                  amounts subject to a third party royalty shall be reduced by the
                  percentage - up to a maximum *****
                  per cent) - by which the third party royalty rate exceeds *****
                  per cent), so that if,
                  for example, the third party royalty rate is *****
                  per cent) the rate of royalty payable to Yeda pursuant to this
                  Section
                  2.1.2 shall be *****
                  per cent), and if, as a further example, the third party royalty
                  rate is
                  *****
                  per cent), the rate of royalty payable to Yeda pursuant to this
                  Section
                  2.1.2 shall be reduced by *****
                  per cent).

              

      

      

      
        	
                2.1.3.

              	
                *****
                  percent) of all amounts received by XTL from a third party payable
                  upon
                  XTL reaching milestones specified in an agreement with such third
                  party
                  providing for performance of development activities by XTL for
                  such third
                  party under and/or using the Licensed Patents and/or the Licensed
                  Technology.

              

      

      

      
        	
                2.1.4.

              	
                *****
                  percent) of all amounts received by XTL under or pursuant to agreements
                  with third parties granting such third parties the right to use
                  chimeric
                  mammals or other animal models (collectively, “Models”) made and/or
                  developed by XTL under and/or using the Licensed Patents and/or
                  the
                  Licensed Technology or granting such third parties the right to
                  produce
                  Models under and/or using the Licensed Patents and/or the Licensed
                  Technology.

              

      

      

      
        	
                2.1.5.
                  

              	
                *****
                  percent) of all amounts received by XTL as a result of any activities
                  under and/or using the Licensed Patents and/or the Licensed Technology
                  (including the grant of sublicences to third parties to carry out
                  activities under and/or using the Licensed Patents and/or the Licensed
                  Technology),, other than those specified in Sections 2.1.1, 2.1.2,
                  2.1.3
                  or 2.1.4 above. Where the amounts received by XTL are the result
                  of
                  activities not involving the grant of sublicences to third parties
                  (“Direct Activities”) and are amounts received in a transaction other than
                  at arms length, the royalty due to Yeda shall be calculated on
                  the amount
                  that would have been received by XTL in a transaction at arms
                  length.

              

      

      

      
        	
                2.1.6.

              	
                For
                  the avoidance of doubt, it is expressly stated that royalties shall
                  not be
                  due pursuant to Sections 2.1.2, 2.1.4 or 2.1.5 above on funds received
                  by
                  XTL which are paid by a third party in order to cover, and are
                  actually
                  applied by XTL in covering, the cost of research and
                  development by
                  XTL for such third party of products generating any of the amounts
                  in
                  respect of which royalties are payable pursuant to Sections 2.1.2,
                  2.1.4
                  or 2.1.5 above.

              

      

      
 

      
        
          
          

        

        
          2

          
            

          

        

        
          
          

        

      

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

       

      
        	
                2.1.7.
                  

              	
                For
                  the avoidance of doubt, it is expressly stated, that nothing in
                  this
                  Section 2.1 above or elsewhere in this letter shall be deemed to
                  derogate
                  from the provisions of Clause 7(c) of the R&L Agreement governing the
                  grant of sublicences.

              

      

      
        	
                2.2.
                  

              	
                Commencement
                  of Payment of Royalties

              

      

      

      Royalties
        due under the R&L Agreement (as herein amended) shall become payable as
        follows:

      

      
        	2.2.1.	
                XTL's
                  obligation to pay royalties to Yeda pursuant to Sections 2.1.1,
                  2.1.2 or
                  2.1.5 above, shall
                  relate only to amounts received by and/or due to XTL on or after
                  the “Due
                  Date” (as hereinafter defined). The “Due Date” means the earlier of the
                  following dates: (a) the date of expiry of the period of 3 years
                  commencing on the date XTL first receives an amount in respect
                  of which
                  royalties were or would have been due to Yeda pursuant to any of
                  Sections
                  2.1.1, 2.1.2, 2.1.4 and 2.1.5 (assuming this Section 2.2.1 did
                  not exist),
                  and (b) the date on which the aggregate amount received by XTL
                  in respect
                  of which royalties would have been due to Yeda pursuant to Sections
                  2.1.1,
                  2.1.2, 2.1.3, 2.1.4 and 2.1.5 (assuming this section 2.2.1 and
                  section
                  2.2.2 below did not exist) *****.

              

      

      

      
        	
                2.2.2.

              	
                XTL’s
                  obligation to pay royalties to Yeda pursuant to Section 2.1.3 above
                  shall
                  apply to all amounts subject to royalty under that Section whenever
                  received, provided that actual payment of royalties due to Yeda
                  pursuant
                  to that Section on amounts received by XTL before the Due Date
                  shall be
                  due and made within 30 days of the Due
                  Date.

              

      

      

      
        	2.2.3.	
                Subject
                  to the provisions
                  of this Section 2.2 above, the provisions of Clause 7(d)(iii) of
                  the
                  R&L Agreement shall apply, mutatis mufandis, to the royalties payable
                  to Yeda pursuant to Section 2.1 above, references to “Net Sales” in the
                  said Clause 7(d)(iii) being deemed references to “Net Sales” as defined in
                  Section 2.1.1 above for the purpose of that Section and to amounts
                  received by XTL from Direct Activities (as defined in Section 2.1.5
                  above)
                  and references to “Sublicensing Receipts” in Clause 7(d)(iii) being deemed
                  references to amounts subject to royalty payment to Yeda pursuant
                  to
                  Sections 2.1.2, 2.1.3, 2.1.4 or 2.1.5 above (not being amounts
                  resulting
                  from Direct Activities (as defined in Section 2.1.5
                  above)).

              

      

      

      
        	
                2.2.4.

              	
                For
                  the avoidance of doubt, it is expressly stated that there shall
                  be no
                  grace period of any kind regarding payment of royalties pursuant
                  to
                  Section 2.1.4 above and they shall be paid on the periodic basis
                  specified
                  in Clause 7(d)(iii) of the R&L
                  Agreement.

              

      

      

      
        	
                2.3.
                  

              	
                For
                  the avoidance of doubt, it is expressly stated that the periods
                  during
                  which royalties shall be payable under the R&L Agreement shall be as
                  follows:

              

      

      

      
        	
                2.3.1.
                  

              	
                Payment
                  of royalties pursuant to Section 2.1.1 shall commence as provided
                  in
                  Section 2.2 and shall continue with respect to sales of any pharmaceutical
                  product as follows:

              

      

      

      
        	 	
                (aa)
                  

              	
                if
                  the product sold is made and/or sold in a country where a Licensed
                  Patent
                  or Patents issue including claims covering, in whole or in part,
                  such
                  product or the manufacture thereof-then, (i) until the date of
                  expiry of
                  the last of the Licensed Patents covering such product in such
                  country to
                  expire, plus the relevant grace period (as hereinafter defined),
                  or (ii)
                  until termination of the ***** commencing on the date of the first
                  commercial sale after the Due Date of such product in such country,
                  whichever is the longer period;

              

      

      

      
        
          
          

        

        
          3

          
            

          

        

        
          
          

        

      

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

       

      
        	 	
                (bb)
                  

              	
                on
                  sales of a product made and sold in any other country, until the
                  date of
                  expiry of a period of ***** commencing on the date of the first
                  commercial
                  sale, after the Due Date, of such product in such
                  country.

              

      

      

      
        	
                2.3.2.

              	
                Payment
                  of royalties pursuant to Section 2.1.2 shall commence as provided
                  in
                  Section 2.2 and shall continue as
                  follows:

              

      

      

      
        	
              	(aa)	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of the
                  paying third parry under a Licensed Patent or Patents in a particular
                  country shall continue until the expiry of the last to expire of
                  the said
                  Licensed Patents, plus the relevant grace period (as hereinafter
                  defined),
                  or (ii) until termination of the ***** commencing on the first
                  date, after
                  the Due Date, on which XTL receives an amount relating to activities
                  in
                  such country on which a royalty is due to Yeda pursuant to Section
                  2.1.2,
                  whichever is the longer period;

              

      

      

      
        	
              	(bb)	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of the
                  paying third party in a particular country in which there is no
                  Licensed
                  Patent shall continue until termination of the ***** commencing
                  on the
                  first date, after the Due Date, on which XTL receives an amount
                  relating
                  to activities in such country on which a royalty is due to Yeda
                  pursuant
                  to Section 2.1.2;

              

      

      

      
        	
              	(cc)	
                payment
                  of royalties on amounts paid to XTL and not attributable to the
                  paying
                  third party's activities in any particular country, shall continue
                  until
                  the expiry of the last to expire of any Licensed Patents sublicensed
                  to
                  the third party under the agreement with
                  it, or (ii) until the date of expiry of a period of *****
                  commencing on the first date, after the Due Date, on which XTL
                  receives an
                  amount relating to activities in any country included in the countries
                  covered by such agreement on which a royalty is due to Yeda pursuant
                  to
                  Section 2.1.2, whichever is the longer
                  period.

              

      

      

      
        	
                2.3.3.

              	
                Payment
                  of royalties pursuant to Section 2.1.3 shall commence as provided
                  in
                  Section 2.2 and shall continue as
                  follows:

              

      

      

      
        	 	
                (aa)
                  

              	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of XTL
                  or of the paying third party under a Licensed Patent or Patents
                  in a
                  particular country shall continue until the expiry of the last
                  to expire
                  of the said Licensed Patents, or (ii) until termination of the
                  *****
                  commencing on the date on which XTL first receives or (assuming
                  section
                  2.2.2 above did not exist) would have been entitled to receive
                  an amount
                  relating to activities in such country on which a royalty is due
                  to Yeda
                  pursuant to Section 2.1.3, whichever is the longer
                  period,

              

      

      

      
        
          
          

        

        
          4

          
            

          

        

        
          
          

        

      

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

       

      
        	 	
                (bb)
                  

              	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of XTL
                  or the paying third party in a particular country in which there
                  is no
                  Licensed Patent shall continue until termination of the *****
                  commencing on the date on which XTL first receives or (assuming
                  section
                  2.2.2 above did not exist) would have been entitled to receive
                  an amount
                  relating to activities in such country on which a royalty is due
                  to Yeda
                  pursuant to Section 2.1.2;

              

      

      

      
        	 	
                (cc)
                  

              	
                payment
                  of royalties on amounts paid to XTL and not attributable to XTL's
                  or the
                  third party's activities in any particular country shall continue
                  until
                  the expiry of the last to expire of any Licensed Patents under
                  which such
                  activities are or may be performed in terms of the agreement with
                  the
                  third party, or (ii) until the date of expiry of a period of *****
                  commencing on the date on which XTL first receives or (assuming
                  section
                  2.2.2 above did not exist) would have been entitled to receive
                  an amount
                  relating to activities in any country covered by such agreement
                  on which a
                  royalty is due to Yeda pursuant to Section 2.1.3, whichever is
                  the longer
                  period.

              

      

      

      
        	
                2.3.4.

              	
                Payment
                  of royalties pursuant to Section 2.1.4 shall commence as provided
                  in
                  Section 2.2 and shall continue as
                  follows:

              

      

      

      
        	
              	(aa)	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of the
                  paying third party under a Licensed Patent or Patents in a particular
                  country shall continue until the expiry of the last to expire of
                  the said
                  Licensed Patents, or (ii) until termination of the ***** commencing
                  on the
                  date on which XTL first receives an amount relating to activities
                  in such
                  country on which a royalty is due to Yeda pursuant to Section 2.1.4,
                  whichever is the longer period;

              

      

      

      
        	
              	(bb)	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of the
                  paying third party in a country in which there is no licensed Patent
                  shall
                  continue until termination of the ***** commencing on the date
                  on which
                  XTL first receives an amount relating to activities in such country
                  on
                  which a royalty is due to Yeda pursuant to Section
                  2.1.4;

              

      

      

      
        	 	
                (cc)
                  

              	
                payment
                  of royalties on amounts paid to XTL and not attributable to the
                  third
                  party's activities in any particular country shall continue, until
                  the
                  expiry of the last to expire of any Licensed Patents sublicensed
                  to the
                  third party under the agreement with it, or (ii) until the date
                  of expiry
                  of a period of ***** commencing on the date on which XTL first
                  receives an
                  amount relating to activities in any country covered by such agreement
                  on
                  which a royalty is due to Yeda pursuant to Section 2.1.4, whichever
                  is the
                  longer period.

              

      

      

      
        	
                2.3.5.

              	
                Payment
                  of royalties pursuant to Section 2.1.5 shall commence as provided
                  in
                  Section 2.2 and shall continue as
                  follows:

              

      

      

      
        	
                (A)

              	
                where
                  the royalties are on
                  amounts
                  received by XTL on any Direct Activity, the duty to pay royalties
                  shall
                  continue:

              

      

       

      
        
          
          

        

        
          5

          
            

          

        

        
          
          

        

      

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

         

      

      
        	 	
                (aa)
                  

              	
                if
                  the activity or any part thereof is carried out in any country
                  under a
                  Licensed Patent or Patents-then, until the date of expiry of the
                  last of
                  such Licensed Patents to expire, plus the relevant grace period
                  (as
                  hereinafter defined), or (ii) until termination of the ***** commencing
                  on
                  the first date, after the Due Date, on which XTL first receives
                  an amount
                  as a result of that activity in that country, whichever is the
                  longer
                  period;

              

      

      

      
        	 	
                (bb)
                  

              	
                if
                  the activity is carried out in any other country, until the date
                  of expiry
                  of a period of ***** commencing on the first date, after the Due
                  Date, on
                  which XTL receives an amount as a result of that activity in that
                  country;

              

      

      

      
        	
                (B)

              	
                Where
                  the royalties are due on amounts received by XTL on activities
                  not being a
                  Direct Activity, the duty to pay royalties shall continue as
                  follows::

              

      

      

      
        	 	
                (aa)
                  

              	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of the
                  paying third party under a Licensed Patent or Patents in a particular
                  country shall continue until the expiry of the last to expire of
                  the said
                  Licensed Patents, plus the relevant grace period (as hereinafter
                  defined),
                  or (ii) until termination of the ***** commencing on the first
                  date, after
                  the Due Date, on which XTL receives an amount relating to activities
                  in
                  such country on which a royalty is due to Yeda pursuant to Section
                  2.1.5,
                  whichever is the longer period;

              

      

      

      
        	 	
                (bb)
                  

              	
                payment
                  of royalties on amounts paid to XTL and attributable to activities
                  of the
                  paying third party in a particular country in which there is no
                  Licensed
                  Patent shall continue until termination of the ***** commencing
                  on the
                  first date, after the Due Date, on which XTL receives an amount
                  relating
                  to activities in such country on which a royalty is due to Yeda
                  pursuant
                  to Section 2.1.5;

              

      

      

      
        	 	
                (cc)
                  

              	
                payment
                  of royalties on amounts paid to XTL and not attributable to the
                  third
                  party's activities in any particular country shall continue, until
                  the
                  last to expire of any Licensed Patents sublicensed to the third
                  party
                  under the agreement with it, or (ii) until the date of expiry of
                  a period
                  of ***** commencing on the first date, after the Due Date, on which
                  XTL
                  receives an amount relating to activities in any country covered
                  by such
                  agreement on which a royalty is due to Yeda pursuant to Section
                  2.1.5,
                  whichever is the longer period.

              

      

      

      
        	
                2.4.

              	
                The
                  “relevant grace period” for the purpose of any of subsections 2.3.1, 2.3.2
                  and 2.3.5 above, shall mean the period by which commencement of
                  payment of
                  royalties due under subsections 2.1.1, 2.1.2 and 2.1.5, respectively,
                  has
                  been delayed, pursuant to Section 2.2
                  above.

              

      

      

      
        	
                2.5.

              	
                The
                  License granted under the R&L Agreement shall remain in force (if not
                  previously terminated according to the provisions of the R&L Agreement
                  (as amended hereby)) for the purpose of each of the activities
                  specified
                  in Sections 2.1.1, 2.1.2, 2.1.3, 2.1.4 and 2.1.5, as long as there
                  is a
                  duty to pay royalties in respect of such activity, as provided
                  in Section
                  2.3 above. Clause 7(b)(iii) of the R&L Agreement is replaced by the
                  provisions of this Section 2.5
                  above.

              

      

      

      
        
          
          

        

        
          6

          
            

          

        

        
          
          

        

      

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

       

      
        	
                3.

              	
                Payments
                  for Sponsored R&D

              

      

      

      
        	
                3.1.

              	
                Subject
                  to the amendments contained herein, the period of research which
                  XTL is
                  obliged to fund under the R&L Agreement is hereby extended by 1 (one)
                  year and shall continue until August 31, 1996 (the “Extension
                  Period”).

              

      

      

      
        	
                3.2.

              	
                XTL
                  shall pay Yeda an
                  aggregate amount in New Israel Sheqels equal (at the representative
                  rate
                  of exchange in force on the date of payment) to *****
                  (plus VAT against VAT invoice) in consideration of Yeda’s undertaking to
                  procure the performance (under the supervision of *****)
                  of research in the Extension Period in accordance with the Research
                  Plan
                  and the Budget attached hereto as Appendices “A” and “B”, respectively, as
                  follows:

              

      

      

      
        	
                3.2.1.

              	
                An
                  amount in New Israel Sheqels equal (at the representative rate
                  of exchange
                  in force on the date of payment) to *****
                  (plus VAT against VAT invoice) on March 31,
                  1996;

              

      

      

      
        	
                3.2.2.

              	
                An
                  amount in New Israel Sheqels equal to *****
                  (plus VAT against VAT invoice) on each of May 15, 1996 and July
                  31,
                  1996.

              

      

      

      
        	
                3.3.

              	
                Simultaneously
                  with counter-signature hereof by Yeda, XTL
                  shall provide Yeda with a bank guarantee from an Israeli bank,
                  in form
                  acceptable to Yeda, in order to secure XTL’s obligations under Sections
                  3.2.1 and 3.2.2 above. *****
                  of
                  the bank charges and commissions actually paid by XTL to the issuing
                  bank
                  in respect of the bank guarantee shall be reimbursed by Yeda to
                  XTL,
                  against proof of the amount paid by XTL, forthwith upon receipt
                  by Yeda of
                  the amount payable by XTL pursuant to Section 3.2.1
                  above.

              

      

      

      
        	4.	
                Entire
                  Agreement

              

      

      

      Except
        as
        set forth in this letter, all the terms of the R&L Agreement shall remain
        unchanged. The R&L Agreement, as amended hereunder, sets forth the entire
        understanding between Yeda and XTL regarding the R&L Agreement (except as
        supplemented by written instrument of even or subsequent date), and supersedes
        any other prior agreement or understanding, oral or written.

      

      Please
        indicate your acceptance of the terms of this letter by affixing your signature
        below.

      

      Very
        truly yours,

      XTL
        Biopharmaceuticals Ltd. 

      Martin
        Becker, Ph.D.

      President
        and CEO

      

      Agreed
        and Accepted:

      Yeda
        Research and Development Company Ltd.

      By:
        *****,
        President / Prof. *****,
        Chairman of the Board of Directors

      
         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

      

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

         

      

      Research
        Plan

      

      
        	
                1.

              	
                Milestones
                  for Contract Research: Year 1

              

      

      

      
        	
                A.

              	
                *****

              

      

      

      
        	
                B.

              	
                *****

              

      

      

      
        	2.	
                Basic
                  Research: Year 1

              

      

      

      
        	
                A.

              	
                *****

              

      

      

      
        	
                B.

              	
                *****

              

      

      

      
        	
                C.

              	
                *****

              

      

      

      Note
        that
        confidential treatment has been requested and one (1) page of material has
        been
        omitted and filed separately with the Commission.

      
         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

      

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

       

      Budget

      

      

      
        
          
            	1.	
                    *****

                  

          

        

      

      
        	a.  	
                *****

              

      

      
        	b.  	
                *****

              

      

      
        	c.  	
                *****

              

      

      
        	d.  	
                *****

              

      

      

      
        	2.	
                *****

              

      

      
        	a.  	
                ***** 

              

      

      
        	b.  	
                *****

              

      

      
        	c.  	
                *****

              

      

      
        	d.  	
                ***** 

              

      

      
        	e.  	
                *****

              

      

      

      *****

      

      Note
        that
        confidential treatment has been requested and one (1) page of material has
        been
        omitted and filed separately with the Commission.

       

      
        
          
          

        

        
          9

          
            

          

        

        
          
          

        

      

      
         
Date:
        13 February, 1996

      To:

      Yeda
        Research and Development Co (Yeda)

      

      Dear
        Sirs,

      

      Research
        and Development Agreement between XTL Biopharmaceuticals Ltd. ("XTL") and
        Neoprobe Corporation (“Neoprobe”)

      

      With
        reference to the Research and Development Agreement between XTL
        Biopharmaceuticals Ltd. and Neoprobe Corporation dated as of February 13,
        1996
        (“the Research Agreement”), XTL, hereby confirms, acknowledges and
        agrees:

      

      
        	
                (a)

              	
                that
                  any agreement by XTL to the amendment of the Research Agreement
                  (and/or
                  Exhibit B thereto) requires Yeda’s prior written
                  consent;

              

      

      
        	
                (b)

              	
                that
                  any agreement by XTL to the sublicensing or assignment of the Research
                  Agreement (and/or Exhibit B thereto) by Neoprobe requires Yeda’s prior
                  written consent;

              

      

      
        	
                (c)

              	
                that
                  any assignment by XTI. of its rights and obligations under the
                  Research
                  Agreement (and/or Exhibit B thereto) requires Yeda’s prior written
                  consent;

              

      

      
        	
                (d)

              	
                that
                  if XTL shall grant its agreement in either of the cases specified
                  in
                  subparagraphs (a) or (b) without first obtaining Yeda’s prior written
                  consent thereto or purport to make an assignment without first
                  obtaining
                  Yeda's prior written consent as required in subparagraph (c), XTL,
                  shall
                  be in material breach of the Research and License Agreement dated
                  as of
                  April 7, 1993 between Yeda and XTL (as amended) ("the
                  RLA”);

              

      

      
        	
                (e)

              	
                that
                  at Yeda’s request, XTL will exercise its right under Exhibit B of the
                  Research Agreement to inspect the books and accounts of
                  Neoprobe;

              

      

      
        	
                (f)

              	
                that
                  Yeda’s consent to the Research Agreement in no way derogates from the
                  provisions of the RLA, including - without limitation - Paragraph
                  7(c)(iv)
                  thereof, or from Yeda's rights and XTL's obligations
                  thereunder;

              

      

      
        	
                (g)

              	
                that,
                  at Yeda's request, XTL will exercise its legal rights under the
                  Research
                  Agreement (and/or Exhibit B thereto) against Neoprobe in the event
                  of a
                  breach of the Research Agreement (and/or Exhibit B thereto) by
                  Neoprobe
                  having an adverse effect for Yeda, including - without limitation
                  -
                  failure by Neoprobe to pay royalties due to XTL, under the Research
                  Agreement.

              

      

      

      Yours
        Faithfully,

      XTL
        Biopharmaceuticals Ltd.

      

      Agreed:

      Yeda
        Research and Development Co. Ltd.

      
         

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

      
 

      February
        13, 1996

      

      To:

      Yeda
        Research and Development Co. Ltd. (Yeda)

      

      Dear
        Sirs,

      

      Research
        and Development Agreement between XTL Biopharmaceuticals Ltd
        (“XTL”) and Neoprobe Corporation (“Neoprobe”)

      

      With
        reference to the Research and Development Agreement between XTL
        Biopharmaceuticals Ltd. and Neoprobe
        Corporation dated as of February 13, 1996 (“the Research Agreement"). XTL hereby
        confirms, acknowledges and agrees:

      

      
        	
                (a)

              	
                that
                  any agreement by XTL to the amendment of the Research Agreement
                  (and/or
                  Exhibit B thereto) requires Yeda's prior written
                  consent;

              

      

      
        	
                (b)

              	
                that
                  any agreement by XTL the sublicensing or assignment of the Research
                  Agreement (and/or Exhibit B thereto) by
                  Neoprobe
                  requires Yeda’s prior written
                  consent;

              

      

      
        	
                (c)

              	
                that
                  any assignment by XTL of its rights and obligations under the Research
                  Agreement (and/or Exhibit B thereto) requires Yeda’s prior written
                  consent;

              

      

      
        	
                (d)

              	
                that
                  if XTL shall grant its agreement in either of the cases specified
                  in
                  subparagraphs (a) or (b) without first obtaining Yeda’s prior written
                  consent thereto or purport to make an assignment without first
                  obtaining
                  Yeda's prior written consent as required in subparagraph (c), XTL
                  shall be
                  in material breach of the Research and License Agreement dated
                  as of April
                  7, 1993 between Yeda and XTL (as amended) (“the
                  RLA”);

              

      

      
        	
                (e)

              	
                that
                  at Yeda’s request, XTL will exercise its right under Exhibit B of the
                  Research Agreement to inspect the books and accounts of
                  Neoprobe;

              

      

      
        	
                (f)

              	
                that
                  Yeda's consent to the Research Agreement in no way derogates from
                  the
                  provisions of the RLA, including - without limitation - Paragraph
                  7(c)(iv)
                  thereof, or from Yeda’s rights and XTL’s obligations
                  thereunder;

              

      

      
        	
                (g)

              	
                that,
                  at Yeda's request, XTL will exercise its legal rights
                  under
                  the Research Agreement (and/or Exhibit B thereto) against Neoprobe
                  in the
                  event of a breach of the Research Agreement (and/or Exhibit B thereto)
                  by
                  Neoprobe having an adverse effect for Yeda, including - without
                  limitation
                  - failure by Neoprobe to pay royalties due to XTL under the Research
                  Agreement.

              

      

      

      Yours
        Faithfully,

      XTL
        Biopharmaceuticals Ltd.

      

      Agreed:

      Yeda
        Research and Development Co. Ltd.

      
         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

      
 

      February
        13, 1996

      

      Yeda
        Research and Development Co. Ltd.

      P.O.
        Box
        95

      Rehovot
        76100

      Israel

      

      
        	Re:	
                “Research
                  and Development Agreement”
Between
                  XTL Biopharmaceuticals Ltd. and Neoprobe
                  Corporation

              

      

      

      

      Gentlemen:

      

      In
        this
        subject agreement dated February 13, 1996, XTL granted an exclusive license
        to
        Neoprobe for the results of certain XTL research from XTL. This research
        will be
        based on certain XTL disease modeling and target agent technology. By this
        letter, Yeda Research and Development Company Limited (“Yeda”) and Neoprobe
        agree to the following:

      

      
        	a.  	
                Yeda
                  acknowledges and consents to the Research and Development Agreement
                  between XTL and Neoprobe and to the Sublicense Agreement attached
                  therein;

              

      

      

      
        	b.  	
                Neoprobe
                  confirms that Yeda is a third party beneficiary under the Research
                  and
                  Development Agreement as stated
                  therein;

              

      

      

      
        	c.  	
                Yeda
                  agrees that, in the event that XTL defaults on the Research and
                  License
                  Agreement between XTL and Yeda dated as of April 7, 1993 (as amended)
                  (the
                  “RLA”), then, unless Yeda terminates the RLA, the exclusive grant
                  described in Article 6.1 of the Research and Development Agreement
                  (and
                  the rest of the Research and Development Agreement) and the Sublicense
                  Agreement attached thereto will not be affected. If the RLA is
                  terminated
                  for any reason, the Research and Development Agreement will terminate
                  automatically (except for Articles 2.1.3, 3, 4.1 (a) - (e) and
                  (f)
                  (provided that the grant under Article 6.1 still is in effect)
                  and 4.2, 5,
                  7 and 11 thereof, which shall survive), but the grant in Article
                  6.1 of
                  the Research and Development Agreement and the Sublicense Agreement
                  attached thereto shall be assumed (if still in force) by Yeda directly,
                  subject to Neoprobe’s continued performance under the Sublicense
                  Agreement, which obligations will, in such circumstances, be deemed
                  to be
                  owed directly to Yeda. For the guidance of all doubt, it is expressly
                  stated that except for the assumption of Article 6.1 and the Sublicense
                  Agreement as aforesaid, Yeda will not assume the research and development
                  of any other aspects of the Research and Development Agreement,
                  will not
                  under any circumstances be obliged to indemnify Neoprobe in respect
                  of any
                  claims, and will not be subject to Article 4 of the Sublicense
                  Agreement.

              

      

      

      
        	d.  	
                Neoprobe
                  acknowledges that any agreement by XTL to any amendment to the
                  Research
                  and Development Agreement requires XTL to obtain Yeda’s prior written
                  consent, which consent will not be unreasonably withheld; and
                  

              

      

      

      
        	e.  	
                Neoprobe
                  agrees that it will not make mention of the name of Yeda or the
                  Weizmann
                  Institute or any of the scientists thereof in any advertising,
                  sales,
                  literature, promotional material, other publications, private placement
                  memoranda, public offering registration statements and the like,
                  unless
                  the prior written approval of Yeda thereto has been obtained (such
                  approval not to be unreasonably withheld) and except as required
                  by law.
                  Once an approval has been granted by Yeda to a certain form of
                  words for
                  use in a particular context, then the same form of words can be
                  used again
                  by Neoprobe in the same context, without further approval from
                  Yeda.

              

      

      
         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

      

      Includes
        confidential material redacted in the to-be-publicly-filed copy of the
        Agreement.
 

       

      Please
        sign and date the attached copy of this letter and return it to me for my
        files.

      

      

      Neoprobe
        Corporation

      *****

      

      Agreed
        and Accepted:

      Yeda
        Research and Development Company Ltd.

      *****    *****

      *****    *****

      

      Agreed:

      XTL
        Biopharmaceuticals Ltd.

      Martin
        Becker, President

       

       

      
        
          
          

        

        
          13

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