RESEARCH AND LICENSE AGREEMENT

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

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RESEARCH AND LICENSE AGREEMENT

RESEARCH AND LICENSE AGREEMENT (the “Agreement”) made and entered into as of April 18, 2000 the “Effective Date”), by and between DRK BLUTSPENDEDIENDST BADEN-WURTTENBERG, INSTITUT ULM (the “Licensor”), having an address at Postfach 15 64, U-89005 Ulm, Germany, and XTL BIOPHARMACEUTICALS, LTD. (the “Company”), having an address at Kiryat Weizmann, P.O. Box 370, Rehovot, 76100, Israel.

RECITALS

A.   ***** has conducted research and made new inventions with respect to technology relating to antibodies to HCV;

B.   The Company is willing to partially finance the performance of further research at the laboratories, and under the supervision, of ***** relating to antibodies to HCV;

C.   The Company is also willing to provide ***** antigens for HCV and access to its animal models to screen antibodies to HCV; and

D.   Subject to and in accordance with the terms and conditions of this Agreement, the Company wishes to acquire, and Licensor is willing to grant the Company, the exclusive license set forth in this Agreement.

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NOW, THEREFORE, in consideration of the mutual promises and agreements contained herein, the parties hereto agree as follows:

1.    Definitions

“ Affiliate ” means any corporation or other entity that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with the designated party but only for so long as such relationship exists. For the purposes of this section, “ Control ” shall mean ownership of at least 50% (or such lesser percent as may be the maximum that may be owned by foreign interests pursuant to the laws of the country of incorporation) of the shares of stock entitled to vote for directors in the case of a corporation and at least 50% (or such lesser percent as may be the maximum that may be owned by foreign interests pursuant to the laws of the country of domicile) of the interests in profits in the case of a business entity other than a corporation.

“ Antibodies ” mean those cell lines secreting antibodies to HCV listed on Exhibit A hereto and other cell lines secreting antibodies to HCV developed by Licensor as a result of the Research.

“ Effective Date ” means the date set forth at the beginning of this Agreement.

“ Existing Technology ” means all Patent Rights and Know-How of Licensor in the Field existing as of the Effective Date, including without limitation, the Patent Rights and Know-How listed on Exhibit B hereto.

“ Field ” means HCV therapeutics and diagnostics.

“ Know-How ” means all unpatented or nonpatentable chemical and biological materials (including cell lines, antibodies and other biological materials), inventions, ideas, data, formulations, processes, techniques, specifications, and other trade secrets or know-how.

“ License ” means the exclusive license granted to the Company by Licensor pursuant to Section 6.1.

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“ Licensed Product ” shall mean any product that incorporates one or more Antibodies or a part of the Licensed Technology for use in the Field.

“ Licensed Technology ” means the Existing Technology and the Research Technology.

“ Net Sales ” shall mean the total amount actually received by the Company or its Sublicensees from the sale of the Licensed Product, in all cases after deduction of (i) sales or service taxes (including value added taxes) and other government charges to the extent applicable to such transaction and not collected separately from the counterparty to the transaction; (ii) credits or allowances, if any, actually granted on account of price adjustments or customary discounts, recalls, rejections or return of Licensed Product previously sold; and (iii) freight and insurance charges which are separately invoiced. Net Sales will be calculated using generally accepted accounting principles.

“ Patent Rights ” means (i) all patents and patent applications useful in the Field conceived and reduced to practice by Licensor during the Research Period and the patents and patent applications listed in Exhibit B hereto; (ii) all patents and patent applications relating to the Antibodies and (iii) any divisionals, continuations, continuations-in-part, reissues, reexaminations, extensions or other governmental actions which extend any of the subject matter of the patent applications or patents in (i) or (ii) above, and any substitutions, confirmations, registrations or revalidations of any of the foregoing, in each case, which is owned or controlled, in whole or part, by license, assignment or otherwise by Licensor during the term of this Agreement.

“ Research ” means the research to be undertaken at the laboratories, and under the supervision of *****, as specified in the work plan attached hereto to Exhibit C .

“ Research Period ” means the period commencing on the Effective Date and, unless extended by written agreement of the parties or sooner terminated as provided herein, terminating on the first anniversary of the Effective Date.

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“ Research Technology ” means Patent Rights and Know-How created, discovered or developed by Licensor during the Research Period or as a result of the Research during the three-month period following the Research Period.

“ Sublicensee ” shall mean a third party to whom the Company has granted a license or sublicense to make, have made, import, use, offer for sale or sell a Licensed Product.

2.    Performance of Research  

2.1.    In consideration of the aggregate sum of ***** to be paid by the Company to Licensor *****, Licensor shall perform, or cause to be performed, the Research during the Research Period.

2.2.    In further consideration of this Agreement, XTL agrees to pay consulting fees in the aggregate sum of *****, to be paid by the Company to *****.

2.3.    During the Research Period, Licensor shall not collaborate with any third party in the Field; provided, however, that the Licensor shall have the right to collaborate with academic partners for research purposes only.

2.4.    In further consideration of the sums to be paid to Licensor ***** under Section 2.1 and Section 2.2, respectively, and the royalties payable to Licensor under Section 6 below, Licensor shall provide the Company with Antibodies pursuant to a Materials Transfer Agreement in the form attached hereto as Exhibit D.

2.5.    During the Research Period, Licensor shall provide XTL employees access to the laboratories where the Research is being conducted and shall instruct them on how to practice the Licensed Technology.

2.6.    The Company shall provide Licensor antigens for HCV and access to its animal models to screen antibodies for HCV and shall also provide any necessary Know-How related thereto. Any such XTL Know-How shall be treated by Licensor as confidential information subject to the obligations of Section 8.1 below.

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3.    Reporting  

Licensor will submit to the Company a detailed written report on the progress of the Research ***** during the Research Period, within 30 days of the end of each ***** period, and a written report summarizing the results of the Research within 60 days of the end of the Research Period. Further, prompt written reports will be submitted by Licensor to the Company on each significant development in the Research during the Research Period and for the three-month period thereafter.

4.    Title

Subject to the License granted to the Company hereunder, it is hereby agreed that all right, title and interest in and to the Licensed Technology shall vest in Licensor, exclusively. All right, title and interest in and to the Company’s animal models shall be retained by the Company, exclusively, and no license or other right to such technology is granted or implied hereby.

5.    Patents and Patent Applications

5.1.    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 content and the timing of the filing of such applications. The Company shall have primary responsibility for the preparation, filing, prosecution and maintenance of such patent applications through counsel of its choice. In the event the Company decides not to pursue such preparation, filing, prosecution or maintenance, it shall so inform Licensor in writing, and Licensor shall assume responsibility for such preparation, filing, prosecution and maintenance through counsel of its choice reasonably satisfactory to the Company. The Company shall bear all costs and fees related to the preparation, filing, prosecution and maintenance of the Patent Rights.

5.2.    The Company shall have the right to take such action as shall be necessary to protect or to sue for infringement of any Patent Rights. At its option, the Company may bring suit against an infringer and join Licensor as a party plaintiff in any such suit. At the request of the Company, Licensor shall also take such action as the Company shall deem necessary to protect any Patent Rights. All costs (including legal costs and other sums awarded to the counter-party in such action) involved in any action taken at the Company’s request, or by the Company, shall be borne by the Company exclusively. Any recovery in any such action shall be retained by the Company ***** and by Licensor *****, after the deduction of all legal costs and expenses.

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