<SEC-DOCUMENT>0001144204-12-065985.txt : 20130125
<SEC-HEADER>0001144204-12-065985.hdr.sgml : 20130125

<ACCEPTANCE-DATETIME>20121203111529

<PRIVATE-TO-PUBLIC>

ACCESSION NUMBER:		0001144204-12-065985

CONFORMED SUBMISSION TYPE:	DRS/A

PUBLIC DOCUMENT COUNT:		11

FILED AS OF DATE:		20121203

<PUBLIC-REL-DATE>20121226

DATE AS OF CHANGE:		20121226


FILER:


	COMPANY DATA:	

		COMPANY CONFORMED NAME:			RedHill Biopharma Ltd.

		CENTRAL INDEX KEY:			0001553846

		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]

		IRS NUMBER:				000000000



	FILING VALUES:

		FORM TYPE:		DRS/A

		SEC ACT:		1933 Act

		SEC FILE NUMBER:	377-00021

		FILM NUMBER:		121236497



	BUSINESS ADDRESS:	

		STREET 1:		21 HA'ARBA'A STREET

		CITY:			TEL AVIV

		STATE:			L3

		ZIP:			64739

		BUSINESS PHONE:		972-3-541-3131



	MAIL ADDRESS:	

		STREET 1:		21 HA'ARBA'A STREET

		CITY:			TEL AVIV

		STATE:			L3

		ZIP:			64739



</SEC-HEADER>

<DOCUMENT>
<TYPE>DRS/A
<SEQUENCE>1
<FILENAME>filename1.htm
<TEXT>
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     <TITLE></TITLE>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B><BR>
<B>SECURITIES AND EXCHANGE COMMISSION</B><BR>
<B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FORM 20-F/A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> (Amendment No. 2) </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Wingdings">x</FONT></TD><TD>REGISTRATION
                                                                                                                         STATEMENT
                                                                                                                         PURSUANT
                                                                                                                         TO SECTION
                                                                                                                         12(b)
                                                                                                                         OR (g)
                                                                                                                         OF THE
                                                                                                                         SECURITIES
                                                                                                                         EXCHANGE
                                                                                                                         ACT OF
                                                                                                                         1934</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">OR</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Wingdings">&uml;</FONT></TD><TD STYLE="text-align: justify">ANNUAL
                                                                                                         REPORT PURSUANT TO SECTION
                                                                                                         13 OR 15(d) OF THE SECURITIES
                                                                                                         EXCHANGE ACT OF 1934</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the fiscal year
ended ______________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3.15in">OR</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 3.15in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD STYLE="text-align: justify">TRANSITION
                                                                                                     REPORT PURSUANT TO SECTION
                                                                                                     13 OR 15(d) OF THE SECURITIES
                                                                                                     EXCHANGE ACT OF 1934</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">OR</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Wingdings">o</FONT></TD><TD>SHELL
                                                                                                                         COMPANY
                                                                                                                         REPORT
                                                                                                                         PURSUANT
                                                                                                                         TO SECTION
                                                                                                                         13 OR
                                                                                                                         15(d)
                                                                                                                         OF THE
                                                                                                                         SECURITIES
                                                                                                                         EXCHANGE
                                                                                                                         ACT OF
                                                                                                                         1934</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 1in; text-indent: 0in">Date
of event requiring this shell company report ________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Commission file number ____________<U>
</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-style: normal">&#9;RedHill
Biopharma Ltd.</FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0pt; margin-bottom: 0pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">(Exact
name of Registrant as specified in its charter)</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-style: normal">N/A</FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0pt; margin-bottom: 0pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">(Translation
of Registrant&rsquo;s name into English)</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-style: normal">Israel</FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0pt; margin-bottom: 0pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">(Jurisdiction
of incorporation or organization)</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-style: normal">&#9;21
Ha&rsquo;arba&rsquo;a Street, Tel Aviv 64739, Israel&#9;</FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0pt; margin-bottom: 0pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">(Address
of principal executive offices)</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">Ori
Shilo, Deputy Chief Executive Officer Finance and Operations </FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">21
Ha&rsquo;arba&rsquo;a Street, Tel Aviv 64739, Israel</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">Tel:
972-3-541-3131; Fax: 972-3-541-3144</FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0pt; margin-bottom: 0pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="font-style: normal">(Name,
Telephone, E-mail and/or Facsimile number and Address of Company Contact Person)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Securities registered or to be registered
pursuant to Section 12(b) of the Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 42%; text-align: center; text-decoration: underline">Title of class</TD>
    <TD STYLE="width: 6%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 52%; text-align: justify; text-decoration: underline">Name of each exchange on which registered</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">American Depositary Shares, each <BR>
    representing one Ordinary Share <SUP>(1)</SUP></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Nasdaq Capital Market</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify">Ordinary Shares, par value NIS 0.01 per share<SUP> (2)</SUP></TD>
    <TD STYLE="text-align: justify">&nbsp;</TD>
    <TD STYLE="text-align: justify">Nasdaq Capital Market</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(1)</TD><TD STYLE="text-align: justify">Evidenced by American
                                                                                Depositary Receipts.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify">Not for trading,
                                                                                but only in connection with the listing of the
                                                                                American Depositary Shares.</TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-style: normal">Securities
registered or to be registered pursuant to Section 12(g) of the Act:</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0pt; margin-bottom: 0pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;<FONT STYLE="font-style: normal">(Title
of Class)</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-style: normal">Securities
for which there is a reporting obligation pursuant to Section 15(d) of the Act:</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <!-- Field: /Page -->
<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-style: normal">None</FONT></P>

<!-- Field: Rule-Page --><DIV ALIGN="LEFT" STYLE="margin-top: 0pt; margin-bottom: 0pt"><DIV STYLE="font-size: 1pt; border-top: Black 1pt solid; width: 100%">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-style: normal">(Title
of Class)</FONT></P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate the number of outstanding shares
of each of the issuer&rsquo;s classes of capital or common stock as of the close of the period covered by the annual report: N/A</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Yes&nbsp;<FONT STYLE="font-family: Wingdings">&#168;&nbsp;</FONT>No&nbsp;<FONT STYLE="font-family: Wingdings">&#120;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If this report is
an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13
or 15(d) of the Securities Exchange Act 1934.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Yes&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT>&nbsp;
&nbsp;No&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Indicate by check
mark whether the registrant (1)&nbsp;has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2)&nbsp;has been subject to such filing requirements for the past 90 days.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Wingdings">&#168;
</FONT>Yes <FONT STYLE="font-family: Wingdings">&#120;</FONT> No</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 9.05pt 0pt 0; text-align: left; text-indent: 22.5pt">Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (&sect;232.405 of this chapter) during the
preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 9.05pt 0pt 0; text-align: left; text-indent: 22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 9.05pt 0pt 0; text-align: left; text-indent: 205.55pt"><FONT STYLE="color: windowtext">Yes
<FONT STYLE="font-family: Wingdings">o</FONT> No <FONT STYLE="font-family: Wingdings">o</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 9pt 0pt 0; text-align: left; text-indent: 22.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Indicate by check
mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of
&ldquo;accelerated filer and large accelerated filer&rdquo; in Rule 12b-2 of the Exchange Act. (Check one):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">Large Accelerated
filer <FONT STYLE="font-family: Wingdings">o</FONT> Accelerated filer <FONT STYLE="font-family: Wingdings">o</FONT>&#9; Non-accelerated
filer <FONT STYLE="font-family: Wingdings">&#120;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Indicate by check
mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">U.S. GAAP <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">International Financing
Reporting Standards as issued by the International Accounting</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&#9;Standards Board <FONT STYLE="font-family: Wingdings">&yacute;</FONT>&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt">Other <FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If &ldquo;Other&rdquo;
has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has
elected to follow.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 27pt">Item 17 <FONT STYLE="font-family: Wingdings">&#168;
</FONT>Item 18 <FONT STYLE="font-family: Wingdings">&#168;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">If this is an annual
report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Yes&nbsp;<FONT STYLE="font-family: Wingdings">o</FONT>&nbsp;
&nbsp;No&nbsp;&nbsp;<FONT STYLE="font-family: Wingdings">o</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12pt; text-align: center"></P>

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<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12pt; text-align: center"></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12pt; text-align: center">&nbsp;&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">TABLE
OF CONTENTS</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12pt; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; width: 90%"> ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT
    AND ADVISERS </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right; width: 10%"><B> 4 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 5 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 3. KEY INFORMATION </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 5 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 4. INFORMATION ON THE COMPANY </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 26 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 4A. UNRESOLVED STAFF COMMENTS </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 51 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 51 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> 62 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 83 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 8. FINANCIAL INFORMATION </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> 87 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 9. THE OFFER AND LISTING </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> 87 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 10.<FONT STYLE="font-size: 10pt; font-weight: normal">
    </FONT>ADDITIONAL INFORMATION </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> 89 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 11.<FONT STYLE="font-size: 10pt; font-weight: normal">
    </FONT>QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"><B> 103 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 12.<FONT STYLE="font-size: 10pt; font-weight: normal">
    </FONT>DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 104 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 14.<FONT STYLE="font-size: 10pt; font-weight: normal">
    </FONT>MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 15. CONTROLS AND PROCEDURES </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 16.<FONT STYLE="font-size: 10pt; font-weight: normal">
    </FONT>[RESERVED] </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 16B. CODE OF ETHICS </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: bold"> ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT
    COMMITTEES. </TD>
    <TD STYLE="padding-right: 0; padding-left: 0; font-weight: normal; text-align: right"><B> 113 </B></TD></TR>
</TABLE>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12pt; text-align: center">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12pt; text-align: center"></P>


<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;&nbsp;</P>

<P STYLE="margin: 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; width: 90%"> ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS </TD>
    <TD STYLE="font-weight: bold; text-align: right; width: 10%"> 113 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"> ITEM 16F. CHANGE IN REGISTRANT&rsquo;S CERTIFYING ACCOUNTANT. </TD>
    <TD STYLE="font-weight: bold; text-align: right"> 113 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"> ITEM 16G. CORPORATE GOVERNANCE </TD>
    <TD STYLE="font-weight: bold; text-align: right"> 113 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"> ITEM 16H. MINE SAFETY DISCLOSURE </TD>
    <TD STYLE="font-weight: bold; text-align: right"> 113 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"> ITEM 17. FINANCIAL STATEMENTS </TD>
    <TD STYLE="font-weight: bold; text-align: right"> 113 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"> ITEM 18.&nbsp;FINANCIAL STATEMENTS </TD>
    <TD STYLE="font-weight: bold; text-align: right"> 113 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"> ITEM 19. EXHIBITS </TD>
    <TD STYLE="font-weight: bold; text-align: right"> 114 </TD></TR>
</TABLE>


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<P STYLE="margin: 0">&nbsp;</P>



<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 12pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">______________________________________________________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Unless the context otherwise requires,
all references to &ldquo;RedHill,&rdquo; &ldquo;we,&rdquo; &ldquo;us,&rdquo; &ldquo;our,&rdquo; the &ldquo;Company&rdquo; and
similar designations refer to RedHill Biopharma Ltd. The term &ldquo;NIS&rdquo; refers to New Israeli Shekels, the lawful currency
of the State of Israel, the terms &ldquo;dollar&rdquo;, &ldquo;US$&rdquo; or &ldquo;$&rdquo; refer to U.S. dollars, the lawful
currency of the U.S. Our functional and presentation currency is the U.S. dollar. Foreign currency transactions in currencies
other than the U.S. dollar are translated in this Registration Statement into U.S. dollars using exchange rates in effect at the
date of the transactions.</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center; text-indent: -0.5in">________________________________</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center; text-indent: -0.5in">FORWARD-LOOKING
STATEMENTS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.55pt">Some of the statements
under the sections entitled &ldquo;Item 3. Key Information&nbsp;&mdash;&nbsp;Risk Factors,&rdquo; &ldquo;Item 4. Information on
the Company,&rdquo; &ldquo;Item 5. Operating and Financial Review and Prospects&rdquo; and elsewhere in this Registration Statement
may include forward looking statements. These statements involve known and unknown risks, uncertainties and other factors that
may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements
expressed or implied by the forward-looking statements. In some cases, you can identify forward-looking statements by terms including
&ldquo;anticipates&rdquo;, &ldquo;believes&rdquo;, &ldquo;could&rdquo;, &ldquo;estimates&rdquo;, &ldquo;expects&rdquo;, &ldquo;intends&rdquo;,
&ldquo;may&rdquo;, &ldquo;plans&rdquo;, &ldquo;potential&rdquo;, &ldquo;predicts&rdquo;, &ldquo;projects&rdquo;, &ldquo;should&rdquo;,
&ldquo;will&rdquo;, &ldquo;would&rdquo;, and similar expressions intended to identify forward-looking statements. Forward-looking
statements reflect our current views with respect to future events and are based on assumptions and subject to risks and uncertainties.
In addition, the sections of this Registration Statement on Form 20-F entitled &ldquo;Item 4. Information on the Company&rdquo;
contain information obtained from independent industry and other sources that we have not independently verified. You should not
put undue reliance on any forward-looking statements. Unless we are required to do so under U.S. federal securities laws or other
applicable laws, we do not intend to update or revise any forward-looking statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Factors that could cause our actual results
to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>the initiation, timing, progress and
                                                                                      results of our preclinical studies, clinical
                                                                                      trials, and other therapeutic candidate
                                                                                      development efforts;</TD>
</TR></TABLE>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 3pt; padding-bottom: 3pt; padding-left: 28.35pt; text-align: justify; text-indent: -14.15pt"></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0.25in; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>our ability to advance our therapeutic
                                                                                      candidates into clinical trials or to successfully
                                                                                      complete our preclinical studies or clinical
                                                                                      trials;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>our receipt of regulatory approvals
                                                                                      for our therapeutic candidates, and the
                                                                                      timing of other regulatory filings and approvals;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>the clinical development, commercialization,
                                                                                      and market acceptance of our therapeutic
                                                                                      candidates;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>our ability to establish and maintain
                                                                                      corporate collaborations;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>the interpretation of the properties
                                                                                      and characteristics of our therapeutic candidates
                                                                                      and of the results obtained with our therapeutic
                                                                                      candidates in preclinical studies or clinical
                                                                                      trials;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>the implementation of our business model,
                                                                                      strategic plans for our business and therapeutic
                                                                                      candidates;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>the scope of protection we are able
                                                                                      to establish and maintain for intellectual
                                                                                      property rights covering our therapeutic
                                                                                      candidates and our ability to operate our
                                                                                      business without infringing the intellectual
                                                                                      property rights of others;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>estimates of our expenses, future revenues
                                                                                      capital requirements and our needs for additional
                                                                                      financing;</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>competitive companies, technologies
                                                                                      and our industry; and</TD>
</TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD>statements as to the impact of the political
                                                                                      and security situation in Israel on our
                                                                                      business.</TD>
</TR></TABLE>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -49.65pt"><FONT STYLE="font-style: normal">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A. <B>Directors and Senior Management
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table lists the members
of our board of directors. The business address for all directors is 21 Ha&rsquo;arba&rsquo;a Street, Tel Aviv 64739, Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 26%; padding-right: 0; padding-left: 0; text-align: justify; font-weight: bold">Name</TD>
    <TD STYLE="width: 23%; padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="width: 51%; padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Position(s)</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Dror Ben-Asher</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Chief
                                                  Executive Officer and Chairman of the Board of Directors</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Ori Shilo</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Deputy
                                                  Chief Executive Officer Finance and Operations, Director</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Dr. Shmuel Cabilly</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Director</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Eric Swenden</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Director</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Dr. Kenneth Reed</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Director</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Dan Suesskind</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Director</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Ofer Tsimchi</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">External
                                                  Director</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">Aliza Rotbard</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify">External Director</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following table lists our executive
officers. The business address for all of these executives is 21 Ha&rsquo;arba&rsquo;a Street, Tel Aviv 64739, Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; font-weight: bold; text-align: justify; width: 26%; padding-right: 0">Name</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; width: 23%; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; width: 51%; padding-right: 0; padding-left: 0"><B>Position</B>(s)</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; font-weight: bold; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Dror Ben-Asher</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Chief Executive
    Officer and Chairman of the Board of Directors</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Ori Shilo</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Deputy Chief Executive
    Officer Finance and Operations, Director</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Reza Fathi, Ph.D.</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Senior Vice President
    Research and Development</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Gilead Raday</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Vice President
    Corporate and Product Development</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Adi Frish</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Vice President
    Business Development and Licensing</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Guy Goldberg</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Chief Business
    Officer</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Ira Kalfus, M.D.</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Chief Medical Officer</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding-top: 0; padding-left: 0; text-align: justify; padding-right: 0">Uri Hananel Aharon</TD>
    <TD STYLE="vertical-align: bottom; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">&nbsp;</TD>
    <TD STYLE="vertical-align: top; padding-top: 0; text-align: justify; padding-right: 0; padding-left: 0">Chief Accounting
    Officer</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">B. <B>Advisors </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Not applicable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">C. <B>Auditors</B><FONT STYLE="color: black">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our auditor since September 2010 has
been Kesselman &amp; Kesselman Certified Public Accountants (Isr), a member of PricewaterhouseCoopers International Limited,
or Kesselman, an independent registered public accounting firm. Kesselman audited our financial statements as of December 31,
2011 and 2010, and for the three years ended December 31, 2011. The address of Kesselman &amp; Kesselman is 25 HaMered
Street, Tel Aviv 68125, Israel.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
2. OFFER STATISTICS AND EXPECTED TIMETABLE</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 58.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 58.5pt"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 58.5pt"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 56.7pt; text-transform: uppercase; text-align: left; text-indent: -56.7pt"><FONT STYLE="text-transform: none; color: Black">ITEM
3. KEY INFORMATION</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 56.7pt; text-transform: uppercase; text-align: left; text-indent: -56.7pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A. &#9;Selected
Financial Data</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal"> The
following table sets forth our selected financial data, which is derived from our financial statements prepared in accordance
with International Financial Reporting Standards as issued by the International Accounting Standards Board, or IFRS. We have derived
the selected financial data as of December 31, 2010 and 2011, and for the period from August 3, 2009 (date of incorporation) through
December 31, 2009 and for the years ended December 31, 2010 and 2011, and the selected financial data as of September 30, 2012,
and for the nine-month periods ended September 30, 2011 and 2012, from our audited financial statements and unaudited financial
statements, respectively, included elsewhere in this Registration Statement on Form 20-F. You should read this selected financial
data in conjunction with, and it is qualified in its entirety by, our historical financial information and other information provided
in this Registration Statement including &ldquo;Item 5. Operating and Financial Review and Prospects&rdquo; and our financial
statements and related notes appearing elsewhere in this Registration Statement on Form 20-F. The unaudited selected financial
data were prepared on a basis consistent with our audited financial statements and include, in the opinion of our management,
all adjustments necessary for the fair presentation of the financial information contained in those statements. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal; color: Black"> &nbsp; </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year ended December
    31 </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Period from<BR> August
    3,<BR> to December<BR> 31, 2009 </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Nine months ended<BR>
    September 30 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> 2010 </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> (U.S. dollars in thousands, except share
    and<BR> per share data)<BR> (audited) </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD><TD NOWRAP STYLE="border-bottom: Black 1pt solid"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="text-align: center; border-bottom: Black 1pt solid"> (U.S. dollars in thousands,<BR> except
    share and per share<BR> data) (unaudited) </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"> Statement of Comprehensive Loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt; width: 45%"> Revenues </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 23 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 12 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 8%; text-align: right"> 20 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Research and development expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (5,414 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (736 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (86 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (5,207 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,559 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> General and administrative expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,482 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (518 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (43 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,730 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,875 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Other income (expenses) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (479 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 28 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Operating Loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (7,873 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,733 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (101 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (6,925 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (5,414 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Financial income </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 570 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 65 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 145 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 685 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Financial expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (8,200 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (876 </TD><TD STYLE="text-align: left"> )(6) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (194 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (8,154 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Financial expenses &ndash; net </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (7,630 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (811 </TD><TD STYLE="text-align: left"> )(4) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (49 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (7,469 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Loss and Comprehensive Loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (15,503 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,544 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (105 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (6,974 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (12,883 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Loss Per Ordinary Share &ndash; basic
    and diluted (in U.S. dollars) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.32 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.27 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.01 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.13 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (0.28 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Number of Ordinary Shares used in
    computing Loss Per Ordinary Share </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 48,087,362 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 9,600,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8,896,000 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 52,461,936 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 46,655,613 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>



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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> As
    of December 31 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> As
    of September 30 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; text-align: center"> 2011 </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; text-align: center"> 2010 </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; text-align: center"> 2012 </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: center; border-bottom: Black 1pt solid"> (U.S.
    dollars in thousands) <BR>(audited) </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; color: Black"> &nbsp; </TD><TD NOWRAP STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: center; border-bottom: Black 1pt solid"> (U.S.
    dollars in thousands)<BR>
    (unaudited) </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; padding-left: 5.4pt"> Balance Sheet Data: </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 58%; font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Cash and short term investments </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 18,647 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 9,152 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 13,653 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Working capital </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 18,223 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 9,161 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 12,957 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Total assets </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 20,186 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 10,510 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 15,309 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Total liabilities </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,399 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 12,104 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,831 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Accumulated deficit </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> (15,209 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> (2,569 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> (20,820 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 14.2pt"> Equity </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 18,787 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> (1,594 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> ) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 13,478 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>B</B>.&#9;<B>Capitalization
and Indebtedness</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> The following
table sets forth our capitalization as of September 30, 2012. This table should be read in conjunction with &ldquo;Item 5. Operating
and Financial Review and Prospects&rdquo; and our financial statements and related notes included elsewhere in this Registration
Statement on Form 20-F. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 12.1pt"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> As
    of September 30, 2012 </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: center"> (U.S. dollars in thousands)<BR> (unaudited) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt"> Current
    Liabilities: </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 86%; font-size: 10pt; color: Black; text-align: left; text-indent: -10pt; padding-left: 10pt"> Accounts
    payable and accruals: </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 816 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt"> Non-Current
    Liabilities: </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; text-indent: -10pt; padding-left: 10pt"> Royalty obligations
    to investors </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,015 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt"> Equity: </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; text-indent: -10pt; padding-left: 10pt"> Ordinary shares </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 143 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; text-indent: -10pt; padding-left: 10pt"> Warrants </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,686 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; text-indent: -10pt; padding-left: 10pt"> Additional paid-in
    capital </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 31,469 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; text-indent: -10pt; padding-left: 10pt"> Accumulated deficit </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> (20,820 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; text-indent: -10pt; padding-left: 10pt"> Total Equity </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 13,478 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: left; text-indent: -10pt; padding-left: 10pt"> Liabilities
    and equity </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 15,309 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: -4.5pt"><FONT STYLE="color: Black"><B>&nbsp;</B>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: -4.5pt"><FONT STYLE="color: Black"><B>C</B>.&#9;<B>Reasons
for the Offer and Use of Proceeds</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: -4.5pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: -4.5pt"><FONT STYLE="color: Black"><B>D</B>.&#9;<B>Risk
Factors</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 4.5pt; text-align: justify; text-indent: -4.5pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>You should
carefully consider the risks we describe below, in addition to the other information set forth elsewhere in this Registration
Statement on Form 20-F, including our consolidated financial statements and the related notes beginning on page F-1, before deciding
to invest in our ordinary shares or our American Depositary Shares. These material risks could adversely impact our results of
operations, possibly causing the trading price of our ordinary shares and American Depositary Shares to decline, and you could
lose all or part of your investment.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12.1pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12.1pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12.1pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 12.1pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Risks Related
to Our Financial Condition and Capital Requirements </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We are
a clinical development stage biopharmaceutical company with a history of operating losses. We expect to incur additional losses
in the future and may never be profitable.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We are a clinical development stage
biopharmaceutical company. Since our incorporation in 2009, we have been focused on acquiring and in-licensing therapeutic products
and performing research and development. All of our therapeutic candidates are in the clinical development stage, and none has
been approved for marketing or is being marketed or commercialized. Many, if not all, of our therapeutic candidates require additional
clinical trials before we can obtain the regulatory approvals in order to initiate commercial sales. We have incurred losses since
inception, principally as a result of research and development and general administrative expenses in support of our operations.
We experienced net losses of approximately $7 million in the first nine months of 2012, net losses of approximately $15.5 million
in 2011, and net losses of approximately $2.5 million in 2010. As of September 30, 2012, we had an accumulated deficit of approximately
$20.8 million. We may incur significant additional losses as we continue to focus our resources on prioritizing, selecting and
advancing our therapeutic candidates. Our ability to generate revenue and achieve profitability depends mainly upon our ability,
alone or with others, to successfully develop our therapeutic candidates, obtain the required regulatory approvals in various
territories and then commercialize our therapeutic candidates. We may be unable to achieve any or all of these goals with regard
to our therapeutic candidates. As a result, we may never be profitable or achieve significant and/or sustained revenues. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I> &nbsp; </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our limited
operating history makes it difficult to evaluate our business and prospects.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have a limited
operating history and our operations to date have been limited primarily to acquiring and in-licensing therapeutic candidates,
research and development, raising capital and recruiting scientific and management personnel and third party partners. We have
not yet demonstrated an ability to commercialize or obtain regulatory approval for any of our therapeutic candidates. Consequently,
any predictions about our future performance may not be accurate, and you may not be able to fully assess our ability to complete
development and/or commercialize our therapeutic candidates, obtain regulatory approvals, or achieve market acceptance or favorable
pricing for our therapeutic candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our current
working capital is not sufficient to complete our research and development with respect to all of our therapeutic candidates.
We will need to raise additional capital to achieve our strategic objectives of acquiring, developing and commercializing therapeutic
candidates, and our failure to raise sufficient capital would significantly impair our ability to fund our operations, develop
our therapeutic candidates, attract development and/or commercial partners and retain key personnel.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> We have
funded our operations primarily through public and private offerings of our securities. We plan to fund our future operations
through commercialization and out-licensing of our therapeutic candidates and raising additional capital. As of September 30,
2012, we had cash and short term investments of approximately $13.7 million. This amount is not sufficient to complete the research
and development of all of our therapeutic candidates. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our business
presently generates an insignificant amount of revenues, and given that we plan to continue expending substantial funds in research
and development, including clinical trials, we will need to raise additional capital in the future through either debt or equity
financing or pursuant to development or commercialization agreements with third parties with respect to particular therapeutic
candidates. However, we cannot be certain that we will be able to raise capital on commercially reasonable terms or at all, or
that our actual cash requirements will not be greater than anticipated. We may have difficulty raising needed capital or securing
a development or commercialization partner in the future as a result of, among other factors, our lack of revenues from commercialization
of the therapeutic candidates, as well as the inherent business risks associated with our company and present and future market
conditions. In addition, global and local economic conditions may make it more difficult for us to raise needed capital or secure
a development or commercialization partner in the future and may impact our liquidity. If we are unable to obtain future financing,
we may be forced to delay, reduce the scope of, or eliminate one or more of our research, development or commercialization programs
related to our therapeutic candidates, any of which may have material adverse effect on our business, financial condition and
results of operations. Moreover, to the extent we are able to raise capital through the issuance of debt or equity securities,
it could result in substantial dilution to existing stockholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our long
term capital requirements are subject to numerous risks.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our long term
capital requirements are expected to depend on many potential factors, including, among others:&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             number
                                                                                                                             of
                                                                                                                             therapeutic
                                                                                                                             candidates
                                                                                                                             in
                                                                                                                             development;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             regulatory
                                                                                                                             path
                                                                                                                             of
                                                                                                                             each
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">our
                                                                                                                             ability
                                                                                                                             to
                                                                                                                             successfully
                                                                                                                             commercialize
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates,
                                                                                                                             including
                                                                                                                             securing
                                                                                                                             commercialization
                                                                                                                             agreements
                                                                                                                             with
                                                                                                                             third
                                                                                                                             parties
                                                                                                                             and
                                                                                                                             favorable
                                                                                                                             pricing
                                                                                                                             and
                                                                                                                             market
                                                                                                                             share;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             progress,
                                                                                                                             success
                                                                                                                             and
                                                                                                                             cost
                                                                                                                             of
                                                                                                                             our
                                                                                                                             clinical
                                                                                                                             trials
                                                                                                                             and
                                                                                                                             research
                                                                                                                             and
                                                                                                                             development
                                                                                                                             programs;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             costs,
                                                                                                                             timing
                                                                                                                             and
                                                                                                                             outcome
                                                                                                                             of
                                                                                                                             regulatory
                                                                                                                             review
                                                                                                                             and
                                                                                                                             obtaining
                                                                                                                             regulatory
                                                                                                                             approval
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates
                                                                                                                             and
                                                                                                                             addressing
                                                                                                                             regulatory
                                                                                                                             and
                                                                                                                             other
                                                                                                                             issues
                                                                                                                             that
                                                                                                                             may
                                                                                                                             arise
                                                                                                                             post-approval;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             costs
                                                                                                                             of
                                                                                                                             enforcing
                                                                                                                             our
                                                                                                                             issued
                                                                                                                             patents
                                                                                                                             and
                                                                                                                             defending
                                                                                                                             intellectual
                                                                                                                             property-related
                                                                                                                             claims;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             costs
                                                                                                                             of
                                                                                                                             developing
                                                                                                                             sales,
                                                                                                                             marketing
                                                                                                                             and
                                                                                                                             distribution
                                                                                                                             channels;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">our
                                                                                                                                               consumption
                                                                                                                                               of
                                                                                                                                               available
                                                                                                                                               resources
                                                                                                                                               more
                                                                                                                                               rapidly
                                                                                                                                               than
                                                                                                                                               currently
                                                                                                                                               anticipated,
                                                                                                                                               resulting
                                                                                                                                               in
                                                                                                                                               the
                                                                                                                                               need
                                                                                                                                               for
                                                                                                                                               additional
                                                                                                                                               funding
                                                                                                                                               sooner
                                                                                                                                               than
                                                                                                                                               anticipated.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Risks Related
to Our Business and Regulatory Matters</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>If we
and/or our commercialization partners are unable to obtain U.S. Food and Drug Administration and/or other foreign regulatory authority
approval for our therapeutic candidates, we and/or our commercialization partners will be unable to commercialize our therapeutic
candidates.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> To date,
we have not marketed, distributed or sold any therapeutic candidate or other product. Currently, we have six therapeutic candidates
in clinical development, &ldquo;RHB-101&rdquo; for the treatment of hypertension, heart failure and left ventricular dysfunction;
&ldquo;RHB-102&rdquo; for the prevention of chemotherapy and radiotherapy induced nausea and vomiting; &ldquo;RHB-103&rdquo; for
the treatment of acute migraine headaches; &ldquo;RHB-104&rdquo; for the treatment of Crohn&rsquo;s disease; &ldquo;RHB-105&rdquo;
for the treatment of <I>Helicobacter pylori </I>infection, a major cause of peptic ulcer disease; and &ldquo;RHB-106&rdquo; for
bowel preparation prior to abdominal procedures such as surgery or colonoscopy. Our therapeutic candidates are subject to extensive
governmental laws, regulations and guidelines relating to development, clinical trials, manufacturing and commercialization of
drugs. We may not be able to obtain marketing approval for any of our therapeutic candidates in a timely manner or at all. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Any material
delay in obtaining, or the failure to obtain, required regulatory approvals will increase our costs and materially and adversely
affect our ability to generate future revenues. Any regulatory approval to market a therapeutic candidate may be subject to limitations
on the indicated uses for marketing the therapeutic candidate or may impose restrictive conditions of use, including cautionary
information, thereby limiting the size of the market for the therapeutic candidate. We also are, and will be, subject to numerous
regulatory requirements from both the U.S. Food and Drug Administration and foreign state agencies that govern the conduct of
clinical trials, manufacturing and marketing authorization, pricing and third-party reimbursement. Moreover, approval by one regulatory
authority does not ensure approval by other regulatory authorities in separate jurisdictions. Each jurisdiction may have different
approval processes and may impose additional testing requirements for our therapeutic candidates than other jurisdictions. Additionally,
the U.S. Food and Drug Administration or other foreign regulatory bodies may change their approval policies or adopt new laws,
regulations or guidelines in a manner that delays or impairs our ability to obtain the necessary regulatory approvals to commercialize
our therapeutic candidates. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Clinical
trials may involve a lengthy and expensive process with an uncertain outcome, and results of earlier studies and trials may not
be predictive of future trial results.</I></B> <B><I>We and/or commercialization partners will not be able to commercialize our
therapeutic candidates without completing such trials.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have limited
experience in conducting and managing the clinical trials that are required to commence commercial sales of our therapeutic candidates.
Clinical trials are expensive, complex, can take many years and have uncertain outcomes. We cannot predict whether we, independently
or through third parties, will encounter problems with any of the completed, ongoing or planned clinical trials that will cause
delays, including suspension of the clinical trial, or delay of data analysis or release of the final report. The clinical trials
of our therapeutic candidates may take significantly longer to complete than is estimated. Failure can occur at any stage of the
testing and we may experience numerous unforeseen events during, or as a result of, the clinical trial process that could delay
or prevent commercialization of our current or future therapeutic candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In connection
with the clinical trials for our therapeutic candidates and other therapeutic candidates that we may seek to develop in the future,
either on our own or through licensing or partnering agreements, we face various risks, including but not limited to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">delays
                                                                                                                             in
                                                                                                                             securing
                                                                                                                             clinical
                                                                                                                             investigators
                                                                                                                             or
                                                                                                                             trial
                                                                                                                             sites
                                                                                                                             for
                                                                                                                             the
                                                                                                                             clinical
                                                                                                                             trials;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">delays
                                                                                                                             in
                                                                                                                             receiving
                                                                                                                             import
                                                                                                                             or
                                                                                                                             other
                                                                                                                             government
                                                                                                                             approvals
                                                                                                                             to
                                                                                                                             ensure
                                                                                                                             appropriate
                                                                                                                             drug
                                                                                                                             supply;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">delays
                                                                                                                             in
                                                                                                                             obtaining
                                                                                                                             institutional
                                                                                                                             review
                                                                                                                             board
                                                                                                                             and
                                                                                                                             other
                                                                                                                             regulatory
                                                                                                                             approvals
                                                                                                                             to
                                                                                                                             commence
                                                                                                                             a
                                                                                                                             clinical
                                                                                                                             trial;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">negative
                                                                                                                             or
                                                                                                                             inconclusive
                                                                                                                             results
                                                                                                                             from
                                                                                                                             clinical
                                                                                                                             trials;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">the
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration
                                                                                                                             or
                                                                                                                             other
                                                                                                                             foreign
                                                                                                                             regulatory
                                                                                                                             authorities
                                                                                                                             may
                                                                                                                             disagree
                                                                                                                             with
                                                                                                                             the
                                                                                                                             number,
                                                                                                                             design,
                                                                                                                             size,
                                                                                                                             conduct
                                                                                                                             or
                                                                                                                             implementation
                                                                                                                             of
                                                                                                                             our
                                                                                                                             clinical
                                                                                                                             studies;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                             inability
                                                                                                                             to
                                                                                                                             monitor
                                                                                                                             patients
                                                                                                                             adequately
                                                                                                                             during
                                                                                                                             or
                                                                                                                             after
                                                                                                                             treatment;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">problems
                                                                                                                             with
                                                                                                                             investigator
                                                                                                                             or
                                                                                                                             patient
                                                                                                                             compliance
                                                                                                                             with
                                                                                                                             the
                                                                                                                             trial
                                                                                                                             protocols;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             therapeutic
                                                                                                                             candidate
                                                                                                                             may
                                                                                                                             not
                                                                                                                             prove
                                                                                                                             safe
                                                                                                                             or
                                                                                                                             efficacious;
                                                                                                                             there
                                                                                                                             may
                                                                                                                             be
                                                                                                                             unexpected
                                                                                                                             or
                                                                                                                             even
                                                                                                                             serious
                                                                                                                             adverse
                                                                                                                             events
                                                                                                                             and
                                                                                                                             side
                                                                                                                             effects
                                                                                                                             from
                                                                                                                             the
                                                                                                                             use
                                                                                                                             of
                                                                                                                             a
                                                                                                                             therapeutic
                                                                                                                             product;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             results
                                                                                                                             with
                                                                                                                             respect
                                                                                                                             to
                                                                                                                             any
                                                                                                                             therapeutic
                                                                                                                             candidate
                                                                                                                             may
                                                                                                                             not
                                                                                                                             confirm
                                                                                                                             the
                                                                                                                             positive
                                                                                                                             results
                                                                                                                             from
                                                                                                                             earlier
                                                                                                                             preclinical
                                                                                                                             studies
                                                                                                                             or
                                                                                                                             clinical
                                                                                                                             trials;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             results
                                                                                                                             may
                                                                                                                             not
                                                                                                                             meet
                                                                                                                             the
                                                                                                                             level
                                                                                                                             of
                                                                                                                             statistical
                                                                                                                             significance
                                                                                                                             required
                                                                                                                             by
                                                                                                                             the
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration
                                                                                                                             or
                                                                                                                             other
                                                                                                                             foreign
                                                                                                                             regulatory
                                                                                                                             authorities;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             results
                                                                                                                             will
                                                                                                                             justify
                                                                                                                             only
                                                                                                                             limited
                                                                                                                             and/or
                                                                                                                             restrictive
                                                                                                                             uses,
                                                                                                                             including
                                                                                                                             the
                                                                                                                             inclusion
                                                                                                                             of
                                                                                                                             warnings
                                                                                                                             and
                                                                                                                             contraindications,
                                                                                                                             which
                                                                                                                             could
                                                                                                                             significantly
                                                                                                                             limit
                                                                                                                             the
                                                                                                                             marketability
                                                                                                                             and
                                                                                                                             profitability
                                                                                                                             of
                                                                                                                             the
                                                                                                                             therapeutic
                                                                                                                             candidate;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             clinical
                                                                                                                             trials
                                                                                                                             may
                                                                                                                             be
                                                                                                                             delayed
                                                                                                                             or
                                                                                                                             not
                                                                                                                             completed
                                                                                                                             due
                                                                                                                             to
                                                                                                                             the
                                                                                                                             failure
                                                                                                                             to
                                                                                                                             recruit
                                                                                                                             suitable
                                                                                                                             candidates
                                                                                                                             or
                                                                                                                             if
                                                                                                                             there
                                                                                                                             is
                                                                                                                             a
                                                                                                                             lower
                                                                                                                             rate
                                                                                                                             of
                                                                                                                             suitable
                                                                                                                             candidates
                                                                                                                             than
                                                                                                                             anticipated
                                                                                                                             or
                                                                                                                             if
                                                                                                                             there
                                                                                                                             is
                                                                                                                             a
                                                                                                                             delay
                                                                                                                             in
                                                                                                                             recruiting
                                                                                                                             suitable
                                                                                                                             candidates;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">changes
                                                                                                                             to
                                                                                                                             the
                                                                                                                             current
                                                                                                                             regulatory
                                                                                                                             requirements
                                                                                                                             related
                                                                                                                             to
                                                                                                                             clinical
                                                                                                                             trials
                                                                                                                             which
                                                                                                                             can
                                                                                                                             delay,
                                                                                                                             hinder
                                                                                                                             or
                                                                                                                             lead
                                                                                                                             to
                                                                                                                             unexpected
                                                                                                                             costs
                                                                                                                             in
                                                                                                                             connection
                                                                                                                             with
                                                                                                                             our
                                                                                                                             receiving
                                                                                                                             the
                                                                                                                             applicable
                                                                                                                             regulatory
                                                                                                                             approvals.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A number of
companies in the pharmaceutical and biotechnology industries, including those with greater resources and experience than us, have
suffered significant setbacks in advanced clinical trials, even after seeing promising results in earlier clinical trials. As
such, despite the results reported in earlier clinical trials of our therapeutic candidates, we do not know whether any Phase
II/III or other clinical trials we may conduct will demonstrate adequate efficacy and safety sufficient to obtain regulatory approval
to market our therapeutic candidates. If any of the clinical trials of any therapeutic candidate do not produce favorable results,
our ability to obtain regulatory approval for the therapeutic candidate may be adversely impacted, which will have a material
adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>If we
do not establish collaborations for our therapeutic candidates or otherwise raise substantial additional capital, we will likely
need to alter our development and any commercialization plans.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our drug development
programs and the potential commercialization of our therapeutic candidates will require additional cash to fund expenses. As such,
our strategy includes selectively partnering or collaborating with multiple pharmaceutical and biotechnology companies to assist
us in furthering development and potential commercialization of our therapeutic candidates, in some or all jurisdictions. Although
we are currently aware of numerous potential third party partners for the development or commercialization of our therapeutic
candidates, we may not be successful in entering into new collaborations with third parties on acceptable terms, or at all. In
addition, if we fail to negotiate and maintain suitable development and/or commercialization agreements, we may have to limit
the size or scope of our activities or we may have to delay one or more of our development or commercialization programs. Any
failure to enter into development or commercialization agreements with respect to the development, marketing and commercialization
of any therapeutic candidate or failure to develop, market and commercialize such therapeutic candidate independently will have
an adverse effect on our business, financial condition and results of operation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Any collaborative
arrangements that we establish may not be successful or we may otherwise not realize the anticipated benefits from these collaborations.
We do not control third parties with whom we have or may have collaborative arrangements, and we rely on them to achieve results
which may be significant to us. In addition, any future collaboration arrangements may place the development and commercialization
of our therapeutic candidates outside our control, may require us to relinquish important rights or may otherwise be on terms
unfavorable to us. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Each of our
collaborative arrangements requires us to rely on external consultants, advisors, and experts for assistance in several key functions,
including clinical development, manufacturing, regulatory, market research, and intellectual property. We do not control these
third parties, but we rely on them to achieve results which may be significant to us. Relying upon collaborative arrangements
to develop and commercialize our therapeutic candidates subjects us to a number of risks, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">we
                                                                                                                             may
                                                                                                                             not
                                                                                                                             be
                                                                                                                             able
                                                                                                                             to
                                                                                                                             control
                                                                                                                             the
                                                                                                                             amount
                                                                                                                             and
                                                                                                                             timing
                                                                                                                             of
                                                                                                                             resources
                                                                                                                             that
                                                                                                                             our
                                                                                                                             collaborators
                                                                                                                             may
                                                                                                                             devote
                                                                                                                             to
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">should
                                                                                                                             a
                                                                                                                             collaborator
                                                                                                                             fail
                                                                                                                             to
                                                                                                                             comply
                                                                                                                             with
                                                                                                                             applicable
                                                                                                                             laws,
                                                                                                                             rules,
                                                                                                                             or
                                                                                                                             regulations
                                                                                                                             when
                                                                                                                             performing
                                                                                                                             services
                                                                                                                             for
                                                                                                                             us,
                                                                                                                             we
                                                                                                                             could
                                                                                                                             be
                                                                                                                             held
                                                                                                                             liable
                                                                                                                             for
                                                                                                                             such
                                                                                                                             violations;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">our
                                                                                                                             collaborators
                                                                                                                             may
                                                                                                                             experience
                                                                                                                             financial
                                                                                                                             difficulties
                                                                                                                             or
                                                                                                                             changes
                                                                                                                             in
                                                                                                                             business
                                                                                                                             focus;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">our
                                                                                                                             collaborators
                                                                                                                             partners
                                                                                                                             may
                                                                                                                             fail
                                                                                                                             to
                                                                                                                             secure
                                                                                                                             adequate
                                                                                                                             commercial
                                                                                                                             supplies
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates
                                                                                                                             upon
                                                                                                                             marketing
                                                                                                                             approval,
                                                                                                                             if
                                                                                                                             at
                                                                                                                             all;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">our
                                                                                                                             collaborators
                                                                                                                             partners
                                                                                                                             may
                                                                                                                             have
                                                                                                                             a
                                                                                                                             shortage
                                                                                                                             of
                                                                                                                             qualified
                                                                                                                             personnel;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">we
                                                                                                                             may
                                                                                                                             be
                                                                                                                             required
                                                                                                                             to
                                                                                                                             relinquish
                                                                                                                             important
                                                                                                                             rights,
                                                                                                                             such
                                                                                                                             as
                                                                                                                             marketing
                                                                                                                             and
                                                                                                                             distribution
                                                                                                                             rights;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">business
                                                                                                                             combinations
                                                                                                                             or
                                                                                                                             significant
                                                                                                                             changes
                                                                                                                             in
                                                                                                                             a
                                                                                                                             collaborator&rsquo;s
                                                                                                                             business
                                                                                                                             strategy
                                                                                                                             may
                                                                                                                             adversely
                                                                                                                             affect
                                                                                                                             a
                                                                                                                             collaborator&rsquo;s
                                                                                                                             willingness
                                                                                                                             or
                                                                                                                             ability
                                                                                                                             to
                                                                                                                             complete
                                                                                                                             its
                                                                                                                             obligations
                                                                                                                             under
                                                                                                                             any
                                                                                                                             arrangement;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">under
                                                                                                                             certain
                                                                                                                             circumstances,
                                                                                                                             a
                                                                                                                             collaborator
                                                                                                                             could
                                                                                                                             move
                                                                                                                             forward
                                                                                                                             with
                                                                                                                             a
                                                                                                                             competing
                                                                                                                             therapeutic
                                                                                                                             candidate
                                                                                                                             developed
                                                                                                                             either
                                                                                                                             independently
                                                                                                                             or
                                                                                                                             in
                                                                                                                             collaboration
                                                                                                                             with
                                                                                                                             others,
                                                                                                                             including
                                                                                                                             our
                                                                                                                             competitors;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">collaborative
                                                                                                                             arrangements
                                                                                                                             are
                                                                                                                             often
                                                                                                                             terminated
                                                                                                                             or
                                                                                                                             allowed
                                                                                                                             to
                                                                                                                             expire,
                                                                                                                             which
                                                                                                                             could
                                                                                                                             delay
                                                                                                                             the
                                                                                                                             development
                                                                                                                             and
                                                                                                                             may
                                                                                                                             increase
                                                                                                                             the
                                                                                                                             cost
                                                                                                                             of
                                                                                                                             developing
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">If any of these
scenarios materialize, they could have adverse effect on our business, financial condition or results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We rely
on third parties to conduct our clinical trials, and those third parties may not perform satisfactorily, including, but not limited
to, failing to meet established deadlines for the completion of such clinical trials. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We do not have
the ability to independently conduct clinical trials for our product candidates, and we rely on third parties, such as contract
research organizations, medical institutions, contract laboratories, development and commercialization partners, clinical investigators
and independent study monitors to perform this function. Our reliance on these third parties for clinical development activities
reduces our control over these activities. Furthermore, these third parties may also have relationships with other entities, some
of which may be our competitors. Although we have, in the ordinary course of business, entered into agreements with these third
parties, we continue to be responsible for confirming that each of our clinical trials is conducted in accordance with its general
investigational plan and protocol. Moreover, the U.S. Food and Drug Administration requires us to comply with regulations and
standards, commonly referred to as good clinical practices, for conducting, recording and reporting the results of clinical trials
to assure that data and reported results are credible and accurate and that the trial participants are adequately protected. Our
reliance on third parties does not relieve us of these responsibilities and requirements. To date, we believe our contract research
organizations and other similar entities with which we are working have performed well. However, if these third parties do not
successfully carry out their contractual duties or meet expected deadlines, we may be required to replace them. Although we believe
that there are a number of other third-party contractors we could engage to continue these activities, it may result in a delay
of the affected trial and additional costs. Accordingly, we may be delayed in obtaining regulatory approvals for our therapeutic
candidates and may be delayed in our efforts to successfully commercialize our therapeutic candidates for targeted diseases.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
our ability to bring our therapeutic candidates to market depends on the quality and integrity of data that we present to regulatory
authorities in order to obtain marketing authorizations. Although we attempt to audit and control the quality of third party data,
we cannot guarantee the authenticity or accuracy of such data, nor can we be certain that such data has not been fraudulently
generated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>If third
parties do not manufacture our therapeutic candidates in sufficient quantities, in the required timeframe, and at an acceptable
cost, clinical development and commercialization of our therapeutic candidates would be delayed. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We do not
currently own or operate manufacturing facilities, and we rely, and expect to continue to rely, on third parties to manufacture
clinical and commercial quantities of our therapeutic candidates. Our reliance on third parties includes our reliance on them
for quality assurance related to regulatory compliance. Our current and anticipated future reliance upon others for the manufacture
of our therapeutic candidates may adversely affect our future profit margins, if any, and our ability to develop therapeutic candidates
and commercialize any therapeutic candidates on a timely and competitive basis.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may not be able to maintain our
existing or future third party manufacturing arrangements on acceptable terms, if at all. If for some reason our manufacturers
do not perform as agreed or expected, we may be required to replace them. Although we are not substantially dependent upon our
existing manufacturing agreements since we could replace them with other third party manufacturers, we may incur added costs and
delays in identifying, engaging, qualifying and training any such replacements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In October 2012, we and our clinical
manufacturer for RHB-104 mutually terminated our relationship after we concluded that another manufacturer would be better suited
to conduct the scale up required to produce our clinical trial material in sufficient quantities and fulfill our timeline. We
do not believe that this action delayed or will delay the initiation of our clinical studies with RHB-104 or will<FONT STYLE="font: 10pt Times New Roman, Times, Serif">
cause us to incur additional significant costs. However, it is possible that in the future we may be required to terminate other
third party manufacturers, which may cause us to incur additional costs or delays.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>We rely
on third party contract vendors to manufacture and supply us with high
quality API, or active pharmaceutical ingredients, in the quantities we require on a timely basis.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We currently do not manufacture any
API ourselves. Instead, we rely on third-party vendors for the manufacture and supply of our APIs that are used to formulate our
therapeutic candidates. While there are many potential API suppliers in the market, if these suppliers are incapable or unwilling
to meet our current or future needs on acceptable terms or at all, we could experience a delay in conducting additional clinical
trials of our therapeutic candidates and incur additional costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">While there may be several alternative suppliers of API in the market, we have not conducted extensive
investigation into the quality or availability of their APIs. As a result, we can provide no assurances that supply sources will
not be interrupted from time to time. Changing API suppliers or finding and qualifying new API suppliers can be costly and take
a significant amount of time. Many APIs require significant lead time to manufacture. There can also be challenges in maintaining
similar quality or technical standards from one manufacturing batch to the next.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If we are not able to find stable,
reliable supplies of our API , we may not be able to produce enough supplies of our therapeutic candidates, which could affect
our business, financial condition or results of operation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We anticipate
continued reliance on third-party manufacturers if we are successful in obtaining marketing approval from the U.S. Food and Drug
Administration and other regulatory agencies for any of our therapeutic candidates.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To date, our
therapeutic candidates have been manufactured in relatively small quantities for preclinical testing and clinical trials by third-party
manufacturers. If the U.S. Food and Drug Administration or other regulatory agencies approve any of our therapeutic candidates
for commercial sale, we expect that we would continue to rely, at least initially, on third-party manufacturers to produce commercial
quantities of our approved therapeutic candidates. These manufacturers may not be able to successfully increase the manufacturing
capacity for any of our approved therapeutic candidates in a timely or economic manner, or at all. Significant scale-up of manufacturing
may require additional validation studies, which the U.S. Food and Drug Administration must review and approve. If they are unable
to successfully increase the manufacturing capacity for a therapeutic candidate, or we are unable to establish our own manufacturing
capabilities, the commercial launch of any approved products may be delayed or there may be a shortage in supply.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We and
our third-party manufacturers are, and will be, subject to regulations of the U.S. Food and Drug Administration and other foreign
regulatory authorities.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We and our
contract manufacturers are, and will be, required to adhere to laws, regulations and guidelines of the U.S. Food and Drug Administration
or other foreign regulatory authorities setting forth current good manufacturing practices. These laws, regulations and guidelines
cover all aspects of the manufacturing, testing, quality control and recordkeeping relating to our therapeutic candidates. We
and our manufacturers may not be able to comply with applicable laws, regulations and guidelines. We and our manufacturers are
and will be subject to unannounced inspections by the U.S. Food and Drug Administration, state regulators and similar foreign
regulatory authorities outside the U.S. Our failure, or the failure of our third party manufacturers, to comply with applicable
laws, regulations and guidelines could result in the imposition of sanctions on us, including fines, injunctions, civil penalties,
failure of regulatory authorities to grant marketing approval of our therapeutic candidates, delays, suspension or withdrawal
of approvals, license revocation, seizures or recalls of our therapeutic candidates, operating restrictions and criminal prosecutions,
any of which could significantly and adversely affect regulatory approval and supplies of our therapeutic candidates, and materially
and adversely affect our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Even
if we obtain regulatory approvals, our therapeutic candidates will be subject to ongoing regulatory review. If we fail to comply
with continuing U.S. and applicable foreign laws, regulations and guidelines, we could lose those approvals, and our business
would be seriously harmed.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Even if our
therapeutic candidates receive regulatory approval, we or our commercialization partners, as applicable, will be subject to ongoing
reporting obligations, including pharmacovigiliance and the therapeutic candidates and the manufacturing operations will be subject
to continuing regulatory review, including inspections by the U.S. Food and Drug Administration or other foreign regulatory authorities.
The results of this ongoing review may result in the withdrawal of a therapeutic candidate from the market, the interruption of
the manufacturing operations and/or the imposition of labeling and/or marketing limitations. Since many more patients are exposed
to drugs following their marketing approval, serious but infrequent adverse reactions that were not observed in clinical trials
may be observed during the commercial marketing of the therapeutic candidate. In addition, the manufacturer and the manufacturing
facilities that we or our commercialization partners use to produce any therapeutic candidate will be subject to periodic review
and inspection by the U.S. Food and Drug Administration and other foreign regulatory authorities. Later discovery of previously
unknown problems with any therapeutic candidate, manufacturer or manufacturing process, or failure to comply with rules and regulatory
requirements, may result in actions such as:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">restrictions
                                                                                                                             on
                                                                                                                             such
                                                                                                                             therapeutic
                                                                                                                             candidate,
                                                                                                                             manufacturer
                                                                                                                             or
                                                                                                                             manufacturing
                                                                                                                             process;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">warning
                                                                                                                             letters
                                                                                                                             from
                                                                                                                             the
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration
                                                                                                                             or
                                                                                                                             other
                                                                                                                             foreign
                                                                                                                             regulatory
                                                                                                                             authorities;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">withdrawal
                                                                                                                             of
                                                                                                                             the
                                                                                                                             therapeutic
                                                                                                                             candidate
                                                                                                                             from
                                                                                                                             the
                                                                                                                             market;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">suspension
                                                                                                                             or
                                                                                                                             withdrawal
                                                                                                                             of
                                                                                                                             regulatory
                                                                                                                             approvals;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">refusal
                                                                                                                             to
                                                                                                                             approve
                                                                                                                             pending
                                                                                                                             applications
                                                                                                                             or
                                                                                                                             supplements
                                                                                                                             to
                                                                                                                             approved
                                                                                                                             applications
                                                                                                                             that
                                                                                                                             we
                                                                                                                             or
                                                                                                                             our
                                                                                                                             commercialization
                                                                                                                             partners
                                                                                                                             submit;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">voluntary
                                                                                                                             or
                                                                                                                             mandatory
                                                                                                                             recall;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">fines;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">refusal
                                                                                                                             to
                                                                                                                             permit
                                                                                                                             the
                                                                                                                             import
                                                                                                                             or
                                                                                                                             export
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">product
                                                                                                                             seizure
                                                                                                                             or
                                                                                                                             detentions;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">injunctions
                                                                                                                             or
                                                                                                                             the
                                                                                                                             imposition
                                                                                                                             of
                                                                                                                             civil
                                                                                                                             or
                                                                                                                             criminal
                                                                                                                             penalties;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">adverse
                                                                                                                             publicity;
                                                                                                                             or</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">if
                                                                                                                             we,
                                                                                                                             or
                                                                                                                             our
                                                                                                                             commercialization
                                                                                                                             partners,
                                                                                                                             suppliers,
                                                                                                                             third
                                                                                                                             party
                                                                                                                             contractors
                                                                                                                             or
                                                                                                                             clinical
                                                                                                                             investigators
                                                                                                                             are
                                                                                                                             slow
                                                                                                                             to
                                                                                                                             adapt,
                                                                                                                             or
                                                                                                                             are
                                                                                                                             unable
                                                                                                                             to
                                                                                                                             adapt,
                                                                                                                             to
                                                                                                                             changes
                                                                                                                             in
                                                                                                                             existing
                                                                                                                             regulatory
                                                                                                                             requirements
                                                                                                                             or
                                                                                                                             the
                                                                                                                             adoption
                                                                                                                             of
                                                                                                                             new
                                                                                                                             regulatory
                                                                                                                             requirements
                                                                                                                             or
                                                                                                                             policies,
                                                                                                                             we
                                                                                                                             or
                                                                                                                             our
                                                                                                                             commercialization
                                                                                                                             partners
                                                                                                                             may
                                                                                                                             lose
                                                                                                                             marketing
                                                                                                                             approval
                                                                                                                             for
                                                                                                                             any
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates
                                                                                                                             if
                                                                                                                             any
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates
                                                                                                                             are
                                                                                                                             approved,
                                                                                                                             resulting
                                                                                                                             in
                                                                                                                             decreased
                                                                                                                             or
                                                                                                                             lost
                                                                                                                             revenue
                                                                                                                             from
                                                                                                                             milestones,
                                                                                                                             product
                                                                                                                             sales
                                                                                                                             or
                                                                                                                             royalties.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Modifications
to our therapeutic candidates, or to any other therapeutic candidates that we may develop in the future, may require new regulatory
clearances or approvals or may require us or our development and/or commercialization partners, as applicable, to recall or cease
marketing these therapeutic candidates until clearances are obtained.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Modifications
to our therapeutic candidates, after they have been approved for marketing, if at all, or to any other pharmaceutical product
or medical device that we may develop in the future, may require new regulatory clearance or approvals, and, if necessitated by
a problem with a marketed product, may result in the recall or suspension of marketing of the previously approved and marketed
product until clearances or approvals of the modified product are obtained. The U.S. Food and Drug Administration and other foreign
regulatory authorities require pharmaceutical products and device manufacturers to initially make and document a determination
of whether or not a modification requires a new approval, supplement or clearance. A manufacturer may determine in conformity
with applicable laws, regulations and guidelines that a modification may be implemented without pre-clearance by the U.S. Food
and Drug Administration or other foreign regulatory authorities; however, the U.S. Food and Drug Administration or other foreign
regulatory authorities can review a manufacturer&rsquo;s decision and may disagree. The U.S. Food and Drug Administration or other
foreign regulatory authorities may also on their own initiative determine that a new clearance or approval is required. If the
U.S. Food and Drug Administration or other foreign regulatory authorities require new clearances or approvals of any pharmaceutical
product for which we or our development and/or commercialization partners previously received marketing approval, we or our development
and/or commercialization partners may be required to recall such therapeutic candidate and to stop marketing the therapeutic candidate
as modified, which could require us or our development and/or commercialization partners to redesign the therapeutic candidate
and cause a material adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We depend
on our ability to identify and in-license therapeutic candidates to achieve commercial success.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our six therapeutic
candidates were all acquired by us or licensed to us by third parties. We evaluate internally and with external consultants each
therapeutic candidate. However, there can be no assurance as to our ability accurately or consistently select therapeutic candidates
that have the highest likelihood to achieve commercial success.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>If
we cannot meet our obligations under our acquisition or in-license agreements or we cannot renegotiate our obligations, we could
lose the rights to our therapeutic candidates and/or experience delays in developing our therapeutic candidates, which could have
a material adverse effect on our business.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We acquired our rights to three of our therapeutic candidates, RHB-104, RHB-105 and RHB-106, from a third
party pursuant to an asset and purchase agreement. In addition, we in-license our rights to three other therapeutic candidates,
RHB-101, RHB-102, and RHB-103 pursuant to license agreements in which we received exclusive worldwide perpetual licenses to certain
patent rights and know-how related to these therapeutic candidates. These agreements require us to make payments and satisfy various
performance obligations in order to maintain our rights and licenses with respect to these products. If we do not meet our obligations
under these agreements, we could lose the rights to our therapeutic candidates which could have a material adverse effect on our
business, financial condition and results of operations. In addition, our agreement with IntelGenx Corp. requires us to renegotiate
certain provisions of the contract in the event the agreed-to budget is exceeded by a certain amount. In the event we are required
to renegotiate this agreement, there is no guarantee that we will agree upon new terms promptly, or at all, which could delay the
development of RHB-103.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
we are responsible for the cost of filing and prosecuting certain patent applications and maintaining certain issued patents licensed
to us. If we do not meet our obligations under these agreements in a timely manner, we could lose the rights to our therapeutic
candidates which could have a material adverse effect on our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our
business could suffer if we are unable to attract and retain key employees.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The loss
of the services of members of senior management or other key personnel could delay or otherwise adversely impact the successful
completion of our planned clinical trials or the commercialization of our therapeutic candidates or otherwise affect our ability
to manage our company effectively and to carry out our business plan. These key personnel are Dror Ben-Asher, our Chief Executive
Officer, and Reza Fathi, our Senior Vice President for Research and Development. We do not maintain key-man life insurance. Although
we have entered into employment or consultancy agreements with all of the members of our senior management team, members of our
senior management team may resign at any time. High demand exists for senior management and other key personnel in the pharmaceutical
industry. There can be no assurance that we will be able to continue to retain and attract such personnel.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our growth
and success also depend on our ability to attract and retain additional highly qualified scientific, technical, business development,
marketing, managerial and finance personnel. We experience intense competition for qualified personnel, and the existence of non-competition
agreements between prospective employees and their former employers may prevent us from hiring those individuals or subject us
to liability from their former employers. In addition, if we elect to independently commercialize any therapeutic candidate, we
will need to expand our marketing and sales capabilities. While we attempt to provide competitive compensation packages to attract
and retain key personnel, many of our competitors are likely to have greater resources and more experience than we have, making
it difficult for us to compete successfully for key personnel. If we cannot attract and retain sufficiently qualified technical
employees on acceptable terms, we may not be able to develop and commercialize competitive therapeutic candidates. Further, any
failure to effectively integrate new personnel could prevent us from successfully growing our company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We face
several risks associated with international business</I>.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We operate
our business in multiple international jurisdictions. Such operations could be affected by changes in foreign exchange rates,
capital and exchange controls, expropriation and other restrictive government actions, changes in intellectual property legal
protections and remedies, trade regulations and procedures and actions affecting approval, production, pricing, and marketing
of, reimbursement for and access to, our products, as well as by political unrest, unstable governments and legal systems and
inter-governmental disputes. Any of these changes could adversely affect our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Risks Related
to Our Industry </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Even
if our therapeutic candidates receive regulatory approval or do not require regulatory approval, they may not become commercially
viable products.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Even if our
therapeutic candidates are approved for commercialization, they may not become commercially viable products. For example, if we
or our commercialization partners receive regulatory approval to market a therapeutic candidate, approval may be subject to limitations
on the indicated uses or subject to labeling or marketing restrictions which could materially and adversely affect the marketability
and profitability of the therapeutic candidate. In addition, a new therapeutic candidate may appear promising at an early stage
of development or after clinical trials but never reach the market, or it may reach the market but not result in sufficient product
sales, if any. A therapeutic candidate may not result in commercial success for various reasons, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">difficulty
                                                                                                                             in
                                                                                                                             large-scale
                                                                                                                             manufacturing,
                                                                                                                             including
                                                                                                                             yield
                                                                                                                             and
                                                                                                                             quality;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">low
                                                                                                                             market
                                                                                                                             acceptance
                                                                                                                             by
                                                                                                                             physicians,
                                                                                                                             healthcare
                                                                                                                             payors,
                                                                                                                             patients
                                                                                                                             and
                                                                                                                             the
                                                                                                                             medical
                                                                                                                             community
                                                                                                                             as
                                                                                                                             a
                                                                                                                             result
                                                                                                                             of
                                                                                                                             lower
                                                                                                                             demonstrated
                                                                                                                             clinical
                                                                                                                             safety
                                                                                                                             or
                                                                                                                             efficacy
                                                                                                                             compared
                                                                                                                             to
                                                                                                                             other
                                                                                                                             products,
                                                                                                                             prevalence
                                                                                                                             and
                                                                                                                             severity
                                                                                                                             of
                                                                                                                             adverse
                                                                                                                             side
                                                                                                                             effects,
                                                                                                                             or
                                                                                                                             other
                                                                                                                             potential
                                                                                                                             disadvantages
                                                                                                                             relative
                                                                                                                             to
                                                                                                                             alternative
                                                                                                                             treatment
                                                                                                                             methods;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">insufficient
                                                                                                                             or
                                                                                                                             unfavorable
                                                                                                                             levels
                                                                                                                             of
                                                                                                                             reimbursement
                                                                                                                             from
                                                                                                                             government
                                                                                                                             or
                                                                                                                             third-party
                                                                                                                             payors,
                                                                                                                             such
                                                                                                                             as
                                                                                                                             insurance
                                                                                                                             companies,
                                                                                                                             health
                                                                                                                             maintenance
                                                                                                                             organizations
                                                                                                                             and
                                                                                                                             other
                                                                                                                             health
                                                                                                                             plan
                                                                                                                             administrators;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">infringement
                                                                                                                             on
                                                                                                                             proprietary
                                                                                                                             rights
                                                                                                                             of
                                                                                                                             others
                                                                                                                             for
                                                                                                                             which
                                                                                                                             we
                                                                                                                             or
                                                                                                                             our
                                                                                                                             commercialization
                                                                                                                             partners
                                                                                                                             have
                                                                                                                             not
                                                                                                                             received
                                                                                                                             licenses;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">incompatibility
                                                                                                                             with
                                                                                                                             other
                                                                                                                             therapeutic
                                                                                                                             products;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">other
                                                                                                                             potential
                                                                                                                             advantages
                                                                                                                             of
                                                                                                                             alternative
                                                                                                                             treatment
                                                                                                                             methods
                                                                                                                             and
                                                                                                                             competitive
                                                                                                                             forces
                                                                                                                             that
                                                                                                                             may
                                                                                                                             make
                                                                                                                             it
                                                                                                                             more
                                                                                                                             difficult
                                                                                                                             for
                                                                                                                             us
                                                                                                                             to
                                                                                                                             penetrate
                                                                                                                             a
                                                                                                                             particular
                                                                                                                             market
                                                                                                                             segment;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">ineffective
                                                                                                                             marketing
                                                                                                                             and
                                                                                                                             distribution
                                                                                                                             support;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">lack
                                                                                                                             of
                                                                                                                             significant
                                                                                                                             competitive
                                                                                                                             advantages
                                                                                                                             over
                                                                                                                             existing
                                                                                                                             products
                                                                                                                             on
                                                                                                                             the
                                                                                                                             market;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">lack
                                                                                                                             of
                                                                                                                             cost-effectiveness;
                                                                                                                             or</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">timing
                                                                                                                             of
                                                                                                                             market
                                                                                                                             introduction
                                                                                                                             of
                                                                                                                             competitive
                                                                                                                             products.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Physicians,
various other health care providers, patients, payers or the medical community in general may be unwilling to accept, utilize
or recommend any of our approved therapeutic candidates. If we are unable, either on our own or through third parties, to manufacture,
commercialize and market our proposed formulations or therapeutic candidates when planned, or develop commercially viable therapeutic
candidates, we may not achieve any market acceptance or generate revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>The market
for our therapeutic candidates is rapidly changing and competitive, and new drug delivery mechanisms, drug delivery technologies,
new drugs and new treatments which may be developed by others could impair our ability to maintain and grow our business and remain
competitive.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The pharmaceutical
and biotechnology industry is highly competitive, and we face significant competition from many pharmaceutical, biopharmaceutical
and biotechnology companies that are researching and marketing products designed to address the indications for which we are currently
developing therapeutic candidates or for which we may develop therapeutic candidates in the future. There are various other companies
that currently market and/or are in the process of developing products that address all of the indications or diseases treated
by our therapeutic candidates. For information regarding our competition, see Item 4. &ldquo;Information on the Company &ndash;
B. Business Overview &ndash; Our Therapeutic Candidates.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">New drug delivery
mechanisms, drug delivery technologies, new drugs and new treatments that have been developed or that are in the process of being
developed by others may render our therapeutic candidates noncompetitive or obsolete, or we may be unable to keep pace with technological
developments or other market factors. Some of these technologies may have an entirely different approach or means of accomplishing
similar therapeutic effects compared to our therapeutic candidates. Technological competition from pharmaceutical and biotechnology
companies, universities, governmental entities and others is intense and is expected to increase. Many of these entities have
significantly greater research and development capabilities, human resources and budgets than we do, as well as substantially
more marketing, manufacturing, financial and managerial resources. These entities represent significant competition for us. Acquisitions
of, or investments in, competing pharmaceutical or biotechnology companies by large corporations could increase such competitors&rsquo;
financial, marketing, manufacturing and other resources.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The potential
widespread acceptance of therapies that are alternatives to ours may limit market acceptance of our formulations or therapeutic
candidates, even if commercialized. Many of our targeted diseases and conditions can also be treated by other medication or drug
delivery technologies. These treatments may be widely accepted in medical communities and have a longer history of use. The established
use of these competitive drugs may limit the potential for our therapeutic candidates to receive widespread acceptance if commercialized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We could
be adversely affected if healthcare reform measures substantially change the market for medical care or healthcare coverage in
the U.S.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In 2010, the
U.S. Congress adopted important legislation regarding health insurance, the provision of health care, and conditions to reimbursement
for healthcare services provided to Medicare and Medicaid patients. Under the new legislation, substantial changes are going to
be made to the current system for paying for healthcare in the U.S., including changes made in order to extend medical benefits
to those who currently lack insurance coverage. Extending coverage to a large population could substantially change the structure
of the health insurance system and the methodology for reimbursing medical services and drugs. Such legislation is one of the
most comprehensive and significant reforms ever experienced by the U.S. in the health care field and is expected to have meaningful
ramifications on tens of millions of citizens in the U.S. Such legislation is expected to impact the scope of health care insurance,
the insurance refunds from the insurance companies and possibly also the costs of medical products. At this stage, we are unable
to estimate the extent of the direct and/or indirect impact of the new legislation on us.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">These structural
changes could entail modifications to the existing system of private payors and government programs (Medicare, Medicaid and State
Children&rsquo;s Health Insurance Program), creation of a government-sponsored healthcare insurance source, or some combination
of both, as well as other changes. Restructuring the coverage of medical care in the U.S. could impact the reimbursement for prescribed
drugs and biopharmaceuticals, such as those we and our development and/or commercialization partners are currently developing.
If reimbursement for our approved therapeutic candidates, if any, is substantially reduced in the future, or rebate obligations
associated with them are substantially increased, our business could be materially and adversely impacted.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Extending medical
benefits to those who currently lack coverage will likely result in substantial cost to the U.S. federal government, which may
force significant additional changes to the healthcare system in the U.S. Much of the funding for expanded healthcare coverage
may be sought through cost savings. While some of these savings may come from realizing greater efficiencies in delivering care,
improving the effectiveness of preventive care and enhancing the overall quality of care, much of the cost savings may come from
reducing the cost of care. Cost of care could be reduced by decreasing the level of reimbursement for medical services or products
(including those biopharmaceuticals currently being developed by us or our development and/or commercialization partners), or
by restricting coverage (and, thereby, utilization) of medical services or products. In either case, a reduction in the utilization
of, or reimbursement for, any therapeutic candidate for which we receive marketing approval in the future could have a materially
adverse effect on our financial performance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Several states
and private entities mounted legal challenges to the healthcare reform legislation. That litigation culminated in a decision from
the U.S. Supreme Court on July 26, 2012 that generally upheld the healthcare reform legislation as constitutional. However, the
Supreme Court held that the legislation improperly required the States to expand their Medicaid programs to cover more individuals.
As a result, the States now have a choice as to whether they will expand the numbers of individuals covered by their respective
State Medicaid programs. Some States have already indicated that they will not expand their Medicaid programs and will develop
other cost saving and coverage measures to provide care to currently uninsured residents. Many of these efforts to date have included
the institution of Medicaid managed care programs. The manner in which these cost saving measures are implemented could have a
materially adverse effect on our financial performance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>If third-party
payors do not adequately reimburse customers for any of our therapeutic candidates that are approved for marketing, they might
not be purchased or used, and our revenues and profits will not develop or increase.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our revenues
and profits will depend heavily upon the availability of adequate reimbursement for the use of our approved therapeutic candidates,
if any, from governmental or other third-party payors, both in the U.S. and in foreign markets. Reimbursement by a third-party
payor may depend upon a number of factors, including the third-party payor&rsquo;s determination that the use of an approved therapeutic
candidate is:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             covered
                                                                                                                             benefit
                                                                                                                             under
                                                                                                                             its
                                                                                                                             health
                                                                                                                             plan;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">safe,
                                                                                                                             effective
                                                                                                                             and
                                                                                                                             medically
                                                                                                                             necessary;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">appropriate
                                                                                                                             for
                                                                                                                             the
                                                                                                                             specific
                                                                                                                             patient;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">cost-effective;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">neither
                                                                                                                             experimental
                                                                                                                             nor
                                                                                                                             investigational.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Obtaining reimbursement
approval for a therapeutic candidate from each government or other third-party payor is a time-consuming and costly process that
could require us or our development and/or commercialization partners to provide supporting scientific, clinical and cost-effectiveness
data for the use of our therapeutic candidates to each payor. Even when a payor determines that a therapeutic candidate is eligible
for reimbursement, the payor may impose coverage limitations that preclude payment for some uses that are approved by the U.S.
Food and Drug Administration or other foreign regulatory authorities. Reimbursement rates may vary according to the use of the
therapeutic candidate and the clinical setting in which it used, may be based on payments allowed for lower-cost products that
are already reimbursed, may be incorporated into existing payments for other products or services, and may reflect budgetary constraints
and/or imperfections in Medicare, Medicaid or other data used to calculate these rates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In the U.S.,
there have been, and we expect that there will continue to be, federal and state proposals to constrain expenditures for medical
products and services, which may affect payments for our therapeutic candidates in the U.S. We believe that legislation that reduces
reimbursement for our therapeutic candidates could adversely impact how much or under what circumstances healthcare providers
will prescribe or administer our therapeutic candidates, if approved. This could materially and adversely impact our business
by reducing our ability to generate revenue, raise capital, obtain additional collaborators and market our therapeutic candidates,
if approved. At this stage, we are unable to estimate the extent of the direct and/or indirect impact of any such federal and
state proposals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Further, the
Centers for Medicare and Medicaid Services frequently change product descriptors, coverage policies, product and service codes,
payment methodologies and reimbursement values. Third-party payors often follow Medicare coverage policy and payment limitations
in setting their own reimbursement rates, and both the Centers for Medicare and Medicaid Services and other third-party payors
may have sufficient market power to demand significant price reductions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We could
be exposed to significant drug product liability claims which could be time consuming and costly to defend, divert management
attention and adversely impact our ability to obtain and maintain insurance coverage. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The clinical trials that we conduct,
and the testing, manufacture, marketing and commercial sale of our therapeutic candidates, involve and will involve an inherent
risk that significant liability claims may be asserted against us. We currently have a product liability policy that includes
coverage for our clinical trials and has an aggregate limit of liability of US $10,000,000. Should we decide to seek additional
insurance against such risks before our product sales commence, there is a risk that such insurance will be unavailable to us,
or if it can be obtained at such time, that it will be available at an unaffordable cost. Even if we obtain insurance, it may
prove inadequate to cover claims and/or litigation costs, especially in the case of wrongful death claims. Product liability claims
or other claims related to our therapeutic candidates, regardless of their outcome, could require us to spend significant time
and money in litigation or to pay significant settlement amounts or judgments. Any successful product liability or other claim
may prevent us from obtaining adequate liability insurance in the future on commercially desirable or reasonable terms. An inability
to obtain sufficient insurance coverage at an acceptable cost or otherwise to protect against potential product liability claims
could prevent or inhibit the commercialization of our products and therapeutic candidates. A product liability claim could also
significantly harm our reputation and delay market acceptance of our therapeutic candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Global
economic conditions may make it more difficult for us to commercialize our therapeutic candidates</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The biopharmaceutical
industry, like other industries and businesses, continues to face the effects of the challenging economic environment. Patients
experiencing the effects of the challenging economic environment, including high unemployment levels and increases in co-pays,
may switch to generic products, delay treatments, skip doses or use less effective treatments to reduce their costs. Challenging
economic conditions in the U.S. have increased the number of patients in the Medicaid program, under which sales of pharmaceuticals
are subject to substantial rebates and, in many states, to formulary restrictions limiting access to brand-name drugs. In addition,
in Europe and in a number of emerging markets there are government-mandated reductions in prices for certain biopharmaceutical
products, as well as government-imposed access restrictions in certain countries. All of the aforesaid may make it more difficult
for us to commercialize our therapeutic candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our business
involves risks related to handling regulated substances which could severely affect our ability to conduct research and development
of our therapeutic candidates.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">In
connection with our or our development and/or commercialization partners&rsquo; research and clinical development activities,
as well as the manufacture of materials and therapeutic candidates, we and our development and/or commercialization partners are
subject to federal, state and local laws, rules, regulations and policies governing the use, generation, manufacture, storage,
air emission, effluent discharge, handling and disposal of certain materials, biological specimens and wastes. We and our development
and/or commercialization partners may be required to incur significant costs to comply with environmental and health and safety
regulations in the future. Our research and clinical development, as well as the activities of our manufacturing and commercialization
partners, both now and in the future, may involve the controlled use of hazardous materials, including but not limited to certain
hazardous chemicals. We cannot completely eliminate the risk of accidental contamination or injury from these materials. In the
event of such an occurrence, we could be held liable for any damages that result and any such liability could exceed our resources</FONT>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Risks Related
to Intellectual Property </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black"><B><I>We
may be unable to adequately protect or enforce our rights to intellectual property, causing us to lose valuable rights. Loss of
patent rights may lead us to lose market share and anticipated profits.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our success
depends, in part, on our ability, and the ability of our commercialization partners to obtain patent protection for our therapeutic
candidates, maintain the confidentiality of our trade secrets and know how, operate without infringing on the proprietary rights
of others and prevent others from infringing our proprietary rights.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We try to protect
our proprietary position by, among other things, filing U.S., European, and other patent applications related to our therapeutic
candidates, inventions and improvements that may be important to the continuing development of our therapeutic candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Because the
patent position of pharmaceutical companies involves complex legal and factual questions, we cannot predict the validity and enforceability
of patents with certainty. Our issued patents and the issued patents of our commercialization partners may not provide us with
any competitive advantages, or may be held invalid or unenforceable as a result of legal challenges by third parties or could
be circumvented. Our competitors may also independently develop drug delivery technologies or products similar to ours or design
around or otherwise circumvent patents issued to, or licensed by, us. Thus, any patents that we own or license from others may
not provide any protection against competitors. Our pending patent applications, those we may file in the future or those we may
license from third parties may not result in patents being issued. If these patents are issued, they may not provide us with proprietary
protection or competitive advantages. The degree of future protection to be afforded by our proprietary rights is uncertain because
legal means afford only limited protection and may not adequately protect our rights or permit us to gain or keep our competitive
advantage.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Patent rights
are territorial; thus, the patent protection we do have will only extend to those countries in which we have issued patents. Even
so, the laws of certain countries do not protect our intellectual property rights to the same extent as do the laws of the U.S.
and the European Union. Competitors may successfully challenge our patents, produce similar drugs or products that do not infringe
our patents, or produce drugs in countries where we have not applied for patent protection or that do not respect our patents.
Furthermore, it is not possible to know the scope of claims that will be allowed in published applications and it is also not
possible to know which claims of granted patents, if any, will be deemed enforceable in a court of law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">After the completion
of development and registration of our patents, third parties may still act to manufacture and/or market our therapeutic candidates
in infringement of our patent protected rights. Such manufacture and/or market of our therapeutic candidates in infringement of
our patent protected rights is likely to cause us damage and lead to a reduction in the prices of our therapeutic candidates,
thereby reducing our anticipated profits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
due to the extensive time needed to develop, test and obtain regulatory approval for our therapeutic candidates, any patents that
protect our therapeutic candidate may expire early during commercialization. This may reduce or eliminate any market advantages
that such patents may give us. Following patent expiration, we may face increased competition through the entry of generic products
into the market and a subsequent decline in market share and profits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>If we
are unable to protect the confidentiality of our trade secrets or know-how, such proprietary information may be used by others
to compete against us.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition
to filing patents, we generally try to protect our trade secrets, know-how and technology by entering into confidentiality or
non-disclosure agreements with parties that have access to it, such as our development and/or commercialization partners, employees,
contractors and consultants. We also enter into agreements that purport to require the disclosure and assignment to us of the
rights to the ideas, developments, discoveries and inventions of our employees, advisors, research collaborators, contractors
and consultants while we employ or engage them. However, these agreements can be difficult and costly to enforce or may not provide
adequate remedies. Any of these parties may breach the confidentiality agreements and willfully or unintentionally disclose our
confidential information, or our competitors might learn of the information in some other way. The disclosure to, or independent
development by, a competitor of any trade secret, know-how or other technology not protected by a patent could materially adversely
affect any competitive advantage we may have over any such competitor.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To the extent
that any of our employees, advisors, research collaborators, contractors or consultants independently develop, or use independently
developed, intellectual property in connection with any of our projects, disputes may arise as to the proprietary rights to this
type of information. If a dispute arises with respect to any proprietary right, enforcement of our rights can be costly and unpredictable
and a court may determine that the right belongs to a third party.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Legal
proceedings or third-party claims of intellectual property infringement and other challenges may require us to spend substantial
time and money and could prevent us from developing or commercializing our therapeutic candidates.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The development,
manufacture, use, offer for sale, sale or importation of our therapeutic candidates may infringe on the claims of third-party
patents or other intellectual property rights. The nature of claims contained in unpublished patent filings around the world is
unknown to us and it is not possible to know which countries patent holders may choose for the extension of their filings under
the Patent Cooperation Treaty, or other mechanisms. We may also be subject to claims based on the actions of employees and consultants
with respect to the usage or disclosure of intellectual property learned at other employers. The cost to us of any intellectual
property litigation or other infringement proceeding, even if resolved in our favor, could be substantial. Some of our competitors
may be able to sustain the costs of such litigation or proceedings more effectively because of their substantially greater financial
resources. Uncertainties resulting from the initiation and continuation or defense of intellectual property litigation or other
proceedings could have a material adverse effect on our ability to compete in the marketplace. Intellectual property litigation
and other proceedings may also absorb significant management time. Consequently, we are unable to guarantee that we will be able
to manufacture, use, offer for sale, sell or import our therapeutic candidates in the event of an infringement action.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In the event
of patent infringement claims, or to avoid potential claims, we may choose or be required to seek a license from a third party
and would most likely be required to pay license fees or royalties or both. These licenses may not be available on acceptable
terms, or at all. Even if we were able to obtain a license, the rights may be non-exclusive, which could potentially limit our
competitive advantage. Ultimately, we could be prevented from commercializing a therapeutic candidate or be forced to cease some
aspect of our business operations if, as a result of actual or threatened patent infringement or other claims, we are unable to
enter into licenses on acceptable terms. This inability to enter into licenses could harm our business significantly.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We may
be subject to other patent-related litigation or proceedings that could be costly to defend and uncertain in their outcome.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition
to infringement claims against us, we may in the future become a party to other patent litigation or proceedings before regulatory
agencies, including interference or re-examination proceedings filed with the U.S. Patent and Trademark Office or opposition proceedings
in other foreign patent offices regarding intellectual property rights with respect to our therapeutic candidates, as well as
other disputes regarding intellectual property rights with development and/or commercialization partners, or others with whom
we have contractual or other business relationships. Post-issuance oppositions are not uncommon and we, our development and/or
commercialization partners will be required to defend these opposition procedures as a matter of course. Opposition procedures
may be costly, and there is a risk that we may not prevail.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Risks Related
to our Ordinary Shares and American Depositary Shares </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black"><B><I>We
may be a passive foreign investment company, or PFIC, for U.S. federal income tax purposes in 2012 or in any subsequent year</I></B></FONT>
<FONT STYLE="font-size: 10pt"><B><I>which may have negative tax consequences for U.S. investors.</I></B> </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We will
be treated as a PFIC for U.S. federal income tax purposes in any taxable year in which either (i) at least 75% of our gross income
is &ldquo;passive income&rdquo; or (ii) on average at least 50% of our assets by value produce passive income or are held for
the production of passive income. Based on our estimated gross income, the average value of our gross assets, and the nature of
our business, we believe that we may be classified as a PFIC in the current taxable year and in future years. In addition, because
we have valued our goodwill based on the market value of our equity, a decrease in the price of our ordinary shares may result
in our becoming a PFIC. If we are treated as a PFIC for any taxable year during which a U.S. investor held our ordinary shares
or American Depositary Shares, certain adverse U.S. federal income tax consequences could apply to the U.S. investor. See &ldquo;Item
10. Additional Information &ndash; E. Taxation &ndash; Foreign Exchange Regulations &ndash; Passive Foreign Investment Companies.&rdquo;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>The market
price of our ordinary shares is, and the market price of our American Depositary Shares will be, subject to fluctuation, which
could result in substantial losses by our investors.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The stock market
in general and the market price of our ordinary shares on the Tel Aviv Stock Exchange in particular, is subject to fluctuation,
and changes in our share price may be unrelated to our operating performance. The market price of our ordinary shares on the Tel
Aviv Stock Exchange has fluctuated in the past, and we expect it will continue to do so. It is likely that the market price of
our American Depositary Shares will likewise be subject to wide fluctuations. The market price of our ordinary shares and American
Depositary Shares are and will be subject to a number of factors, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">announcements
                                                                                                                             of
                                                                                                                             technological
                                                                                                                             innovations
                                                                                                                             or
                                                                                                                             new
                                                                                                                             therapeutic
                                                                                                                             candidates
                                                                                                                             by
                                                                                                                             us
                                                                                                                             or
                                                                                                                             others;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">announcements
                                                                                                                             by
                                                                                                                             us
                                                                                                                             of
                                                                                                                             significant
                                                                                                                             acquisitions,
                                                                                                                             strategic
                                                                                                                             partnerships,
                                                                                                                             in-licensing,
                                                                                                                             out-licensing,
                                                                                                                             joint
                                                                                                                             ventures
                                                                                                                             or
                                                                                                                             capital
                                                                                                                             commitments;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">expiration
                                                                                                                             or
                                                                                                                             terminations
                                                                                                                             of
                                                                                                                             licenses,
                                                                                                                             research
                                                                                                                             contracts
                                                                                                                             or
                                                                                                                             other
                                                                                                                             development
                                                                                                                             or
                                                                                                                             commercialization
                                                                                                                             agreements;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">public
                                                                                                                             concern
                                                                                                                             as
                                                                                                                             to
                                                                                                                             the
                                                                                                                             safety
                                                                                                                             of
                                                                                                                             drugs
                                                                                                                             we,
                                                                                                                             our
                                                                                                                             development
                                                                                                                             or
                                                                                                                             commercialization
                                                                                                                             partners
                                                                                                                             or
                                                                                                                             others
                                                                                                                             develop;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             volatility
                                                                                                                             of
                                                                                                                             market
                                                                                                                             prices
                                                                                                                             for
                                                                                                                             shares
                                                                                                                             of
                                                                                                                             biotechnology
                                                                                                                             companies
                                                                                                                             generally;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">success
                                                                                                                             or
                                                                                                                             failure
                                                                                                                             of
                                                                                                                             research
                                                                                                                             and
                                                                                                                             development
                                                                                                                             projects;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">departure
                                                                                                                             of
                                                                                                                             key
                                                                                                                             personnel;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">developments
                                                                                                                             concerning
                                                                                                                             intellectual
                                                                                                                             property
                                                                                                                             rights
                                                                                                                             or
                                                                                                                             regulatory
                                                                                                                             approvals;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">variations
                                                                                                                             in
                                                                                                                             our
                                                                                                                             and
                                                                                                                             our
                                                                                                                             competitors&rsquo;
                                                                                                                             results
                                                                                                                             of
                                                                                                                             operations;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">changes
                                                                                                                             in
                                                                                                                             earnings
                                                                                                                             estimates
                                                                                                                             or
                                                                                                                             recommendations
                                                                                                                             by
                                                                                                                             securities
                                                                                                                             analysts,
                                                                                                                             if
                                                                                                                             our
                                                                                                                             ordinary
                                                                                                                             shares
                                                                                                                             or
                                                                                                                             American
                                                                                                                             Depositary
                                                                                                                             Shares
                                                                                                                             are
                                                                                                                             covered
                                                                                                                             by
                                                                                                                             analysts;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">changes
                                                                                                                             in
                                                                                                                             government
                                                                                                                             regulations
                                                                                                                             or
                                                                                                                             patent
                                                                                                                             decision;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">developments
                                                                                                                             by
                                                                                                                             our
                                                                                                                             development
                                                                                                                             and/or
                                                                                                                             commercialization
                                                                                                                             partners;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">general
                                                                                                                             market
                                                                                                                             conditions
                                                                                                                             and
                                                                                                                             other
                                                                                                                             factors,
                                                                                                                             including
                                                                                                                             factors
                                                                                                                             unrelated
                                                                                                                             to
                                                                                                                             our
                                                                                                                             operating
                                                                                                                             performance.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">These factors
and any corresponding price fluctuations may materially and adversely affect the market price of our ordinary shares and result
in substantial losses by our investors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Additionally,
market prices for securities of biotechnology and pharmaceutical companies historically have been very volatile. The market for
these securities has from time to time experienced significant price and volume fluctuations for reasons unrelated to the operating
performance of any one company. In the past, following periods of market volatility, shareholders have often instituted securities
class action litigation. If we were involved in securities litigation, it could have a substantial cost and divert resources and
attention of management from our business, even if we are successful.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Future
sales of our ordinary shares or American Depositary Shares could reduce the market price of our ordinary shares and American Depositary
Shares.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> All of our
outstanding ordinary shares are registered and available for sale in Israel. In addition, as of November 28<FONT STYLE="font: 10pt Times New Roman, Times, Serif">,
2012, we had outstanding 7,151,150 tradable Series 1 warrants to purchase an aggregate of 7,151,150 ordinary shares, 3,180,861
non-tradable warrants to purchase an aggregate of 3,180,861 ordinary shares and 12,015,000 options to purchase 12,015,000 ordinary
shares under our 2010 Stock Option Plan. See &ldquo;Item 6. Directors, Senior Management and Employees &ndash; E. Share Ownership
&ndash; Stock Option Plans.&rdquo; Substantial sales of our ordinary shares or American Depositary Shares, or the perception that
such sales may occur in the future, including sales of shares issuable upon the exercise of options and warrants, may cause the
market price of our ordinary shares or American Depositary Shares to decline. Moreover, the issuance of shares underlying our
options and warrants will also have a dilutive effect on our shareholders, which could further reduce the price of our ordinary
shares and American Depositary Shares on their respective exchanges.</FONT>&nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I> &nbsp; </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our ordinary
shares and our American Depositary Shares will be traded on different markets and this may result in price variations.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our ordinary
shares have been traded on the Tel Aviv Stock Exchange since February 2011, and we have applied to have our American Depositary
Shares listed on The Nasdaq Capital Market. Trading in our securities on these markets will take place in different currencies
(U.S. dollars on The Nasdaq Capital Market and New Israeli Shekels, or NIS, on the Tel Aviv Stock Exchange), and at different
times (resulting from different time zones, different trading days and different public holidays in the U.S. and Israel). The
trading prices of our securities on these two markets may differ due to these and other factors. Any decrease in the price of
our securities on one of these markets could cause a decrease in the trading price of our securities on the other market.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our American
Depositary Shares have no prior trading history in the U.S., and an active market may not develop, which may limit the ability
of our investors to sell our American Depositary Shares in the U.S.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">There is no
public market for our American Depositary Shares or ordinary shares in the U.S. Although we have applied to have our American
Depositary Shares listed on The Nasdaq Capital Market, an active trading market for our American Depositary Shares may never develop
or may not be sustained if one develops. If an active market for our American Depositary Shares does not develop, it may be difficult
to sell your American Depositary Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We will
incur significant additional increased costs as a result of the listing of our American Depositary Shares on The Nasdaq Capital
Market, and our management will be required to devote substantial time to new compliance initiatives as well as to compliance
with ongoing U.S. and Israeli reporting requirements.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As a public
company in the U.S., we will incur additional significant accounting, legal and other expenses that we did not incur before the
offering. We also anticipate that we will incur costs associated with reporting requirements of the Securities and Exchange Commission
and the Nasdaq Marketplace Rules. We expect these rules and regulations to increase our legal and financial compliance costs,
introduce new costs such as investor relations, stock exchange listing fees and shareholder reporting, and to make some activities
more time consuming and costly. These laws, rules and regulations could make it more difficult or more costly for us to obtain
certain types of insurance, including director and officer liability insurance, and we may be forced to accept reduced policy
limits and coverage or incur substantially higher costs to obtain the same or similar coverage. The impact of these requirements
could also make it more difficult for us to attract and retain qualified persons to serve on our board of directors, our board
committees or as executive officers. Furthermore, until such time as our shareholders may vote to approve our transition from
Israeli securities law reporting requirements to U.S. requirements, we will also be required to comply fully with both Israeli
and U.S. requirements. The need to comply with both U.S. and Israeli reporting and other securities law requirements will also
add to our legal and financial compliance costs and require devotion of additional management resources to reporting and compliance
efforts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>As a
foreign private issuer, we are permitted to follow certain home country corporate governance practices instead of applicable Securities
and Exchange Commission and Nasdaq Stock Market requirements, which may result in less protection than is accorded to investors
under rules applicable to domestic issuers.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As a foreign private issuer, we are
permitted to follow certain home country corporate governance practices instead of those otherwise required under the Nasdaq Marketplace
Rules for domestic issuers. For instance, we will follow home country practice in Israel with regard to, among other things, composition
of the board of directors, which does not require that a majority of a company's board of directors be independent, director nomination
procedure and quorum at shareholders&rsquo; meetings. In addition, we will follow our home country law, instead of the Nasdaq
Marketplace Rules, which require that we obtain shareholder approval for certain dilutive events, such as for the establishment
or amendment of certain equity based compensation plans, an issuance that will result in a change of control of the company, certain
transactions other than a public offering involving issuances of a 20% or more interest in the company and certain acquisitions
of the stock or assets of another company. Following our home country governance practices as opposed to the requirements that
would otherwise apply to a U.S. company listed on the Nasdaq Capital Market may provide less protection than is accorded to investors
under the Marketplace Rules of The Nasdaq Stock Market applicable to domestic issuers.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
as a foreign private issuer, we will be exempt from the rules and regulations under the U.S. Securities Exchange Act of 1934,
as amended, related to the furnishing and content of proxy statements, and our officers, directors and principal shareholders
will be exempt from the reporting and short-swing profit recovery provisions contained in Section 16 of the U.S. Securities Exchange
Act of 1934, as amended. In addition, we will not be required under the U.S. Securities Exchange Act of 1934, as amended, to file
annual, quarterly and current reports and financial statements with the Securities and Exchange Commission as frequently or as
promptly as domestic companies whose securities are registered under the U.S. Securities Exchange Act of 1934, as amended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>As a
result of becoming a U.S. Securities and Exchange Commission registrant, we will be obligated to develop and maintain proper and
effective internal controls over financial reporting. We may not complete our analysis of our internal controls over financial
reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor
confidence in our company and, as a result, the value of our ordinary shares.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We will be
required, pursuant to Section 404 of the Sarbanes-Oxley Act, to furnish a report by management on, among other things, the effectiveness
of our internal control over financial reporting. This assessment will need to include disclosure of any material weaknesses identified
by our management in our internal control over financial reporting. In addition, depending on the market value of our shares held
by the public, our independent registered public accounting firm will be required to issue an opinion on management's assessment
of those matters, which will be tested in connection with the filing of our second annual report on Form 20-F after this Registration
Statement on Form 20-F is declared effective.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have not
completed the challenging process of compiling the system and processing documentation necessary to perform the evaluation needed
to comply with Section 404. We may not be able to complete our evaluation, testing and any required remediation in a timely fashion.
During the evaluation and testing process, if we identify one or more material weaknesses in our internal control over financial
reporting, we will be unable to assert that our internal controls are effective.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">If we are unable
to assert that our internal control over financial reporting is effective, or if our independent registered public accounting
firm is unable to express an opinion on the effectiveness of our internal controls, we could lose investor confidence in the accuracy
and completeness of our financial reports, which would cause the price of our common shares to decline.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;<B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Because
we are becoming a reporting company under the Securities Exchange Act of 1934, as amended, by means of filing this Form 20-F,
we may not be able to attract the attention of research analysts at major brokerage firms.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Because we
do not intend to become a reporting company by conducting an underwritten initial public offering, we do not expect security analysts
of major brokerage firms to provide coverage of our company in the near future. In addition, major investment banks may be less
likely to agree to underwrite secondary offerings on our behalf than they might if we were to become a public reporting company
by means of an initial public offering. The failure to receive research coverage or support in the market for our shares will
have an adverse effect on our ability to develop a liquid market for our American Depositary Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We currently
do not anticipate paying cash dividends, and accordingly, shareholders must rely on the appreciation in our American Depositary
Shares for any return on their investment.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We currently
anticipate that we will retain future earnings for the development, operation and expansion of our business and do not anticipate
declaring or paying any cash dividends for the foreseeable future. Therefore, the success of an investment in our American Depositary
Shares will depend upon any future appreciation in their value. There is no guarantee that our American Depositary Shares will
appreciate in value or even maintain the price at which our shareholders have purchased their shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>You may not receive the same
distributions or dividends as those we make to the holders of our ordinary shares, and, in some limited circumstances, you may
not receive dividends or other distributions on our ordinary shares and you may not receive any value for them, if it is illegal
or impractical to make them available to you. </I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">The depositary for the American Depositary Shares has agreed to pay to you the cash dividends or other
distributions it or the custodian receives on ordinary shares or other deposited securities underlying the American Depositary
Shares, after deducting its fees and expenses. You will receive these distributions in proportion to the number of ordinary shares
your American Depositary Shares represent. However, the depositary is not responsible if it decides that it is unlawful or impractical
to make a distribution available to any holders of American Depositary Shares. For example, it would be unlawful to make a distribution
to a holder of American Depositary Shares if it consists of securities that require registration under the Securities Act of 1933,
as amended, but that are not properly registered or distributed under an applicable exemption from registration. In addition,
conversion into U.S. dollars from foreign currency that was part of a dividend made in respect of deposited ordinary shares may
require the approval or license of, or a filing with, any government or agency thereof, which may be unobtainable. In these cases,
the depositary may determine not to distribute such property and hold it as &ldquo;deposited securities&rdquo; or may seek to
effect a substitute dividend or distribution, including net cash proceeds from the sale of the dividends that the depositary deems
an equitable and practicable substitute. We have no obligation to register under U.S. securities laws any American Depositary
Shares, ordinary shares, rights or other securities received through such distributions. We also have no obligation to take any
other action to permit the distribution of American Depositary Shares, ordinary shares, rights or anything else to holders of
American Depositary Shares. In addition, the depositary may withhold from such dividends or distributions its fees and an amount
on account of taxes or other governmental charges to the extent the depositary believes it is required to make such withholding.
This means that you may not receive the same distributions or dividends as those we make to the holders of our ordinary shares,
and, in some limited circumstances, you may not receive any value for such distributions or dividends if it is illegal or impractical
for us to make them available to you. These restrictions may cause a material decline in the value of the American Depositary
Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Holders
of American Depositary Shares must act through the depositary to exercise their rights as shareholders of our company. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Holders of
our American Depositary Shares do not have the same rights of our shareholders and may only exercise the voting rights with respect
to the underlying ordinary shares in accordance with the provisions of the deposit agreement for the American Depositary Shares.
Under Israeli law, the minimum notice period required to convene a shareholders meeting is no less than 35 or 21 calendar days,
depending on the proposals on the agenda for the shareholders meeting. When a shareholder meeting is convened, holders of our
American Depositary Shares may not receive sufficient notice of a shareholders&rsquo; meeting to permit them to withdraw their
ordinary shares to allow them to cast their vote with respect to any specific matter. In addition, the depositary and its agents
may not be able to send voting instructions to holders of our American Depositary Shares or carry out their voting instructions
in a timely manner. We will make all reasonable efforts to cause the depositary to extend voting rights to holders of our American
Depositary Shares in a timely manner, but we cannot assure holders that they will receive the voting materials in time to ensure
that they can instruct the depositary to vote their American Depositary Shares. Furthermore, the depositary and its agents will
not be responsible for any failure to carry out any instructions to vote, for the manner in which any vote is cast or for the
effect of any such vote. As a result, holders of our American Depositary Shares may not be able to exercise their right to vote
and they may lack recourse if their American Depositary Shares are not voted as they requested. In addition, in the capacity as
an American Depositary Share holder, they will not be able to call a shareholders&rsquo; meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>The depositary
for our American Depositary Shares will give us a discretionary proxy to vote our ordinary shares underlying American Depositary
Shares if a holder of our American Depositary Shares does not vote at shareholders&rsquo; meetings, except in limited circumstances,
which could adversely affect their interests. </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Under the deposit
agreement for the American Depositary Shares, the depositary will give us a discretionary proxy to vote our ordinary shares underlying
American Depositary Shares at shareholders&rsquo; meetings if a holder of our American Depositary Shares does not vote, unless:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">we
                                                                                                                             have
                                                                                                                             instructed
                                                                                                                             the
                                                                                                                             depositary
                                                                                                                             that
                                                                                                                             we
                                                                                                                             do
                                                                                                                             not
                                                                                                                             wish
                                                                                                                             a
                                                                                                                             discretionary
                                                                                                                             proxy
                                                                                                                             to
                                                                                                                             be
                                                                                                                             given;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">we
                                                                                                                             have
                                                                                                                             informed
                                                                                                                             the
                                                                                                                             depositary
                                                                                                                             that
                                                                                                                             there
                                                                                                                             is
                                                                                                                             substantial
                                                                                                                             opposition
                                                                                                                             as
                                                                                                                             to
                                                                                                                             a
                                                                                                                             matter
                                                                                                                             to
                                                                                                                             be
                                                                                                                             voted
                                                                                                                             on
                                                                                                                             at
                                                                                                                             the
                                                                                                                             meeting;
                                                                                                                             or</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             matter
                                                                                                                             to
                                                                                                                             be
                                                                                                                             voted
                                                                                                                             on
                                                                                                                             at
                                                                                                                             the
                                                                                                                             meeting
                                                                                                                             would
                                                                                                                             have
                                                                                                                             a
                                                                                                                             material
                                                                                                                             adverse
                                                                                                                             impact
                                                                                                                             on
                                                                                                                             shareholders.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The effect
of this discretionary proxy is that a holder of our American Depositary Shares cannot prevent our ordinary shares underlying such
American Depositary Shares from being voted, absent the situations described above, and it may make it more difficult for shareholders
to influence the management of our company. Holders of our ordinary shares are not subject to this discretionary proxy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Risks Related
to our Operations in Israel </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>We conduct
our operations in Israel and therefore our results may be adversely affected by political, economic and military instability in
Israel and its region.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are incorporated
under the laws of the State of Israel, our principle offices are located in central Israel and some of our officers, employees
and directors are residents of Israel. Accordingly, political, economic and military conditions in Israel and the surrounding
region may directly affect our business. Since the establishment of the State of Israel in 1948, a number of armed conflicts have
taken place between Israel and its Arab neighbors. Any hostilities involving Israel or the interruption or curtailment of trade
within Israel or between Israel and its trading partners could adversely affect our operations and results of operations and could
make it more difficult for us to raise capital. During the winter of 2008, Israel was engaged in an armed conflict with Hamas,
a militia group and political party operating in the Gaza Strip, and during the summer of 2006, Israel was engaged in an armed
conflict with Hezbollah, a Lebanese Islamist Shiite militia group and political party. These conflicts involved missile strikes
against civilian targets in various parts of Israel, and negatively affected business conditions in Israel. Recent political uprisings
and civil resistance demonstrations in various countries in the Middle East, including Egypt and Syria, are affecting the political
stability of those countries. It is not clear how this instability, or the Arab Spring in general, will develop and how it will
affect the political and security situation in the Middle East. This instability may lead to deterioration of the political relationships
that exist between Israel and these countries, and have raised concerns regarding security in the region and the potential for
armed conflict. In addition, it is widely believed that Iran, which has previously threatened to attack Israel, has been stepping
up its efforts to achieve nuclear capability. Iran is also believed to have a strong influence among extremist groups in the region,
such as Hamas in Gaza and Hezbollah in Lebanon. The tension between Israel and Iran and/or these groups may escalate in the future
and turn violent, which could affect the Israeli economy generally and us in particular. Any armed conflicts, terrorist activities
or political instability in the region could adversely affect business conditions and could harm our results of operations. For
example, any major escalation in hostilities in the region could result in a portion of our employees being called up to perform
military duty for an extended period of time. Parties with whom we do business have sometimes declined to travel to Israel during
periods of heightened unrest or tension, forcing us to make alternative arrangements when necessary.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our commercial
insurance does not cover losses that may occur as a result of events associated with the security situation in the Middle East.
Although the Israeli government currently covers the reinstatement value of direct damages that are caused by terrorist attacks
or acts of war, we cannot assure you that this government coverage will be maintained. Any losses or damages incurred by us could
have a material adverse effect on our business. Any armed conflicts or political instability in the region would likely negatively
affect business conditions and could harm our results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Further, in
the past, the State of Israel and Israeli companies have been subjected to an economic boycott. Several countries still restrict
business and trade activity with the State of Israel and with Israeli companies. These restrictive laws and policies may have
an adverse impact on our operating results, financial condition or the expansion of our business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Our operations
may be disrupted as a result of the obligation of management or personnel to perform military service.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Many of our
male employees in Israel, including members of our senior management, perform up to one month, and in some cases more, of annual
military reserve duty until they reach the age of 45 or older and, in the event of a military conflict, may be called to active
duty. There have also been periods of significant call-ups of military reservists, and it is possible that there will be military
reserve duty call-ups in the future. Our operations could be disrupted by the absence of a significant number of our employees.
Such disruption could materially adversely affect our business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Because
a certain portion of our expenses is incurred in currencies other than the U.S. dollar, our results of operations may be harmed
by currency fluctuations and inflation.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our reporting
and functional currency is the U.S. dollar. Most of the royalty payments from our agreements with our development and/or commercialization
partners are payable in U.S. dollars, and we expect our revenues from future licensing agreements to be denominated mainly in
U.S. dollars or in Euros. We pay a substantial portion of our expenses in U.S. dollars; however, a portion of our expenses, related
to salaries of the employees in Israel and payment to part of the service providers in Israel and other territories, are paid
in NIS and in other currencies. In addition, a portion of our financial assets is held in NIS and in other currencies. As a result,
we are exposed to the currency fluctuation risks. For example, if the NIS strengthens against the U.S. dollar, our reported expenses
in U.S. dollars may be higher than anticipated. In addition, if the NIS weakens against the U.S. dollar, the U.S. dollar value
of our financial assets held in NIS will decline.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Provisions of our 2010 Stock
Option Plan, Israeli law and our Articles of Association may delay, prevent or otherwise impede a merger with, or an acquisition
of, our company, or an acquisition of a significant portion of our shares, which could prevent a change of control, even when
the terms of such a transaction are favorable to us and our shareholders.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">Our 2010 Stock Option Plan provides that all options granted by us prior the completion of our initial
public offering and options granted subject to completion of our initial public offering and options which we granted after September
24, 2012, will be fully accelerated upon a &quot;takeover&quot; of the Company. A &quot;takeover&quot; is defined in our 2010
Stock Option Plan as an event in which any person, entity or group that was not an &quot;interested party&quot;, as defined in
the Israeli Securities Law &ndash; 1968, on the date of the&nbsp;initial public offering of our securities, shall become a&nbsp;&quot;controlling&nbsp;shareholder&quot;.
A &ldquo;controlling shareholder&rdquo; for these purposes means a controlling shareholder as defined in the Israel Securities
Law, 1968, or any person, entity or group becoming a holder, as defined in the Israel Securities Law, 1968, of 25% or more of
our voting rights. <FONT STYLE="font: 10pt Times New Roman, Times, Serif">See &ldquo;Item 6. Directors, Senior Management and
Employees &ndash; E. Share Ownership &ndash; Stock Option Plan&rdquo; for a description of interested parties under the Israeli
Securities Law &ndash; 1968.</FONT></P>

<P STYLE="margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Israeli
Companies Law, 1999, or the Israeli Companies Law, regulates mergers, requires tender offers for acquisitions of shares above
specified thresholds, requires special approvals for transactions involving directors, officers or significant shareholders and
regulates other matters that may be relevant to these types of transactions. For example, a merger may not be consummated unless
at least 50 days have passed from the date that a merger proposal was filed by each merging company with the Israel Registrar
of Companies and at least 30 days from the date that the shareholders of both merging companies approved the merger. In addition,
a majority of each class of securities of the target company must approve a merger. Moreover, the Israeli Companies Law provides
that certain purchases of securities of a public company are subject to tender offer rules. As a general rule, the Israeli Companies
Law prohibits any acquisition of shares in a public company that would result in the purchaser holding 25% or more, or more than
45% of the voting power in the company, if there is no other person holding 25% or more, or more than 45% of the voting power
in a company, respectively, without conducting a special tender offer. The Israeli Companies Law further provides that a purchase
of shares or voting rights of a public company or a class of shares of a public company, which will result in the purchaser&rsquo;s
holding 90% or more of the company&rsquo;s shares or class of shares, is prohibited unless the purchaser conducts a full tender
offer for all of the company&rsquo;s shares or class of shares. The purchaser will be allowed to purchase all of the company&rsquo;s
shares or class of shares (including those shares held by shareholders who did not respond to the offer), if either (i) the shareholders
who do not accept the offer hold less than 5% of the issued and outstanding share capital of the company or of the applicable
class, and more than half of the shareholders who do not have a personal interest in the offer accept the offer, or (ii) the shareholders
who do not accept the offer hold less than 2% of the issued and outstanding share capital of the company or of the applicable
class. The shareholders, including those who indicated their acceptance of the tender offer (except if otherwise detailed in the
tender offer document), may, at any time within 6 months following the completion of the tender offer, petition the court to alter
the consideration for the acquisition. At the request of an offeree of a full tender offer which was accepted, the court may determine
that the consideration for the shares purchased under the tender offer was lower than their fair value and compel the offeror
to pay to the offerees the fair value of the shares. Such application to the court may be filed as a class action.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
the Israeli Companies Law provides for certain limitations on a shareholder that holds more than 90% of the company&rsquo;s shares,
or class of shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Pursuant
to our articles of association, the size of our board of directors shall be no less than 5 persons but no more than 7, excluding
at least two external directors. The directors, except for our external directors, are divided into three classes, as nearly equal
in number as possible. At each annual general meeting, the term of one class of directors expires, and the directors of such class
are re-nominated to serve an additional three year term that expires at the annual general meeting held in the third year following
such election. This process continues indefinitely. Such provisions of our articles of association make it more difficult for
a third party to effect a change in control or takeover attempt that our management and board of directors oppose.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Furthermore,
Israeli tax considerations may, in certain circumstances, make potential transactions unappealing to us or to some of our shareholders.
For example, Israeli tax law does not recognize tax-free share exchanges to the same extent as U.S. tax law. With respect to mergers,
Israeli tax law allows for tax deferral in certain circumstances but makes the deferral contingent on the fulfillment of numerous
conditions, including a holding period of two years from the date of the transaction during which sales and dispositions of shares
of the participating companies are restricted. Moreover, with respect to certain share swap transactions, the tax deferral is
limited in time, and when such time expires, the tax becomes payable even if no actual disposition of the shares has occurred.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: justify">These and other
similar provisions could delay, prevent or impede an acquisition of us or our merger with another company, or an acquisition of
a significant portion of our shares, even if such an acquisition or merger would be beneficial to us or to our shareholders. See
&ldquo;Item 10. Additional Information&nbsp;-&nbsp;B. Memorandum and Articles of Association.&rdquo;<FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>It may
be difficult to enforce a U.S. judgment against us and our officers and directors named in this Registration Statement on Form
20-F in Israel or the U.S., or to serve process on our officers and directors.</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are incorporated
in Israel. Most of our executive officers and directors listed in this Registration Statement on Form 20-F reside outside of the
U.S., and all of our assets and most of the assets of our executive officers and directors are located outside of the U.S. Therefore,
a judgment obtained against us or most of our executive officers and our directors in the U.S., including one based on the civil
liability provisions of the U.S. federal securities laws, may not be collectible in the U.S. and may not be enforced by an Israeli
court. It may also be difficult for you to affect service of process on these persons in the U.S. or to assert U.S. securities
law claims in original actions instituted in Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Your obligations and responsibilities
as a shareholder will be governed by Israeli law which may differ in some respects from the obligations and responsibilities of
shareholders of U.S. companies.</I></B> <B><I>Israeli law may impose obligations and responsibilities on a shareholder
of an Israeli company that are not imposed upon shareholders of corporations in the U.S.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0">We are incorporated under Israeli law. The obligations and responsibilities of the holders of our
ordinary shares are governed by our articles of association and Israeli law. These obligations and responsibilities differ in
some respects from the obligations and responsibilities of shareholders in typical U.S.-based corporations. In particular, a shareholder
of an Israeli company has a duty to act in good faith toward the company and other shareholders and to refrain from abusing its
power in the company, including, among other things, in voting at the general meeting of shareholders on matters such as amendments
to a company&rsquo;s articles of association, increases in a company&rsquo;s authorized share capital, mergers and acquisitions
and interested party transactions requiring shareholder approval. In addition, a shareholder who knows that it possesses the power
to determine the outcome of a shareholder vote or to appoint or prevent the appointment of a director or executive officer in
the company has a duty of fairness toward the company. There is limited case law available to assist us in understanding the implications
of these provisions that govern shareholders&rsquo; actions. These provisions may be interpreted to impose additional obligations
and responsibilities on holders of our ordinary shares that are not typically imposed on shareholders of U.S. corporations.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Claims for indemnification by
our directors and officers may reduce our available funds to satisfy successful stockholder claims against us and may reduce the
amount of money available to us.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">The Israeli Companies Law and our Articles of Association permit us to indemnify our directors and
officers for acts performed by them in their capacity as directors and officers. The Israeli Companies Law and our Articles of
Association provide that a company may not exempt or indemnify a director or an office holder nor enter into an insurance contract,
which would provide coverage for any monetary liability incurred as a result of (a) a breach by the director or officer of his
duty of loyalty, except for insurance and indemnification where the director or officer acted in good faith and had a reasonable
basis to believe that the act would not prejudice the company; (b) a breach by the director or officer of his duty of care if
the breach was done intentionally or recklessly, except if the breach was solely as a result of negligence; (c) any act or omission
done with the intent to derive an illegal personal benefit; or (d) any fine, civil fine, monetary sanctions, or forfeit imposed
on the officer or director. See &ldquo;Item 6. Directors, Senior Management and Employees &ndash; C. Board Practices - Corporate
Governance Practices - Exemption, Insurance and Indemnification of Directors and Officers.&quot;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have issued letters of indemnification
to our directors and officers, pursuant to which we have agreed to indemnify them in advance for any liability or expense imposed
on or incurred by them in connection with acts they perform in their capacity as a director or officer, subject to applicable
law. The amount of the advance indemnity is limited to the higher of 25% of our then consolidated shareholders&rsquo; equity,
per our most recent consolidated annual financial statements, or $3 million.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Our indemnification obligations limit
the personal liability of our directors and officers for monetary damages for breach of their duties as directors by shifting
the burden of such losses and expenses to us. Although we have obtained directors and officers liability insurance providing coverage
for up to $10 million a year, certain liabilities or expenses covered by our indemnification obligations may not be covered by
such insurance or the coverage limitation amounts may be exceeded. As a result, we may need to use a significant amount of our
funds to satisfy our indemnification obligations, which could severely harm our business and financial condition and limit the
funds available to stockholders who may choose to bring a claim against our company. These provisions and resultant costs may
also discourage us from bringing a lawsuit against directors and officers for breaches of their duties, and may similarly discourage
the filing of derivative litigation by our shareholders against the directors and officers even though such actions, if successful,
might otherwise benefit our shareholders.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 0; text-transform: uppercase; text-align: justify; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
4. INFORMATION ON THE COMPANY</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.3pt 0pt 0; text-transform: uppercase; text-align: justify; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>A.&#9;History
and Development of the Company</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our legal and
commercial name is RedHill Biopharma Ltd. The company was incorporated on August 3, 2009 and was registered as a private company
limited by shares under the laws of the State of Israel. Our principal executive offices are located at 21 Ha&rsquo;arba&rsquo;a
Street, Tel Aviv, Israel and our telephone number is 972-3-541-3131.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In February
2011, we completed our initial public offering in Israel, pursuant to which we issued 14,302,300 ordinary shares, and 7,151,150
tradable Series 1 Warrants to purchase 7,151,150 ordinary shares for aggregate gross proceeds of approximately $14 million. Our
ordinary shares are traded on the Tel Aviv Stock Exchange under the symbol &ldquo;RDHL&rdquo; and our Series 1 Warrants are traded
on the Tel Aviv Stock Exchange under the symbol &ldquo;RDHL.W1.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our capital
expenditures for the years ended December 31, 2011, 2010 and 2009 were $139,000, $8,000 and $0, respectively. Our current capital
expenditures involve equipment and leasehold improvements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>B. Business
Overview </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are a biopharmaceutical
company focused on the development of therapeutic candidates acquired through asset purchases or in-licensing. In particular,
we acquire or in-license and develop patent-protected new formulations and combinations of existing drugs in advanced stages of
development.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Depending
on the specific development program, our therapeutic candidates are designed to provide improvements over existing drugs by improving
their safety profile, reducing side effects, lowering the number of administrations, using a more convenient administration form,
providing a cost advantage and/or exhibiting greater efficacy. Where applicable, we intend to seek U.S. Food and Drug Administration
approval for the commercialization of certain of our therapeutic candidates <FONT STYLE="font: 10pt Times New Roman, Times, Serif">through
the alternative Section 505(b)(2) regulatory path under the Federal Food, Drug, and Cosmetic Act of 1938, as amended, and in corresponding
regulatory paths in other foreign jurisdictions. Our current pipeline consists of six late clinical development therapeutic candidates,
two of which have completed bioequivalence clinical trials subject to review and approval by the U.S. Food and Drug Administration
and, in some cases, regulatory authorities in other countries.</FONT>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We generate
our pipeline of therapeutic candidates by identifying, rigorously validating and in-licensing or acquiring products that are consistent
with our products strategy and that we believe exhibit a relatively high probability of therapeutic and commercial success. Our
therapeutic candidates have not yet been approved for marketing and, to date, there have been no meaningful sales. Upon and subject
to receipt of the requisite approvals, we intend to commercialize our therapeutic candidates through licensing and other commercialization
arrangements with pharmaceutical companies on a global and territorial basis. We may also evaluate, on a case by case basis, co-development
and similar arrangements and the commercialization of our therapeutic candidates independently.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Our Strategy
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our goal is
to become a significant player in the development of pharmaceuticals that represent improvements, enhancements or innovative uses
of existing drugs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Key elements
of our strategy are to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD><FONT STYLE="color: Black">identify
                                                                                                                                            and
                                                                                                                                            acquire
                                                                                                                                            rights
                                                                                                                                            to
                                                                                                                                            products
                                                                                                                                            from
                                                                                                                                            companies
                                                                                                                                            in
                                                                                                                                            the
                                                                                                                                            pharmaceutical
                                                                                                                                            field,
                                                                                                                                            which
                                                                                                                                            have
                                                                                                                                            encountered
                                                                                                                                            cash
                                                                                                                                            flow
                                                                                                                                            or
                                                                                                                                            operational
                                                                                                                                            problems
                                                                                                                                            or
                                                                                                                                            that
                                                                                                                                            decide
                                                                                                                                            to
                                                                                                                                            divest
                                                                                                                                            one
                                                                                                                                            or
                                                                                                                                            more
                                                                                                                                            of
                                                                                                                                            their
                                                                                                                                            products
                                                                                                                                            for
                                                                                                                                            various
                                                                                                                                            reasons.
                                                                                                                                            We
                                                                                                                                            identify
                                                                                                                                            such
                                                                                                                                            opportunities
                                                                                                                                            through
                                                                                                                                            our
                                                                                                                                            broad
                                                                                                                                            network
                                                                                                                                            of
                                                                                                                                            contacts
                                                                                                                                            and
                                                                                                                                            other
                                                                                                                                            sources
                                                                                                                                            in
                                                                                                                                            the
                                                                                                                                            pharmaceutical
                                                                                                                                            field.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD><FONT STYLE="color: Black">produce
                                                                                                                                            enhancements
                                                                                                                                            of
                                                                                                                                            existing
                                                                                                                                            pharmaceutical
                                                                                                                                            products,
                                                                                                                                            including
                                                                                                                                            broadening
                                                                                                                                            their
                                                                                                                                            range
                                                                                                                                            of
                                                                                                                                            indications
                                                                                                                                            or
                                                                                                                                            launching
                                                                                                                                            innovative
                                                                                                                                            and
                                                                                                                                            advantageous
                                                                                                                                            pharmaceutical
                                                                                                                                            products
                                                                                                                                            based
                                                                                                                                            on
                                                                                                                                            existing
                                                                                                                                            products.
                                                                                                                                            Because
                                                                                                                                            there
                                                                                                                                            is
                                                                                                                                            a
                                                                                                                                            large
                                                                                                                                            knowledge
                                                                                                                                            base
                                                                                                                                            regarding
                                                                                                                                            existing
                                                                                                                                            products,
                                                                                                                                            the
                                                                                                                                            preclinical,
                                                                                                                                            clinical
                                                                                                                                            and
                                                                                                                                            regulatory
                                                                                                                                            requirements
                                                                                                                                            needed
                                                                                                                                            to
                                                                                                                                            obtain
                                                                                                                                            marketing
                                                                                                                                            approval
                                                                                                                                            for
                                                                                                                                            enhanced
                                                                                                                                            formulations
                                                                                                                                            are
                                                                                                                                            relatively
                                                                                                                                            well
                                                                                                                                            defined.
                                                                                                                                            In
                                                                                                                                            particular,
                                                                                                                                            clinical
                                                                                                                                            study
                                                                                                                                            designs,
                                                                                                                                            inclusion
                                                                                                                                            criteria
                                                                                                                                            and
                                                                                                                                            endpoints
                                                                                                                                            previously
                                                                                                                                            accepted
                                                                                                                                            by
                                                                                                                                            regulators
                                                                                                                                            may
                                                                                                                                            sometimes
                                                                                                                                            be
                                                                                                                                            re-used.
                                                                                                                                            In
                                                                                                                                            addition
                                                                                                                                            to
                                                                                                                                            reducing
                                                                                                                                            costs
                                                                                                                                            and
                                                                                                                                            time
                                                                                                                                            to
                                                                                                                                            market,
                                                                                                                                            we
                                                                                                                                            believe
                                                                                                                                            that
                                                                                                                                            targeting
                                                                                                                                            therapeutics
                                                                                                                                            with
                                                                                                                                            proven
                                                                                                                                            safety
                                                                                                                                            and
                                                                                                                                            efficacy
                                                                                                                                            provides
                                                                                                                                            us
                                                                                                                                            a
                                                                                                                                            better
                                                                                                                                            prospect
                                                                                                                                            of
                                                                                                                                            clinical
                                                                                                                                            success.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD><FONT STYLE="color: Black">acquire
                                                                                                                                            and
                                                                                                                                            develop
                                                                                                                                            products
                                                                                                                                            that
                                                                                                                                            are
                                                                                                                                            intended
                                                                                                                                            to
                                                                                                                                            treat
                                                                                                                                            pronounced
                                                                                                                                            clinical
                                                                                                                                            needs,
                                                                                                                                            have
                                                                                                                                            patent
                                                                                                                                            protection,
                                                                                                                                            and
                                                                                                                                            have
                                                                                                                                            target
                                                                                                                                            markets
                                                                                                                                            totaling
                                                                                                                                            tens
                                                                                                                                            of
                                                                                                                                            millions
                                                                                                                                            to
                                                                                                                                            billions
                                                                                                                                            of
                                                                                                                                            dollars.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD><FONT STYLE="color: Black">acquire
                                                                                                                                            and
                                                                                                                                            develop
                                                                                                                                            products
                                                                                                                                            based
                                                                                                                                            on
                                                                                                                                            different
                                                                                                                                            technologies
                                                                                                                                            designed
                                                                                                                                            to
                                                                                                                                            reduce
                                                                                                                                            our
                                                                                                                                            dependency
                                                                                                                                            on
                                                                                                                                            any
                                                                                                                                            specific
                                                                                                                                            product
                                                                                                                                            technology.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD><FONT STYLE="color: Black">capitalize
                                                                                                                                            on
                                                                                                                                            the
                                                                                                                                            U.S.
                                                                                                                                            Food
                                                                                                                                            and
                                                                                                                                            Drug
                                                                                                                                            Administration&rsquo;s
                                                                                                                                            505(b)(2)
                                                                                                                                            regulatory
                                                                                                                                            pathway
                                                                                                                                            to
                                                                                                                                            obtain
                                                                                                                                            more
                                                                                                                                            timely
                                                                                                                                            and
                                                                                                                                            efficient
                                                                                                                                            approval
                                                                                                                                            of
                                                                                                                                            our
                                                                                                                                            formulations
                                                                                                                                            of
                                                                                                                                            previously
                                                                                                                                            approved
                                                                                                                                            products,
                                                                                                                                            when
                                                                                                                                            applicable.
                                                                                                                                            Under
                                                                                                                                            the
                                                                                                                                            505(b)(2)
                                                                                                                                            process,
                                                                                                                                            we
                                                                                                                                            are
                                                                                                                                            able
                                                                                                                                            to
                                                                                                                                            seek
                                                                                                                                            U.S.
                                                                                                                                            Food
                                                                                                                                            and
                                                                                                                                            Drug
                                                                                                                                            Administration
                                                                                                                                            approval
                                                                                                                                            of
                                                                                                                                            a
                                                                                                                                            new
                                                                                                                                            dosage
                                                                                                                                            form,
                                                                                                                                            strength,
                                                                                                                                            route
                                                                                                                                            of
                                                                                                                                            administration,
                                                                                                                                            formulation,
                                                                                                                                            dosage
                                                                                                                                            regimen,
                                                                                                                                            or
                                                                                                                                            indication
                                                                                                                                            of
                                                                                                                                            a
                                                                                                                                            pharmaceutical
                                                                                                                                            product
                                                                                                                                            that
                                                                                                                                            has
                                                                                                                                            previously
                                                                                                                                            been
                                                                                                                                            approved
                                                                                                                                            by
                                                                                                                                            the
                                                                                                                                            U.S.
                                                                                                                                            Food
                                                                                                                                            and
                                                                                                                                            Drug
                                                                                                                                            Administration.
                                                                                                                                            This
                                                                                                                                            enables
                                                                                                                                            us
                                                                                                                                            to
                                                                                                                                            partially
                                                                                                                                            rely
                                                                                                                                            on
                                                                                                                                            the
                                                                                                                                            U.S.
                                                                                                                                            Food
                                                                                                                                            and
                                                                                                                                            Drug
                                                                                                                                            Administration&rsquo;s
                                                                                                                                            findings
                                                                                                                                            of
                                                                                                                                            safety
                                                                                                                                            and/or
                                                                                                                                            efficacy
                                                                                                                                            for
                                                                                                                                            previously
                                                                                                                                            approved
                                                                                                                                            drugs,
                                                                                                                                            thus
                                                                                                                                            avoiding
                                                                                                                                            the
                                                                                                                                            duplication
                                                                                                                                            of
                                                                                                                                            costly
                                                                                                                                            and
                                                                                                                                            time
                                                                                                                                            consuming
                                                                                                                                            preclinical
                                                                                                                                            and
                                                                                                                                            various
                                                                                                                                            human
                                                                                                                                            studies.
                                                                                                                                            See
                                                                                                                                            &ldquo;Government
                                                                                                                                            Regulations
                                                                                                                                            and
                                                                                                                                            Funding
                                                                                                                                            -
                                                                                                                                            Section&nbsp;505(b)(2)
                                                                                                                                            New
                                                                                                                                            Drug
                                                                                                                                            Applications.&rdquo;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD><FONT STYLE="color: Black">cooperate
                                                                                                                                            with
                                                                                                                                            third
                                                                                                                                            parties
                                                                                                                                            to
                                                                                                                                            both
                                                                                                                                            develop
                                                                                                                                            and
                                                                                                                                            commercialize
                                                                                                                                            therapeutic
                                                                                                                                            candidates
                                                                                                                                            in
                                                                                                                                            order
                                                                                                                                            to
                                                                                                                                            share
                                                                                                                                            costs
                                                                                                                                            and
                                                                                                                                            leverage
                                                                                                                                            the
                                                                                                                                            expertise
                                                                                                                                            of
                                                                                                                                            others.</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our six current
clinical stage therapeutic candidates include &ldquo;RHB-101&rdquo;, &ldquo;RHB-102&rdquo;, &ldquo;RHB-103&rdquo;, &ldquo;RHB-104&rdquo;,
&ldquo;RHB-105&rdquo; and &ldquo;RHB-106&rdquo;, each of which are described below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Our Therapeutic
Candidates</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I><U>RHB&ndash;101</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-101 is
intended for the treatment of hypertension, heart failure and left ventricular dysfunction (following myocardial infraction) by
means of controlled release of an active ingredient known as carvedilol, which is designed to be administered to patients on a
once-daily basis. Carvedilol is a nonselective &beta;-adrenergic blocking agent with &alpha;1-blocking activity providing its
clinical effect through two different mechanisms. &beta;-adrenergic blockade slows the heart rate and promotes its effect by decreasing
the work or output of the heart. &alpha;1 adrenergic blockade is effected within the vascular system and lowers blood pressure.
We believe that our once-daily RHB-101 is an improvement over existing generic carvedilol-containing drugs, which are administered
several times per day.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-101 is
based on a patented technology for the controlled release of drugs administered orally. The technology is based on a drug-release
polymer system built of an external envelope that is consumed at a slow rate, and an internal matrix that breaks down on contact
with the fluids of the gastrointestinal system, releasing the drug at a constant rate according to the drug&rsquo;s exposed geometric
surface.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We acquired
the rights to RHB-101 under a November 18, 2009 agreement with Egalet a/s, pursuant to which we received a worldwide, exclusive
and perpetual license to certain patent rights related to RHB-101. See &ldquo;&ndash; Acquisition and License Agreements &ndash;
License Agreement for RHB-101.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Competition
and Market</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The pharmaceutical
market targeted by RHB-101 has over 200 million users worldwide according to a 2012 report by Scrip Intelligence. According to
the 2007 annual report of GlaxoSmithKline, generic products have entered this market since 2007. In 2011, the target worldwide
market of RHB-101 reached a total value in excess of $500 million according to sales market data integrated from a 2012 report
by Scrip Intelligence, the 2011 annual report of GlaxoSmithKline and European 2011 sales data for carvedilol from IMS Health,
a provider of information for the health care industry. At present, the market can be divided into two parts:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The first part
of the market includes generic drugs based on the immediate release of the generic active ingredient known as carvedilol (such
as Coreg&reg; produced by GlaxoSmithKline). These drugs are administered to patients twice a day, due to their relatively short
active span, as opposed to the once daily administration of RHB-101. Administration once per day instead of several times per
day has the potential to be a significant advantage, including improved compliance, especially for the elderly who commonly take
a relatively large number of drugs over long periods of time.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The second
part of the market is based on a patented drug known under the trade name of Coreg CR&reg; (produced by GlaxoSmithKline). This
drug is an improvement over the generic Coreg&reg; drug, having a longer duration of action and being administered once per day.
One of the potential advantages of RHB-101 over Coreg CR&reg; is that RHB-101 is expected to be priced below the current price
of Coreg CR&reg;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In 2011, sales
of Coreg CR&reg; in the U.S. reached approximately $240 million according to the 2011 annual report of GlaxoSmithKline. Coreg
CR&reg; is not marketed in Europe. The European market of immediate release carvedilol in 2011 was in excess of $200 million according
to IMS Health. In 2010, the sale of generic immediate release of carvedilol reached $273 million in the U.S. alone according to
data published by IMS Health. Consolidating sales data for both segments of the market indicate that the worldwide target market
of RHB-101 is in excess of $500 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To the best
of our knowledge, although the U.S. patent on Coreg CR&reg; is expected to expire in 2023, generic competitors of Coreg CR&reg;
may reach the market immediately. In particular, in 2008 Mutual Pharmaceutical Company Inc. submitted an application in the U.S.
for approval of a generic version of this drug and reached an agreement with GlaxoSmithKline, pursuant to which GlaxoSmithKline
agreed, after several rounds of court hearings, not to sue Mutual Pharmaceutical Company Inc. Entry of generic drugs competing
with Coreg CR&reg; may cause a significant decrease in the price of Coreg CR&reg;, thereby reducing the current price differential
between this drug and the segment of generic carvedilol-containing drugs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Clinical
Development </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are currently
reassessing RHB-101&rsquo;s development strategy, including its regulatory path, for the possible obtainment of marketing approvals
in the U.S., pursuant to the 505(b)(2) regulatory path, and in Europe, based on a number of clinical trials previously conducted
by us and Egalet a/s. In addition, we are currently searching for a strategic partner to jointly develop RHB-101.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
chart summarizes the clinical trial history and status of RHB-101:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Clinical
    trial name</FONT></TD>
    <TD STYLE="width: 10%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Development
    phase of the clinical trial</FONT></TD>
    <TD STYLE="width: 18%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Purpose
    of the clinical trial</FONT></TD>
    <TD STYLE="width: 9%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Clinical
    trial site</FONT></TD>
    <TD STYLE="width: 10%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Planned
    number of subjects of the trial</FONT></TD>
    <TD STYLE="width: 7%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Number
    of subjects</FONT></TD>
    <TD STYLE="width: 11%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Nature
    and status of the trial</FONT></TD>
    <TD STYLE="width: 9%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Schedule</FONT></TD>
    <TD STYLE="width: 9%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Total
    clinical development cost (estimate)</FONT></TD>
    <TD STYLE="width: 7%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Total
    accrued cost</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">CL-EG-
    01</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Phase
    I</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Pharmacokinetic
    (PK) comparison of once-daily administration of the product in 25 mg concentration against carvedilol, and the impact of food
    on the product&rsquo;s absorption in the human body</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Shandon
    Clinic, Ireland</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">30</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">30</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">The
    trial was performed and indicated that food does not have any impact on the absorption of the product</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Ended
    in 2004</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">-</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">CL-EG-
    02</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Phase
    I</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">PK
    comparison of repeat product administration in 25 mg concentration against carvedilol</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Shandon
    Clinic, Ireland</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">30</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">30</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">The
    trial was performed and indicated that there is PK similarity between the products</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Ended
    in 2004</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">-</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">CL-EG-
    04</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Phase
    I</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">PK
    comparison of once-daily administration of two different product formulations in a concentration of 50 mg against carvedilol</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Shandon
    Clinic, Ireland</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">12</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">12</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">The
    trial was performed and indicated that one of the formulations is pharmacokinetically preferable</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">Ended
    in 2007</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black">-</FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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    <!-- Field: /Page -->
<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 10%"><FONT STYLE="color: Black"> CL-EG-
    09 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 10%"><FONT STYLE="color: Black"> Phase
    I </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 18%"><FONT STYLE="color: Black"> PK
    comparison of once-daily administration of two different formulations of the product in a concentration of 12.5 mg against
    carvedilol </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 9%"><FONT STYLE="color: Black"> Shandon
    Clinic, Ireland </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 10%"><FONT STYLE="color: Black"> 14 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 7%"><FONT STYLE="color: Black"> 14 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 11%"><FONT STYLE="color: Black"> The
    trial was performed and indicated that one of the formulations is pharmacokinetically preferable </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 9%"><FONT STYLE="color: Black"> Ended
    in 2007 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 9%"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center; width: 7%"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> PLT-11 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Pilot </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Feasibility
    check of PK comparison of the product with Coreg CR&reg; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> RA
    Chem Pharma India </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> 36 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> 36 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> The
    trial was performed and provided initial and partial information on potential comparison with Coreg CR&reg; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Ended
    in 2011 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> Approx.
                                                          $60,000 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> Approx.
                                                          $60,000 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> To
    be determined </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> We
    are examining the relevant regulatory strategy </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Under
    examination </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> To
    be determined </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> To
    be determined </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Under
    examination </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Under
    examination </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Under
    examination </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We cannot predict
with certainty our development costs and they may be subject to changes. See &ldquo;Item 3. Key Information &ndash; D. Risk Factors
&ndash; Risk Related to Our Financial Condition and Capital Requirements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I><U>RHB-102
</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-102
is a once-daily controlled release oral formulation of ondansetron, a leading member of the family of 5HT-3 serotonin receptor
inhibitors. It is intended to prevent <FONT STYLE="font: 10pt Times New Roman, Times, Serif">chemotherapy and radiotherapy induced
nausea and vomiting.</FONT>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-102 utilizes
a technology called CDT&reg; that uses salts to provide a controlled release of ondansetron. The CDT&reg; platform enables controlled
release drug design (<I>i.e.</I>, measured rate of introduction of active drug) at a relatively low manufacturing cost.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We acquired
the rights to RHB-102 under a May 2, 2010 agreement with SCOLR Pharma Inc., pursuant to which we received a worldwide, exclusive
and perpetual license to various patent rights and know-how related to RHB-102. See &ldquo;&ndash; Acquisition and License Agreements
&ndash; License Agreement for RHB-102.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Competition
and Market</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Nausea and
vomiting prevention (anti-emetic) treatments account for a large market share of oncology-support treatments. In 2010, the worldwide
market for treatments for prevention of chemotherapy-induced nausea and vomiting exceeded $2 billion. Of this market, 5-HT3 serotonin
receptor inhibitors are estimated at approximately $1 billion in 2010 (RHB-102 belongs to this family of inhibitors) according
to BCC Research, a leading market intelligence and information resource.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To the best
of our knowledge, the main competitors of RHB-102 are other 5-HT3 serotonin receptor inhibitors. This class of medication is derived
from the active ingredient ondansetron (such as the generic drug marketed in the U.S. under the trade name Zofran&reg;, produced
by GlaxoSmithKline). Additional first-generation generic drugs from the same family contain the active ingredient granisetron
(marketed in the U.S. under the name Kytril&reg;, produced by Hoffman-La Roche Ltd.) or the active ingredient dolasetron (marketed
in the U.S. under the name of Anzemet&reg;, produced by Sanofi-Aventis Groupe). In addition, a second-generation drug containing
the active ingredient palonosetron is still under patent and marketed in the U.S. under the name Aloxi, by Eisai Pharmaceuticals
Inc., or Eisai.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Zofran&reg;
is a leading 5HT-3 serotonin receptor inhibitor drug, reaching worldwide sales of approximately $400 million in 2011 according
to integration of data from IMS Health and the 2011 annual report of GlaxoSmithKline. This drug contains the active ingredient
ondansetron and became generic in December 2006. The drug is available in oral tablet and intravenous (IV) formulations. The price
of the drug varies broadly and reaches up to $85 for a single chemotherapy treatment.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Granisetron and dolasetron are additional
first-generation generic drugs from the same family of 5HT-3 serotonin receptor inhibitors. Although there are no significant
differences in the mechanisms of action between them and ondansetron, sales of ondansetron products exceed those of granisetron
and dolasetron. The generic drugs containing these active ingredients are available both orally and intravenously and by transdermal
patch. The price of the Kytril&reg; and Anzemet&reg; drugs varies roughly between $100 and $180 for each chemotherapy treatment.
Their relatively high cost is one of the reasons that ondansetron-based drugs are more widely used. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Aloxi&reg;
is a second-generation drug from the same family of inhibitors. To the best of our knowledge, it is currently administered only
intravenously (IV). It has longer duration of action in the body and is the only drug in this family that was approved for use
with an indication of nausea and vomiting prevention for more than 24 hours from the chemotherapy treatment (delayed onset). This
means that the drug continues to be effective from the time of its administration for more than the ensuing 24 hours. The price
of this drug is significantly higher than Zofran&reg; and is estimated at approximately $400 per treatment. To the best of our
knowledge, an oral version of this drug was approved in August 2008 in the U.S., but is not currently marketed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The potential advantages of RHB-102
compared to Zofran&reg; are significant. A single dose of RHB-102 is anticipated to prevent chemotherapy or radiotherapy induced
nausea and vomiting over a time window of approximately 24 hours. This effectiveness period is significantly longer than the effective
time of Zofran&reg; 8mg, which is indicated to be administered several times a day. This is potentially advantageous for cancer
patients undergoing radiation treatments who would prefer to avoid the need to take additional drugs (tablets) during the day
after the treatment, when they may suffer attacks of nausea and vomiting.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The potential advantages of RHB-102
compared to Aloxi&reg;, the only drug that has a relatively long-term effect (beyond 24 hours, as stated above), is the delivery
method and price. Aloxi&reg; is a drug that in the United States is delivered intravenously (IV) and costs approximately $400
per dose. RHB-102 is planned to be delivered orally, in tablet form. Oral administration is expected to allow independent self-administration
by patient, save patient travel time to the clinic or hospital and reduce health care professional work load, thus significantly
lowering its cost as opposed to currently available IV alternatives. To the best of our knowledge, there are several plans to
develop new products in the area of nausea and vomiting prevention, including the development of a product that directly competes
with RHB-102, for controlled release of ondansetron, based on a different technology of controlled release, by the Eurand N.V.
(which merged with Axcan Pharma, and changed its name after the merger to Aptalis Pharma Inc.). To the best of our knowledge,
this product completed Phase II trials. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Clinical
Development</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In April 2012,
we completed a comparative bioavailability trial. The clinical trial assessed the bioequivalence of RHB-102 (24mg) administered
once, to Zofran&reg; 8mg tablet administered three times, over a 24 hour period. The final results of the study, which we received
in June 2012, showed that one dose of RHB-102 (24mg) is bioequivalent to Zofran&reg; 8mg tablet administered three times over
a 24 hour period, in accordance with U.S. Food and Drug Administration defined criteria for bioequivalence, indicating that the
efficacy and safety of the two pharmaceutical products would be expected to be similar.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In order to
carry out clinical trials for RHB-102, in November 2011 we entered into an agreement with our Canadian service provider which
entered into a back-to-back agreement with Algorithme Pharma Inc., a Canadian clinical research organization specializing in the
performance of clinical trials. Algorithme Pharma Inc. performed the clinical trials described above for RHB-102 from February
to April 2012. See &ldquo;&ndash; Master Service Agreement with 7810962 Canada Inc.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In light of
the positive results of the clinical trial, we intend to approach the U.S. Food and Drug Administration to request a Type B meeting
by the end of 2012 in order to discuss the U.S. marketing approval pathway.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
chart summarizes the clinical trial history and status of RHB-102:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 11%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    trial name </FONT></TD>
    <TD STYLE="width: 11%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Development
    phase of the clinical trial </FONT></TD>
    <TD STYLE="width: 18%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Purpose
    of the clinical trial </FONT></TD>
    <TD STYLE="width: 11%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    trial site </FONT></TD>
    <TD STYLE="width: 8%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Planned
    number of subjects of the trial </FONT></TD>
    <TD STYLE="width: 7%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Number
    of subjects </FONT></TD>
    <TD STYLE="width: 11%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Nature
    and status of the trial </FONT></TD>
    <TD STYLE="width: 7%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Schedule </FONT></TD>
    <TD STYLE="width: 8%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Total
    clinical development cost (estimate) </FONT></TD>
    <TD STYLE="width: 8%; padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Accrued
    cost </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> Biovail
                                                          838332783283 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Phase
    I </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> PK
    test of three different formulations of the product in a concentration of 24 mg compared to Zofran 8 mg administered 3 times
    per day </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Biovail
    Contact Research, Canada </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> 30 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> 30 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> The
    trial was performed and indicated that one of the formulations is suitable for continuing the development process </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Ended
    in 2007 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> ODO-P1-494 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Comparative
    Bioavailablity </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Comparison
    between once-daily administration of several formulations of RHB-102 to&nbsp; administration of Zofran&reg; 8mg three times
    per day, 8 hours apart </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Algorithme
    Pharma, Canada </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> 26 </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> 26 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> Successfully
                                                          completed the study in compliance with the trial&rsquo;s bioequivalence
                                                          and safety objectives, meeting its objectives of bioequivalence as defined
                                                          by U.S. Food and Drug Administration&nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> Ended
                                                          in Q2 2012 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Approx.
    $2 million </FONT></TD>
    <TD STYLE="padding-top: 2pt; padding-right: -4.8pt; padding-bottom: 2pt; text-align: center"><FONT STYLE="color: Black"> Approx.
    $1.3 million </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We cannot predict
with certainty our development costs and they may be subject to changes. See &ldquo;Item 3. Key Information &ndash; D. Risk Factors
&ndash; Risk Related to Our Financial Condition and Capital Requirements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I><U>RHB-103</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> RHB-103
is an oral thin film formulation of rizatriptan intended for the treatment of acute migraine headaches. Migraine is a neurovascular
disorder (related to nerves and blood vessels) characterized by recurrent headaches in one side or both sides of the head. In
general, migraine headaches are accompanied by nausea and increased sensitivity to light and sound. Migraines are generally treated
through the usage of triptans, a class of molecules that narrow (constrict) blood vessels in the brain in order to relieve swelling
and other migraine symptoms. Examples of triptans include sumatriptan, zolmitriptan and rizatriptan, the basis of RHB-103. RHB-103
rapidly dissolves in the mouth. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The product
is based on a patented technology called &ldquo;VersaFilm<SUP>TM</SUP>.&rdquo; This technology allows the production of thin film
strips that dissolve rapidly in the mouth, allowing the drug to be absorbed through the oral mucosa and into the bloodstream.
The proprietary VersaFilm<SUP>TM</SUP> technology is a novel, non-mucoadhesive, fast dissolving oral dosage form.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The VersaFilm<SUP>TM
</SUP>platform offers potential advantages that include fast absorption of the drug and the convenience of use compared to conventional
tablets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We acquired
the rights to RHB-103 under an August 26, 2010 joint development and commercialization agreement with IntelGenx Corp., pursuant
to which we received a worldwide, exclusive and perpetual license to various patent rights and know-how related to RHB-103. See
&ldquo;&ndash; License Agreement for RHB-103&rdquo; for more information regarding this agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Competition
and Market</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To the best
of our knowledge, the main marketing competitors of RHB-103 are oral drugs from the triptan family, such as rizatriptan from Merck
and Co., Inc., which is marketed in the U.S. under the name of Maxalt&reg;, and sumatriptan, produced by GlaxoSmithKline and marketed
in the U.S. as Imitrex&reg; and in generic form since 2006. The target market for RHB-103 is the triptan market, which was estimated
at approximately $2.1 billion worldwide in 2011 according to a 2011 report by Business Insights.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">According to
the 2011 annual report of Merck and Co., Inc., the direct sales of Maxalt&reg; worldwide in 2011 accounted for $639 million. According
to an article in the journal Current Pain and Headache Reports 2004 by Dr. David W. Dodick et. al., Rizatriptan (Maxalt&reg;)
is considered one of the oral triptans with the highest effectiveness among the triptan family. According to HTA (Health Technology
Assessment), the price of one 10 mg tablet is approximately $37. The U.S. patent of Maxalt&reg; is expected to expire in the U.S.
in December 2012. It should be noted that, to the best of our knowledge, and based on investigations performed by us, we are prevented
from marketing RHB-103 in the U.S. until December 2012, due to the validity of the existing patent of Merck &amp; Co. Inc.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Sumatriptan
is the only generic triptan competitor on the market. While its price is generally lower than the rizatriptan based drugs on the
market, it ranks lower than these drugs in terms of effectiveness</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We believe
that RHB-103 will compare favorably to the other triptan drugs due to the fact that it is delivered through oral dissolution,
rather than through conventional tablets. This feature should be especially appealing to pediatric and geriatric populations that
often struggle with swallowing capsules with water.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In April 2012,
we and IntelGenx, Corp. completed a bioequivalence clinical trial in Canada, subject to the U.S. Food and Drug Administration
review and approval, in order to examine the pharmacokinetic equivalence between the soluble film of RHB-103 and rizatriptan of
Merck &amp; Co. Inc. (Maxalt MLT&reg;), using 26 volunteers. The final results of the clinical trial, which we received in August
2012, demonstrated that RHB-103 met its specified endpoints and the U.S. Food and Drug Administration criteria in all parameters
for bioequivalence with rizatriptan of Merck &amp; Co. Inc. (Maxalt MLT&reg;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On November 7, 2012, we and IntelGenx
Corp. held a pre-New Drug Application, or pre-NDA, meeting with the FDA. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Based on this clinical trial and the
outcome of the pre-NDA meeting, we and IntelGenx Corp. intend to file an NDA with the U.S. Food and Drug Administration for U.S.
marketing approval under the 505(b)(2) regulatory path during the first quarter of 2013. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
chart summarizes the clinical trial history status of RHB-103:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    trial name </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Development
    phase of the clinical trial </FONT></TD>
    <TD STYLE="width: 10%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Purpose
    of the clinical trial </FONT></TD>
    <TD STYLE="width: 17%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    trial site </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Planned
    number of subjects of the trial </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Number
    of subjects </FONT></TD>
    <TD STYLE="width: 12%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Nature
    and status of the trial </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Schedule </FONT></TD>
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Total
    clinical development cost (estimate) </FONT></TD>
    <TD STYLE="width: 10%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Accrued
    cost </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> PLT-008-09 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Phase I </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> PK comparison with
    a parallel product </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> RA Chem Pharma, India </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 10 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 10 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> The trial was performed
    and indicated similarity between the PK profile of the product and the profile of the reference product </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Ended in 2009 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> RZA-P9-688 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Comparative Bioequivalence </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> PK
                                                          comparison </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> with
        Maxalt MLT&reg; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Algorithme Pharma,
    Canada </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="color: Black"> 26 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0.5in"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 26 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Successfully completed
    the study demonstrating bioequivalence as defined by U.S. Food and Drug Administration </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> Q2
                                                          2012 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Approx. $1.2 million </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Approx. $800,000 </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We cannot predict
with certainty our development costs and they may be subject to changes. See &ldquo;Item 3. Key Information &ndash; D. Risk Factors
&ndash; Risk Related to Our Financial Condition and Capital Requirements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I><U>RHB-104</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> RHB-104
is intended for the treatment of Crohn&rsquo;s disease which is a serious inflammatory disease of the gastrointestinal system
that may cause severe abdominal pain and bloody diarrhea, malnutrition and potential life-threatening complications. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-104
is a patented combination of clarithromycin, clofazimine and rifabutin, three generic antibiotic ingredients, in a single capsule
and was developed to <FONT STYLE="font: 10pt Times New Roman, Times, Serif">treat <I>Mycobacterium avium paratuberculosis, </I>or
MAP, infections in Crohn&rsquo;s disease. According to a 2007 article in The Lancet Infectious Diseases by Dr. Martin Feller et.
al., which contains a meta-analysis of 18 published scientific and clinical studies, Crohn&rsquo;s disease patients are seven
times more likely to be infected with MAP than non-Crohn&rsquo;s patients.</FONT>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To date, Crohn&rsquo;s
disease has been considered to be an autoimmune disease, but the exact pathological mechanism is unclear. According to Dr. Robert
Greenstein&rsquo;s article published in The Lancet Infectious Diseases in 2003, the hypothesis that Crohn&rsquo;s disease is caused
by an interaction between MAP bacteria and the immune systems of individuals having a predisposition to the pathological inflammatory
reaction is supported by increasing evidence. This hypothesis is further supported by an increasing number of scientific and clinical
studies published in peer reviewed journals since a National Institute of Allergy and Infectious Diseases conference in 1998 that
focused on MAP in Crohn&rsquo;s disease.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In 2011, we
obtained U.S. Food and Drug Administration &ldquo;Orphan Drug&rdquo; status for RHB-104 for the treatment of Crohn&rsquo;s disease
in the pediatric population. See &ndash; &ldquo;Government Regulations and Funding Orphan Drug Designation.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The formulation
for RHB-104 is presently complete and manufacturing of the all-in-one capsules for our clinical trials and NDA submission is currently
in process. Stability testing is currently in progress.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We acquired
the rights to RHB-104, RHB-105 and RHB-106 pursuant to an asset purchase agreement with Giaconda Limited, a publicly traded Australian
company. See &ldquo;Acquisition and License Agreements &ndash; Acquisition of RHB-104, RHB-105 and RHB-106.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> In recent
years, a diagnostic technology enabling the identification of the presence of MAP bacteria in patients was developed and patented
by Professor Saleh Naser of the University of Central Florida in Orlando. On September 15, 2011, we entered into an agreement
with the University of Central Florida Research Foundation, Inc., pursuant to which we acquired the exclusive rights in this patented
diagnostic test. See &ldquo;&ndash; Acquisition and License Agreements &ndash; License Agreement related to RHB-104.&rdquo; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On February
12, 2012, we entered into an agreement with Quest Diagnostics Ltd. to develop a commercial diagnostic test for detecting the presence
of MAP bacteria in the blood based upon the rights we acquired from University of Central Florida Research Foundation, Inc. We
intend to use this test in connection with our planned RHB-104 clinical trials and future commercial applications of RHB-104.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Market </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">According
to a report on the epidemiology of Inflammatory Bowel Disease published by Datamonitor in August 2012, there were approximately
534,000 Crohn&rsquo;s patients in the U.S. in 2011, which number is expected to increase by 12% to approximately 598,800 by 2021.
The disease is now considered to be the second most common chronic inflammatory disorder after rheumatoid arthritis. According
to <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Dr. Andrew Yu in an article published in Current Medical Research Opinions
in 2008, the total direct medical cost of Crohn&rsquo;s disease in the U.S. was estimated to be $7.8 billion to $11.2 billion
in 2006. Including indirect costs, the total economic burden of Crohn&rsquo;s disease was estimated to be $10.9 billion to $15.5
billion.</FONT>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The MAP bacterium
is suspected of being a major factor in causing the inflammatory symptoms of Crohn&rsquo;s disease patients. According to a study
by Professor Saleh Naser et. al. in 2004 in The Lancet Infectious Diseases, approximately 40-50% of Crohn&rsquo;s disease patients
have been found to be infected with these bacteria. These patients represent our target market. EvaluatePharma, a source for commercial
analysis of the pharmaceutical and biotech sector, estimates the market for diagnosis and drug treatment of Crohn&rsquo;s disease
to have been approximately $3 billion worldwide in 2011 and estimates the worldwide market for diagnosis and drug treatment of
Crohn&rsquo;s disease to reach $5 billion by 2016.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Competition
</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Unlike other
drugs on the market for the treatment of Crohn&rsquo;s disease which are immunosuppressive agents, RHB-104 is intended to directly
address the suspected cause of the disease, MAP infection. To the best of our knowledge, there is no other drug approved for marketing
that treats infections of MAP bacteria in Crohn&rsquo;s disease patients.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Currently available
drugs on the market for the treatment of Crohn&rsquo;s disease offer only symptomatic relief, the effects of which are largely
temporary and accompanied by numerous adverse effects. A report of these side effects is shown in the following chart published
by Dr. Carol Nacy et. al. in a report from the American Academy of Microbiology that was published in June 2007.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 23%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="color: Black">Drug
    Family</FONT></TD>
    <TD STYLE="width: 19%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="color: Black">Example
    of Drug from the Family</FONT></TD>
    <TD STYLE="width: 30%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="color: Black">Effect</FONT></TD>
    <TD STYLE="width: 28%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="color: Black">Common
    Side Effects</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Corticosteroids</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Prednisone</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Relatively good effectiveness,
    for some patients only.</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Headaches, swinging moods,
    muscle and bone weakness, heart failure, diabetes and risk of infections.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Immunomodulatory
                                                          drugs</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">6-Mercaptopurine</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Methotrexate</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">High effectiveness, but
    only for a certain time and for some patients.</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Suppresses the immune
    system causing risks of infection or even cancer, negative side effects on the liver, kidneys and blood.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Biological agents &ndash;Anti-TNF-&alpha;
    drugs. The TNF (Tumor Necrosis Factor) is a component of the immune system.</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Remicade,
                                                          (Infliximab)</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Humira</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Administered intravenously
    (IV) every 2-8 weeks. Effective for some patients (30-40%). Effectiveness decreases over time.</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Suppresses a central component
    of the immune system. Risk of infectious diseases, cancer and damage to the nervous system.</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We may also
be exposed to potentially competitive products which may be under development to treat Crohn&rsquo;s disease, including Sequella&rsquo;s
CM Analog, an innovative cellular therapy with stem cells by Hospital Clinic in Barcelona, Spain, which is still in the formulation
stage, and new anti-TNF&alpha; therapies which may be under development to treat Crohn&rsquo;s disease.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Clinical
Development</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are currently
preparing two clinical trials, one in the U.S. and one Europe, before submitting applications for marketing approval for RHB-104
from the U.S. Food and Drug Administration through the 505(b)(2) regulatory path. These trials, based on the analysis and data
of a Phase III trial conducted in Australia, are designed as a Phase III trial for Crohn&rsquo;s disease patients in North America
and Israel, and a Phase III trial for Crohn&rsquo;s disease in six countries in Europe. In the Phase III clinical trial in Australia,
sponsored by Pharmacia and published by Professor Warwick Selby in 2007 in the medical journal, Gastroenterology, the main objective
of the trial was the ratio of patients with recurrent symptoms of the disease in the 12th, 24th and 36th month of disease, out
of the patients whose condition had improved after 16 weeks of treatment. The main secondary objective was the rate of patients
whose clinical condition improved within the first 16 weeks. Although the study did not meet the main trial objective of showing
a difference in relapse rate with long-term treatment, there was a statistically significant difference between the treatment
groups in the percentage of subjects in remission at week 16. Professor Marcel Behr and Professor James Hanley from McGill University
published a re-analysis of the study in The Lancet Infectious Diseases in June 2008 based on the intent-to-treat (ITT) principle
and found that there was a significant statistical advantage for the active therapy over the placebo throughout the period of
administration that disappeared once the active therapy was discontinued.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The trial of
RHB-104 in North America and Israel will be led by Professor David Y. Graham, MD, from Baylor College of Medicine, Houston, Texas,
U.S., while the clinical trial of RHB 104 in Europe will be led by Professor Colm O&rsquo;Morain, MD, of Meath and Adelaide Hospital,
Dublin, Ireland.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are also
currently examining the possibility of carrying out clinical trials on pediatric patients that suffer from Crohn&rsquo;s disease,
a population for which RHB-104 received &ldquo;Orphan Drug&rdquo; status in 2011. Upon the successful completion of these trials,
we intend to apply for regulatory approval of a pediatric indication of RHB-104.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On October
21, 2012<FONT STYLE="font: 10pt Times New Roman, Times, Serif">, we entered into an agreement, with our Canadian service provider
which entered into a back-to-back agreement with Corealis Pharma, Inc., a Canadian drug manufacturer, to manufacture and supply
RHB-104 for our clinical trials See &quot; &ndash; Manufacturing Agreement Related to RHB-104.&quot;</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In June 2011,
we entered into an agreement with our Canadian service provider, which entered into a back-to-back agreement with PharmaNet Canada
Inc. for the provision of clinical trial services for the RHB-104 adult studies in North America and Europe. In March 2012, our
Canadian service provider entered into another agreement with PharmaNet Canada Inc. for the provision of clinical trial services
for a pediatric trial of RHB-104. We have no<FONT STYLE="font-family: Times New Roman, Times, Serif">t yet set a date for starting
the pediatric clinical trial, nor have we applied for U.S. Food and Drug Administration approval to undertake this trial. See
&ldquo;&ndash; Master Service Agreements with Canadian service provider&rdquo; and see also &quot;&ndash; Clinical Services Agreement
related to RHB-104.&quot;</FONT></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">We
are currently in discussions with the U.S. Food and Drug Administration for approval to conduct the North American trial based
upon an Investigative New Drug (IND) approved by the U.S. Food and Drug Administration on July 18, 2007.<FONT STYLE="color: black">
</FONT>On August 29, 2012, we revised the IND filed by Giaconda with the submission of a new Phase III protocol to the U.S.
Food and Drug Administration, and after 30 days, the IND became effective. However, we are still awaiting a response from the
U.S. Food and Drug Administration on issues relating to the clinical study prior to proceeding with the clinical study
in North America and Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Approximately
240 Crohn&rsquo;s disease subjects are expected to participate in the clinical trial in North America and Israel. Half of the
patients will receive RHB-104 and half will receive a placebo drug over a period of approximately six months to determine efficacy,
followed by an additional follow-up period of approximately six months to confirm safety. A further Clinical Trial Application
(CTA) will be submitted in Europe once we receive additiona</FONT>l FDA responses to our questions regarding the update
to the IND.<I> </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Potential Other Indications</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We are also exploring, through preliminary
research, the potential impact of RHB-104 in treating other indications. To date, we have performed three pre-clinical studies
in an experimental autoimmune encephalomyelitis (EAE) mouse model of Multiple Sclerosis, or MS. The first pre-clinical study measured
cytokine production (biomarkers of inflammation) and demonstrated that the RHB-104 treatment led to a significant reduction of
pro-inflammatory cytokine concentrations of IL-6 and TNF, which are associated with inflammation and MS, compared to the control
group. The second pre-clinical study measured the efficacy of RHB-104 as prophylactic therapy, and the treatment with RHB-104
demonstrated a significant reduction in the inflammatory area and level of demyelination, compared with the control group. The
third pre-clinical study measured relapses, demonstrating RHB-104&rsquo;s efficacy in significantly reducing the incidence of
relapse, compared with the control group. Following these pre-clinical studies, we are making advanced preparations for starting
a Phase IIa proof of concept clinical trial to be run in Israel. Such clinical trial is currently expected to commence in January
2013 and to conclude during the second quarter of 2014, with interim results expected during the first quarter of 2014. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">MS is an inflammatory, demyelinating, and neurodegenerative disease of the central nervous system
of uncertain etiology that exhibits characteristics of both infectious and autoimmune pathology. There is a growing consensus
in the medical community that a dysregulated immune system plays a critical role in the pathogenesis of MS.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
chart summarizes the clinical trial history and status of RHB-104:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Clinical
    trial name </FONT></TD>
    <TD STYLE="width: 12%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Development
    phase of the clinical trial </FONT></TD>
    <TD STYLE="width: 16%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Purpose
    of the clinical trial </FONT></TD>
    <TD STYLE="width: 10%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Clinical
    trial site </FONT></TD>
    <TD STYLE="width: 10%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Planned
    number of subjects of the trial </FONT></TD>
    <TD STYLE="width: 7%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Number.
    of subjects </FONT></TD>
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Nature and
    status of the trial </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Schedule </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Total clinical
    development cost (estimate) </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Accrued
    cost </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Borody 2002 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Phase IIa </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Examining the effect
    of the treatment on Crohn&rsquo;s disease patients </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Center for Digestive
    Disease, Australia </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> 12 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> 12 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Performed </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Ended in 2002 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Borody 2005 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Phase II </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Examining the effect
    of the treatment on Crohn&rsquo;s disease patients </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Center for Digestive
    Disease, Australia </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> 52 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> 52 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Performed </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Ended in 2005 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Selby 2007 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Phase III </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Examining
                                                          the effect of the treatment with the product on Crohn&rsquo;s disease
                                                          patients </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> 20 clinical centers
    in Australia </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> 213 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> 211 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> The trial was performed
    and indicated promising improvement rates, although it did not meet the main trial objective, as defined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Ended in 2007 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Phase
                                                          III </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> (N.
        America and Israel trials) </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Examining the product&rsquo;s
    effectiveness in alleviating symptoms of Crohn&rsquo;s disease in patients </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT> To
                                                          be determined </P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> 240 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Preparations for Phase
    III trial in North America and Israel </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Expected
                                                          to end in 2014 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> $8
                                                          million </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> $2.5
                                                          million </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Phase
                                                          III </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> (Europe
        trial) </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Examining the product&rsquo;s
    effectiveness in alleviating Crohn&rsquo;s disease patients </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> To
                                                          be determined </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Under examination </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Under examination </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> $6
                                                          million </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> To
                                                          be determined </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Pediatric trial </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Examining the product&rsquo;s
    effectiveness in alleviating Crohn&rsquo;s disease in pediatric patients </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Under examination </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> - </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We cannot predict
with certainty our development costs and they may be subject to changes. See &ldquo;Item 3. Key Information &ndash; D. Risk Factors
&ndash; Risk Related to Our Financial Condition and Capital Requirements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I><U>RHB-105</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> RHB-105
is intended for the treatment of <I>Helicobacter pylori</I> bacterial infection in the gastrointestinal tract. RHB-105 is a combination
of three approved drug products &ndash; omeprazole, which is a proton pump inhibitor (the natural body pump that produces the
gastric acids used for digesting the food in the stomach), and amoxicillin and rifabutin which are antibiotics. RHB-105 is administered
to patients orally. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Chronic infection
with <I>Helicobacter pylori</I> irritates the mucosal lining of the stomach and small intestine. This condition is further exacerbated
by the acidic environment within the upper gastro intestinal tract, and can eventually result in a peptic ulcer. According to
a 2004 article in The Emerging Infectious Diseases by William M. Duck et. al., patients with a peptic ulcer may complain of abdominal
pain, nausea, vomiting and weight loss. In addition, these bacteria are a major risk factor for the development of stomach cancer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As noted above,
we acquired the rights to RHB-105 pursuant to an agreement with Giaconda Limited. See &ldquo;&ndash; Acquisition and License Agreements
&ndash; Acquisition of RHB-104, RHB-105 and RHB-106.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Competition
and Market </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The most popular
treatments of <I>Helicobacter pylori</I> type bacteria combine clarithromycin or metronidazole antibiotics with amoxicillin and
a proton pump inhibitor. Such current standard of care treatments fail in more than 20% of the patients due to the development
of antibiotic resistance, as reported by Dr. Lennita Wannmacher in a 2011 report submitted to the World Health Organization. The
potential advantage of RHB-105 over these drugs (such as PrevPac&reg; of Takeda Pharmaceuticals NA) was shown in a Phase II study
comprising 130 subjects, in which RHB-105 was shown to eradicate <I>Helicobacter pylori</I> in over 90% of treated patients who
failed previous eradication attempts using the current standard of care treatment, as published in the 2006 study report by Dr.
TJ. Borody, et. al. in Alimentary Pharmacology &amp; Therapeutics.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Approximately
three million <I>Helicobacter pylori</I> infected patients are treated per annum in the U.S. according to a 2007 report by Colin
W. Howden, MD, et. al. in The American Journal of Managed Care. Based on this figure, combined with the price of current treatments,
we estimate that the U.S. market of RHB-105 to be between $1 billion and $1.5 billion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Clinical
Development</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> RHB-105 completed a Phase II clinical
trial in Australia and is planned to undergo a Phase II/III study in North America, which is currently anticipated to commence
during the first quarter of 2013, subject to receipt of necessary regulatory approvals. We intend to seek marketing approval for
RHB-105 from the U.S. Food and Drug Administration through the 505(b)(2) regulatory path. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We entered
into an agreement with Professor David Y. Graham, MD, from Baylor College of Medicine, Houston, Texas, U.S., to serve as the lead
investigator of the clinical trial of RHB-105.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
chart summarizes the clinical trial history and status of RHB-105:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 6%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    trial name </FONT></TD>
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Development
    phase of the clinical trial </FONT></TD>
    <TD STYLE="width: 16%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Purpose
    of the clinical trial </FONT></TD>
    <TD STYLE="width: 11%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    trial site </FONT></TD>
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Planned
    number. of subjects of the trial </FONT></TD>
    <TD STYLE="width: 7%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Number
    of Subjects </FONT></TD>
    <TD STYLE="width: 11%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Nature
    and status of the trial </FONT></TD>
    <TD STYLE="width: 12%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Schedule </FONT></TD>
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Total
    clinical development cost (estimate) </FONT></TD>
    <TD STYLE="width: 10%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Accrued
    cost </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Phase IIa </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Examining the product&rsquo;s
    effectiveness in treating <I>Helicobacter pylori</I> infections in patients for whom standard of care had failed to treat
    the infection </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Center for Digestive
    Disease, Australia </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 130 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 130 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> The trial was performed
    and indicated that the treatment is effective for bacteria patients for whom standard of care had failed to treat the infection </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Ended in 2005 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT> Phase
                                                          II/III </P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Examining the effectiveness,
    safety and pharmacokinetics of the final formulation </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> To
                                                          be determined </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> $2.7
                                                          million </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> $0.6 million </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We cannot predict
with certainty our development costs and they may be subject to changes. See &ldquo;Item 3. Key Information &ndash; D. Risk Factors
&ndash; Risk Related to Our Financial Condition and Capital Requirements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I><U>RHB-106
</U></I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-106 is
a tablet intended for the preparation and cleansing of the gastrointestinal tract prior to the performance of abdominal procedures,
including diagnostic tests, such as colonoscopy, barium enema or virtual colonoscopy, as well as surgical interventions, such
as laparotomy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As noted above,
we acquired the rights to RHB-106 pursuant to an agreement with Giaconda Limited. See &ldquo;&ndash; Acquisition and License Agreements
&ndash; Acquisition of RHB-104, RHB-105 and RHB-106.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Competition
and Market</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">According to
a 2012 report by EvaluatePharma, the world market of products intended for cleansing the gastrointestinal system was estimated
at approximately $1.4 billion in 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To the best
of our knowledge, the main competition for RHB-106 are gastrointestinal cleansing products based on polyethylene glycol (PEG 3350).
These products are delivered in the form of water-soluble powder, and require users to drink between 2-4 liters of solution before
performance of the gastroenterological procedure. In addition to the need to drink considerable amounts of solution, a common
side effect that raises difficulties with users is the accompanying harsh and unpleasant taste leading to potential difficulties
with patient compliance. RHB-106 offers the potential for improved patient compliance because it is tasteless and eliminates the
need for drinking liters of poor tasting electrolyte solution. RHB-106 also has an advantage compared to currently available tableted
products in the field, in that it does not contain sodium phosphate, an active ingredient linked with a risk of nephrotoxicity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> An additional product, called PrepoPik<SUP>TM
</SUP>in the U.S. is manufactured by Ferring Pharmaceuticals<FONT STYLE="font: 10pt Times New Roman, Times, Serif"> </FONT>and
received Food and Drug Administration approval on July 17, 2012. The product, marketed under the name PicoPrep<SUP>TM </SUP>in
other countries, is based on an active chemical ingredient called sodium picosulfate, the same active ingredient used in RHB-106.
This product is also used for clearing the gastrointestinal system and it is given in the form of a water-soluble powder and requires
drinking quantities of fluids.&nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Products administered
in the form of tablets or capsules that were released on the market in the U.S., such as OsmoPrep&reg; and Visicol&reg; (produced
by Salix Pharmaceuticals Inc.) and Fleet (produced by C.B. Fleet Company, Inc., or C.B. Fleet), are based on a chemical substance
called sodium phosphate. In December 2008, the U.S. Food and Drug Administration published a severe warning against the use of
these products due to rare but severe side effects linked to kidney damage. As a consequence of this development, the over-the-counter
products of C.B. Fleet were recalled from the market, while the prescription products must carry a severe warning (black box label).
As announced by Salix Pharmaceuticals Inc., following the black box warning received from the U.S. Food and Drug Administration,
sales in 2009 of these products declined by 39% compared to 2008.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">A
leading product among the PEG 3350 family of products is MoviPrep&reg;, marketed by Salix Pharmaceuticals, Inc. in the U.S. and
by Norgine in Europe. Its price in the U.S. varies from $40 to $60 per dose. It requires drinking of about 2 liters of solution
and some users report it has an unpleasant taste. EvaluatePharma estimates that the annual worldwide sales of MoviPrep&reg; and
the parallel product marketed outside of the U.S. (Movicol&reg;) in 2011 were approximately $400 million. </FONT> <FONT STYLE="font-size: 10pt">The
potential advantage of RHB-106 over the current competitor products of the PEG 3350 type (such as MoviPrep&reg;), as well as over
PicoPrep<SUP>TM</SUP>, is that it is tasteless, eliminates the need to drink several liters of solution, and spares the patient
the exposure to the harsh tastes that may accompany these products. RHB-106 also does not fall under the black box warning against
nephrotoxicity issued by the U.S. Food and Drug Administration in December 2008 with respect to currently marketed capsule preparations
which are based on sodium phosphate. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Clinical
Development</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Giaconda Limited
completed a Phase IIa clinical trial in which 62 patients who underwent elective colonoscopies were prospectively randomized to
receive either a hypertonic solution with PicoPrep<SUP>TM</SUP> (sodium picosulphate) capsules, PicoPrep<SUP>TM</SUP> capsules
alone, standard Glycoprep<SUP>TM</SUP> (PEG) or PicoPrep<SUP>TM</SUP> sachets. The clinical trial showed that the PicoPrep<SUP>TM
</SUP>capsules were the preferred option by the patients and resulted in a lower number of mild adverse events than the other
preparations. In terms of &ldquo;ease of completion&rdquo;, more subjects in the PicoPrep<SUP>TM</SUP> capsule arm, as compared
to the GlycoPrep<SUP>TM</SUP> arm, rated this bowel preparation as easy to complete.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-106 is
currently in the formulation stage. We intend to seek marketing approval from the U.S. Food and Drug Administration through the
505(b)(2) regulatory path.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
chart summarizes the clinical trial history and status of RHB-106:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    trial name </FONT></TD>
    <TD STYLE="width: 11%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Development
    phase of the clinical trial </FONT></TD>
    <TD STYLE="width: 17%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Purpose
    of the clinical trial </FONT></TD>
    <TD STYLE="width: 10%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Clinical
    site </FONT></TD>
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Planned
    number of subjects of the trial </FONT></TD>
    <TD STYLE="width: 7%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Number
    of subjects </FONT></TD>
    <TD STYLE="width: 9%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Nature
    and status of the trial </FONT></TD>
    <TD STYLE="width: 12%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Performance
    schedule </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Total
    clinical development cost (estimate) </FONT></TD>
    <TD STYLE="width: 8%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Accrued
    cost </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Phase IIa </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Comparison of the
    product&rsquo;s effectiveness and safety with an existing products </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Center for Digestive
    Disease, Australia </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 60 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 60 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Performed </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Ended in 2005 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Comparison of the
    product&rsquo;s effectiveness and safety (in its final formulation) with an existing product </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> - </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> To be determined </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Approx. $ 200,000 </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We cannot predict
with certainty our development costs and they may be subject to changes. See &ldquo;Item 3. Key Information &ndash; D. Risk Factors
&ndash; Risk Related to Our Financial Condition and Capital Requirements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Summary</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A summary of
our therapeutic candidates is provided below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 18%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: justify; font-weight: bold"><FONT STYLE="color: Black"> Name
    of Product </FONT></TD>
    <TD STYLE="width: 16%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: justify; font-weight: bold"><FONT STYLE="color: Black"> Relevant
    Indication </FONT></TD>
    <TD STYLE="width: 27%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: left; font-weight: bold"><FONT STYLE="color: Black"> Potential
    Advantages Over Most Existing Treatments </FONT></TD>
    <TD STYLE="width: 19%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: justify; font-weight: bold"><FONT STYLE="color: Black"> Development
    Stage </FONT></TD>
    <TD STYLE="width: 20%; padding-right: -4.8pt; padding-left: 5.4pt; text-align: justify; font-weight: bold"><FONT STYLE="color: Black"> Rights
    in the Product </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> RHB-101 </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Cardiovascular </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Once-daily </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Under&nbsp; review </FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"> Worldwide, exclusive
    license </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> RHB-102 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Oncology support </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Reduced
        number of drug administrations </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> In
        preparation for application for marketing approval </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Worldwide,
        exclusive license </FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> RHB-103 </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Acute
                                                          migraine </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Discrete
        dosage form and ease of use </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> In
        preparation for application for marketing approval </FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> Worldwide,
        exclusive license and co-development </FONT></P></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 18%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">RHB-104</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 16%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Crohn&rsquo;s
                                                                      disease</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 27%; text-align: left; vertical-align: top"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: Black">Novel
                                                                                                             mechanism of action
                                                                                                             and improved clinical
                                                                                                             benefit</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 19%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">In preparation
        for Phase III studies</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; width: 20%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Acquired
        all rights to the product, worldwide and exclusive</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">RHB-105</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black"><I>Helicobacter pylori
    </I>infection</FONT></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Improved effectiveness</FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">In
                                                          preparation for Phase II/III studies</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: -4.8pt; padding-left: 5.4pt; text-align: left"><FONT STYLE="color: Black">Acquired all rights to
    the product, worldwide and exclusive</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">RHB-106</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;Bowel
                                                          preparation</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT>Avoids
                                                          severe bad taste</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">No known
        nephrotoxicity issues</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;In
                                                          preparation for Phase II/III studies</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT>Acquired
                                                          all rights to the product, worldwide and exclusive</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Acquisition
and License Agreements </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>License
Agreement for RHB-101</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On November
18, 2009, we entered into an agreement with Egalet a/s, a private Danish pharmaceutical company, pursuant to which Egalet a/s
granted us a worldwide, exclusive and perpetual license to use its rights in patents and know how relating to a therapeutic candidate
containing the active ingredient &ldquo;Carvedilol&rdquo; and which is referred to by Egalet a/s as &ldquo;Egalet Carvedilol.&rdquo;
The name given to this product by us is RHB-101.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The license
granted to us includes the right to grant sublicenses. The license covers the development, manufacture, commercialization, use,
sale, offer for sale and import of the product for all uses, including medical uses, diagnostics, and other uses in human beings
and/or animals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The granted
license is exclusive with regard to Egalet Carvedilol. We also received a non-exclusive license in additional patents for which
Egalet a/s retained a right to use such patents in connection with other products.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In consideration
for the license, we paid Egalet a/s $100,000. Furthermore, we are obligated under the license to pay Egalet a/s the following
additional amounts:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">$200,000
                                                                                                                             on
                                                                                                                             the
                                                                                                                             date
                                                                                                                             of
                                                                                                                             our
                                                                                                                             filing
                                                                                                                             of
                                                                                                                             an
                                                                                                                             application
                                                                                                                             for
                                                                                                                             marketing
                                                                                                                             of
                                                                                                                             the
                                                                                                                             product
                                                                                                                             with
                                                                                                                             the
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration
                                                                                                                             and
                                                                                                                             acceptance
                                                                                                                             by
                                                                                                                             the
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration
                                                                                                                             of
                                                                                                                             such
                                                                                                                             filing
                                                                                                                             for
                                                                                                                             review;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">$500,000
                                                                                                                             on
                                                                                                                             the
                                                                                                                             date
                                                                                                                             of
                                                                                                                             receipt
                                                                                                                             of
                                                                                                                             the
                                                                                                                             marketing
                                                                                                                             approval
                                                                                                                             from
                                                                                                                             the
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">royalties
                                                                                                                             at
                                                                                                                             a
                                                                                                                             rate
                                                                                                                             of
                                                                                                                             30%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             amounts
                                                                                                                             received
                                                                                                                             by
                                                                                                                             us
                                                                                                                             from
                                                                                                                             our
                                                                                                                             own
                                                                                                                             sales
                                                                                                                             or
                                                                                                                             from
                                                                                                                             sublicenses
                                                                                                                             payments,
                                                                                                                             for
                                                                                                                             a
                                                                                                                             fixed
                                                                                                                             period
                                                                                                                             up
                                                                                                                             to
                                                                                                                             the
                                                                                                                             expiration
                                                                                                                             of
                                                                                                                             the
                                                                                                                             patents
                                                                                                                             exclusively
                                                                                                                             granted
                                                                                                                             to
                                                                                                                             us
                                                                                                                             or
                                                                                                                             12
                                                                                                                             years
                                                                                                                             from
                                                                                                                             the
                                                                                                                             date
                                                                                                                             of
                                                                                                                             the
                                                                                                                             first
                                                                                                                             sale
                                                                                                                             of
                                                                                                                             the
                                                                                                                             product,
                                                                                                                             whichever
                                                                                                                             is
                                                                                                                             earlier,
                                                                                                                             in
                                                                                                                             any
                                                                                                                             country
                                                                                                                             where
                                                                                                                             a
                                                                                                                             patent
                                                                                                                             forming
                                                                                                                             the
                                                                                                                             subject
                                                                                                                             of
                                                                                                                             the
                                                                                                                             license
                                                                                                                             is
                                                                                                                             registered.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Egalet a/s
had the right to terminate the license if we fail to initiate clinical trials within 24 months, except if the failure to do so
was due to the decision of regulatory authorities, is related to technical problems or other reasons beyond our control or influence.
We believe that we satisfied this requirement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have
the right to terminate the agreement if Egalet a/s is in material breach and does not cure the breach within ninety (90) days,
and we may voluntarily terminate the agreement upon providing thirty (30) days written notice to Egalet a/s.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The license
also included various intellectual property representations of Egalet a/s, including that the intellectual property licensed to
us did not infringe upon third party patents or other intellectual property rights, except for one patent in Europe and one patent
in the U.S. We subsequently filed an objection to the validity of the relevant European patent and on May 27, 2011, the European
Patent Office annulled that patent. With respect to the patent in the U.S., we believe that RHB-101 does not infringe that patent
to the extent that RHB-101 contains a &ldquo;carvedilol free base&rdquo; and does not contain carvedilol phosphate. RHB-101 does
not contain carvedilol phosphate at present and only contains carvedilol free base.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>License
Agreement for RHB-102</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On May 2, 2010,
we entered into an agreement with SCOLR Pharma, Inc., a publicly traded Seattle based pharmaceutical company, that granted us
a worldwide, exclusive and perpetual license to use patents and know how relating to an oral formulation for sustained release
of ondansetron, a generic active chemical substance, for any pharmaceutical indication or treatment usage, diagnostic usage or
any other use in human beings or in animals. The name given to the product by us is RHB-102.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The license
granted to us includes the right to grant sublicenses. The license covers the development, manufacture, commercialization, use,
sale, offer for sale and import of products for all uses, including medical uses, diagnostics, and other uses in human beings
and/or animals. However, under the license agreement SCOLR Pharma, Inc. retained certain rights and is entitled to make use of
the know- how for purposes other than RHB-102 and/or products outside of RHB-102&rsquo;s field of use, which is defined as all
indications, including therapeutic, diagnostic and other human and or animal uses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In consideration
for the granting of the license, we paid SCOLR Pharma, Inc. an up-front payment of $100,000. Furthermore, we are obligated under
the license to pay to SCOLR Pharma, Inc. additional amounts, as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">$250,000
                                                                                                                             upon
                                                                                                                             the
                                                                                                                             receipt
                                                                                                                             of
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration
                                                                                                                             approval
                                                                                                                             for
                                                                                                                             marketing
                                                                                                                             the
                                                                                                                             product;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">$250,000
                                                                                                                             upon
                                                                                                                             the
                                                                                                                             first
                                                                                                                             sale
                                                                                                                             of
                                                                                                                             the
                                                                                                                             product;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">royalty
                                                                                                                             payments.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Royalties are
payable to SCOLR Pharma, Inc. at a rate of 8% of our net sales or sublicensing fees, for the shorter of:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">expiration
                                                                                                                             of
                                                                                                                             the
                                                                                                                             last
                                                                                                                             patent
                                                                                                                             granted
                                                                                                                             under
                                                                                                                             the
                                                                                                                             license;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">10
                                                                                                                             years
                                                                                                                             from
                                                                                                                             the
                                                                                                                             date
                                                                                                                             of
                                                                                                                             the
                                                                                                                             sale
                                                                                                                             of
                                                                                                                             the
                                                                                                                             first
                                                                                                                             product
                                                                                                                             by
                                                                                                                             us
                                                                                                                             or
                                                                                                                             any
                                                                                                                             third
                                                                                                                             party;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             date
                                                                                                                             when
                                                                                                                             the
                                                                                                                             total
                                                                                                                             of
                                                                                                                             all
                                                                                                                             payments
                                                                                                                             made
                                                                                                                             to
                                                                                                                             SCOLR
                                                                                                                             Pharma,
                                                                                                                             Inc.
                                                                                                                             reach
                                                                                                                             an
                                                                                                                             aggregate
                                                                                                                             of
                                                                                                                             $30
                                                                                                                             million.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
requires us to make a good faith, continuous and diligent effort to allocate appropriate financial resources to prepare, initiate
and complete the clinical development of RHB-102 and file an application for regulatory marketing approval in accordance with
industry standards. If we do not comply with this undertaking, SCOLR Pharma, Inc. may terminate the license, except if our failure
is due to development failures, negative regulatory decisions, and/or other reasons beyond our control.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have
the right to terminate the agreement if SCOLR Pharma Inc. is in material breach and does not cure the breach within ninety (90)
days, and we may voluntarily terminate the agreement upon providing thirty (30) days written notice to SCOLR Pharma Inc.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Furthermore,
if we have not received U.S. Food and Drug Administration approval for the marketing of the product within 36 months, or if product
sales do not occur within 48 months following the transfer of the know- how to us, which was 30 days following the date of the
agreement, SCOLR Pharma, Inc. may terminate the agreement, unless we elect to pay the relevant milestone payment within 45 days
from the date SCOLR Pharma, Inc. notifies us of its intention to terminate the agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>License
Agreement for RHB-103</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On August 26,
2010, we entered into a joint development and commercialization agreement with IntelGenx Corp. under which IntelGenx Corp. granted
us a worldwide, exclusive and perpetual license to use its rights in patents and know-how relating to a triptan formula based
on the VersaFilm<SUP>TM</SUP> technology and which we call RHB-103.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The license
includes the right to grant sublicenses. The license covers the co-developing, selling, offering for sale and importing the product
for all indications, including, but not limited to, acute treatment of migraine attacks with or without an aura and all other
therapeutic, diagnostic, and other human /or animal uses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The license
provides that IntelGenx Corp. reserves the right to grant licenses to manufacture the product, subject to the approval of a steering
committee. The agreement further limits our right to grant sublicenses by requiring that we give prior notice to IntelGenx Corp.
of the identity of any proposed sub-licensee and provide IntelGenx Corp. with information regarding the main elements of the proposed
sublicense agreement. If IntelGenx Corp. objects to a sublicense, the proposed sublicense will be presented for the approval of
a steering committee.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Pursuant to
the agreement, the parties agreed on joint product development activities. Accordingly, IntelGenx Corp. agreed to devote sufficient
resources (subject to the approved budget in the agreement) in order to conduct clinical trials and file an application with the
U.S. Food and Drug Administration for marketing of the product, and we agreed to finance the balance of the development in the
amount of approximately $849,000, subject to deviations of 10%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The joint development
of the product is to be conducted through a steering committee, comprised of an equal number of members appointed by us and IntelGenx
Corp. The committee is charged with supervising progress of our research and development efforts, reporting on possible delays
and deciding on required revisions in the plan. IntelGenx Corp. has the deciding vote in any vote relating to issues of development,
regulation and manufacture, while we have the deciding vote in any vote relating to issues of licensing, commercialization and
collaborations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In consideration
for the license, we made up-front and milestone payments in the aggregate amount of $600,000 and we are required to make additional
milestone payments of up to $700,000 as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black"> &middot; </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"> $200,000
                                                                                                                             upon
                                                                                                                             the
                                                                                                                             filing
                                                                                                                             of
                                                                                                                             an
                                                                                                                             NDA
                                                                                                                             and
                                                                                                                             acceptance
                                                                                                                             of
                                                                                                                             the
                                                                                                                             filing
                                                                                                                             by
                                                                                                                             the
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration;
                                                                                                                             and </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">$500,000
                                                                                                                             upon
                                                                                                                             receipt
                                                                                                                             of
                                                                                                                             U.S.
                                                                                                                             Food
                                                                                                                             and
                                                                                                                             Drug
                                                                                                                             Administration
                                                                                                                             marketing
                                                                                                                             approval
                                                                                                                             for
                                                                                                                             the
                                                                                                                             product.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
we are required to make royalty payments to IntelGenx Corp. of 20% of net sales if the product is marketed by us and 60% of the
first $2 million of net sublicense fees, and 40% of net sublicensing fees thereafter, in if the product is marketed by sublicensees.
However, if we bear the regulatory costs in a sublicense arrangement, royalties will be 20% of net sublicense fees until we recover
these costs, plus 10% interest, and if IntelGenx Corp. bears such costs, royalties will be 70% of net sublicense fees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
provides that all intellectual property developed or to be developed exclusively by IntelGenx Corp. will belong exclusively to
IntelGenx Corp. and will be licensed to us, and the intellectual property to be developed or financed jointly by IntelGenx Corp.
and us will be jointly owned by us and IntelGenx Corp., and each party may make use of such joint intellectual property for uses
not competing with either the product or the other party.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The agreement is of unlimited duration
and will remain in force until terminated in accordance with its terms. Either party may terminate the agreement if (i) the other
party is in material breach and does not cure within ninety (90) days; or (ii) a bankruptcy or liquidation event occurs with respect
to the other party. This agreement also provides that we may terminate the agreement for convenience upon providing thirty (30)
days written notice to IntelGenx Corp.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Acquisition
of RHB-104, RHB-105 and RHB-106</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On August 11,
2010 we entered into an asset purchase agreement with Giaconda Limited, a publicly traded Australian company, pursuant to which
Giaconda Limited transferred all of its patents, tangible assets, production files, regulatory approvals and other data related
to the &ldquo;Myoconda&rdquo;, &ldquo;Heliconda&rdquo; and &ldquo;Picoconda&rdquo; products to us. We renamed these products RHB-104,
RHB-105 and RHB-106, respectively. Giaconda Limited further transferred to us products in process, product samples and raw materials.
The agreement excluded from the transfer the rights to two other products of Giaconda Limited that are not related to RHB-104,
RHB-105 and RHB-106. However, to the extent that the intellectual property associated with these two other products shall be required
for the research, development, manufacture, registration, import/export, use, commercialization, distribution, sale and/or offer
for sale of any of RHB-104, RHB-105 and RHB-106, Giaconda Limited granted us an exclusive worldwide assignable right to such intellectual
property for such purposes. The closing under this agreement occurred on August 26, 2010.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In consideration
for the assets purchased by us, we paid Giaconda Limited $500,000. We and Giaconda Limited also agreed that until the expiration
of the last patent transferred to us, we will pay to Giaconda Limited 7% of net sales from the sale of the products by us and
20% of the royalties received from sublicensees, in each case, only after we recoup the amounts and expenses exceeding an approved
budget.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">Under
the agreement, it was agreed that none of Giaconda Limited, Prof. Thomas Borody, the developer of the products, nor their respective
affiliates may compete with us or assist others to compete with us with respect to the products and acquired technology. Such
non-compete undertaking shall be in force for a period of time of up to 10 years</FONT> <FONT STYLE="font-size: 10pt">from the
date of the agreement. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
provides that, should we elect not to proceed with the registration proceedings or the maintenance of any patent transferred to
us, we will notify Giaconda Limited and Giaconda Limited will have the right to proceed with the registration, maintenance, development
and commercialization of such patent at its expense. Should Giaconda Limited exercise such right, it will be entitled to all amounts
received in connection with sales relating to such patent.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
also requires us to make a good faith, continuous and commercially reasonable effort to allocate appropriate financial resources
to prepare, initiate and complete the clinical development of the products (with the exception of Picoconda) and file an application
for regulatory marketing approval in accordance with industry standards. Development failures, negative regulatory decisions,
and/or other reasons beyond our control will not constitute a breach of this obligation. Should we breach this obligation with
respect to the development of any of the products, and fail to cure the breach within 90 days from the date that Giaconda Limited
sends us a default notice, Giaconda Limited may buy back all of the intellectual property rights with respect to such product
for the original purchase price, plus the related development costs incurred by us through the date of the buy-back.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>License
Agreement for MAP diagnostic test related to RHB-104 </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On September
18, 2011, we entered into a license agreement with the University of Central Florida Research Foundation, Inc. pursuant to which
we were granted an exclusive license to a patent-protected diagnostic test that identifies the presence of MAP in peripheral blood
through DNA testing. The license covers future commercial use of the test, including its manufacture, marketing, sale and commercialization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Under the agreement,
we may grant sublicenses for the test with the consent of the University of Central Florida Research Foundation, Inc., which consent
may not be unreasonably withheld.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We intend to
use this test in order to identify the MAP status of the subjects in the clinical study, thereby allowing a correlation of MAP
status and treatment response to RHB-104.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Under the license
agreement, we received an exclusive license for all indications and medical uses of the test in exchange for a one-time payment
of $45,000. Furthermore, we agreed to pay royalties of 7% of future sales, or an annual minimum amount noted below, as well as
20% of payments we receive from granting sublicenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
provides that the annual minimum royalty payment amount shall be $10,000 in year two, $15,000 in year three, $20,000 in year four
and $35,000 every year thereafter. These annual minimum payment amounts shall be deducted from future royalty payments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The agreement will remain in force
on a country by country basis until the last patent covered by the agreement expires. The University of Central Florida Research
Foundation may terminate the agreement if (i) we are in material breach; (ii) if we fail to pay royalties when due and payable
following provision of sixty (60) days notice; or (iii) a bankruptcy or liquidation event occurs with respect to us. We may terminate
the agreement at any time by providing ninety (90) days written notice to the University of Central Florida Research Foundation. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Potential License of Two Other Therapeutic
Candidates</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">On October 21, 2012, we signed a term sheet for an exclusive worldwide licensing agreement with SCOLR
Pharma Inc. Subject to completion of due diligence and execution of a binding agreement, the agreement would provide us a worldwide,
perpetual, exclusive license for all indications for two proprietary therapeutic candidates, both 12 hour extended release proprietary
formulations of currently available pharmaceutical products. The first therapeutic candidate is extended release ibuprofen, which
to the best of our knowledge, has completed a Phase III study in the U.S. To the best of our knowledge, prior to the NDA submission
to the U.S. Food and Drug Administration, we will be required to complete an &ldquo;Actual Use study,&rdquo; the purpose of which
is to assess safety under conditions resembling non-prescription use (OTC). The second therapeutic candidate is extended release
pseudoephedrine, which has, to the best of our knowledge, completed a pivotal bioequivalence trial. To the best of our knowledge,
an Abbreviated New Drug Application was submitted to the U.S. Food and Drug Administration and a complete response letter was
received citing certain deficiencies. We would have the primary responsibility for development and commercialization of the therapeutic
candidates in cooperation with SCOLR Pharma Inc. SCOLR Pharma Inc. would receive royalties in the event either therapeutic candidate
generates commercial sales. For extended release ibuprofen, SCOLR Pharma Inc. would be entitled to a royalty of between 20% and
50%, depending on the distribution channel and territory, and for extended release pseudoephedrine, SCOLR Pharma Inc. would be
entitled to a royalty of between 8% and 15% depending on the distribution channel. The consummation of this licensing transaction
is subject to our further due diligence as well as a negotiation and execution of a definitive agreement. The term sheet establishes
various mechanisms, including payment-related mechanisms, in the event the agreement is not executed; however, we are entitled
not to enter into an agreement, with no payment to SCOLR, in the event that material deviations emerge during the due diligence
process. The term sheet also includes a framework for potential future cooperation between the parties with respect to other products.
We cannot guarantee that we will in fact enter into a definitive agreement with SCOLR Pharma Inc. or that the terms that we ultimately
agree to will be similar to the terms described in the term sheet.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Master Service
Agreement with 7810962 Canada Inc.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On April 28,
2011, we entered into a master service agreement, which was later amended, with 7810962 Canada Inc., our Canadian service provider
for various project management services. According to the agreement, as amended, we agreed to pay our Canadian service provider
a monthly fee of $10,000. The agreement allowed our Canadian service provider to enter into service agreements with third parties
for the relevant services. The agreement may be terminated by either party upon 30 days&rsquo; advance notice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
with our Canadian service provider provides that certain research and development services related to our projects will be carried
out pursuant to our specific requests and upon the signing of specific agreements for each project. Such agreements shall include
a description of the required services, service terms and fees. To date, we, through our Canadian service provider, have entered
into manufacturing, clinical services and regulatory agreements with respect to RHB-102, RHB-104, RHB-105 and RHB-106.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> Furthermore,
pursuant to the agreement, the Canadian service provider may provide us with a discount to the research and development services
with respect to incentives programs from various authorities that may be granted to the Canadian service provider in the future.
As of September 30, 2012 we estimated, that in the future we may receive from our Canadian service provider discounts of approximately
$0.5 million. As of September 30, 2012, we had not recorded any research and development expense deductions. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Manufacturing
Agreements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Manufacturing
Agreement Related to RHB-102</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On March
21, 2011, we entered into an agreement with a U.S. drug manufacturer, Pharmaceutics International, Inc., for the manufacture and
supply of RHB-102 for our clinical trial. On May 24, 2012 and on July 13, 2012, we entered into further agreements with Pharmaceutics
International, Inc. to manufacture, test and supply registration batches of RHB-102.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
provides for Pharmaceutics International, Inc. to manufacture sufficient amounts of RHB-102 for our clinical trials and other
planned tests pursuant to our specifications and in accordance with regulatory requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to this agreement, as amended,
the manufacturer is entitled to receive up to approximately $1.2 million payable upon the completion of milestones during the
production periods and reimbursement of certain expenses. Milestone payments will be triggered upon the manufacturer performing
various services, such as API and raw materials sourcing, formulation and manufacturing work, development, manufacturing process,
project management support and regulatory support, analytical work and stability work. Actual payment amounts may deviate significantly
due to changes in the manufacturing processes, the cost of raw materials, laboratory tests and other expenses, subject to the
consent of the parties. Milestones are currently expected to be achieved over the next few years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Manufacturing Agreements Related
to RHB-104 </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">On April 28, 2011, we entered into
an agreement with our Canadian service provider which entered into a back-to-back agreement with Uman Pharma, Inc., a Canadian
drug manufacturer, to manufacture and supply RHB-104 for the clinical trials.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The agreement provided for Uman Pharma,
Inc. to manufacture sufficient amounts of RHB-104 for our clinical trials, NDA submission batches, and other planned tests pursuant
to our specifications and in accordance with regulatory requirements. All manufacturing will be done under good manufacturing
practices (GMP), as proscribed by the U.S. Food and Drug Administration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Pursuant to the agreement, as amended,
the manufacturer is entitled to receive approximately $1.4 million, payable upon the completion of milestones during the production
periods and reimbursement of certain expenses. Milestone payments will be triggered upon the manufacturer performing various services,
such as sourcing, formulation and manufacturing work, development, manufacturing process, project management support and regulatory
support, analytical work and stability work. Actual payment amounts may deviate significantly due to changes in the manufacturing
processes, the cost of raw materials, laboratory tests and other expenses, subject to the consent of the parties. Milestones are
currently expected to be achieved over the next few years.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On October 14, 2012, we mutually terminated
this agreement with our Canadian service provider, resulting in the concurrent termination of the related back-to-back agreement
between the Canadian service provider and Uman Pharma Inc. Through the end of October, we paid Uman Pharma approximately $1.1
million. No additional amount are payable to Uman Pharma. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="margin: 0pt 0">On October 21, 2012, we entered into a new agreement with our Canadian service provider which, in
turn, entered into a back-to-back agreement with Corealis Pharma Inc. to complete the manufacturing and supply of RHB-104 for
our clinical trials. Pursuant to this agreement, the manufacturer is entitled to receive approximately $350,000 upon the completion
of milestones during the production and stability tests periods and the reimbursement of various expenses. All manufacturing will
be done under GMP. Milestone payments will be triggered upon the performance by the manufacturer of various services, such as
manufacturing process, project management support and regulatory support, analytical work and stability work. Actual payment amounts
may deviate significantly due to changes in the manufacturing processes, the cost of raw materials, laboratory tests and other
expenses, subject to the consent of the parties. Milestones are currently expected to be achieved over the next few years. The
total costs of the two manufacturing agreements with the Canadian service provider are expected<FONT STYLE="font: 10pt Times New Roman, Times, Serif">
to be approximately $1.5 million.</FONT></P>

<P STYLE="margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">See &ldquo;&ndash;
Master Service Agreement with 7810962 Canada Inc.&rdquo; for a description of our agreement with our Canadian service provider.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Manufacturing
Agreement Related to RHB-105</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On July 5,
2011, we entered into an agreement with our Canadian service provider which entered into a back-to-back agreement with Corealis
Pharma Inc., a Canadian drug manufacturer, to formulate, manufacture and supply a clinical trial batch of RHB-105.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
provides for Corealis Pharma Inc. to manufacture sufficient amounts of RHB-105 for our clinical trials and other planned tests
pursuant to our specifications and in accordance with regulatory requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">Pursuant
to this agreement, as amended, the manufacturer is entitled to receive approximately $500,000, payable upon the completion of
milestones during the production periods and for reimbursement of certain expenses. Milestone payments will be triggered upon
the performance by the manufacturer of various services, such as</FONT> <FONT STYLE="font-size: 10pt">raw materials formulation
and manufacturing work, development, manufacturing process, project management support and regulatory support, analytical work
and stability work. Actual payment amounts may deviate significantly due to changes in the manufacturing processes, the cost of
raw materials, laboratory tests and other expenses, subject to the consent of the parties. Milestones are currently expected to
be achieved over the next few years. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0">The agreement will remain in force until terminated. This agreement provides that either party may
terminate the agreement (i) if the other party is in material breach and does not cure within thirty (30) days or (ii) upon a
bankruptcy or liquidation event with respect to the other party.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">See &ldquo;&ndash;
Master Service Agreement with 7810962 Canada Inc.&rdquo; for a description of our agreement with our Canadian service provider.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Manufacturing
Agreement Related to RHB-106 </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On June 27,
2011, we entered into an agreement, which was subsequently amended, with Pharmaceutics International Inc., a U.S. drug manufacturer,
for the manufacture of RHB-106.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
provides for Pharmaceutics International Inc. to manufacture sufficient amounts of RHB-106 for our clinical trials and other planned
tests pursuant to our specifications and in accordance with regulatory requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">Pursuant
to this agreement, as amended, the manufacturer is entitled to receive approximately $400,000, payable in upon the completion
of milestones during the production periods and reimbursement of certain expenses over a period of approximately 3 years. Milestone
payments will be triggered upon the performance by the manufacturer of various services, such as raw materials sourcing, formulation
and manufacturing work, development, manufacturing process, project management support and regulatory support, analytical work
and stability work. Actual payment amounts may deviate significantly due to changes in the manufacturing processes, the cost of
raw materials, laboratory tests and other expenses, subject to the consent of the parties.</FONT> <FONT STYLE="font-size: 10pt">Milestones
are currently expected to be achieved over the next few years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Either party may terminate the agreement
if the other party is in material breach and does not cure within sixty (60) days (ten (10) days in connection with monetary obligations).
We may terminate the agreement at any time and for any reason upon providing thirty (30) days written notice to Pharmaceutics
International Inc. Pharmaceutics International Inc. may terminate the agreement if we fail to authorize purchase of material needed
in connection with the services.<FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Clinical
Services Agreement related to RHB-104 </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On June 15,
2011 we entered into an agreement with our Canadian service provider which entered into a back-to-back agreement with PharmaNet
Canada Inc., a subsidiary of an international CRO company, and other related entities, for the purpose of performing the clinical
trials for RHB-104</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">PharmaNet Canada
Inc. specializes in the performance of clinical trials and pursuant to the agreement will be responsible for the performance of
the clinical trials, including entering into agreements with medical centers to perform the trials, supervision of the performance
and progress of the trials and the analysis of the results, all pursuant and subject to applicable regulatory requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Pursuant
to this agreement and subsequent amendments, PharmaNet Canada Inc. is entitled to receive $8 million in connection with the Phase
III clinical trial in North America and the Phase III clinical trial in Europe, as well as reimbursement of costs and investigator
grants to be paid during the trials. The payments will be spread out over the period of the clinical trials and based upon quarterly
administration fees, payments of up to approximately $4 million during the course of the clinical trials subject to the satisfaction
of certain milestones and reimbursements of certain expenses. These fees, however, may vary widely from time to time in accordance
with the final clinical trials protocol and payments to be made to third parties, such as investigator grants and payments for
various laboratory tests during the clinical trials, including tests to identify the MAP bacterium.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
includes a timetable for the recruitment of patients, performance of the trials and analysis of results, including a timetable
for the performance of ongoing patient follow-up. Such timetables may vary as a result of possible delays in recruitment of patients
for the clinical trials.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The agreement
will remain in force until all relevant services have been provided and we have made all payments thereunder, or until terminated.
Either party may terminate the agreement (i) if the other party is in material breach and does not cure within thirty (30) days;
or (ii) upon a bankruptcy or liquidation event with respect to the other party. This agreement also provides that we may terminate
the agreement at any time without cause upon providing forty five (45) days written notice to our Canadian service provider.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">In
March, 2012, we entered into an agreement with our Canadian service provider which entered into a back-to-back agreement with
PharmaNet Canada Inc. for the provision of clinical trial services, for pediatric trial of RHB-104.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">See &ldquo;&ndash;
Master Service Agreement with 7810962 Canada Inc.&rdquo; for a description of our agreement with our Canadian service provider.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Intellectual
Property </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our success
depends in part on our ability to obtain and maintain proprietary protection for our technology, its therapeutic applications,
and related technology and know-how, to operate without infringing the proprietary rights of others and to prevent others from
infringing our proprietary rights. Our policy is to seek to protect our proprietary position by, among other methods, filing U.S.
and foreign patent applications related to our proprietary technology, inventions and improvements that are important to the development
of our business. We also rely on our trade secrets, know-how and continuing technological innovation to develop and maintain our
proprietary position. We vigorously defend our intellectual property to preserve our rights and gain the benefit of our technological
investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have rights
either through assignment, asset purchase or in-licensing to a total of 104 issued patents and 21 patent applications in 12 different
patent families. The patents and patent applications are registered in various jurisdictions, the details of each family of patents
being provided below. In addition, we have licensed rights to various platform technologies on a non-exclusive basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>RHB-101
</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">One family
of our patents and patent applications is in-licensed by us and is comprised of ten issued patents and one patent application.
This family is entitled &ldquo;Controlled Release Solid Dispersion of carvedilol&rdquo; and relates to RHB-101. The patent family
has a priority date of September 21, 2001 and assuming no extension or adjustment of term, the patents in this family will expire
September 23, 2022. This patent family is licensed from Egalet a/s as part of our licensing agreement and relates to controlled
release pharmaceutical composition for oral use comprising a solid dispersion of:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">at
                                                                                                                             least
                                                                                                                             one
                                                                                                                             therapeutically,
                                                                                                                             prophylactically
                                                                                                                             and/or
                                                                                                                             diagnostically
                                                                                                                             active
                                                                                                                             substance
                                                                                                                             (including
                                                                                                                             carvedilol),
                                                                                                                             which
                                                                                                                             is
                                                                                                                             at
                                                                                                                             least
                                                                                                                             partially
                                                                                                                             in
                                                                                                                             an
                                                                                                                             amorphous
                                                                                                                             form,</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             pharmaceutically
                                                                                                                             acceptable
                                                                                                                             polymer
                                                                                                                             that
                                                                                                                             has
                                                                                                                             plasticizing
                                                                                                                             properties,
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">optionally,
                                                                                                                             a
                                                                                                                             stabilizing
                                                                                                                             agent,
                                                                                                                             the
                                                                                                                             active
                                                                                                                             substance
                                                                                                                             having
                                                                                                                             a
                                                                                                                             limited
                                                                                                                             water
                                                                                                                             solubility,
                                                                                                                             and
                                                                                                                             the
                                                                                                                             composition
                                                                                                                             being
                                                                                                                             designed
                                                                                                                             to
                                                                                                                             release
                                                                                                                             the
                                                                                                                             active
                                                                                                                             substance
                                                                                                                             with
                                                                                                                             a
                                                                                                                             substantially
                                                                                                                             zero
                                                                                                                             order
                                                                                                                             release.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">This family
of patents includes one patent application filed in the U.S., and patents granted in Austria, Belgium, Switzerland, Germany, Denmark,
Spain, France, the United Kingdom, Ireland and Italy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A second family
of our patents and patent applications is in-licensed by us from Egalet a/s and is comprised of one patent application in the
U.S. related to a controlled release pharmaceutical composition for oral use comprising carvedilol. This family is entitled &ldquo;Controlled
Release Carvedilol Compositions&rdquo; and also relates to RHB-101. The patent family has a priority date of November 8, 2002
and assuming no extension or adjustment of term or terminal disclaimer once issued, the patent in this family will expire November
7, 2023.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>RHB-102
</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">A third family is in-licensed by us
and is comprised of three issued patents in the U.S., Canada and Mexico, and two pending patent applications in Europe and Hong
Kong. Nineteen countries are designated in the European application. This family is entitled &ldquo;Monolithic tablet for controlled
drug release&rdquo; and has priority date of March 9, 1998. The non-U.S. patents in this family will expire March 2, 2019 and
the U.S. patent will expire on March 9, 2018. This family is in-licensed from SCOLR Pharma, Inc. as part of our licensing agreement
and relates to a swellable hydrophilic matrix tablet that delivers drugs in a controlled manner over a long period of time. The
drug is disposed in a matrix composed of HPMC or polyethylene oxide, in the presence of a salt, which may be a combination of
salts.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A fourth patent
family is in-licensed by us and is comprised of 24 issued patents and two pending patent applications. This family is entitled
&ldquo;Amino Acid Modulated extended Release Dosage Form&rdquo; and has an earliest priority date of December 20, 1999 for the
U.S. patents, and the earliest US patent will expire December 20, 2019. The non-U.S. patents will expire February 20, 2022. The
patent has been granted in the U.S., Canada, Australia and Europe and two patent applications are still pending in Japan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">This family
is licensed from SCOLR Pharma, Inc. and covers an extended release tablet comprising a plurality of granules of an effective amount
of a pharmaceutically active compound, at least one amino acid, and an intragranular polymer in which the granule is dispersed
within a hydrophilic extragranular polymer matrix which is more rapidly hydrating than the intragranular polymer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>RHB-103</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A fifth patent
family is in-licensed by us from IntelGenx Corp. and is comprised of three issued patents in the U.S. and one pending patent application.
As part of the agreement with IntelGenx Corp., we were granted a worldwide, exclusive and perpetual license which includes the
right to grant sub-licenses to these patents and applications. These patents and applications cover various aspects of the VersaFilm<SUP>TM
</SUP>technology that is the basis for RHB-103. The central U.S. patent (7,132,113) for a multi-layer film formulation comprising
the combination of a hydroxypropyl cellulose and a modified starch was issued November 7, 2006 and expires in 2022.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>RHB-104</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A sixth family
of our patents and patent applications is owned by us and is comprised of thirty five issued patents (including U.S., Australia,
Canada, Israel, Japan, New Zealand, Norway, Philippines, South Africa, Austria, Belgium, Switzerland, Lichtenstein, Cyprus, Germany,
Denmark, Spain, Finland, France, the United Kingdom, Greece, Ireland, Italy, Luxembourg, Monaco, the Netherlands, Portugal and
Sweden) and two pending patent applications. This family is entitled &ldquo;Method and composition for treating inflammatory bowel
disease&rdquo; and relates to RHB-104. The patent family has priority rights dating to April 1, 1997 and the patents in this family
will expire April 1, 2018. This patent family was acquired from Giaconda Limited as part of our asset purchase agreement with
them.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">This family
relates to a method and composition of medications used to treat inflammatory bowel disease, which includes Crohn&rsquo;s disease.
It further provides combinations of anti-atypical mycobacterial agents effective against the atypical mycobacterial strains. It
also provides a method of potentially immunizing patients with extracts of non-pathogenic mycobacteria.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> A seventh family of our patents and
patent applications is owned by us and is comprised of seven patent applications in Australia, Canada, Europe (Austria, Belgium,
Bulgaria, Croatia, Cyprus, Czech Republic, Switzerland/Liechtenstein, Germany, Denmark, Estonia, Spain, Finland, France, United
Kingdom, Greece, Hungary, Ireland, Iceland, Italy, Latvia, Lithuania, Luxembourg, Macedonia, Malta, Monaco, Netherlands, Norway,
Poland, Portugal, Romania, Slovenia, Slovakia, Sweden and Turkey), Israel, Japan, South Africa and the Philippines, and one granted
patent in New Zealand. In the U.S., we have received a notice of allowance. In Europe we have the option, once the European application
is granted, to validate the European patent in a total of 35 countries. This patent family was acquired from Giaconda Limited
as part of our asset purchase agreement with them and is related to RHB-104. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The family
is entitled &ldquo;Method and composition for treating inflammatory bowel disease&rdquo; and covers improved compositions comprising
rifabutin, clarithromycin, and clofazimine for use in the treatment of Inflammatory Bowel Diseases. In one instance, the compositions
may comprise a formulation of rifabutin, clarithromycin, and clofazimine in a single dosage form, such as a capsule, tablet, etc.,
with one or more specific excipients.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">The family also
covers a method for formulating the compositions to provide a solid oral dosage form of the composition which has improved efficacy
and a reduced likelihood of side effects.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>RHB-105</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">An eighth family
of our patents and patent applications is owned by us and comprised of twenty issued patents (including the U.S., Australia, Canada,
Austria, Belgium, Switzerland/Liechtenstein, Cyprus, Germany, Denmark, Spain, France, the United Kingdom, Greece, Ireland, Italy,
Luxembourg, Monaco, the Netherlands, Portugal and Sweden). This eighth family is entitled &ldquo;Improved Method of Eradication
of <I>H.pylori</I>&rdquo; and relates to RHB-105. The patent family has priority rights dating to April 30, 1998 and the patents
in this family will expire April 30, 2019. This patent family was acquired as part of the asset purchase agreement with Giaconda
Limited.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The family
relates to methods for the treatment and/or prevention of recurrence of a gastrointestinal disorder associated with <I>Helicobacter
pylori</I>, which entails administering to the patient a therapeutically effective amount of a first antibiotic, which is an ansamycin
and a therapeutically effective amount of at least a second antibiotic or antimicrobial agent. The invention also provides pharmaceutical
compositions for use in the methods of the invention.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>RHB-106</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A ninth family
of our patents and patent applications is owned by us and is comprised of seven issued patents in the U.S., Australia, Canada
and New Zealand and one application in Europe (designating Austria, Belgium, Switzerland/Liechtenstein, Germany, Denmark, Spain,
Finland, France, United Kingdom, Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands, Portugal and Sweden). This ninth family
is entitled &ldquo;Improved Preparation for colonic evacuation&rdquo; and relates to RHB-106. The patent family has priority rights
dating to November 3, 1995 and the non-U.S. patents in this family will expire November 1, 2016 and the U.S. patents October 31,
2016.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">This patent
family was acquired from Giaconda Limited as part of our asset purchase transaction and relates to an osmotic colonic evacuant
in solid oral dosage form comprising an orthostatic lavage in powder form and a pharmaceutically acceptable excipient, diluent
and/or adjuvant. It also relates to a method of evacuating a patient&rsquo;s colon, a method of treating small bowel bacterial
overgrowth or irritable bowel syndrome and a method of treating acute or chronic bacterial bowel infection. It further relates
to a sequential pack for the oral administration of at least two treatment regimens including a first treatment regimen comprising
an osmotic colonic evacuant in solid oral dosage form, in unit dosage form adapted and presented for a first administration period,
together with a second treatment regimen comprising an osmotic colonic evacuant in solid oral dosage form, in unit dosage form
adapted and presented for a second administration period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A tenth family
is owned by us and at present includes one U.S. provisional application. The title of this application is &ldquo;A formulation
and method of manufacturing a formulation for use in colonic evacuation&rdquo; and relates to a new formulation of RHB 106. The
U.S. provisional application was filed July 27, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>RHB-104
new indications</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">An eleventh family is owned by us and
is comprised of two U.S. provisional patent applications. The title of these applications is &ldquo;A composition and method for
treating an autoimmune disease&rdquo; and relates to new indications for RHB-104. The first U.S. provisional application was filed
September 20, 2011 and the second U.S. provisional application was filed September 21, 2011.<FONT STYLE="font: 10pt Times New Roman, Times, Serif">
On September 19, 2012, we completed a PCT filing and additional filings occurred in select non-PCT countries.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Protocol
for detection of the Intracellular Infection Mycobacterium avium paratuberculosis in blood</I><B> </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A twelfth family
of patents is a single patent licensed from the University of Central Florida Research Foundation Inc. (UCF) and is entitled Protocol
for detection of the Intracellular Infection Myobacterium avium paratuberculosis in blood. It was granted in the U.S. (7,488,580
B1) and has a priority date of March 8, 2006, expiring in 2026. This patent relates to a method and kit for detection of intracellular
MAP infection in blood and blood derivative samples from humans by culture and PCR. The technology can screen for MAP in blood
samples from patients having inflammatory and non-inflammatory bowel disease, and the results used to identify those patients
for appropriate treatment with antibiotics. The method and kit allows monitoring and evaluation of the outcome of antibiotic therapy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The patent
positions of companies like ours are generally uncertain and involve complex legal and factual questions. Our ability to maintain
and solidify our proprietary position for our technology will depend on our success in obtaining effective claims and enforcing
those claims once granted.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Government
Regulations and Funding </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Pharmaceutical
companies are subject to extensive regulation by national, state and local agencies such as the U.S. Food and Drug Administration
in the U.S., the Ministry of Health in Israel, or the European Medicines Agency (EMA). The manufacture, distribution, marketing
and sale of pharmaceutical products are subject to government regulation in the U.S. and various foreign countries. Additionally,
in the U.S., we must follow rules and regulations established by the U.S. Food and Drug Administration requiring the presentation
of data indicating that our products are safe and efficacious and are manufactured in accordance with current good manufacturing
practices (cGMP) regulations. If we do not comply with applicable requirements, we may be fined, the government may refuse to
approve our marketing applications or allow us to manufacture or market our products, and we may be criminally prosecuted. We
and our manufacturers and clinical research organizations may also be subject to regulations under other federal, state and local
laws, including, but not limited to, the U.S. Occupational Safety and Health Act, the Resource Conservation and Recovery Act,
the Clean Air Act and import, export and customs regulations as well as the laws and regulations of other countries. The U.S.
government has increased its enforcement activity regarding illegal marketing practices domestically and internationally. As a
result, pharmaceutical companies must ensure their compliance with the Foreign Corrupt Practices Act and federal healthcare fraud
and abuse laws, including the False Claims Act.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">These regulatory
requirements impact our operations and differ from one country to another, so that securing the applicable regulatory approvals
of one country does not imply the approval of another country. However, securing the approval of a more stringent body, <I>i.e.
</I>the U.S. Food and Drug Administration, may facilitate receiving the approval by a regulatory authority in a different country
where the regulatory requirements are similar or less stringent. The approval procedures involve high costs and are manpower intensive,
usually extend over many years and require highly skilled and professional resources.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>U.S. Food
and Drug Administration Approval Process</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The steps required
to be taken before a new drug may be marketed in the U.S. generally include:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">completion
                                                                                                                                               of
                                                                                                                                               pre-clinical
                                                                                                                                               laboratory
                                                                                                                                               and
                                                                                                                                               animal
                                                                                                                                               testing;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">the
                                                                                                                                               submission
                                                                                                                                               to
                                                                                                                                               the
                                                                                                                                               U.S.
                                                                                                                                               Food
                                                                                                                                               and
                                                                                                                                               Drug
                                                                                                                                               Administration
                                                                                                                                               of
                                                                                                                                               an
                                                                                                                                               investigational
                                                                                                                                               new
                                                                                                                                               drug,
                                                                                                                                               or
                                                                                                                                               IND,
                                                                                                                                               application
                                                                                                                                               which
                                                                                                                                               must
                                                                                                                                               be
                                                                                                                                               evaluated
                                                                                                                                               and
                                                                                                                                               found
                                                                                                                                               acceptable
                                                                                                                                               by
                                                                                                                                               the
                                                                                                                                               U.S.
                                                                                                                                               Food
                                                                                                                                               and
                                                                                                                                               Drug
                                                                                                                                               Administration
                                                                                                                                               before
                                                                                                                                               human
                                                                                                                                               clinical
                                                                                                                                               trials
                                                                                                                                               may
                                                                                                                                               commence;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">performance
                                                                                                                                               of
                                                                                                                                               adequate
                                                                                                                                               and
                                                                                                                                               well-controlled
                                                                                                                                               human
                                                                                                                                               clinical
                                                                                                                                               trials
                                                                                                                                               to
                                                                                                                                               establish
                                                                                                                                               the
                                                                                                                                               safety
                                                                                                                                               and
                                                                                                                                               efficacy
                                                                                                                                               of
                                                                                                                                               the
                                                                                                                                               proposed
                                                                                                                                               drug
                                                                                                                                               for
                                                                                                                                               its
                                                                                                                                               intended
                                                                                                                                               use;
                                                                                                                                               and</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">submission
                                                                                                                                 and
                                                                                                                                 approval
                                                                                                                                 of
                                                                                                                                 an
                                                                                                                                 NDA.</FONT></TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Clinical studies
are conducted under protocols detailing, among other things, the objectives of the study, what types of patients may enter the
study, schedules of tests and procedures, drugs, dosages, and length of study, as well as the parameters to be used in monitoring
safety, and the efficacy criteria to be evaluated. A protocol for each clinical study and any subsequent protocol amendments must
be submitted to the U.S. Food and Drug Administration as part of the IND.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In all the
countries that are signatories of the Helsinki Declaration (including Israel), the prerequisite for conducting clinical trials
(on human subjects) is securing the preliminary approval of the competent authorities of that country to conduct medical experiments
on human subjects in compliance with the other principles established by the Helsinki Declaration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The clinical
testing of a drug product candidate generally is conducted in three sequential phases prior to approval, but the phases may overlap
or be combined. A fourth, or post approval, phase may include additional clinical studies. The phases are generally as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Phase I.
</I>In Phase 1 clinical studies, the product is tested in a small number of patients with the target condition or disease or in
healthy volunteers. These studies are designed to evaluate the safety, dosage tolerance, metabolism and pharmacologic actions
of the product candidate in humans, side effects associated with increasing doses, and, in some cases, to gain early evidence
on efficacy. The number of participants included in Phase 1 studies is generally in the range of 20 to 80.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Phase II</I>.
In Phase II studies, in addition to safety, the sponsor evaluates the efficacy of the product candidate on targeted indications
to determine dosage tolerance and optimal dosage and to identify possible adverse effects and safety risks. Phase II studies typically
are larger than Phase I but smaller than Phase III studies and may involve several hundred participants</FONT>.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Phase III</I>.
Phase III studies typically involve an expanded patient population at geographically-dispersed test sites. They are performed
after preliminary evidence suggesting effectiveness of the product candidate has been obtained and are designed to further evaluate
clinical efficacy and safety, to establish the overall benefit-risk relationship of the product candidate and to provide an adequate
basis for product approval. Phase III studies usually involve several hundred to several thousand participants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Phase IV.&nbsp;</I>Phase
IV clinical trials are studies required of, or agreed to by, a sponsor that are conducted after the U.S. Food and Drug Administration
has approved a product for marketing. These studies are used to gain additional information from the treatment of patients in
the intended therapeutic indication and to verify a clinical benefit in the case of drugs approved under accelerated approval
regulations. If the U.S. Food and Drug Administration approves a product while a company has ongoing clinical trials that were
not necessary for approval, a company may be able to use the data from these clinical trials to meet all or part of any Phase
IV clinical trial requirement. These clinical trials are often referred to as Phase IV post-approval or post marketing commitments.
Failure to promptly conduct Phase IV clinical trials could result in the inability to deliver the product into interstate commerce,
misbranding charges, and civil monetary penalties.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Clinical trials
must be conducted in accordance with the U.S. Food and Drug Administration&rsquo;s good clinical practices, or GCP, requirements.
The U.S. Food and Drug Administration may order the temporary or permanent discontinuation of a clinical study at any time or
impose other sanctions if it believes that the clinical study is not being conducted in accordance with U.S. Food and Drug Administration
requirements or that the participants are being exposed to an unacceptable health risk. An institutional review board, or IRB,
generally must approve the clinical trial design and patient informed consent at study sites that the IRB oversees and also may
halt a study, either temporarily or permanently, for failure to comply with the IRB&rsquo;s requirements, or may impose other
conditions. Additionally, some clinical studies are overseen by an independent group of qualified experts organized by the clinical
study sponsor, known as a data safety monitoring board or committee. This group recommends whether or not a trial may move forward
at designated check points based on access to certain data from the study. The clinical study sponsor may also suspend or terminate
a clinical trial based on evolving business objectives and/or competitive climate.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As a product
candidate moves through the clinical testing phases, manufacturing processes are further defined, refined, controlled and validated.
The level of control and validation required by the U.S. Food and Drug Administration increases as clinical studies progress.
We and the third-party manufacturers on which we rely for the manufacture of our product candidates and their respective components
(including the active pharmaceutical ingredient, or API) are subject to requirements that drugs be manufactured, packaged and
labeled in conformity with cGMP. To comply with cGMP requirements, manufacturers must continue to spend time, money and effort
to meet requirements relating to personnel, facilities, equipment, production and process, labeling and packaging, quality control,
recordkeeping and other requirements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Assuming completion
of all required testing in accordance with all applicable regulatory requirements, detailed information on the product candidate
is submitted to the U.S. Food and Drug Administration in the form of an NDA, requesting approval to market the product for one
or more indications, together with payment of a user fee, unless waived. An NDA includes all relevant data available from pertinent
nonclinical and clinical studies, including negative or ambiguous results as well as positive findings, together with detailed
information on the chemistry, manufacture, controls and proposed labeling, among other things. To support marketing approval,
the data submitted must be sufficient in quality and quantity to establish the safety and efficacy of the product candidate for
its intended use to the satisfaction of the U.S. Food and Drug Administration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">If an NDA submission
is accepted for filing, the U.S. Food and Drug Administration begins an in-depth review of the NDA. Under the Prescription Drug
User Fee Act, or PDUFA, the U.S. Food and Drug Administration&rsquo;s goal is to complete its initial review and respond to the
applicant within twelve months of submission, unless the application relates to an unmet medical need in a serious or life-threatening
indication, in which case the goal may be within eight months of NDA submission. However, PDUFA goal dates are not legal mandates
and U.S. Food and Drug Administration response often occurs several months beyond the original PDUFA goal date. Further, the review
process and the target response date under PDUFA may be extended if the U.S. Food and Drug Administration requests or the NDA
sponsor otherwise provides additional information or clarification regarding information already provided in the NDA. The NDA
review process can, accordingly, be very lengthy. During its review of an NDA, the U.S. Food and Drug Administration may refer
the application to an advisory committee for review, evaluation and recommendation as to whether the application should be approved.
The U.S. Food and Drug Administration is not bound by the recommendation of an advisory committee, but it typically follows such
recommendations. Data from clinical studies are not always conclusive and the U.S. Food and Drug Administration and/or any advisory
committee it appoints may interpret data differently than the applicant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">After the U.S.
Food and Drug Administration evaluates the NDA and inspects manufacturing facilities where the drug product and/or its API will
be produced, it will either approve commercial marketing of the drug product with prescribing information for specific indications
or issue a complete response letter indicating that the application is not ready for approval and stating the conditions that
must be met in order to secure approval of the NDA. If the complete response letter requires additional data and the applicant
subsequently submits that data, the U.S. Food and Drug Administration nevertheless may ultimately decide that the NDA does not
satisfy its criteria for approval. The U.S. Food and Drug Administration could also approve the NDA with a Risk Evaluation and
Mitigation Strategies, or REMS, plan to mitigate risks, which could include medication guides, physician communication plans,
or elements to assure safe use, such as restricted distribution methods, patient registries and other risk minimization tools.
The U.S. Food and Drug Administration also may condition approval on, among other things, changes to proposed labeling, development
of adequate controls and specifications, or a commitment to conduct post-marketing testing. Such post-marketing testing may include
phase 4 clinical studies and surveillance to further assess and monitor the product&rsquo;s safety and efficacy after approval.
Regulatory approval of products for serious or life-threatening indications may require that participants in clinical studies
be followed for long periods to determine the overall survival benefit of the drug.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">If the U.S.
Food and Drug Administration approves one of our product candidates, we will be required to comply with a number of post-approval
regulatory requirements. We would be required to report, among other things, certain adverse reactions and production problems
to the U.S. Food and Drug Administration, provide updated safety and efficacy information and comply with requirements concerning
advertising and promotional labeling for any of our products. Also, quality control and manufacturing procedures must continue
to conform to cGMP after approval, and the U.S. Food and Drug Administration periodically inspects manufacturing facilities to
assess compliance with cGMP, which imposes extensive procedural, substantive and record keeping requirements. If we seek to make
certain changes to an approved product, such as certain manufacturing changes, we will need U.S. Food and Drug Administration
review and approval before the change can be implemented. For example, if we change the manufacturer of a product or its API,
the U.S. Food and Drug Administration may require stability or other data from the new manufacturer, which data will take time
and is costly to generate, and the delay associated with generating this data may cause interruptions in our ability to meet commercial
demand, if any. While physicians may use products for indications that have not been approved by the U.S. Food and Drug Administration,
we may not label or promote the product for an indication that has not been approved. Securing U.S. Food and Drug Administration
approval for new indications is similar to the process for approval of the original indication and requires, among other things,
submitting data from adequate and well-controlled studies that demonstrate the product&rsquo;s safety and efficacy in the new
indication. Even if such studies are conducted, the U.S. Food and Drug Administration may not approve any change in a timely fashion,
or at all.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We rely, and
expect to continue to rely, on third parties for the manufacture of clinical and future commercial, quantities of our product
candidates. Future U.S. Food and Drug Administration and state inspections may identify compliance issues at these third-party
facilities that may disrupt production or distribution or require substantial resources to correct. In addition, discovery of
previously unknown problems with a product or the failure to comply with applicable requirements may result in restrictions on
a product, manufacturer or holder of an approved NDA, including withdrawal or recall of the product from the market or other voluntary,
U.S. Food and Drug Administration-initiated or judicial action that could delay or prohibit further marketing. Newly discovered
or developed safety or efficacy data may require changes to a product&rsquo;s approved labeling, including the addition of new
warnings and contraindications, and also may require the implementation of other risk management measures. Many of the foregoing
could limit the commercial value of an approved product or require us to commit substantial additional resources in connection
with the approval of a product. Also, new government requirements, including those resulting from new legislation, may be established,
or the U.S. Food and Drug Administration&rsquo;s policies may change, which could delay or prevent regulatory approval of our
products under development.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Section&nbsp;505(b)(2)
New Drug Applications </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As an alternate
path for U.S. Food and Drug Administration approval of new indications or new formulations of previously-approved products, a
company may file a Section&nbsp;505(b)(2) NDA, instead of a &ldquo;stand-alone&rdquo; or &ldquo;full&rdquo; NDA. Section&nbsp;505(b)(2)
of the Food, Drug, and Cosmetic Act, or FDC, was enacted as part of the Drug Price Competition and Patent Term Restoration Act
of 1984, otherwise known as the Hatch-Waxman Amendments. Section&nbsp;505(b)(2) permits the submission of an NDA where at least
some of the information required for approval comes from studies not conducted by or for the applicant and for which the applicant
has not obtained a right of reference. Some examples of products that may be allowed to follow a 505(b)(2) path to approval are
drugs that have a new dosage form, strength, route of administration, formulation or indication.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Hatch-Waxman
Amendments permit the applicant to rely upon certain published nonclinical or clinical studies conducted for an approved product
or the U.S. Food and Drug Administration&rsquo;s conclusions from prior review of such studies. The U.S. Food and Drug Administration
may require companies to perform additional studies or measurements to support any changes from the approved product. The U.S.
Food and Drug Administration may then approve the new product for all or some of the labeled indications for which the reference
product has been approved, as well as for any new indication supported by the NDA. While references to nonclinical and clinical
data not generated by the applicant or for which the applicant does not have a right of reference are allowed, all development,
process, stability, qualification and validation data related to the manufacturing and quality of the new product must be included
in an NDA submitted under Section&nbsp;505(b)(2).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">To the extent
that the Section&nbsp;505(b)(2) applicant is relying on the U.S. Food and Drug Administration&rsquo;s conclusions regarding studies
conducted for an already approved product, the applicant is required to certify to the U.S. Food and Drug Administration concerning
any patents listed for the approved product in the U.S. Food and Drug Administration&rsquo;s Orange Book publication. Specifically,
the applicant must certify that: (i)&nbsp;the required patent information has not been filed; (ii)&nbsp;the listed patent has
expired; (iii)&nbsp;the listed patent has not expired, but will expire on a particular date and approval is sought after patent
expiration; or (iv)&nbsp;the listed patent is invalid or will not be infringed by the new product. The Section&nbsp;505(b)(2)
application also will not be approved until any non-patent exclusivity, such as exclusivity for obtaining approval of a new chemical
entity, listed in the Orange Book for the reference product has expired. Thus, the Section&nbsp;505(b)(2) applicant may invest
a significant amount of time and expense in the development of its products only to be subject to significant delay and patent
litigation before its products may be commercialized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Orphan Drug
Designation </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Orphan
Drug Act of 1983, or Orphan Drug Act, encourages manufacturers to seek approval of products intended to treat &ldquo;rare diseases
and conditions&rdquo; with a prevalence of fewer than 200,000 patients in the U.S. or for which there is no reasonable expectation
of recovering the development costs for the product. For products that receive Orphan Drug designation by the U.S. Food and Drug
Administration, the Orphan Drug Act provides tax credits for clinical research, U.S. Food and Drug Administration assistance with
protocol design, eligibility for U.S. Food and Drug Administration grants to fund clinical studies, waiver of the U.S. Food and
Drug Administration application fee, and a period of seven years of marketing exclusivity for the product following U.S. Food
and Drug Administration marketing approval.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: -21.3pt"><FONT STYLE="color: Black"><B>C.
Organizational Structure</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: -21.3pt"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: 14.15pt"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify; text-indent: 14.15pt"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in"><FONT STYLE="color: Black"><B>D.
Property, Plant and Equipment</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: left; text-indent: -35.45pt"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On February 23, 2011 we entered into
a lease agreement for the lease of offices in the &ldquo;Platinum&rdquo; building at 21 Ha&rsquo;arba&rsquo;ah Street, Tel Aviv,
Israel. Pursuant to the lease agreement, we lease approximately 310 square meters of office space, a 27 square meter warehouse
and six parking spaces. The monthly rent is NIS 48,000 (approximately $13,000, based on the representative U.S. dollar <I>&ndash;
</I>NIS rate of exchange of 3.81 on December 2, 2012), linked to the Israeli Consumer Price Index of January 2011. The lease term
under the agreement is as of March 1, 2011 up to February 28, 2016, with an option to extend the lease term by three additional
years. As security for its obligations under the Lease Agreement, we provided a bank guarantee in the amount of NIS 280,000 ($73,000,
based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012). Since April 2011, these
offices have served as our corporate headquarters. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: left; text-indent: -35.45pt"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
4A.&#9;UNRESOLVED STAFF COMMENTS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="text-transform: uppercase; color: Black"><B>ITEM
5.&#9;OPERATING AND FINANCIAL REVIEW AND PROSPECTS </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>You should
read the following discussion of our financial condition and results of operations in conjunction with the financial statements
and the notes thereto included elsewhere in this Registration Statement on Form 20-F.&nbsp;&nbsp;The following discussion contains
forward-looking statements that reflect our plans, estimates and beliefs.&nbsp;&nbsp;Our actual results could differ materially
from those discussed in the forward-looking statements.&nbsp;Factors that could cause or contribute to these differences include
those discussed below and elsewhere in this registration statement on Form 20-F, particularly those in &ldquo;Item 3. Key Information
&ndash;</I> <I>Risk Factors.&rdquo;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Company
Overview </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are a biopharmaceutical
company focused on the development of therapeutic candidates acquired through asset purchases or in-licensing. In particular,
we acquire or in-license and develop patent-protected new formulations and combinations of existing drugs in advanced stages of
development.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Depending on
the specific development program, our therapeutic candidates are designed to provide improvements over existing drugs by improving
the safety profile, reducing side effects, lowering the number of daily administrations, using a more convenient administration
form, providing a cost advantage and/or exhibiting greater efficacy. Where applicable, we intend to seek U.S. Food and Drug Administration
approval for the commercialization of certain of our therapeutic candidates through the alternative Section 505(b)(2) regulatory
path under the Federal Food, Drug, and Cosmetic Act of 1938, as amended, and in corresponding regulatory paths in other foreign
jurisdictions. Our current pipeline consists of six late clinical development therapeutic candidates, two of which have completed
bioequivalence clinical trials subject to review and approval by the U.S. Food and Drug Administration.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have funded
our operations primarily through public (in Israel) and private offerings of our securities. Because our therapeutic candidates
are currently in development, we cannot estimate when and if we will generate significant revenues in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
is a description of our six therapeutic candidates:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-101 is
a patented formulation once-daily controlled release formulation of carvedilol intended for the treatment of hypertension, heart
failure and left ventricular dysfunction (following myocardial infarction). We acquired the rights to RHB-101 pursuant to a November
18, 2009 agreement with Egalet a/s. Pursuant to this agreement, we received a worldwide, exclusive and perpetual license to certain
patent rights related to RHB-101. We paid Egalet a/s $100,000 and are required to make milestone payments of up to $700,000 and
pay future royalties, for a fixed period of time as determined under the agreement, at a rate of 30% of the amounts received by
us from sales of the product by us or from sublicenses payments. See &ldquo;Item 4. Information on the Company &ndash; B. Business
Overview &ndash; Acquisition and License Agreements - License Agreement for RHB-101.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> RHB-102 is a patented formulation once-daily
controlled release oral formulation of ondansetron, in combination with salts, intended for the prevention of chemotherapy and
radiotherapy induced nausea and vomiting, by means of an oral formulation of ondansetron. RHB-102 is anticipated to prevent chemotherapy
and radiotherapy induced nausea and vomiting over a time frame of approximately 24 hours. On May 2, 2010, we received a worldwide,
exclusive and perpetual license to use patents and know how relating to RHB-102 from SCOLR Pharma, Inc. in exchange for an up-front
payment of $100,000, milestone payments of up to $500,000 and future royalties, for a fixed period of time as determined under
the agreement, of 8% of our net sales or sublicense fees. See &ldquo;Item 4. Information on the Company &ndash; B. Business Overview
&ndash; Acquisition and License Agreements - License Agreement for RHB-102.&rdquo; </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-103 is
a patented oral thin film formulation of rizatriptan intended for the treatment of acute migraine headaches. On August 26, 2010,
we entered into a joint development and commercialization agreement with IntelGenx Corp. pursuant to which IntelGenx Corp. granted
us a worldwide, exclusive and perpetual license to use RHB-103 and to grant sublicenses. In consideration for the license, we
made up-front and milestone payments in the aggregate amount of $600,000 and are required to make additional milestone payments
of up to $700.000. In addition, we are required to make royalty payments to IntelGenx Corp. of 20% of net sales if the product
is marketed by us and 40% of net sublicense fees if the product is marketed by sublicensees. However, in certain events the royalty
payments could range between 20% to 70% of net sublicense fees. See &ldquo;Item 4. Information on the Company &ndash; B. Business
Overview &ndash; Acquisition and License Agreements &ndash; License Agreement for RHB-103.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-104 is
a patented combination of three antibiotics (<I>i.e.</I>, clarithromycin, clofazamine and rifabutin) in a single capsule that
is intended for the treatment of Inflammatory Bowel Disease (IBD) but has focused on Crohn&rsquo;s disease patients. Unlike other
drugs on the market for the treatment of Crohn&rsquo;s disease that are immunosuppressive agents, RHB-104 is intended to directly
address what is believed to be the cause of the disease - an infection with MAP. On August 11, 2010, we entered into an asset
purchase agreement with Giaconda Limited, pursuant to which we acquired ownership rights in patents, tangible assets, production
files and regulatory approvals and other data and certain third party agreements related to RHB-104, RHB-105 and RHB-106 in exchange
for $500,000 and royalty payments of 7% of net sales and 20% of sublicense fees, in each case, only after we recoup the amounts
and expenses exceeding the approved budget. See &ldquo;Item 4. Information on the Company &ndash; B. Business Overview &ndash;
Acquisition and License Agreements &ndash; Acquisition of RHB-104, RHB-105 and RHB-106.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-105 is
a patented combination of three drugs&ndash; omeprazole, which is a proton pump inhibitor, and amoxicillin and rifabutin, both
of which are antibiotics. RHB-105 is intended for the treatment of <I>Helicobacter pylori</I> bacterial infection in the gastrointestinal
tract. We acquired ownership rights in patents, tangible assets, production files and regulatory approvals and other data and
certain third party agreements related to RHB-105 pursuant to the Asset Purchase Agreement with Giaconda Limited described above.
See &ldquo;Item 4. Information on the Company &ndash; B. Business Overview &ndash; Acquisition and License Agreements &ndash;
Acquisition of RHB-104, RHB-105 and RHB-106.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">RHB-106 is
a patented formulation in tablet form intended for the preparation and cleansing of the gastrointestinal tract prior to the performance
of abdominal procedures. We acquired ownership rights in patents, tangible assets, production files and regulatory approvals and
other data and certain third party agreements related to RHB-106 pursuant to the Asset Purchase Agreement with Giaconda Limited
described above. See &ldquo;Item 4. Information on the Company &ndash; B. Business Overview &ndash; Acquisition and License Agreements
&ndash; Acquisition of RHB-104, RHB-105 and RHB-106.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Components
of Statement of Comprehensive Loss</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Revenues
</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In 2011, we
recorded non-significant revenues for the first time, in connection with royalty payments received from a third party licensee
of limited rights to a patent that we acquired from Giaconda Limited. Our therapeutic candidates are currently in development
and, therefore, we cannot estimate when and if we will generate significant revenues in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Research
and Development Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">See &ldquo;&ndash;
C. Research and Development, Patents and Licenses&rdquo; below.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>General
and Administrative Expenses</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">General and
administrative expenses consist primarily of compensation for directors, employees and consultants in executive and operational
functions. Other significant general and administration costs include office related expenses, professional fees for outside accounting
and legal services, travel costs, insurance premiums and depreciation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Financial
Income and Expense </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Financial income and expense consist
of non-cash financing expenses in connection with the revaluation of mandatory convertible loans that we entered into during 2010.
The fair value of these loans was measured at the time of initial issuance. Subsequent to initial recognition of the fair value
of these loans, changes in fair value were charged to financial expense or financial income. Immediately before the completion
of our initial public offering, all of these loans were automatically converted into ordinary shares and warrants. See &ldquo;Item
10. Additional Information &ndash; C. Material Contracts &ndash; Loan Agreements &ndash; August 2010 Mandatory Convertible Loan
Agreements.&rdquo; Other financial income and expense include revaluing certain royalty liabilities due to investors in our mandatory
convertible loans, interest earned on our cash, cash equivalents and short-term bank deposits, bank fees and other transactional
costs and expense or income resulting from fluctuations of the U.S. dollar and other currencies, in which a portion of our assets
and liabilities are denominated in NIS. In 2011, the majority of the finance expenses were generated from the revaluation to fair
value of the mandatory convertible loans upon their conversion to shares and warrants prior to our initial public offering</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Critical
Accounting Policies and Estimates</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The preparation
of financial statements in conformity with International Financial Reporting Standards, or IFRS, requires companies to make estimates
and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and disclosure of contingent assets
and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting
period. These estimates and judgments are subject to an inherent degree of uncertainty and actual results may differ. Our significant
accounting policies are more fully described in Note 2 to our financial statements included elsewhere in this Registration Statement
on Form 20-F. Critical accounting estimates and judgments are continually evaluated and are based on historical experience and
other factors, including expectations of future events that are believed to be reasonable under the circumstances, and are particularly
important to the portrayal of our financial position and results of operations. Our estimates are primarily guided by observing
the following critical accounting policies:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Impairment
                                                                                                                                    of
                                                                                                                                    intangible
                                                                                                                                    assets;
                                                                                                                                    and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Royalty
                                                                                                                                    obligations
                                                                                                                                    to
                                                                                                                                    investors</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Since each
of the accounting policies listed above require certain judgments and the use of estimates, actual results may differ from our
estimations and as a result would increase or decrease our related actual results.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Impairment
of Intangible Assets </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">Since
the development of our therapeutic candidates has not yet been completed and they are defined as research and development assets
acquired by us, we review, on an annual basis</FONT> <FONT STYLE="font-size: 10pt">or when indications of impairment are present,
whether those assets are impaired. We make judgments to determine whether indications are present that require reviewing the impairment
of these intangible assets. An impairment loss is recognized for the amount by which the assets&rsquo; carrying amount exceeds
its recoverable amount. The recoverable amounts of cash generating units are based on our estimates as to the development of the
therapeutic candidates, changes in market scope, market competition and timetables for regulatory approvals. Since our inception,
we have not recognized impairment to our intangible assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Royalty
Obligations to Investors</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Obligations to pay future royalties
to investors <FONT STYLE="font: 10pt Times New Roman, Times, Serif">at a rate of 5% of our future revenues resulting from two
of our therapeutic candidates, RHB-103 for the treatment of acute migraine headaches and RHB-104 for the treatment of Crohn&rsquo;s
disease, are presented in the statement of financial position at amortized cost according to our current estimation to pay future
royalties to investors. On September 24, 2012, we offered to acquire these royalty rights from all of the investors and then terminate
them. See &ldquo;Item 10. Additional Information &ndash; C. Material Contracts &ndash; Loan Agreements &ndash; August 2010 Mandatory
Convertible Loan Agreements&rdquo;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Royalty obligations
to investors were first recognized at the time we issued mandatory convertible loans in 2010, which were divided into two components
for measurement purposes - mandatory convertible loans and royalty obligations to investors. The total consideration that we received
from these loans was attributed to the mandatory convertible loans, based on their fair value at the time of initial issuance
and the balance was assigned to royalty obligation which is carried at amortized cost (using the embedded effective interest on
the date of issuance).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black"> For
purposes of our financial statements, the royalty obligation was presented as amortized cost at the time of initial issuance of
$391,000 and $1,015,000 as of September 30, 2012. </FONT> <FONT STYLE="font-size: 10pt">The increase resulted primarily
from interest accretion and from updated management's estimate with regard to future royalties.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Recent Accounting
Pronouncements </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The recent
accounting pronouncements are set forth in Note 2 to our audited financial statements beginning on page F-1 of this Registration
Statement on Form 20-F. We are assessing the expected effect of the accounting pronouncements on our financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>A. Operating
Results</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>History
of Losses</B>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Since inception in 2009, we have generated
significant losses mainly in connection with the research and development of our therapeutic candidates. Such research and development
activities are expected to expand over time and will require further resources if we are to be successful. As a result, we expect
to continue incurring operating losses, which may be substantial over the next several years, and will need to obtain additional
funds to further develop our research and development programs. As of September 30, 2012, we had an accumulated deficit of approximately
$20.8 million. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We expect to continue to fund our operations
over the next several years through public or private equity offerings, debt financings or through commercialization of our therapeutic
candidates.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As of September 30, 2012, we had approximately
$13.7 million of cash, cash equivalents and short term investments. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B> Comparison of the Nine Month Period
Ended September 30, 2012 to the Nine Month Period Ended September 30, 2011 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Revenues </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Revenues for the nine months ended
September 30, 2012 were $12,000, a decrease of $8,000 compared to $20,000 for the nine months ended September 30, 2011. The revenues
were in connection with royalty payments received from a third party licensee of limited rights to a patent that we acquired from
Giaconda Limited. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I> &nbsp; </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Research and Development Expenses</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Research and development expenses for
the nine months ended September 30, 2012 were $5.2 million, an increase of $1.6 million, or 44%, compared to $3.6 million for
the nine months ended September 30, 2011. The increase resulted primarily from approximately $1.3 million in manufacturing and
supply costs related to the clinical trials of RHB-102, RHB-103, RHB-104 and RHB-105 and clinical trials costs related to RHB-102
and RHB-103.<I> </I> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>General and Administrative Expenses</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> General and administrative expenses
for the nine months ended September 30, 2012 were $1.7 million, a decrease of $200,000, or 12%, compared to $1.9 million for the
nine months ended September 30, 2011. The decrease resulted primarily from a decrease in share-based payments expenses. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B> &nbsp; </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Operating Loss </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt"> During
the nine months ended September 30, 2012 and 2011, our operating loss was approximately $6.9 million and $5.4 million, respectively.
This increase in operating loss was mainly due to an increase in our research and development activities </FONT> <FONT STYLE="font-size: 10pt">mentioned
above. </FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I> &nbsp; </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Financing Income and Expenses </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> We recognized net financial expenses
of $49,000 for the nine months ended September 30, 2012, compared to net financial expenses of $7.5 million for the nine months
ended September 30, 2011. The expenses in the first nine months of 2011 represented primarily a one-time non-cash financing expense
of $7.94 million related to the revaluation of our mandatory convertible loans at fair value at the time of their conversion into
shares prior to our initial public offering. </P>





<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I> &nbsp; </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Comparison
of the Year Ended December 31, 2011 to the Year Ended December 31, 2010</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Revenues</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">During
the year ended December 31, 2011, we recorded revenues for the first time in the amount of $23,000, in connection with royalty
payments received from a third party licensee of limited rights to a patent that we acquired from Giaconda Limited.</FONT> <FONT STYLE="font-size: 10pt">In
the year ended December 31, 2010, we had no such revenue.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Research
and Development Expenses</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Research and
development expenses for the year ended December 31, 2011 were $5.4 million, compared to $0.7 million for the year ended December
31, 2010. This increase resulted primarily from an increase of $2.3 million in manufacturing and supply costs related to the clinical
trials of RHB-102, RHB-103, RHB-104, RHB-105 and RHB-106, fees paid to third parties engaged to conduct our clinical trials for
RHB-104 and a $2.1 million increase in salaries and consulting fees (including an increase from share-based payments made to several
employees and consultants in the amount of $1.4 million) mainly due to an increase of the number of employees and consultants
and option grants in connection with and following our initial public offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>General
and Administrative Expenses</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">General and
administrative expenses for the year ended December 31, 2011 were $2.5 million, compared to $0.5 million for the year ended December
31, 2010. This increase resulted mainly from an increase of $1.6 million in our payroll and consultant expenses, mainly due to
higher share-based payments of $1.4 million in connection with and following our initial public offering, and the transfer of
our operations to offices in Tel Aviv in April 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Other Income
and Expenses </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In 2011, we
had no other expenses, compared to $0.5 million for the year ended December 31, 2010 that was related to financing agent fees
paid in connection with our mandatory convertible loans.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Operating
Loss </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 57; Value: 4 -->
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In 2011, our
operating loss amounted to approximately $7.9 million, compared to $1.7 million in 2010. The increase was due to growth in our
activities, which was reflected mainly in an increase in research and development expenses and general and administrative expenses
described above, including an increase of share-based payments of $2.8 million in connection with and following our initial public
offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Financing
Income and Expenses </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We recognized
net financial expenses of $7.6 million in the year ended December 31, 2011, compared to net financial expense of $0.8 million
for the year ended December 31, 2010. This increase resulted primarily from a one-time non-cash financing expense of $7.49 million
in the year ended December 31, 2011 related to the revaluation of our mandatory convertible loans at fair value at the time of
their conversion into shares prior to our initial public offering. In addition, the increase in financial expenses was offset
by an increase of $0.5 million in financial income resulting primarily from changes in foreign exchange rates on our cash balances,
which had a positive effect on our net assets during the year ended December 31, 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Comparison
of the Year Ended December 31, 2010 to the period from August 3, 2009 (date of incorporation) through December 31, 2009</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Research
and Development Expenses</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Research and
development expenses for the year ended December 31, 2010 were $0.7 million, compared to $0.1 million for the period from August
3, 2009 through December 31, 2009. The increase was mainly due to significant growth in our activities resulting primarily from
an increase in salaries and consulting fees.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>General
and Administrative Expenses</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">General and
administrative expenses for the year ended December 31, 2010 were $0.5 million, compared to $43,000 for the period from August
3, 2009 through December 31, 2009, resulting from a significant increase in our activities, primarily the increased number of
employees and consultants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Other Income
and Expenses </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Other income
and expenses for the year ended December 31, 2010 was $0.5 million, compared to other income of $28,000 for the period from August
3, 2009 through December 31, 2009. In 2010, other expenses were due to financing agent fees paid in connection with our mandatory
convertible loans.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Financing
Income and Expenses </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We recognized
net financial expenses of $0.8 million for the year ended December 31, 2010, compared to $4,000 for the period from August 3,
2009 through December 31, 2009. This increase resulted primarily from one-time non-cash financing expenses of $0.5 million related
to the revaluation of our mandatory convertible loans in the year ended December 31, 2010, and $0.3 million accretion in respect
of royalty obligations to investors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Quarterly
Results of Operations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
tables show our unaudited quarterly statements of operations for the periods indicated. We have prepared this quarterly information
on a basis consistent with our audited financial statements and we believe it includes all adjustments, consisting of normal recurring
adjustments necessary for a fair presentation of the information shown. Operating results for any quarter are not necessarily
indicative of results for a full fiscal year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="45" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify"> Three Months Ended </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> March
    31 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> June
    30 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Sept.
    30 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Dec.
    31 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> March
    31 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> June
    30 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Sep.
    30 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Dec.
    31 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> March
    31 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> June
    30 </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="border-bottom: Black 1pt solid"><B> Sep. 30 </B></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> 2010 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="42" STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: justify; border-bottom: Black 1pt solid"> (U.S.
    dollars in thousands) <BR>(unaudited) </TD><TD STYLE="padding-bottom: 1pt; font: 10pt Times New Roman, Times, Serif; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Statements of operations </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 23%; font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Revenues </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> 6 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> 3 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> 11 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> 3 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> 4 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 4%; font-size: 10pt; color: Black; text-align: right"> 5 </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 4%; text-align: right"> 3 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Research and development expenses </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 39 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 86 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 202 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 409 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 843 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,176 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,540 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,855 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,330 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,498 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 1,379 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> General and administrative expenses </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 37 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 106 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 173 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 202 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 509 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 679 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 687 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 607 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 607 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 573 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 550 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Other expenses (income) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 58 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 60 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 361 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Operating loss </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 76 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 250 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 435 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 972 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,346 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,852 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,216 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,459 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,933 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,066 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 1,926 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Financial income </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 16 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 404 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 765 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 381 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 20 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 5 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 258 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 40 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 57 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Financial expenses </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 4 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 7 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,222 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 8,045 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 57 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 533 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 166 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 59 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 247 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 98 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Net loss </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 79 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 256 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,641 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 569 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 8,626 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,528 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,729 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,620 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,734 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2,273 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 1,967 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our quarterly
revenues and operating results of operations have varied in the past and are expected to vary in the future due to numerous factors.
We believe that period-to-period comparisons of our operating results are not necessarily meaningful and should not be relied
upon as indications of future performance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>B.&#9;Liquidity
and Capital Resources</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black"><B><I>Liquidity
and Capital Resources </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> Our therapeutic
candidates are in the research and development stage and therefore do not generate significant revenues. To date, our activities
have been financed by raising capital. Since inception, we have raised an aggregate of approximately $13.3 million from private
investors pursuant to investment and/or loan agreements and gross proceeds of approximately $14 million from our initial public
offering on the Tel Aviv Stock Exchange. As September 30, 2012, we had approximately $13.7 million of cash, cash equivalents and
short term investments. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Below is a
summary of our material financing transactions since our inception:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">From September
to November 2009, we entered into investment agreements pursuant to which we raised an aggregate of $975,000 from the issuance
of 649,673 preferred shares and 129,935 warrants exercisable into preferred shares at an exercise price of $0.45 per preferred
share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">From June 2010 to August 2010, we entered
into loan agreements with a number of investors, pursuant to which we received gross proceeds of approximately $3.5 million. The
loans issued under these loan agreements accrued interest at an annual rate of 8% and were payable upon conversion of the loans.
Under the terms of the loan agreements, we agreed to pay the investors certain royalty payments with regard to possible future
sales of two of our therapeutic candidates. The loan agreements were subsequently replaced in their entirety by a mandatory convertible
loan agreement, other than the obligation to pay royalties to the investors which remain <FONT STYLE="font: 10pt Times New Roman, Times, Serif">in
effect. On September 24, 2012, we offered to acquire these royalty rights from all of the investors and then terminate them. The
mandatory convertible loan agreement subsequently was converted into shares and warrants immediately prior to the completion of
our initial public offering on the Tel Aviv Stock Exchange. See &ldquo;Item 10. &ndash; C. Material Contracts &ndash; Loan Agreements
&ndash; August 2010 Mandatory Convertible Loan Agreements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On November
7, 2010, we entered into additional mandatory convertible loan agreements with a number of investors pursuant to which we received
proceeds of approximately $7.6 million. The loans accrued interest at an annual rate of 8%. Such loans were subsequently converted
into shares and warrants immediately prior to the completion of our initial public offering on the Tel Aviv Stock Exchange. See
&ldquo;Item 10. &ndash; C. Material Contracts &ndash; Loan Agreements &ndash; November 2010 Mandatory Convertible Loan Agreement.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In January
2011, we received gross proceeds of an aggregate of $584,000 in connection with the exercise of all warrants issued under our
2009 investment agreements for 1,299,347 preferred shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> In February
3, 2011, we raised gross proceeds of approximately $14 million in connection with our initial public offering on the Tel Aviv
Stock Exchange of 14,302,300 ordinary shares and 7,151,150 tradable Series 1 warrants. Each tradable Series 1 warrant is exercisable
through February 2, 2014 into one ordinary share (i) at a dollar-linked exercise price of NIS 3.8 (approximately $1 based on the
representative U.S. dollar &ndash; NIS rate of exchange of 3.81 on December 2, 2012) through February 2, 2012 and (ii) at a dollar-linked
exercise price of NIS 4.6 (approximately $1.2, based on the representative U.S. dollar &ndash; NIS rate of exchange of 3.81 on
December 2, 2012) from February 3, 2012 to February 2, 2014. The tradable Series 1 warrants expire on February 2, 2014. </FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Since our initial
public offering, investors in our mandatory convertible loans have exercised warrants for an aggregate gross amount of approximately
$600,000.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On November 26, 2012, our board of
directors approved the private placement of up to 7,063,000 ordinary shares at a price per share of NIS 4.00 and up to 3,531,500
non-tradable warrants exercisable for ordinary shares for a total investment amount of approximately $7 million. As of December
2, 2012, we had entered into investment agreements with investors for an aggregate investment amount of approximately $6.5 million.
Investors will include existing shareholders. The transaction is subject to the approval of the Tel Aviv Stock Exchange. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The warrants will be exercisable for
a period of two (2) years from the closing. The exercise price for each warrant share (the &ldquo;Warrant Price&rdquo;) will be
calculated as follows: (i) in the event the holder exercises the warrant by the end of the sixth (6) month following the closing
(the &ldquo;Initial Exercise Period&rdquo;), the fixed Warrant Price will be $1.18 ; (ii) in the event the holder exercises the
holder's warrant within six (6) months following the end of the Initial Exercise Period (the &ldquo;Second Exercise Period&rdquo;),
the fixed Warrant Price will be $1.34 ; and (iii) in the event the holder exercises the holder's warrant following the end of
the Second Exercise Period and until the two (2) year anniversary of the closing, the exercise period will be $1.54. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We estimate
that so long as no significant revenues are generated from our therapeutic candidates, we will need to raise substantial additional
funds to acquire, develop and commercialize therapeutic candidates, as our current cash and short-term investments are not sufficient
to complete the research and development of all of our therapeutic candidates and fund our operations. However, additional financing
may not be available on acceptable terms, if at all. Our future capital requirements will depend on many factors, including:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             regulatory
                                                                                                                             path
                                                                                                                             of
                                                                                                                             each
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">our
                                                                                                                             ability
                                                                                                                             to
                                                                                                                             successfully
                                                                                                                             commercialize
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates,
                                                                                                                             including
                                                                                                                             securing
                                                                                                                             commercialization
                                                                                                                             agreements
                                                                                                                             with
                                                                                                                             third
                                                                                                                             parties
                                                                                                                             and
                                                                                                                             favorable
                                                                                                                             pricing
                                                                                                                             and
                                                                                                                             market
                                                                                                                             share;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.25pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             progress,
                                                                                                                             success
                                                                                                                             and
                                                                                                                             cost
                                                                                                                             of
                                                                                                                             our
                                                                                                                             clinical
                                                                                                                             trials
                                                                                                                             and
                                                                                                                             research
                                                                                                                             and
                                                                                                                             development
                                                                                                                             programs;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             costs,
                                                                                                                             timing
                                                                                                                             and
                                                                                                                             outcome
                                                                                                                             of
                                                                                                                             regulatory
                                                                                                                             review
                                                                                                                             and
                                                                                                                             obtaining
                                                                                                                             regulatory
                                                                                                                             approval
                                                                                                                             of
                                                                                                                             our
                                                                                                                             therapeutic
                                                                                                                             candidates
                                                                                                                             and
                                                                                                                             addressing
                                                                                                                             regulatory
                                                                                                                             and
                                                                                                                             other
                                                                                                                             issues
                                                                                                                             that
                                                                                                                             may
                                                                                                                             arise
                                                                                                                             post-approval;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             costs
                                                                                                                             of
                                                                                                                             enforcing
                                                                                                                             our
                                                                                                                             issued
                                                                                                                             patents
                                                                                                                             and
                                                                                                                             defending
                                                                                                                             intellectual
                                                                                                                             property-related
                                                                                                                             claims;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             costs
                                                                                                                             of
                                                                                                                             developing
                                                                                                                             sales,
                                                                                                                             marketing
                                                                                                                             and
                                                                                                                             distribution
                                                                                                                             channels;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">our
                                                                                                                             consumption
                                                                                                                             of
                                                                                                                             available
                                                                                                                             resources
                                                                                                                             more
                                                                                                                             rapidly
                                                                                                                             than
                                                                                                                             currently
                                                                                                                             anticipated,
                                                                                                                             resulting
                                                                                                                             in
                                                                                                                             the
                                                                                                                             need
                                                                                                                             for
                                                                                                                             additional
                                                                                                                             funding
                                                                                                                             sooner
                                                                                                                             than
                                                                                                                             anticipated;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 2.25pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">We
                                                                                                                             may
                                                                                                                             consume
                                                                                                                             available
                                                                                                                             resources
                                                                                                                             more
                                                                                                                             rapidly
                                                                                                                             than
                                                                                                                             currently
                                                                                                                             anticipated,
                                                                                                                             resulting
                                                                                                                             in
                                                                                                                             the
                                                                                                                             need
                                                                                                                             for
                                                                                                                             additional
                                                                                                                             funding
                                                                                                                             sooner
                                                                                                                             than
                                                                                                                             anticipated.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">If the Company
is unable to commercialize or out-license its therapeutic candidates or obtain future financing, the Company may be forced to
delay, reduce the scope of, or eliminate one or more of its research and development programs related to the therapeutic candidates,
which may have material adverse effect on the Company's business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Cash
Flow </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Operating
activities</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">For the year
ended December 31, 2011, net cash flow used in operating activities was approximately $4.7 million compared to approximately $1.6
million for the year ended December 31, 2010 and $93,000 for the period from August 3, 2009 through December 31, 2009. The increase
in net cash flow used in operating activities was a direct result of the significant increase in our operations, reflected, by
increased payments for research and development activities and increased payment of salaries, consultant fees, and payments to
other service providers.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Investment
activities </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Net cash flow
used in investing activities for the year ended December 31, 2011 totaled approximately $4.77 million compared to $1.02 million
for the year ended December 31, 2010 and $283,000 for the period from August 3, 2009 through December 31, 2009. For the year ended
December 31, 2011, we invested a total of $4.5 million in bank deposits and in the acquisition of marketable securities, and for
the year ended December 31, 2010, we invested $1.1 million to acquire rights to pharmaceutical products. For the period from August
3, 2009 through December 31, 2009, we purchased rights to a pharmaceutical product for $100,000 and purchased financial assets
(marketable securities) at fair value for $189,000.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Financing
activities </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Net cash flow
resulting from financing activities for the year ended December 31, 2011 amounted to approximately $13.8 million, compared with
$11.1 million for the year ended December 31, 2010 and $975,000 for the period from August 3, 2009 through December 31, 2009.
In 2011, most of the cash flows from financing activities were derived from cash raised in our initial public offering. In 2010,
our cash flows from financing activities were derived from our mandatory convertible loans. In 2009, our cash flows from financing
activities were derived from the issuance of shares and warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">C. <B>Research
and Development, Patents and Licenses</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our research
and development expenses consist primarily of costs of clinical trials, salaries and consulting fees (including share-based payments),
and fees paid to external service providers. We primarily use external service providers to manufacture our therapeutic candidates
and to perform clinical trials with our therapeutic candidates. We charge all research and development expenses to operations
as they are incurred. We expect our research and development expense to remain our primary expense in the near future as we continue
to develop our therapeutic candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Clinical
trial</I> <I>expenses</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Set forth below is a summary of the
gross external clinical trial costs allocated to our therapeutic candidates on an individual basis for the years ended December
31, 2009, 2010 and 2011 and for the nine month period ended September 30, 2012. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp;&nbsp;&nbsp; </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; border-bottom: Black 1pt solid"> Year Ended December 31, </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"> 2009 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"> 2010 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"><B> Nine Months </B> <BR>
    <B>ended Sept.</B><BR><B> 30, 2012</B> </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: right; border-bottom: Black 1pt solid"> Total Costs Since<BR>
    Project Inception </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="18" NOWRAP STYLE="text-align: center"> U.S. dollars in millions </TD><TD NOWRAP> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 35%; text-align: justify"> RHB-101 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.2 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.1 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 0.3 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> RHB-102 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.3 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.8 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"> RHB-103 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.6 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.8 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> RHB-104 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.6 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"> RHB-105 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.3 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.5 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt"> RHB-106 </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> - </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> - </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 0.2 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 0.1 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 0.3 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"> Total gross direct project costs </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Research
and development expenses</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">From our inception
through September 30, 2012, we have incurred research and development expenses of approximately $11.4 million. Set below is a summary
of our research and development expenses based on the type of expenditure.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<FONT STYLE="color: Black"></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="13" NOWRAP STYLE="font-weight: bold; text-align: center"> Amount invested in R&amp;D<BR> (U.S. dollars in millions) </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left"> 2011 </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left"> Nine months<BR> ended Sept.<BR> 30, 2012 </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: left"> From<BR> incorporation date<BR> until Sept. 30,<BR>
    2012 </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD><TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 55%; text-align: justify"> Payroll and related expenses </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 0.4 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 0.4 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 0.9 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Professional services </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.8 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"> Share-based payments </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.1 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Clinical trials </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2.5 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3.1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5.7 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"> Patents expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.5 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"> Other </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"> Total </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 5.2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 11.4 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Due to the
inherently unpredictable nature of clinical development processes, we are unable to estimate with any certainty the costs we will
incur in the continued development of the therapeutic candidates in our pipeline for potential commercialization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Set below is
a summary of the total currently anticipated costs related to the development of our pharmaceutical candidates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="width: 14%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify; font-weight: bold"><FONT STYLE="color: Black"> Product
    Name </FONT></TD>
    <TD STYLE="width: 24%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="color: Black"> Total
    remaining expected costs until the end of the expected development plan (U.S. dollars in millions) </FONT></TD>
    <TD STYLE="width: 18%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="color: Black"> Expected
    timeline for the completion of the product development </FONT></TD>
    <TD STYLE="width: 44%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center; font-weight: bold"><FONT STYLE="color: Black"> Comments </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> RHB-101 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Not known </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> Not known </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> We
    are examining the regulatory strategy for this product </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> RHB-102 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 0.5 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 2013 </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> Completed
    clinical trial prior to submitting the NDA under the 505(b)(2) regulatory path including related costs. </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> RHB-103 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 0.5 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 2013 </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> Completed
    clinical trial prior to submitting the NDA under the 505(b)(2) regulatory path, including related costs. </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> RHB-104 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 13 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 2014 </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> Phase
    III trial in North America including sites in the U.S., Canada, and Israel and Phase III trial in Europe leading to submission
    of a 505(b)(2) regulatory approval, studies for additional indications, or trials related to the development of the MAP diagnostic
    test. </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> RHB-105 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 2-3 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 2013 </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> Formulation,
    Phase II/III trials toward submission of NDA under the 505(b)(2) regulatory path, including related expenses. </FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> RHB-106 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 2-3 </FONT></TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="color: Black"> 2013 </FONT></TD>
    <TD STYLE="vertical-align: top; padding-right: 5.4pt; padding-left: 5.4pt; text-align: justify"><FONT STYLE="color: Black"> Formulation,
    Phase II/III trials and submission of NDA under the 505(b)(2) regulatory path, including related expenses. </FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">While we are
currently focused on advancing each of our therapeutic candidates, our future research and development expenses will depend on
the clinical success of each therapeutic candidate, as well as available resources and the ongoing assessments of each therapeutic
candidate&rsquo;s commercial potential. In addition, we cannot forecast with any degree of certainty which therapeutic candidates
may be subject to future commercialization arrangements, when such commercialization arrangements will be secured, if at all,
and to what degree such arrangements would affect our development plans and capital requirements. See &ldquo;Item 3. Key Information
&ndash; D. Risk Factors &ndash; If we and/or our commercialization partners are unable to obtain U.S. Food and Drug Administration
and/or other foreign regulatory authority approval for our therapeutic candidates, we and/or our commercialization partners will
be unable to commercialize our therapeutic candidates.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As we obtain
results from clinical trials, we may elect to discontinue or delay development and clinical trials for certain therapeutic candidates
in order to focus our resources on more promising therapeutic candidates or projects. Completion of clinical trials by us or our
licensees may take several years or more, but the length of time generally varies according to the type, complexity, novelty and
intended use of a therapeutic candidate. See &ldquo;Item 3. Key Information &ndash; D. Risk Factors &ndash; Risks Related to Our
Business and Regulatory Matters.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We expect our
research and development expenses to increase from current levels as we continue the advancement of our clinical trials and therapeutic
candidates&rsquo; development. The lengthy process of completing clinical trials and seeking regulatory approvals for our therapeutic
candidates requires substantial expenditures. Any failure or delay in completing clinical trials, or in obtaining regulatory approvals,
could cause a delay in generating product revenue and cause our research and development expenses to increase and, in turn, have
a material adverse effect on our operations. Due to the factors set forth above, we are not able to estimate with any certainty
if and when we would recognize any net revenues from our projects.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">D. &#9;<B>Trend
Information</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are a biopharmaceutical
company which focuses its activities on the development of our therapeutic candidates. It is not possible for us to predict with
any degree of accuracy the outcome of our research and development or commercialization efforts with regard to any of our therapeutic
candidates. Our research and development expenditure is our primary expenditure. Increases or decreases in research and development
expenditure are primarily attributable to the level and results of our clinical trial activities and the amount of expenditure
on those trials.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">E. &#9;<B>Off-Balance
Sheet Arrangements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Since inception,
we have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, subordinated retained
interests, derivative instruments or other contingent arrangements that expose us to material continuing risks, contingent liabilities,
or any other obligations under a variable interest in an unconsolidated entity that provides us with financing, liquidity, market
risk or credit risk support.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">F. &#9;<B>Tabular
Disclosure of Contractual Obligations </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
table summarizes our significant contractual obligations on December 31, 2011:</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"><FONT STYLE="color: Black"> Total </FONT></TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"><FONT STYLE="color: Black"> Less&nbsp;than<BR>
1
year </FONT></TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"><FONT STYLE="color: Black"> 1-3&nbsp;years </FONT></TD>
    <TD NOWRAP> &nbsp; </TD>
    <TD NOWRAP> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center"><FONT STYLE="color: Black"><B> 3-5&nbsp;years </B></FONT></TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD>
    <TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"><FONT STYLE="color: Black"> More<BR>
than&nbsp;5 </FONT><BR>
<FONT STYLE="color: Black"> years </FONT></TD><TD NOWRAP STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; font-style: italic; text-align: right"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: left"> &nbsp; </TD><TD COLSPAN="16" STYLE="font: 10pt Times New Roman, Times, Serif; color: Black; text-align: right"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Black"> (U.S.
                                                                                                                                                                                                       dollars
                                                                                                                                                                                                       in
                                                                                                                                                                                                       thousands) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Black"> (Unaudited) </FONT></P>

</TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; font-style: italic; text-align: right; width: 45%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; width: 1%"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right; width: 8%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; width: 1%"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right; width: 8%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; width: 1%"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right; width: 8%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 8%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; width: 1%"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right; width: 8%"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left; width: 1%"> &nbsp; </TD></TR>

<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; padding-left: 5.4pt"> Office lease&nbsp; obligations </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 629 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 151 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 302 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 176 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left; padding-left: 5.4pt"> Accounts payable and accruals </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 513 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 513 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; font-style: italic; text-align: justify; padding-left: 5.4pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> Total </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1,142 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 664 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 302 </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD STYLE="text-align: right"> 176 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> - </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding-left: 5.4pt"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD>
    <TD> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The foregoing
table does not include royalty obligations to investors at a rate of 5% of our future revenues resulting <FONT STYLE="font: 10pt Times New Roman, Times, Serif">from
two of our therapeutic candidates, RHB-103 and RHB-104, which are presented in the statement of financial position at amortized
cost because the obligation will become affective only when such revenues will occur.&nbsp;For purposes of our financial statements,
as of December 31, 2011, the royalty obligation was $886,000; the royalty obligation will become payable only when relevant revenues
will be generated. On September 24, 2012, we offered to acquire these royalty rights from all of the investors and then terminate
them. See &ldquo;Item 10. &ndash; C. Material Contracts &ndash; Loan Agreements &ndash; August 2010 Mandatory Convertible Loan
Agreements.&rdquo;</FONT>&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The foregoing
table also does not include our in-license agreements with Egalet a/s, SCLOR Pharma, Inc. and IntelGenx Corp., our agreement with
the University of Central Florida Research Foundation, Inc., and our asset sale agreement with Giaconda Limited, pursuant to which
we are obligated to make various payments upon the achievement of agreed upon milestones and/or make certain royalty payments
since we are unable to currently estimate the actual amount or timing of these payments. If all of the milestones are achieved
over the life of each in-licensing agreement, we will be required to pay, in addition to royalties on our net income, an aggregate
amount of approximately $1.9 million. All of our in-licensing agreements are terminable at-will by us upon prior written notice
of 30 days. See &ldquo;Item 4. Information on the Company &mdash; Business Overview &mdash; Acquisition and License Agreements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The foregoing table also does not include
payments payable under our manufacturing agreements or payments under our clinical services agreements, all of which are contingent
upon the completion of milestones. See &ldquo;Item 4. Information on the Company &mdash; Business Overview &mdash; Manufacturing
Agreements&rdquo; and &ldquo;Item 4. Information on the Company &ndash; Business Overview &ndash; Clinical Services Agreement
Related to RHB-104.&rdquo; </P>



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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
6.&#9;DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A.&#9;<B>Directors
and Senior Management</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
table sets forth the name, age and position of each of our executive officers and directors as of the date of this Registration
Statement on Form 20-F.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 324px; padding: 0; text-align: left; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black"> Name </FONT></TD>
    <TD STYLE="width: 19px; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="padding: 0; text-align: center; font-weight: bold"><FONT STYLE="color: Black"> Age </FONT></TD>
    <TD STYLE="width: 19px; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="width: 280px; padding: 0; text-align: center; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black"> Position(s) </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 23.55pt; text-align: left"><FONT STYLE="color: Black"><B> &nbsp; </B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B> Executive
        Officers </B></FONT></P></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Dror Ben-Asher </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 47 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Chief Executive
    Officer and Chairman of the board of directors </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Ori Shilo </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 46 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Deputy Chief Executive
    Officer Finance and Operations, and Director </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Reza Fathi, Ph.D. </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 58 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Senior Vice President
    Research and Development </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Gilead Raday </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 38 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Vice President
    Corporate and Product Development </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Adi Frish </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 43 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Vice President
    Business Development and Licensing </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Guy Goldberg </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 37 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Chief Business
    Officer </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Ira N. Kalfus,
    M.D. </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 51 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Chief Medical
    Officer </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Uri Hananel Aharon </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 32 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Chief Accounting
    Officer </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black"> Directors </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"> Dr. Shmuel Cabilly (2) </TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 62 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Director </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Eric Swenden </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 68 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Director </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"> Dr. Kenneth Reed </TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 58 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Director </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Dan Suesskind
    (1) </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 68 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Director </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Ofer Tsimchi (1),
    (2) </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 52 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> External Director </FONT></TD></TR>
<TR>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> Aliza Rotbard
    (1), (2) </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: center"><FONT STYLE="color: Black"> 66 </FONT></TD>
    <TD STYLE="vertical-align: bottom; padding: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> &nbsp; </FONT></TD>
    <TD STYLE="vertical-align: top; padding: 0; text-align: left; text-indent: 0"><FONT STYLE="color: Black"> External Director </FONT></TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">(1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Member
                                                                                                                  of our audit
                                                                                                                  committee that
                                                                                                                  also serves
                                                                                                                  as our financial
                                                                                                                  statements committee.</FONT></TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font-size: 10pt; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left">(2)</TD><TD STYLE="text-align: justify">Member of our
                                                                                compensation committee.</TD>
</TR></TABLE>

<P STYLE="margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 42.55pt"><FONT STYLE="color: Black"><B>Executive
officers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -35.45pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Dror Ben-Asher
</I>has served as our Chief Executive Officer and as a director since August 3, 2009. Since May 4, 2011, Mr. Ben- Asher has also
served as Chairman of our board of directors. From January 2002 to November 2010, Mr. Ben- Asher served as a manager at P.C.M.I.
Ltd., an affiliate of ProSeed Capital Holdings CVA, which provides us with certain advisory services. Mr. Ben-Asher is currently
a director at Agrea Ltd. Mr. Ben-Asher holds an LLB from the University of Leicester, UK, an MJur. from Oxford University, UK
and completed LLM studies at Harvard University in the U.S.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Ori Shilo</I><FONT STYLE="font: 10pt Times New Roman, Times, Serif">
has served as our Deputy Chief Executive Officer Finance and Operations since November 1, 2010 and as a director since August
3, 2009. From 2009 to 2010, Mr. Shilo served as our Vice President Finance and Operations. From 2000 to 2010, Mr. Shilo served
as Chief Executive Officer of P.C.M.I. Ltd. Mr. Shilo is currently a director at P.C.M.I. Ltd. and G. Shilo Holdings Ltd. Mr.
Shilo holds a B.A in Business Administration from the Academic College for Management in Rishon Lezion, Israel and an MBA in Business
Administration from the Ben Gurion University in Beer Sheva, Israel. The board of directors has determined that Mr. Shilo is a
financial and accounting expert under Israeli law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black"><I>Reza
Fathi, Ph.D</I>., has served as our Senior Vice President Research and Development since May 1, 2010. From 2005 to 2009, Dr. Fathi
served as a Director of Research in XTL Biopharmaceuticals Inc., a biotechnology company engaged in developing small molecule
clinical candidates for infectious diseases. Prior to that, between 2000-2005, Dr. Fathi served as Director of Research at Vivoquest,
Inc., responsible for developing a number of novel natural product based combinatorial</FONT> <FONT STYLE="font-size: 10pt">technologies
for infectious diseases such as HCV and HIV. Between 1998-2000, he served as a Manager of Chemical Biology Research at the Institute
of Chemistry and Chemical Biology (ICCB) at Harvard Medical School, pioneering chemical genetics to identify small molecules in
cancer biology, and from 1991-1998 headed the Discovery Group at PharmaGenics, Inc. Dr. Fathi holds a Postdoctoral and PhD in
Chemistry from Rutgers University, NJ, U.S.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Gilead Raday
</I>has served as our Vice President Corporate and Product Development since November 1, 2010. From January 2010 until October
2010, Mr. Raday served as Interim Chief Executive Officer of Sepal Pharma Plc., an oncology drug development company, and from
January 2009 to December 2009, he was an independent consultant, specializing in business development and project management in
the field of life sciences. From 2004 to 2008, Mr. Raday was a partner in Charles Street Securities Europe, LLP, an investment
banking firm, where he was responsible for the field of life sciences. Mr. Raday serves on the boards of Sepal Pharma Plc., Morria
Biopharmaceuticals Plc. and ViDAC Limited. Mr. Raday previously served on the boards of Vaccine Research International Plc., TKsignal
Plc., and Miras Medical Imaging Plc. He received his MSc in Neurobiology from the Hebrew University of Jerusalem and an MPhil
in Biotechnology Management from Cambridge University, UK.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Adi Frish
</I>has served as our Vice President Business Development and Licensing since October 10, 2010. From 2006 to 2010, Mr. Frish served
as the Chief Business Development at Medigus Ltd., a medical device company in the endoscopic field, and from 1998 to 2006, Mr.
Frish was an associate and a partner at the law firm of Y. Ben Dror &amp; Co. Mr. Frish holds an LLB from Essex University, UK
and an LLM in Business Law from the Bar-Ilan University, Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Guy Goldberg
</I>has served as our Chief Business Officer since July 16, 2012. From July 2007 to July 2012, Mr. Goldberg served as Vice President
and then as Senior Vice President of Business Operations at Eagle Pharmaceuticals, a specialty injectable drug development company,
based in New Jersey. From 2004 to 2007, Mr. Goldberg was an associate at ProQuest Investments, a healthcare focused venture capital
firm, and from 2002 to 2004, Mr. Goldberg was a consultant at McKinsey &amp; Company. Mr. Goldberg holds a B.A. in Economics and
Philosophy from Yale University and a J.D. from Harvard Law School in the U.S.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Ira N. Kalfus, M.D.</I>&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">has
served as our Chief Medical Officer since August 15, 2010. Dr. Kalfus has over 22 years&rsquo; experience in the healthcare industry,
and has been a biotech and drug development consultant since 2006. From 2006-2008, Dr. Kalfus was a consultant and then Vice President,
Medical Affairs at Lev Pharmaceuticals Inc., a development stage biopharmaceutical company. Dr. Kalfus led the clinical development
of CINRYZE, the first approved C1 inhibitor therapy for Hereditary Angioedema. Lev Pharmaceuticals was acquired by ViroPharma
Incorporated in 2008 for $530 million. Dr. Kalfus has been a medical director and clinical peer reviewer for US Healthcare, Aetna,
and Group Health Insurance. From 1990-2004, Dr. Kalfus practiced internal medicine in New York. He also served as President of
the Staff Society at the LIJ Division of the North Shore LIJ Health System. Dr. Kalfus received his B.A. in Biology from Columbia
University and his M.D. from the Albert Einstein College of Medicine.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Uri Hananel
Aharon </I>has served as our Chief Accounting Officer since April 12, 2011. From 2007 to 2011, Mr. Aharon served as a team manager
at Ernst &amp; Young Israel, specializing in auditing and financial consulting for companies traded on The Nasdaq Stock Market
and the Tel Aviv Stock Exchange, both in the biotech and high-tech sectors. From 2004 to 2007, Mr. Aharon served as an accounting
intern at Ziv Haft, BDO. Mr. Aharon holds a BA in Accounting and Economics from the Hebrew University of Jerusalem, Israel and
an MBA in Business Taxation from the Academic College for Management in Rishon Lezion, Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Directors
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Dr. Shmuel
</I>Cabilly has served as a member of our board of directors since August 26, 2010, and has served on our compensation committee
since May 5, 2011. Dr. Cabilly currently serves on the board of directors of BioKine Therapeutics Ltd., Irody Inc., Biologic Design
Ltd., Silenseed Ltd., Mobydom Ltd., Neuroderm Ltd., Dentack Implants Ltd., Ofakim Hi-Tech Ventures Ltd., Meytag Hi-Tech Ventures
Ltd., Dia Cardio Ltd., Pixcell Medical Technologies Ltd., Medasense Biometrics Ltd., L.R.S. Ltd., Algomia Ltd. Velocee Inc., A.G.M.
Biological Products Development Ltd. Ornim Inc. N.E.D. Next Dimension Ltd., OPLON B.V., ONECALL CONTACT CENTERS LTD., Coeruleus
Ltd., Efranat Ltd. BioCep Ltd., Health Watch Technologies Ltd., and VIDAC Pharma Ltd. Dr. Cabilly holds a BSC Biology from the
Ben Gurion University of Beer Sheva, Israel, an MSC in Immunology and Microbiology from the Hebrew University of Jerusalem, Israel
and a PhD in Immunology and Microbiology from the Hebrew University of Jerusalem, Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Eric Swenden</I> has served
as a member of our board of directors since May 3, 2010, and has served on our investment committee since May 5, 2011. From 1966
until 2001 Mr. Swenden served in various positions including Chief Executive Officer (since 1985) and Executive Chairman (since
1990) of Vandemoortele Food Group, a privately held Belgium-based European food group with revenue of approximately EUR 2 billion,
and he currently serves on the board of directors of Lifeline Scientific, Inc., TBC S.A., ERDA S.A., Alterpharma N.V., Uteron
Pharma and Gudrun N.V. Mr. Swenden holds an M.A. in Commercial Science from the University of Antwerp, Belgium. The board of directors
has determined that Mr. Swenden is a financial and accounting expert under Israeli law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Dr. Kenneth Reed </I>has
served as a member of our board of directors since December 15, 2009. Dr. Reed is a dermatologist, practicing in a private practice
under the name of Kenneth Reed MD PC. Dr. Reed currently serves on the board of directors of Minerva Biotechnologies Corporation.
Dr. Reed received his B.A from Brown University in the United States and a M.D. from the University of Medicine and Dentistry
of New Jersey in the U.S. Dr. Reed is a board certified dermatologist with over 25 years of clinical experience since completing
the Harvard Medical School Residency Program in Dermatology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Dan Suesskind </I>has served
as a member of our board of directors since February 21, 2011, and has served on our audit committee and investment committee
since May 5, 2011. From 1977 to 2008, Mr. Suesskind served as the Chief Financial Officer of Teva Pharmaceutical Industries Ltd.
Mr. Suesskind served as a director of Teva Pharmaceutical Industries Ltd. between 1981 to 2001<I> </I>and<I> </I>again since 2010.
In addition, Mr. Suesskind currently serves on the board of directors of Migdal Insurance and Financial Holdings Ltd., Syneron
Medical Ltd., Gefen Biomed Investments Ltd., Israel Corporation Ltd. as well as a member of the board (and finance and investment
committee) of the Jerusalem Foundation, a member of the investment committee of the Israel Academy of Science and Humanities and
the board of trustees of the Hebrew University. Mr. Suesskind is one of the founders and a member of the steering committee of
the Israeli Forum of Chief Financial Officers.<I> </I>Mr. Suesskind holds a BA in Economics and Political Science from the Hebrew
University of Jerusalem, Israel and an MBA in Business Administration from University of Massachusetts in the U.S. The board of
directors has determined that Mr. Suesskind is a financial and accounting expert under Israeli law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Ofer Tsimchi </I>has served
as an external director on our board of directors since May 4, 2011, a member of our audit committee and as the Chairman of our
compensation committee since May 5, 2011. Since 2008, Mr. Tsimchi has served as the Chairman of the board of directors of Polysack
Plastic Industries Ltd. and Polysack-Agriculture Products, and since 2006 he has served as a Partner in the Danbar Group Ltd.,
a holding company. Mr. Tsimchi currently serves on the board of directors of Polysack Plastic Industries Ltd., Kidron Industrial
Materials Ltd., Amutat Zionut 2000, Danbar Group Ltd. and Polysack Agriculture Hi-Technologies. Mr. Tsimchi received his BA in
Economics and Agriculture from the Hebrew University of Jerusalem, Israel. The board of directors has determined that Mr. Tsimchi
is a financial and accounting expert under Israeli law.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="margin: 0pt 0; text-align: justify"><I> Aliza Rotbard </I> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">has
served as an external director on our board of directors since May 4, 2011, as the Chairman of our audit committee and a member
of our compensation committee since May 5, 2011. Ms. Rotbard served as the Deputy General Manager of the Tel-Aviv Stock Exchange,
was the founder and CEO of DOORS Information Systems and currently serves as an external director of Kamada Ltd., ProSeed Venture
Capital Fund Ltd., AIG-American Insurance Group, Hadera Paper Ltd., R.V.B. Holdings Ltd. and Queenco Leisure International Ltd.
Ms. Rotbard also serves as a director of Israel Discount Bank, MobileMax Technologies Ltd. and Pointer Telocation Ltd. Ms. Rotbard
holds a B.Sc. in Mathematics and Physics from the Hebrew University of Jerusalem, Israel. The board of directors has determined
that Ms. Rotbard is a financial and accounting expert under Israeli law.</FONT> </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">B.&#9;Compensation</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>Employment
Agreements </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have entered
into employment agreements with each of our executive officers. All of these agreements contain customary provisions regarding
noncompetition, confidentiality of information and assignment of inventions. However, the enforceability of the noncompetition
provisions may be limited under applicable laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">For information
on exemption and indemnification letters granted to our officers and directors, please see &ldquo; &ndash; 6.C. Board Practices
&ndash; Exemption, Insurance and Indemnification of Directors and Officers.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Director
Compensation </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Under the Israeli Companies Law, 5754-1999,
and related regulations, external directors are entitled to a fixed annual compensation and an additional payment for each meeting
attended. We currently pay our external directors, Mr. Ofer Tsimchi and Ms. Aliza Rotbard, an annual fee of NIS 42,<FONT STYLE="font: 10pt Times New Roman, Times, Serif">200
(approximately $11,000, based on the representative U.S. dollar<I> &ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012)
and a fee of NIS 2,820 (approximately $700, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81
on December 2, 2012) per meeting (or a smaller amount in case they do not physically attend the meeting). In addition, each of
Mr. Tsimchi and Ms. Rotbard received options to purchase 150,000 ordinary shares at an exercise price of $1.05 per share, which
expire in 2018.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On May 30,
2010, our shareholders approved a recommendation from the board of directors to grant options to Mr. Swenden and Dr. Reed to purchase
90,000 ordinary shares each at an exercise of $0.165 per share, which expire in 2017, and on November 11, 2010, our shareholders
approved a recommendation from the board of directors to grant an option to Dr. Cabilly to purchase 90,000 ordinary shares at
an exercise of $0.50 per share, which expire in 2017 (the numbers reflect adjustments made following the distribution of bonus
shares to our shareholders at the time of our initial public offering on the Tel Aviv Stock Exchange). These options vest over
a period of 3 years, a third of which vested at the first anniversary, and the remaining of which vest in 8 subsequent equal quarterly
installments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0">On January 19, 2011,
our shareholders approved a recommendation from the board of directors to cause all options granted to our directors, prior to
our initial public offering and at the time of our initial public offering, to immediately vest in the event of a &ldquo;takeover&rdquo;
as defined in our 2010 Stock Option Plan. See <FONT STYLE="font: 10pt Times New Roman, Times, Serif">&ldquo;&ndash; F. Share Ownership
&ndash; Stock Option Plans.&rdquo; Our shareholders further approved a recommendation of the board of directors to grant:</FONT><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Mr.
                                                                                                                              Sweden:
                                                                                                                              options
                                                                                                                              to
                                                                                                                              purchase
                                                                                                                              150,000
                                                                                                                              ordinary
                                                                                                                              shares
                                                                                                                              at
                                                                                                                              an
                                                                                                                              exercise
                                                                                                                              price
                                                                                                                              of
                                                                                                                              $0.50
                                                                                                                              per
                                                                                                                              share,
                                                                                                                              which
                                                                                                                              expire
                                                                                                                              in
                                                                                                                              2018;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Mr.
                                                                                                                              Suesskind:
                                                                                                                              options
                                                                                                                              to
                                                                                                                              purchase
                                                                                                                              860,000
                                                                                                                              ordinary
                                                                                                                              shares
                                                                                                                              at
                                                                                                                              an
                                                                                                                              exercise
                                                                                                                              price
                                                                                                                              of
                                                                                                                              $0.50
                                                                                                                              per
                                                                                                                              share,
                                                                                                                              which
                                                                                                                              expire
                                                                                                                              in
                                                                                                                              2018;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol; color: Black"> &middot; </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"> Dr.
                                                                                                                              Reed:
                                                                                                                              options
                                                                                                                              to
                                                                                                                              purchase
                                                                                                                              150,000
                                                                                                                              ordinary
                                                                                                                              shares
                                                                                                                              at
                                                                                                                              an
                                                                                                                              exercise
                                                                                                                              price
                                                                                                                              of
                                                                                                                              $0.50
                                                                                                                              per
                                                                                                                              share,
                                                                                                                              which
                                                                                                                              expire
                                                                                                                              in
                                                                                                                              2018;
                                                                                                                              and </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 21.3pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Dr.
                                                                                                                              Cabilly:
                                                                                                                              options
                                                                                                                              to
                                                                                                                              purchase
                                                                                                                              150,000
                                                                                                                              ordinary
                                                                                                                              shares
                                                                                                                              at
                                                                                                                              an
                                                                                                                              exercise
                                                                                                                              price
                                                                                                                              of
                                                                                                                              $0.50
                                                                                                                              per
                                                                                                                              share,
                                                                                                                              which
                                                                                                                              expire
                                                                                                                              in
                                                                                                                              2018.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Upon completion
of our initial public offering, the above options grants were issued. A third of these options vested on February 3, 2012, and
the remaining options vest in 8 subsequent equal quarterly installments (subject to rounding) commencing March 31, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> In addition,
on September 24, 2012 our board of directors approved the amendment of all options granted to our directors<FONT STYLE="font: 10pt Times New Roman, Times, Serif">
after completion of our IPO to provide that in the event any person, entity or group that was not an interested party at the time
of our IPO becomes a &quot;controlling shareholder&quot;, as defined in our 2010 Option Plan, all such options will immediately
vest in full. The amendment was approved by our shareholders on November 6, 2012. See &ldquo; &ndash; E. Share Ownership &ndash;
Stock Option Plan&rdquo; for a description of interested parties under the Israeli Securities Law &ndash; 1968.</FONT>&nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Effective as
of October 1, 2011, Dr. Reed, Mr. Swenden, Dr. Cabilly and Mr. Suesskind receive the same cash remuneration as was approved for
the external directors as described above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Executives
and Directors Compensation</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The aggregate
compensation paid, and benefits in-kind granted to or accrued on behalf of all of our directors and senior management for their
services, in all capacities, to us during the year ended December 31, 2011, was approximately $3.5 million. This amount included
approximately $88,000 for long-term benefits paid to retirement plans on behalf of our senior management during the year ended
December 31, 2011. No additional amounts have been set aside or accrued by us to provide pension, retirement or similar benefits.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Below is a
breakdown of the annual compensation paid to each of our five highest paid executives and directors for 2011:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 37%; padding-right: 0; padding-left: 0; text-align: justify; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black">Name
    and Positions</FONT></TD>
    <TD STYLE="width: 17%; border-bottom: windowtext 1pt solid; padding-right: 0; padding-left: 0; text-align: center; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black">Salary
    and</FONT><BR>
    <FONT STYLE="color: Black">related </FONT><BR>
    <FONT STYLE="color: Black">benefits</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: windowtext 1pt solid; padding-right: 0; padding-left: 0; text-align: center; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black">Consultancy
    fees </FONT><BR>
    <FONT STYLE="color: Black">and related </FONT><BR>
    <FONT STYLE="color: Black">benefits</FONT></TD>
    <TD STYLE="width: 23%; border-bottom: windowtext 1pt solid; padding-right: 0; padding-left: 0; text-align: center; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black">Cost
    attributed to </FONT><BR>
    <FONT STYLE="color: Black">share-based </FONT><BR>
    <FONT STYLE="color: Black">compensation</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black">&nbsp;</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; font-weight: bold"><FONT STYLE="color: Black">(U.S. dollar
    in thousands)</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; font-weight: bold; text-indent: 0"><FONT STYLE="color: Black">&nbsp;</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0; padding-left: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: left"><FONT STYLE="color: Black">Dror
                                                                  Ben-Asher</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 12.95pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Chief
        Executive Officer and Chairman of the board of directors</FONT></P></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">273</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">656</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0; padding-left: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Ori
        Shilo</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Deputy
        Chief Executive Officer Finance and Operations</FONT></P></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">218</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">522</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0; padding-left: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Gilead
        Raday</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Vice
        President Corporate and Product Development</FONT></P></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">148</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">216</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0; padding-left: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Reza
        Fathi, Ph.D.</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Senior
        Vice President Research and Development&nbsp;</FONT></P></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">174</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">208</FONT></TD></TR>
<TR>
    <TD STYLE="padding-right: 0; padding-left: 0; text-indent: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Dan
                                                                  Suesskind</FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 21.55pt 0pt 0; text-align: left"><FONT STYLE="color: Black">Director</FONT></P></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">-</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">4</FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black">361</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: -1.55pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: -1.55pt"><FONT STYLE="color: Black"><U>Employment
Agreement with Mr. Dror Ben-Asher</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
November 1, 2010 we entered into an employment agreement with Mr. Dror Ben-Asher, pursuant to which he serves as our Chief Executive
Officer. Mr. Ben-Asher also currently serves as Chairman of our board of directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> Pursuant to the terms
of the agreement, Mr. Ben-Asher is entitled to a monthly salary of NIS 55,000 (approximately $14,000, based on the representative
U.S. dollar<I> &ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012), a car allowance of NIS 5,000 (approximately $1,300,
based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012), reimbursement for all
mobile phone expenses, contributions to a pension fund/directors&rsquo; insurance fund, advanced study fund, disability insurance
and leave days, all as provided for in his employment agreement. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"> &nbsp;&nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> The agreement further
provides that if the agreement is terminated in connection with a &ldquo;hostile takeover,&rdquo; Mr. Ben-Asher shall be entitled
to a special one-time bonus equal to his then current monthly salary and retirement benefits, including payments to an advanced
study fund and pension arrangement and car expense reimbursement, multiplied by 12. A &ldquo;hostile takeover&rdquo; is defined
in the employment agreement as an occurrence where a person, entity or group that was not an interested party under the Israeli
Securities on the date of the initial public offering of our ordinary shares, becomes a &ldquo;controlling shareholder,&rdquo;
within the meaning of such term in the Israeli Securities Law 1968, or a &ldquo;holder,&rdquo; as defined in the Israel Securities
Law 1968, of 25% or more of the voting rights in the Company. See &ldquo; &ndash; E. Share Ownership &ndash; Stock Option Plan&rdquo;
for a description of interested parties under the Israeli Securities Law. In addition, on January 19, 2011, we amended the terms
of Mr. Ben-Asher&rsquo;s options to provide that in the event any person, entity or group that was not an interested party at
the time of our IPO becomes a &quot;controlling shareholder&quot;, as defined in our 2010 Option Plan, all options granted to
Mr. Ben-Asher prior to the IPO, including the options granted subject to completion of our IPO shall immediately vest in full.
In addition, on September 24, 2012, our board of directors approved the amendment of the terms of Mr. Ben-Asher&rsquo;s options
to provide that in the event any person, entity or group that was not an interested party at the time of our IPO becomes a &quot;controlling
shareholder&quot;, as defined in our 2010 Option Plan, all options granted to Mr. Ben-Asher after completion of our IPO shall
immediately vest in full. The September 24, 2012 amendment was approved by our shareholders on November 6, 2012. See &ldquo; &ndash;
E. Share Ownership &ndash; Stock Option Plan&rdquo; for a description of interested parties under the Israeli Securities Law &ndash;
1968. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">We
may terminate the employment agreement with Mr. Ben-Asher upon 180-days prior notice, while Mr. Ben-Asher may terminate the agreement
upon 90-days prior notice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
May 30, 2010 Mr. Ben-Asher was granted 7 year options to purchase 750,000 ordinary shares at an exercise price of $0.165 per share.
250,000 of these options vested on February 2, 2011, and the remaining 500,000 options vest in 8 subsequent quarterly installments
of 62,500 options commencing March 31, 2011 (which numbers reflect adjustments made following the distribution of bonus shares
to our shareholders at the time of our initial public offering on the Tel Aviv Stock Exchange).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Upon
completion of the initial public offering, Mr. Ben-Asher was granted 7 year options to purchase 1,540,000 ordinary shares at an
exercise price of $0.50 per share. 513,333 of these options vested on February 3, 2012, and the remaining 1,026,667 options vest
in 8 subsequent equal quarterly installments of 128,333 options (except for one installment of 128,337) commencing March 31, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On February 15, 2012 we amended Mr.
Ben-Asher&rsquo;s employment agreement in order to increase his car allowance, as of January 1, 2011, from NIS 5,000 (approximately
$1,300, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012) to NIS 6,000
(approximately $1,600, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012). </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"><FONT STYLE="color: Black">On
February 15, 2012 we granted Mr. Ben-Asher 7 year options to purchase 600,000 ordinary shares at an exercise price of $0.72. These
options vest in 6 equal installments of 100,000 options every 6 months following January 1, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: -1.55pt"><FONT STYLE="color: Black"><U>Employment
Agreement with Mr. Ori Shilo</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
November 1, 2010, we entered into an employment agreement with Mr. Ori Shilo, pursuant to which Mr. Shilo serves as our Deputy
Chief Executive Officer Finance and Operations. Mr. Shilo also currently serves as one of our directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> Pursuant to the terms
of the agreement, Mr. Shilo is entitled to a monthly salary of NIS 45,000 (approximately $12,000, based on the representative
U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012), a car allowance of NIS 4,000 (approximately $1,000
, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012), reimbursement for
all mobile phone expenses, contributions to a pension fund/directors&rsquo; insurance fund, advanced study fund, disability insurance
and leave days, all as provided for in his employment agreement. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> The agreement further
provides that if the agreement is terminated in connection with a &ldquo;hostile takeover&rdquo;, Mr. Shilo will be entitled to
a special one-time bonus equal to his then current monthly salary and retirement benefits, including payments to an advanced study
fund and pension arrangement and car expense reimbursement, multiplied by 12. In addition, on January 19, 2011, we amended the
terms of Mr. Shilo&rsquo;s options to provide that in the event any person, entity or group that was not an interested party at
the time of our IPO becomes a &ldquo;controlling shareholder&rdquo;, as defined in our 2010 Option Plan, all options granted to
Mr. Shilo prior to the IPO, including the options granted subject to completion of our IPO shall immediately vest in full. In
addition, on September 24, 2012, our board of directors approved the amendment of the terms of Mr. Shilo&rsquo;s options to provide
that in the event any person, entity or group that was not an interested party at the time of our IPO becomes a &ldquo;controlling
shareholder&rdquo;, as defined in our 2010 Option Plan, all options granted to Mr. Shilo after completion of our IPO shall immediately
vest in full. The September 24, 2012 amendment was approved by our shareholders on November 6, 2012. See &ldquo; &ndash; E. Share
Ownership &ndash; Stock Option Plan&rdquo; for a description of interested parties under the Israeli Securities Law &ndash; 1968.
.. We may terminate the employment agreement with Mr. Shilo upon 180-days prior notice, while Mr. Shilo may terminate the agreement
upon 90-days prior notice. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
May 30, 2010 Mr. Shilo was granted 7 year options to purchase 750,000 ordinary shares at an exercise price of $0.165 per share.
250,000 of these options vested on February 2, 2011, and the remaining 500,000 options vest in 8 subsequent quarterly installments
of 62,500 options commencing March 31, 2011 (which numbers reflect adjustments made following the distribution of bonus shares
to our shareholders at the time of our initial public offering on the Tel Aviv Stock Exchange).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Upon
completion of the initial public offering, Mr. Shilo was granted 7 year options to purchase 1,220,000 ordinary shares at an exercise
price of $0.50 per share. 406,667 of these options vested on February 3, 2012, and the remaining 813,333 options vesting in 8
subsequent equal quarterly installments of 101,666 options (except for one installment of 101,671) commencing March 31, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On February 15, 2012 we amended Mr.
Shilo&rsquo;s employment agreement in order to increase his car allowance, as of January 1, 2011, from NIS 4,000 (approximately
$1,000, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012) to NIS 5,000
(approximately $1,300, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012). </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"><FONT STYLE="color: Black">On
February 15, 2012, we granted Mr. Shilo 7 year options to purchase 400,000 ordinary shares at an exercise price of $0.72. These
options vest in 6 equal installments of 66,667 options (except for one installment of 66,665) every 6 months following January
1, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify"><FONT STYLE="color: Black"><U>Employment
Agreement with Mr. Gilead Raday</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
November 1, 2010, we entered into an employment agreement with Mr. Gilead Raday, pursuant to which Mr. Raday serves as our Vice
President Corporate and Product Development.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> Pursuant to the terms
of the agreement, Mr. Raday is entitled to a monthly salary of NIS 30,000 (approximately $7,800, based on the representative U.S.
dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012), a car allowance of NIS 3,000 (approximately $800, based
on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012), reimbursement for all mobile
phone expenses up to NIS 400 a month (approximately $100, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange
of 3.81 on December 2, 2012), contributions to a pension fund/directors&rsquo; insurance fund, advanced study fund, disability
insurance and leave days, all as provided for in his employment agreement. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> The agreement further
provides that if the agreement is terminated in connection with a &ldquo;hostile takeover&rdquo;, Mr. Raday will be entitled to
a special one-time bonus equal to his then current monthly salary and retirement benefits, including payments to an advanced study
fund and pension arrangement and car expense reimbursement, multiplied by 6. In addition, on January 19, 2011, we amended the
terms of Mr. Raday&rsquo;s options to provide that in the event any person, entity or group that was not an interested party at
the time of our IPO becomes a &ldquo;controlling shareholder&rdquo;, as defined in our 2010 Option Plan, all options granted to
Mr. Raday prior to the IPO, including the options granted subject to completion of our IPO shall immediately vest in full. In
addition, on September 24, 2012, our board of directors approved the amendment of the terms of Mr. Raday&rsquo;s options to provide
that in the event any person, entity or group that was not an interested party at the time of our IPO becomes a &ldquo;controlling
shareholder&rdquo;, as defined in our 2010 Option Plan, all options granted to Mr. Raday after completion of our IPO shall immediately
vest in full. The September 24, 2012 amendment was approved by our shareholders on November 6, 2012. See &ldquo; &ndash; E. Share
Ownership &ndash; Stock Option Plan&rdquo; for a description of interested parties under the Israeli Securities Law &ndash; 1968.
Mr. Raday&rsquo;s employment agreement may be terminated by either us or Mr. Raday upon 60-day prior notice. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
August 24, 2010, Mr. Raday was granted 7 year options to purchase 310,000 ordinary shares at an exercise price of $0.165 per share.
103,333 of these options vested on February 2, 2011, and the remaining 206,667 options vest in 8 subsequent quarterly installments
of 25,833 options (except for one installment of 25,836) commencing March 31, 2011 (which numbers reflect adjustments made following
the distribution of bonus shares to our shareholders at the time of our initial public offering on the Tel Aviv Stock Exchange).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Upon
completion of the initial public offering, Mr. Raday was granted 7 year options to purchase 500,000 ordinary shares at an exercise
price of $0.50 per share. 166,667 of these options vested on February 3, 2012, and the remaining 333,333 options vesting in 8
subsequent equal quarterly installments of 41,667 options (except for one installment of 41,664) commencing March 31, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> On January 5, 2012,
we amended Mr. Raday&rsquo;s employment agreement in order to increase his car allowance from NIS 3,000 (approximately $800, based
on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012) to NIS 4,000 (approximately
$1,000, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012) and his monthly
salary from NIS 30,000 (approximately $7,800, based on the representative U.S. dollar <I>&ndash; </I>NIS rate of exchange of 3.81
on December 2, 2012) to NIS 36,000 (approximately $9,400, based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange
of 3.81 on December 2, 2012), each as of January 1, 2012. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify"><FONT STYLE="color: Black">On
January 5, 2012, we granted Mr. Raday 7 year options to purchase 75,000 ordinary shares at an exercise price of $0.72. These options
vest in 6 equal installments of 12,500 options every 6 months following January 1, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: -1.55pt"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: -1.55pt"><FONT STYLE="color: Black"><U>Consultancy
Services Agreement with Reza Fathi, PhD </U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
May 11, 2010 we entered into a consulting agreement with Reza Fathi, PhD, to serve as our director of research operations</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Pursuant
to the terms of the agreement, Dr. Fathi is entitled to a monthly payment of $4,000 and reimbursement of expenses in the fixed
amount of $100. On August 25, 2010, we amended this agreement and Dr. Fathi was appointed as our Senior Vice President R&amp;D
as of August 1, 2010, and his monthly payment was increased to $10,000. On January 1, 2011, we amended the agreement in order
to increase Dr. Fathi&rsquo;s, monthly payment to $13,000 and expense reimbursement amount of $300. On October 1, 2011, we amended
the agreement again in order to increase Dr. Fathi&rsquo;s monthly payment to $16,000.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"> The agreement further
provides that if the agreement is terminated in connection with a &ldquo;hostile takeover&rdquo;, Dr. Fathi will be entitled to
a special one-time bonus in the amount of his then current monthly consultancy payment, multiplied by 6. In addition, on January
19, 2011, we amended the terms of Dr. Fathi&rsquo;s options to provide that in the event any person, entity or group that was
not an interested party at the time of our IPO becomes a &ldquo;controlling shareholder&rdquo;, as defined in our 2010 Option
Plan, all options granted to Dr. Fathi prior to the IPO, including the options granted subject to completion of our IPO shall
immediately vest in full. In addition, on September 24, 2012, our board of directors approved the amendment of the terms of Dr.
Fathi&rsquo;s options to provide that in the event any person, entity or group that was not an interested party at the time of
our IPO becomes a &ldquo;controlling shareholder&rdquo;, as defined in our 2010 Option Plan, all options granted to Dr. Fathi
after completion of our IPO shall immediately vest in full. The September 24, 2012 amendment was approved by our shareholders
on November 6, 2012. See &ldquo; &ndash; E. Share Ownership &ndash; Stock Option Plan&rdquo; for a description of interested parties
under the Israeli Securities Law &ndash; 1968. Dr. Fathi&rsquo;s employment agreement may be terminated by either us or Dr. Fathi
upon 60-days prior notice. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
May 30, 2010, Dr. Fathi was granted 7 year options to purchase 90,000 ordinary shares at an exercise price of $0.165 per share.
30,000 of these options vested on February 2, 2011, and the remaining 60,000 options vest in 8 quarterly subsequent installments
of 7,500 options commencing March 31, 2011 (which numbers reflect adjustments made following the distribution of bonus shares
to our shareholders at the time of our initial public offering on the Tel Aviv Stock Exchange).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
August 6, 2010, Dr. Fathi was granted 7 year options to purchase 180,000 ordinary shares respectively at an exercise price of
$0.165 per share. 60,000 of these options vested on May 30, 2011, and the remaining 120,000 options vest in 8 subsequent equal
quarterly installments of 15,000 options commencing June 30, 2011 (which numbers reflect adjustments made following the distribution
of bonus shares to our shareholders at the time of our initial public offering on the Tel Aviv Stock Exchange).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Upon
completion of our initial public offering, Dr. Fathi was granted 7 year options to purchase 500,000 ordinary shares at an exercise
price of $0.50 per share. 166,667 of these options vested on February 3, 2012, and the remaining 333,333 options vest in 8 subsequent
equal quarterly installments of 41,667 options (except for one installment of 41,664) commencing March 31, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">On
January 5, 2012, we granted Dr. Fathi 7 year options to purchase 200,000 ordinary shares at an exercise price of $0.72. These
options vest in 6 equal installments of 33,333 options (except for one installment of 33,335) every 6 months following January
1, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 87.35pt; text-align: justify; text-indent: -87.35pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 87.35pt; text-align: justify; text-indent: -87.35pt"><FONT STYLE="color: Black"><U>Remuneration
of Mr. Dan Suesskind (Director) </U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">For
information regarding remuneration to Mr. Dan Suesskind, please see &ldquo;&ndash; Director Compensation.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.3in 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">C.&#9;Board
Practices</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Appointment
of Directors and Terms of Officers </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">Pursuant to our articles
of association, the size of our board of directors shall be no less than 5 persons but no more than 7, excluding at least two
external directors. The directors, except for our external directors, are divided into three classes, as nearly equal in number
as possible. At each annual general meeting, which is required to be held annually, but not more than fifteen months after the
prior annual general meeting, the term of one class of directors expires, and the directors of such class are re-nominated to
serve an additional three year term that expires at the annual general meeting held in the third year following such election.
This process continues indefinitely. The directors of the first class, currently consisting of Dror Ben-Asher and Ori Shilo, will
hold office until our annual general meeting to be held in the year 2014. The directors of the second class, currently consisting
of Dr. Kenneth Reed, and Eric Swenden, will hold office until our annual general meeting to be held in the year 2015, and the
directors of the third class, currently consisting of Dr. Shmuel Cabili and Dan Suesskind, will hold office until our annual general
meeting to be held in the year 2013. Until the next annual general meeting, the board of directors may elect new directors to
fill vacancies, or increase the number of members of the board of directors up to the maximum number provided in our articles
of association. Any director so appointed may hold office until the first general shareholders&rsquo; meeting convened after the
appointment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Pursuant
to the Israeli Companies Law, 1999, one may not be elected and may not serve as a director in a public company if he or she does
not have the required qualifications and the ability to dedicate an appropriate amount of time for the performance of his duties
as a director in the company, taking into consideration, among other things, the special needs and size of the company. In addition,
a public company may convene an annual general meeting of shareholders to elect a director, and may elect such director, only
if prior to such shareholders meeting, the nominee declares, among other things, that he or she possesses all of the required
qualifications to serve as a director (and lists such qualifications in such declaration) and has the ability to dedicate an appropriate
amount of time for the performance of his duties as a director of the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, the entering by a public company into a contract with a non-controlling director as to the terms of
his office, including exculpation, indemnification or insurance, requires the approval of the audit committee, the board of directors
and the shareholders of the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
appointment and terms of office of all our officers, other than directors and the general manager (chief executive officer), are
determined by the general manager, subject to the approval of our board of directors, audit committee and/or compensation committee.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have service
contracts with two of our directors, Dror Ben-Asher and Ori Shilo that provide for benefits upon termination of their employment
as directors. For more information, see &ldquo; &ndash; B. Compensation &ndash; Executives and Director Compensation.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Independent
and External Directors - Israeli Companies Law Requirements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-weight: normal; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are subject
to the provisions of the Israeli Companies Law. The Israeli Minister of Justice has adopted regulations exempting companies like
us whose shares are traded outside of Israel from some provisions of the Israeli Companies Law.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, companies incorporated under the laws of Israel whose shares are either (i) listed for trading on a
stock exchange or (ii) have been offered to the public in or outside of Israel, and are held by the public (Public Company) are
required to appoint at least two external directors. The Israeli Companies Law provides that a person may not be appointed as
an external director if the person is a relative of the controlling shareholder or if the person or the person&rsquo;s relative,
partner, employer, someone to whom he is subordinated directly or indirectly or any entity under the person&rsquo;s control, has,
as of the date of the person&rsquo;s appointment to serve as external director, or had, during the two years preceding that date,
any affiliation with us, our controlling shareholder, any relative of our controlling shareholder, as of the date of the person&rsquo;s
appointment to serve as external director, or any entity in which, currently or within the two years preceding the appointment
date, the controlling shareholder was the company or the company's controlling shareholder; and in a company without a controlling
shareholder or without a shareholder holding 25% or more of the voting rights in the company, any affiliation to the chairman
of the board of directors, to the general manager (Chief Executive Officer), to a shareholder holding 5% or more of the company's
shares or voting rights, or to the chief officer in any field as of the date of the person&rsquo;s appointment. The term &ldquo;affiliation&rdquo;
includes:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                              employment
                                                                                                                              relationship;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              business
                                                                                                                              or
                                                                                                                              professional
                                                                                                                              relationship
                                                                                                                              maintained
                                                                                                                              on
                                                                                                                              a
                                                                                                                              regular
                                                                                                                              basis;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">control;
                                                                                                                              and</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">service
                                                                                                                              as
                                                                                                                              an
                                                                                                                              office
                                                                                                                              holder,
                                                                                                                              other
                                                                                                                              than
                                                                                                                              service
                                                                                                                              as
                                                                                                                              a
                                                                                                                              director
                                                                                                                              who
                                                                                                                              was
                                                                                                                              appointed
                                                                                                                              in
                                                                                                                              order
                                                                                                                              to
                                                                                                                              serve
                                                                                                                              as
                                                                                                                              an
                                                                                                                              external
                                                                                                                              director
                                                                                                                              of
                                                                                                                              a
                                                                                                                              company
                                                                                                                              when
                                                                                                                              such
                                                                                                                              company
                                                                                                                              was
                                                                                                                              about
                                                                                                                              to
                                                                                                                              make
                                                                                                                              an
                                                                                                                              initial
                                                                                                                              public
                                                                                                                              offering.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 14.2pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, an &ldquo;office holder&rdquo; is defined as a general manager, chief business manager, deputy general
manager, vice-general manager, any person filing any of these positions in a company even if he holds a different title, director
or any manager directly subordinate to the general manager.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">However,
a person may not serve as an external director if the person or the person&rsquo;s relative, partner, employer, someone to whom
he is subordinated directly or indirectly or any entity under the person&rsquo;s control has business or professional relationship
with an entity which an affiliation with is prohibited as detailed above, even if such relationship is not on a regular basis
(excluding negligible relationship). In addition, a person who received compensation other than the compensation permitted by
the Israeli Companies Law may not serve as an external director.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Regulations
under the Israeli Companies Law, provide for various instances and kinds of relationships in which an external director will not
be deemed to have &ldquo;affiliation&rdquo; with the public company for which he serves, or is a candidate for serving as an external
director.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">No
person can serve as an external director if the person&rsquo;s positions or other businesses create, or may create a conflict
of interests with the person&rsquo;s responsibilities as a director or may impair his ability to serve as a director. In addition,
a person who is a director of a company may not be elected as an external director of another company if, at that time, a director
of the other company is acting as an external director of the first company. Until the lapse of two years from termination of
office, a company, its controlling shareholder, or a company controlled by him may not engage an external director, his spouse,
or child to serve as an office holder in the company or in any entity controlled by the controlling shareholder and cannot employ
or receive professional services for consideration from that person, and may not grant such person any benefit either directly
or indirectly, including through a corporation controlled by that person. The same restrictions apply to relatives other than
a spouse or a child, but such limitations shall only apply for one year from the date such external director ceased to be engaged
in such capacity. In addition, if at the time an external director is appointed, all current members of the board of directors,
who are neither controlling shareholders nor relatives of controlling shareholders, are of the same gender, then the external
director to be appointed must be of the other gender.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, a public company is required to appoint as an external director, a person who has &ldquo;professional
expertise&rdquo; or a person who has &ldquo;financial and accounting expertise,&rdquo; provided that at least one of the external
directors must have &ldquo;financial and accounting expertise.&rdquo; However, if at least one of our other directors (1)&nbsp;meets
the independence requirements of the Securities Exchange Act of 1934, as amended, (2)&nbsp;meets the standards of the Nasdaq Stock
Market for membership on the audit committee and (3)&nbsp;has financial and accounting expertise as defined in the Israeli Companies
Law and applicable regulations, then neither of our external directors is required to possess financial and accounting expertise
as long as both possess other requisite professional qualifications. The determination whether a director possesses financial
and accounting expertise is made by the board of directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law regulations, a director having financial and accounting expertise is a person who, due to his education,
experience and qualifications is highly skilled in respect of, and understands, business-accounting matters and financial reports
in a manner that enables him to understand in depth the company&rsquo;s financial statements and to stimulate discussion regarding
the manner in which the financial data is presented. Under the Israeli Companies Law regulations, a director having professional
expertise is a person who has an academic degree in either economics, business administration, accounting, law or public administration
or another academic degree or has completed other higher education studies, all in an area relevant to the main business sector
of the company or in a relevant area for the board of directors position, or has at least five years of experience in one of the
following or at least five years of aggregate experience in two or more of the following: a senior management position in the
business of a corporation with a substantial scope of business, in a senior position in the public service or a senior position
in the main field of the company&rsquo;s business.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, each Israeli public company is required to determine the minimum number of directors with &ldquo;accounting
and financial expertise&rdquo; that such company believes is appropriate in light of the company&rsquo;s type, size, the scope
and complexity of its activities and other factors. Once a company has made this determination, it must ensure that the necessary
appointments to the board of directors are made in accordance with this determination. Our board of directors determined that
two directors with &ldquo;accounting and financial expertise&rdquo; is appropriate for us. Our board of directors currently has
five directors with such &ldquo;accounting and financial expertise.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">External
directors are to be elected by a majority vote at a shareholders&rsquo; meeting, provided that either (1)&nbsp;the majority of
shares voted at the meeting, including at least a majority of the votes of the shareholders who are not controlling shareholders
(as defined in the Israeli Companies Law), do not have a personal interest in the appointment (excluding a personal interest which
did not result from the shareholder&rsquo;s relationship with the controlling shareholder), vote in favor of the election of the
director without taking abstentions into account; or (2)&nbsp;the total number of shares of the above mentioned shareholders who
voted against the election of the external director does not exceed two percent of the aggregate voting rights in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
initial term of an external director is three years and may be extended for two additional three-year terms under certain circumstances
and conditions. Nevertheless, regulations under the Israeli Companies Law provide that companies, whose shares are listed for
trading both on the Tel Aviv Stock Exchange and on the Nasdaq Stock Market, may appoint an external director for additional three-year
terms, under certain circumstances and conditions. External directors may be removed only in a general meeting, by the same percentage
of shareholders as is required for their election, or by a court, and in both cases only if the external directors cease to meet
the statutory qualifications for their appointment or if they violate their duty of loyalty to us.&nbsp; Each committee authorized
to exercise any of the powers of the board of directors, is required to include at least one external director and the audit committee
is required to include all of the external directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">An
external director is entitled to compensation and reimbursement of expenses in accordance with regulations promulgated under the
Israeli Companies Law and is otherwise prohibited from receiving any other compensation, directly or indirectly, in connection
with serving as a director except for certain exculpation, indemnification and insurance provided by the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Ms.
Aliza Rotbard and Mr. Ofer Tzimchi currently serve as our external directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Audit Committees</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Israeli
Companies Law Requirements </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, the board of directors of a public company must appoint an audit committee, comprised of at least three
directors including all of the external directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
majority of the members of the audit committee, as well as the majority of members present at audit committee meetings, must be
&ldquo;independent&rdquo; (as such term is defined below) and the chairman of the audit committee must be an external director.
In addition, the following are disqualified from serving as members of the audit committee: the chairman of the board of directors,
the controlling shareholder and her or his relatives, any director employed by the company or by its controlling shareholder or
by an entity controlled by the controlling shareholder, a director who regularly provides services to the company or to its controlling
shareholder or to an entity controlled by the controlling shareholder, and any director who derives most of its income from the
controlling shareholder.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">An
&ldquo;independent director&rdquo; is defined as an external director or a director who meets the following conditions: (i) satisfies
certain conditions for appointment as an external director (as described above) and the audit committee has determined that such
conditions have been met and (ii) has not served as a director of the company for more than nine consecutive years, with any interruption
of up to two years in service not being deemed a disruption in the continuity of such service.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
role of the audit committee under the Israel Companies Law is to examine suspected flaws in our business management, in consultation
with the internal auditor or our independent accountants and suggest appropriate course of action in order to correct such flaws.
In addition, the approval of the audit committee is required to effect specified actions and related party transactions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Additional
functions to be performed by the audit committee include, among others, the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">determination
                                                                                                                             whether
                                                                                                                             certain
                                                                                                                             related
                                                                                                                             party
                                                                                                                             actions
                                                                                                                             and
                                                                                                                             transactions
                                                                                                                             are
                                                                                                                             &ldquo;material&rdquo;
                                                                                                                             or
                                                                                                                             &ldquo;extraordinary&rdquo;
                                                                                                                             for
                                                                                                                             purposes
                                                                                                                             of
                                                                                                                             the
                                                                                                                             requisite
                                                                                                                             approval
                                                                                                                             procedures;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">to
                                                                                                                             assess
                                                                                                                             the
                                                                                                                             scope
                                                                                                                             of
                                                                                                                             work
                                                                                                                             and
                                                                                                                             compensation
                                                                                                                             of
                                                                                                                             the
                                                                                                                             company&rsquo;s
                                                                                                                             independent
                                                                                                                             accountant;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify">to
                                                                                                                                               assess
                                                                                                                                               the
                                                                                                                                               company&rsquo;s
                                                                                                                                               internal
                                                                                                                                               audit
                                                                                                                                               system
                                                                                                                                               and
                                                                                                                                               the
                                                                                                                                               performance
                                                                                                                                               of
                                                                                                                                               its
                                                                                                                                               internal
                                                                                                                                               auditor
                                                                                                                                               and
                                                                                                                                               if
                                                                                                                                               the
                                                                                                                                               necessary
                                                                                                                                               resources
                                                                                                                                               have
                                                                                                                                               been
                                                                                                                                               made
                                                                                                                                               available
                                                                                                                                               to
                                                                                                                                               the
                                                                                                                                               internal
                                                                                                                                               auditor
                                                                                                                                               considering
                                                                                                                                               the
                                                                                                                                               company&rsquo;s
                                                                                                                                               needs
                                                                                                                                               and
                                                                                                                                               size;
                                                                                                                                               and</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0in; text-indent: 0in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">to
                                                                                                                             determine
                                                                                                                             arrangements
                                                                                                                             for
                                                                                                                             handling
                                                                                                                             complaints
                                                                                                                             of
                                                                                                                             employees
                                                                                                                             in
                                                                                                                             relation
                                                                                                                             to
                                                                                                                             suspected
                                                                                                                             flaws
                                                                                                                             in
                                                                                                                             the
                                                                                                                             business
                                                                                                                             management
                                                                                                                             of
                                                                                                                             the
                                                                                                                             company
                                                                                                                             and
                                                                                                                             the
                                                                                                                             protection
                                                                                                                             of
                                                                                                                             the
                                                                                                                             rights
                                                                                                                             of
                                                                                                                             such
                                                                                                                             employees.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Our
audit committee also serves as our financial statements committee. The members of our audit committee are Ms. Aliza Rotbard, Mr.
Ofer Tzimchi and Mr. Dan Suesskind.</FONT></P>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Nasdaq
Stock Market Requirements</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Nasdaq Marketplace Rules, we are required to maintain an audit committee consisting of at least three members, all of whom
are independent and are financially literate and one of whom has accounting or related financial management expertise.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
independence requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended, implement two basic criteria for determining
independence:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">audit
                                                                                                                             committee
                                                                                                                             members
                                                                                                                             are
                                                                                                                             barred
                                                                                                                             from
                                                                                                                             accepting
                                                                                                                             directly
                                                                                                                             or
                                                                                                                             indirectly
                                                                                                                             any
                                                                                                                             consulting,
                                                                                                                             advisory
                                                                                                                             or
                                                                                                                             other
                                                                                                                             compensatory
                                                                                                                             fee
                                                                                                                             from
                                                                                                                             the
                                                                                                                             issuer
                                                                                                                             or
                                                                                                                             an
                                                                                                                             affiliate
                                                                                                                             of
                                                                                                                             the
                                                                                                                             issuer,
                                                                                                                             other
                                                                                                                             than
                                                                                                                             in
                                                                                                                             the
                                                                                                                             member&rsquo;s
                                                                                                                             capacity
                                                                                                                             as
                                                                                                                             a
                                                                                                                             member
                                                                                                                             of
                                                                                                                             the
                                                                                                                             board
                                                                                                                             of
                                                                                                                             directors
                                                                                                                             and
                                                                                                                             any
                                                                                                                             board
                                                                                                                             committee,
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">audit
                                                                                                                             committee
                                                                                                                             members
                                                                                                                             may
                                                                                                                             not
                                                                                                                             be
                                                                                                                             an
                                                                                                                             &ldquo;affiliated
                                                                                                                             person&rdquo;
                                                                                                                             of
                                                                                                                             the
                                                                                                                             issuer
                                                                                                                             or
                                                                                                                             any
                                                                                                                             subsidiary
                                                                                                                             of
                                                                                                                             the
                                                                                                                             issuer
                                                                                                                             apart
                                                                                                                             from
                                                                                                                             her
                                                                                                                             or
                                                                                                                             his
                                                                                                                             capacity
                                                                                                                             as
                                                                                                                             a
                                                                                                                             member
                                                                                                                             of
                                                                                                                             the
                                                                                                                             board
                                                                                                                             of
                                                                                                                             directors
                                                                                                                             and
                                                                                                                             any
                                                                                                                             board
                                                                                                                             committee.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Securities
and Exchange Commission has defined &ldquo;affiliate&rdquo; for non-investment companies as &ldquo;a person that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or is under common control with, the person specified.&rdquo;
The term &ldquo;control&rdquo; is intended to be consistent with the other definitions of this term under the Securities Exchange
Act of 1934, as amended, as &ldquo;the possession, direct or indirect, of the power to direct or cause the direction of the management
and policies of a person, whether through the ownership of voting securities, by contract, or otherwise.&rdquo; A safe harbor
has been adopted by the Securities and Exchange Commission, under which a person who is not an executive officer or 10% shareholder
of the issuer would be deemed not to have control of the issuer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In accordance
with the Sarbanes-Oxley Act of 2002 and the Nasdaq Marketplace Rules, the audit committee is directly responsible for the appointment,
compensation and performance of our independent auditors. In addition, the audit committee is responsible for assisting the board
of directors in reviewing our annual financial statements, the adequacy of our internal controls and our compliance with legal
and regulatory requirements. The audit committee also oversees our major financial risk exposures and policies for managing such
potential risks, discusses with management and our independent auditor significant risks or exposure and assesses the steps management
has taken to minimize such risk.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt; color: Black">As
noted above, the members of our audit committee include&nbsp;Ms. Aliza Rotbard, Mr. Ofer Tzimchi and Mr. Dan Suesskind, with Ms.
Rotbard&nbsp;serving as chairman. All members of our audit committee meet the requirements for financial literacy under the Nasdaq
Marketplace Rules. Our board of directors has determined that</FONT> <FONT STYLE="font-size: 10pt">each member of our audit committee
is an audit committee financial expert as defined by the Securities and Exchange Commission rules and has the requisite financial
experience as defined by the Nasdaq Marketplace Rules. Each of the members of the audit committee is &ldquo;independent&rdquo;
as such term is defined in Rule&nbsp;10A-3(b)(1) under the Securities Exchange Act of 1934, as amended.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-style: normal; color: Black"><B>Nasdaq
Stock Market Listing Rules and Home Country Practices </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As a foreign
private issuer, we are permitted to follow Israeli corporate governance practices instead of Nasdaq Marketplace Rules, provided
that we disclose which requirements we are not following and the equivalent Israeli requirement. We intend to rely on this &ldquo;foreign
private issuer exemption&rdquo; with respect to the following items:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD STYLE="text-align: justify"><I>Independent
                                                                                             Directors</I><FONT STYLE="font: 10pt Times New Roman, Times, Serif">
                                                                                             -&nbsp;Our board of directors includes
                                                                                             two external directors in accordance
                                                                                             with the Israeli Companies Law, but
                                                                                             does not require that a majority
                                                                                             of our board members be independent
                                                                                             as required by the Nasdaq Listing
                                                                                             Rules. Furthermore, Israeli law does
                                                                                             not require, nor do our independent
                                                                                             directors conduct, regularly scheduled
                                                                                             meetings at which only our independent
                                                                                             directors are present. </FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD STYLE="text-align: justify"><I>Shareholder
                                                                                             Approval</I><FONT STYLE="font: 10pt Times New Roman, Times, Serif">
                                                                                             -&nbsp;We seek shareholder approval
                                                                                             for all corporate actions requiring
                                                                                             such approval in accordance with
                                                                                             the requirements of the Israeli Companies
                                                                                             Law, which are different from the
                                                                                             shareholder approval requirements
                                                                                             under the Nasdaq Listing Rules. The
                                                                                             NASDAQ Listing Rules require that
                                                                                             we obtain shareholder approval for
                                                                                             certain dilutive events, such as
                                                                                             for the establishment or amendment
                                                                                             of certain equity-based compensation
                                                                                             plans and arrangements, issuances
                                                                                             that will result in a change of control
                                                                                             of a company, certain transactions
                                                                                             other than a public offering involving
                                                                                             issuances of 20% or more of the shares
                                                                                             or voting power in a company, and
                                                                                             certain acquisitions of the stock
                                                                                             or assets of another company involving
                                                                                             issuances of 20% or more of the shares
                                                                                             or voting power in a company or if
                                                                                             any director, officer or holder of
                                                                                             5% or more of the shares or voting
                                                                                             power of the company has a 5% or
                                                                                             greater interest in the company or
                                                                                             assets to be acquired or consideration
                                                                                             to be paid and the transaction could
                                                                                             result in an increase in the outstanding
                                                                                             common shares or voting power by
                                                                                             5% or more.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0.5in; text-indent: 0in; text-align: justify">Under the Israeli Companies Law, shareholder approval is required for any transaction, including any grant
of equity-based compensation, to a director or a controlling shareholder, but is not generally required to establish or amend an
equity based compensation plan. Similarly, shareholder approval is required for a private placement that is deemed a &ldquo;extraordinary
private placement&rdquo; or that involves a director or controlling shareholder. A &ldquo;extraordinary private placement&rdquo;
is a private placement in which a company issues securities representing 20% or more of its voting rights prior to the issuance
and the consideration received pursuant to such issuance is not comprised, in whole or in part, solely of cash or securities registered
for trade on an exchange or which is not made pursuant to market conditions, and as a result of which the shareholdings of a 5%
holder of the shares or voting rights of the company increases or as a result of which a person will become a holder of 5% of the
shares or voting rights of the company or a controlling shareholder after the issuance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0.5in; text-indent: 0in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD STYLE="text-align: justify"><I>Quorum
                                                                                             </I><FONT STYLE="font: 10pt Times New Roman, Times, Serif">-&nbsp;As
                                                                                             permitted under the Israeli Companies
                                                                                             Law, pursuant to our articles of
                                                                                             association, the quorum required
                                                                                             for an ordinary meeting of shareholders
                                                                                             consists of at least two shareholders
                                                                                             present in person or by proxy who
                                                                                             hold or represent at least 25% of
                                                                                             the voting rights of our shares (and
                                                                                             in an adjourned meeting, with some
                                                                                             exceptions, any number of shareholders),
                                                                                             instead of 33&nbsp;1/3% of the issued
                                                                                             share capital required under the
                                                                                             Nasdaq Listing Rules. </FONT></TD>
</TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT>&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><I>Nominations
                                                                                                                                                      Committee
                                                                                                                                                      </I><FONT STYLE="font: 10pt Times New Roman, Times, Serif">-&nbsp;As
                                                                                                                                                      permitted
                                                                                                                                                      under
                                                                                                                                                      the
                                                                                                                                                      Israeli
                                                                                                                                                      Companies
                                                                                                                                                      Law,
                                                                                                                                                      our
                                                                                                                                                      board
                                                                                                                                                      of
                                                                                                                                                      directors
                                                                                                                                                      selects
                                                                                                                                                      director
                                                                                                                                                      nominees
                                                                                                                                                      subject
                                                                                                                                                      to
                                                                                                                                                      the
                                                                                                                                                      terms
                                                                                                                                                      of
                                                                                                                                                      our
                                                                                                                                                      articles
                                                                                                                                                      of
                                                                                                                                                      association
                                                                                                                                                      which
                                                                                                                                                      provide
                                                                                                                                                      that
                                                                                                                                                      incumbent
                                                                                                                                                      directors
                                                                                                                                                      are
                                                                                                                                                      re-nominated
                                                                                                                                                      for
                                                                                                                                                      additional
                                                                                                                                                      terms.
                                                                                                                                                      Directors
                                                                                                                                                      are
                                                                                                                                                      not
                                                                                                                                                      selected,
                                                                                                                                                      or
                                                                                                                                                      recommended
                                                                                                                                                      for
                                                                                                                                                      board
                                                                                                                                                      of
                                                                                                                                                      director
                                                                                                                                                      selection,
                                                                                                                                                      by
                                                                                                                                                      independent
                                                                                                                                                      directors
                                                                                                                                                      constituting
                                                                                                                                                      a
                                                                                                                                                      majority
                                                                                                                                                      of
                                                                                                                                                      the
                                                                                                                                                      board's
                                                                                                                                                      independent
                                                                                                                                                      directors
                                                                                                                                                      or
                                                                                                                                                      by
                                                                                                                                                      a
                                                                                                                                                      nominations
                                                                                                                                                      committee
                                                                                                                                                      comprised
                                                                                                                                                      solely
                                                                                                                                                      of
                                                                                                                                                      independent
                                                                                                                                                      directors
                                                                                                                                                      as
                                                                                                                                                      required
                                                                                                                                                      by
                                                                                                                                                      the
                                                                                                                                                      Nasdaq
                                                                                                                                                      Listing
                                                                                                                                                      Rules.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 38.6pt; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Otherwise,
we intend to comply with the rules generally applicable to U.S. domestic companies listed on the Nasdaq Stock Market. We may in
the future decide to use the foreign private issuer exemption with respect to some or all of the other Nasdaq Marketplace Rules
related to corporate governance. We also intend to comply with Israeli corporate governance requirements under the Israeli Companies
Law applicable to public companies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;<B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Corporate
Governance Practices </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Internal
Auditor</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, the board of directors must appoint an internal auditor proposed by the audit committee. The role of
the internal auditor is, among others, to examine whether our actions comply with the law and orderly business procedure. Under
the Israeli Companies Law, the internal auditor may not be an interested party, an office holder, a relative of an interested
party, or a relative of an office holder, nor may the internal auditor be our independent accountant or its representative. Ms.
Dana Gottesman &ndash; Erlich, Partner at Risk Advisory and Internal Auditing Group at BDO Israel, serves as our internal auditor.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Duties of
Office Holders and Approval of Specified Related Party Transactions Under Israeli Law </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Fiduciary
Duties of Office Holders</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law imposes a duty of care and a duty of loyalty on all office holders of a company, including directors and
executive officers. The duty of care requires an office holder to act with the level of care, according to which a reasonable
office holder in the same position would have acted under the same circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
duty of care includes a duty to use reasonable means to obtain:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">information
                                                                                                                                               on
                                                                                                                                               the
                                                                                                                                               appropriateness
                                                                                                                                               of
                                                                                                                                               a
                                                                                                                                               given
                                                                                                                                               action
                                                                                                                                               brought
                                                                                                                                               for
                                                                                                                                               the
                                                                                                                                               office
                                                                                                                                               holder&rsquo;s
                                                                                                                                               approval
                                                                                                                                               or
                                                                                                                                               performed
                                                                                                                                               by
                                                                                                                                               him
                                                                                                                                               by
                                                                                                                                               virtue
                                                                                                                                               of
                                                                                                                                               his
                                                                                                                                               position;
                                                                                                                                               and</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">all
                                                                                                                                               other
                                                                                                                                               important
                                                                                                                                               information
                                                                                                                                               pertaining
                                                                                                                                               to
                                                                                                                                               the
                                                                                                                                               previous
                                                                                                                                               actions.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
duty of loyalty requires an office holder to act in good faith and for the benefit of the company, and includes a duty to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">refrain
                                                                                                                                               from
                                                                                                                                               any
                                                                                                                                               action
                                                                                                                                               involving
                                                                                                                                               a
                                                                                                                                               conflict
                                                                                                                                               of
                                                                                                                                               interest
                                                                                                                                               between
                                                                                                                                               the
                                                                                                                                               performance
                                                                                                                                               of
                                                                                                                                               the
                                                                                                                                               office
                                                                                                                                               holder&rsquo;s
                                                                                                                                               duties
                                                                                                                                               in
                                                                                                                                               the
                                                                                                                                               company
                                                                                                                                               and
                                                                                                                                               his
                                                                                                                                               personal
                                                                                                                                               affairs;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">refrain
                                                                                                                                               from
                                                                                                                                               any
                                                                                                                                               activity
                                                                                                                                               that
                                                                                                                                               is
                                                                                                                                               competitive
                                                                                                                                               with
                                                                                                                                               the
                                                                                                                                               company&rsquo;s
                                                                                                                                               business;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">refrain
                                                                                                                                               from
                                                                                                                                               usurping
                                                                                                                                               any
                                                                                                                                               business
                                                                                                                                               opportunity
                                                                                                                                               of
                                                                                                                                               the
                                                                                                                                               company
                                                                                                                                               to
                                                                                                                                               receive
                                                                                                                                               a
                                                                                                                                               personal
                                                                                                                                               gain
                                                                                                                                               for
                                                                                                                                               the
                                                                                                                                               office
                                                                                                                                               holder
                                                                                                                                               or
                                                                                                                                               others;
                                                                                                                                               and</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">disclose
                                                                                                                                               to
                                                                                                                                               the
                                                                                                                                               company
                                                                                                                                               any
                                                                                                                                               information
                                                                                                                                               or
                                                                                                                                               documents
                                                                                                                                               relating
                                                                                                                                               to
                                                                                                                                               a
                                                                                                                                               company&rsquo;s
                                                                                                                                               affairs
                                                                                                                                               which
                                                                                                                                               the
                                                                                                                                               office
                                                                                                                                               holder
                                                                                                                                               has
                                                                                                                                               received
                                                                                                                                               due
                                                                                                                                               to
                                                                                                                                               his
                                                                                                                                               position
                                                                                                                                               as
                                                                                                                                               an
                                                                                                                                               office
                                                                                                                                               holder.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, directors&rsquo; compensation arrangements require audit committee approval, board of directors&rsquo;
approval and shareholder approval.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law requires that an office holder of a company promptly and, in any event, not later than the first board meeting
at which the transaction is discussed, disclose any personal interest that he may have and all related material facts or document
known to her or him, in connection with any existing or proposed transaction by the company. A personal interest of an office
holders includes a personal interest of the office holder&rsquo;s relative, of a company in which the office holder or the office
holder&rsquo;s relative is, a shareholder which holds 5% or more of a company&rsquo;s share capital or its voting rights, a director
or a general manager, or in which the office holder has the right to appoint at least one director or the general manager. A personal
interest also includes a personal interest of a person who votes according to a proxy of another person, even if the other person
has no personal interest, and a personal interest of a person who gave a proxy to another person to vote on his behalf &ndash;
all whether the discretion how to vote lies with the person voting or not. In the case of an extraordinary transaction, the office
holder&rsquo;s duty to disclose applies also to a personal interest of the office holder&rsquo;s relative.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
Israeli law, an extraordinary transaction is a transaction:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">other
                                                                                                                                               than
                                                                                                                                               in
                                                                                                                                               the
                                                                                                                                               ordinary
                                                                                                                                               course
                                                                                                                                               of
                                                                                                                                               business;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">other
                                                                                                                                               than
                                                                                                                                               on
                                                                                                                                               market
                                                                                                                                               terms;
                                                                                                                                               or</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">that
                                                                                                                                               is
                                                                                                                                               likely
                                                                                                                                               to
                                                                                                                                               have
                                                                                                                                               a
                                                                                                                                               material
                                                                                                                                               impact
                                                                                                                                               on
                                                                                                                                               the
                                                                                                                                               company&rsquo;s
                                                                                                                                               profitability,
                                                                                                                                               assets
                                                                                                                                               or
                                                                                                                                               liabilities.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, once an office holder complies with the above disclosure requirement, the board of directors may approve
an ordinary transaction between the company and an office holder, or a third party in which an office holder has a personal interest,
unless the articles of association provide otherwise. A transaction that is adverse to the company&rsquo;s interest cannot be
approved. Subject to certain exceptions, the audit committee and the board of directors must approve the conditions and term of
office of an office holder (which is not a director).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
the transaction is an extraordinary transaction, both the audit committee and the board of directors, in that order, must approve
the transaction. Under specific circumstances, shareholder approval may also be required. Whoever has a personal interest in a
matter, which is considered at a meeting of the board of directors or the audit committee, may not be present at this meeting
or vote on this matter. However, if the chairman of the board of directors or the chairman of the audit committee has determined
that the presence of such person is required to present a matter to the meeting, such officer holder may be present at the meeting.
Notwithstanding the foregoing, if the majority of the directors have a personal interest in a matter, a director who has the personal
interest in this matter may be present at this meeting or vote on this matter, but the board of directors decision requires the
shareholder approval.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B><I>Controlling
Shareholder Transactions and Actions</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, the disclosure requirements which apply to an office holder also apply to a controlling shareholder
of a public company and to a person who would become a controlling shareholder as a result of a private placement. A controlling
shareholder includes a person who has the ability to direct the activities of a company, other than if this power derives solely
from his/her position on the board of directors or any other position with the company. In addition, for such purposes a controlling
shareholder includes a shareholder that holds 25% or more of the voting rights in a public company if no other shareholder owns
more than 50% of the voting rights in the company. Extraordinary transactions with a controlling shareholder or in which a controlling
shareholder has a personal interest, including a private placement in which a controlling shareholder has a personal interest;
and the terms of engagement of the company, directly or indirectly, with a controlling shareholder or his or her relative (including
through a corporation controlled by a controlling shareholder), regarding the company&rsquo;s receipt of services from the controlling
shareholder, and if such controlling shareholder is also an office holder of the company or an employee, regarding his or her
terms of office and employment, require the approval of the audit committee, the board of directors and the shareholders of the
company, in that order. The shareholders approval must include either:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              majority
                                                                                                                              of
                                                                                                                              the
                                                                                                                              shareholders
                                                                                                                              who
                                                                                                                              have
                                                                                                                              no
                                                                                                                              personal
                                                                                                                              interest
                                                                                                                              in
                                                                                                                              the
                                                                                                                              transaction
                                                                                                                              and
                                                                                                                              who
                                                                                                                              are
                                                                                                                              participating
                                                                                                                              in
                                                                                                                              the
                                                                                                                              voting,
                                                                                                                              in
                                                                                                                              person,
                                                                                                                              by
                                                                                                                              proxy
                                                                                                                              or
                                                                                                                              by
                                                                                                                              written
                                                                                                                              ballot,
                                                                                                                              at
                                                                                                                              the
                                                                                                                              meeting
                                                                                                                              (votes
                                                                                                                              abstaining
                                                                                                                              shall
                                                                                                                              not
                                                                                                                              be
                                                                                                                              taken
                                                                                                                              into
                                                                                                                              account);
                                                                                                                              or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                              total
                                                                                                                              number
                                                                                                                              of
                                                                                                                              shares
                                                                                                                              voted
                                                                                                                              against
                                                                                                                              the
                                                                                                                              proposal
                                                                                                                              by
                                                                                                                              shareholders
                                                                                                                              without
                                                                                                                              a
                                                                                                                              personal
                                                                                                                              interest
                                                                                                                              does
                                                                                                                              not
                                                                                                                              exceed
                                                                                                                              2%
                                                                                                                              of
                                                                                                                              the
                                                                                                                              aggregate
                                                                                                                              voting
                                                                                                                              rights
                                                                                                                              in
                                                                                                                              the
                                                                                                                              Company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">In
addition, any such transaction whose term is more than three years requires the above mentioned approval every three years, unless,
with respect to transactions not involving the receipt of services or compensation, the audit committee approves a longer term
as reasonable under the circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">However,
under regulations, promulgated pursuant to the Israeli Companies Law, certain transactions between a company and its controlling
shareholders, or the controlling shareholder&rsquo;s relative, do not require shareholder approval.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">For
information concerning the direct and indirect personal interests of certain of our office holders and principal shareholders
in certain transactions with us, see &ldquo;Item 7. Major Shareholders &ndash; B. Related Party Transactions.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law requires that every shareholder that participates, either by proxy or in person, in a vote regarding a transaction
with a controlling shareholder indicate whether or not that shareholder has a personal interest in the vote in question, the failure
of which results in the invalidation of that shareholder&rsquo;s vote.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law further provides that an acquisition of shares in a public company must be made by means of a tender offer
if as a result of the acquisition the purchaser would become a holder of 45% of the voting rights of the company, unless there
is a holder of more than 45% of the voting rights of the company or would become a holder of 25% of the voting rights unless there
is another person holding 25% of the voting rights. This restriction does not apply to:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                             acquisition
                                                                                                                             of
                                                                                                                             shares
                                                                                                                             in
                                                                                                                             a
                                                                                                                             private
                                                                                                                             placement,
                                                                                                                             if
                                                                                                                             the
                                                                                                                             acquisition
                                                                                                                             had
                                                                                                                             been
                                                                                                                             approved
                                                                                                                             in
                                                                                                                             a
                                                                                                                             shareholders
                                                                                                                             meeting
                                                                                                                             under
                                                                                                                             certain
                                                                                                                             circumstances;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                             acquisition
                                                                                                                             of
                                                                                                                             shares
                                                                                                                             from
                                                                                                                             a
                                                                                                                             holder
                                                                                                                             of
                                                                                                                             at
                                                                                                                             least
                                                                                                                             25%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             voting
                                                                                                                             rights,
                                                                                                                             as
                                                                                                                             a
                                                                                                                             result
                                                                                                                             of
                                                                                                                             which
                                                                                                                             a
                                                                                                                             person
                                                                                                                             would
                                                                                                                             become
                                                                                                                             a
                                                                                                                             holder
                                                                                                                             of
                                                                                                                             at
                                                                                                                             least
                                                                                                                             25%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             voting
                                                                                                                             rights;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                             acquisition
                                                                                                                             of
                                                                                                                             shares
                                                                                                                             from
                                                                                                                             a
                                                                                                                             holder
                                                                                                                             of
                                                                                                                             more
                                                                                                                             than
                                                                                                                             45%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             voting
                                                                                                                             rights,
                                                                                                                             as
                                                                                                                             a
                                                                                                                             result
                                                                                                                             of
                                                                                                                             which
                                                                                                                             the
                                                                                                                             acquirer
                                                                                                                             would
                                                                                                                             become
                                                                                                                             a
                                                                                                                             holder
                                                                                                                             of
                                                                                                                             more
                                                                                                                             than
                                                                                                                             45%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             voting
                                                                                                                             rights
                                                                                                                             in
                                                                                                                             the
                                                                                                                             company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Regulations
under the Israeli Companies Law provide that the Israeli Companies Law&rsquo;s tender offer rules do not apply to a company whose
shares are publicly traded outside of Israel, if, pursuant to the applicable foreign laws or stock exchange rules, there is a
restriction on the acquisition of any level of control of the company, or if the acquisition of any level of control of the company
requires the purchaser to make a tender offer to the public shareholders. It is the view of the Israeli Securities Authority that
U.S. securities laws and stock exchange rules do not impose the required restriction on the acquisition of any level of control
of a company, and therefore the Israeli Companies Law&rsquo;s special tender offer rules would apply to a company whose shares
are publicly traded in the U.S.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law further provides that a shareholder has a duty to act in good faith towards the company and other shareholders
when exercising his rights and duties and shall refrain from oppressing other shareholders, including in connection with the voting
at a shareholders&rsquo; meeting on:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">any
                                                                                                                             amendment
                                                                                                                             to
                                                                                                                             the
                                                                                                                             articles
                                                                                                                             of
                                                                                                                             association;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                             increase
                                                                                                                             in
                                                                                                                             the
                                                                                                                             company&rsquo;s
                                                                                                                             authorized
                                                                                                                             share
                                                                                                                             capital;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             merger;
                                                                                                                             or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">approval
                                                                                                                             of
                                                                                                                             certain
                                                                                                                             transactions
                                                                                                                             with
                                                                                                                             control
                                                                                                                             persons
                                                                                                                             and
                                                                                                                             other
                                                                                                                             related
                                                                                                                             parties,
                                                                                                                             which
                                                                                                                             require
                                                                                                                             shareholder
                                                                                                                             approval.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">In
addition, any controlling shareholder, any shareholder who knows that it possesses power to determine the outcome of a shareholder
vote and any shareholder who, pursuant to the provisions of a company&rsquo;s articles of association, has the power to appoint
or prevent the appointment of an office holder in the company, or has any other power over the company, is under a duty to act
with fairness towards the company. Under the Israeli Companies Law, the laws that apply to a breach of a contract will generally
also apply to a breach of duty of fairness.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Exemption,
Insurance and Indemnification of Directors and Officers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Office
Holder Exemption</I></B><I> </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Under the Israeli
Companies Law, a company may not exempt an officer or director from liability with respect to a breach of his duty of loyalty,
but may exempt in advance an officer or director from liability to the company, in whole or in part, with respect to a breach
of his duty of care, except in connection with a prohibited distribution made by the company, if so provided in its articles of
association. Our articles of association provide for this exemption from liability for officers and directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Office
Holder Insurance</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Israeli
Companies Law and our articles of association provide that, subject to the provisions of the Israeli Companies Law, we may obtain
insurance for our officers and directors for any liability stemming from any act performed by an officer or director in his capacity
as an officer or director, as the case may be with respect to any of the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             breach
                                                                                                                             of
                                                                                                                             such
                                                                                                                             officer&rsquo;s
                                                                                                                             or
                                                                                                                             director&rsquo;s
                                                                                                                             duty
                                                                                                                             of
                                                                                                                             care
                                                                                                                             to
                                                                                                                             us
                                                                                                                             or
                                                                                                                             to
                                                                                                                             another
                                                                                                                             person;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             breach
                                                                                                                             of
                                                                                                                             such
                                                                                                                             officer&rsquo;s
                                                                                                                             or
                                                                                                                             director&rsquo;s
                                                                                                                             duty
                                                                                                                             of
                                                                                                                             loyalty
                                                                                                                             to
                                                                                                                             us,
                                                                                                                             provided
                                                                                                                             that
                                                                                                                             such
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             acted
                                                                                                                             in
                                                                                                                             good
                                                                                                                             faith
                                                                                                                             and
                                                                                                                             had
                                                                                                                             reasonable
                                                                                                                             cause
                                                                                                                             to
                                                                                                                             assume
                                                                                                                             that
                                                                                                                             his
                                                                                                                             act
                                                                                                                             would
                                                                                                                             not
                                                                                                                             prejudice
                                                                                                                             our
                                                                                                                             interests;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 79; Value: 4 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             financial
                                                                                                                             liability
                                                                                                                             imposed
                                                                                                                             upon
                                                                                                                             such
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             in
                                                                                                                             favor
                                                                                                                             of
                                                                                                                             another
                                                                                                                             person;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">financial
                                                                                                                             liability
                                                                                                                             imposed
                                                                                                                             on
                                                                                                                             the
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             for
                                                                                                                             payment
                                                                                                                             to
                                                                                                                             persons
                                                                                                                             or
                                                                                                                             entities
                                                                                                                             harmed
                                                                                                                             as
                                                                                                                             a
                                                                                                                             result
                                                                                                                             of
                                                                                                                             violations
                                                                                                                             in
                                                                                                                             administrative
                                                                                                                             proceedings
                                                                                                                             as
                                                                                                                             described
                                                                                                                             in
                                                                                                                             Section
                                                                                                                             52(54)(a)(1)(a)
                                                                                                                             of
                                                                                                                             the
                                                                                                                             Israeli
                                                                                                                             Securities
                                                                                                                             Law
                                                                                                                             (the
                                                                                                                             &ldquo;Party
                                                                                                                             Harmed
                                                                                                                             by
                                                                                                                             the
                                                                                                                             Breach&rdquo;);</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">expenses
                                                                                                                             incurred
                                                                                                                             by
                                                                                                                             such
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             in
                                                                                                                             connection
                                                                                                                             with
                                                                                                                             an
                                                                                                                             administrative
                                                                                                                             proceeding
                                                                                                                             conducted
                                                                                                                             in
                                                                                                                             his
                                                                                                                             matter,
                                                                                                                             including
                                                                                                                             reasonable
                                                                                                                             litigation
                                                                                                                             expenses,
                                                                                                                             including
                                                                                                                             legal
                                                                                                                             fees;
                                                                                                                             or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             breach
                                                                                                                             of
                                                                                                                             any
                                                                                                                             duty
                                                                                                                             or
                                                                                                                             any
                                                                                                                             other
                                                                                                                             obligation,
                                                                                                                             to
                                                                                                                             the
                                                                                                                             extent
                                                                                                                             insurance
                                                                                                                             may
                                                                                                                             be
                                                                                                                             permitting
                                                                                                                             by
                                                                                                                             law.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In February
2011, we increased our directors and officers liability insurance policy, pursuant to which the amount of insurance covered under
the policy is $10 million per event, per insurance period. The total annual premium paid by us for this insurance policy, totals
$16,000. The insurance policy was for a period ended December 15, 2011. In order for us to receive any payments under this insurance
policy, we were required to satisfy the following deductibles: $7,500 per claim; $35,000 per claim in North America; and $50,000
per securities claim and intellectual property claim.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In December
2011, we renewed the liability insurance policy for another year. The terms of the new policy are similar to those of the prior
policy, other than the policy premium which was reduced to $13,000 and the amount of the deductible for securities claims and
intellectual property claims was reduced to $35,000. The insurance policy is for a period of 12 months, commencing as of December
15, 2011.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Further, on
February 15, 2012, at our general meeting of shareholders, our shareholders authorized us to purchase, from time to time, liability
insurance to cover officers and directors, except for officers and directors who are controlling shareholders, together with their
relatives, and interested controlling shareholders. Pursuant to this authorization, we may purchase this insurance commencing
on the date of the approval of the general shareholders&rsquo; meeting and ending on the 2015 annual general shareholders&rsquo;
meeting, to be convened in 2016, provided that:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             policy
                                                                                                                             provides
                                                                                                                             up
                                                                                                                             to
                                                                                                                             $13,000,000
                                                                                                                             of
                                                                                                                             liability
                                                                                                                             coverage
                                                                                                                             per
                                                                                                                             period
                                                                                                                             and
                                                                                                                             per
                                                                                                                             event;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black"> &middot; </FONT></TD><TD STYLE="text-align: justify"> that
                                                                                                                             the
                                                                                                                             annual
                                                                                                                             insurance
                                                                                                                             premium
                                                                                                                             is
                                                                                                                             not
                                                                                                                             more
                                                                                                                             than
                                                                                                                             $15,000
                                                                                                                             (the
                                                                                                                             &ldquo;Framework
                                                                                                                             Resolution&rdquo;). </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our audit committee
and board of directors will approve, on a yearly basis, that the new insurance policy complies with the terms of the February
15, 2012 general meeting of our shareholders and that they are fair and reasonable under the circumstances, taking into account
our exposure and the market conditions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On September 24, 2012, our Board of
Directors approved the amendment of the Framework Resolution for our directors and officers liability insurance policy, pursuant
to which we may purchase, from time to time, liability coverage of up to $30 million with a total annual insurance premium of
up to $130,000. The liability insurance policy will also cover directors and/or officers who are considered controlling shareholders.
The Board of Directors resolved that the amended insurance framework would be effective from the date the amended framework is
approved by our general meeting of shareholders and ending at our annual general meeting for the year 2016 to be convened in 2017. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On November 6, 2012, at our general
meeting of shareholders, our shareholders approved the proposed amendment to the Framework Resolution, pursuant to which we may
acquire a new insurance policy shortly prior to the time of the listing of our shares on Nasdaq and thereafter. Further to such
approval, our audit committee and board of directors will approve, on a yearly basis, that the new insurance policy complies with
the terms of the amended Framework Resolution and that they are fair and reasonable under the circumstances, taking into account
our exposure and the market conditions. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Subsequent to the amendment to the
Framework Resolution, our audit committee and board of directors resolved in November 2012 to purchase directors and officers
liability insurance policy, pursuant to which the amount of insurance covered under the policy would be $20 million and the total
annual policy premium would be $69,000. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Indemnification
of Office Holders</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Israeli
Companies Law provides that a company may indemnify an officer or director for payments or expenses associated with acts performed
in his capacity as an officer or director of the company, provided the company&rsquo;s articles of association include the following
provisions with respect to indemnification:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             provision
                                                                                                                             authorizing
                                                                                                                             the
                                                                                                                             company
                                                                                                                             to
                                                                                                                             indemnify
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             for
                                                                                                                             future
                                                                                                                             events
                                                                                                                             with
                                                                                                                             respect
                                                                                                                             to
                                                                                                                             a
                                                                                                                             monetary
                                                                                                                             liability
                                                                                                                             imposed
                                                                                                                             on
                                                                                                                             him
                                                                                                                             in
                                                                                                                             favor
                                                                                                                             of
                                                                                                                             another
                                                                                                                             person
                                                                                                                             pursuant
                                                                                                                             to
                                                                                                                             a
                                                                                                                             judgment
                                                                                                                             (including
                                                                                                                             a
                                                                                                                             judgment
                                                                                                                             given
                                                                                                                             in
                                                                                                                             a
                                                                                                                             settlement
                                                                                                                             or
                                                                                                                             an
                                                                                                                             arbitrator&rsquo;s
                                                                                                                             award
                                                                                                                             approved
                                                                                                                             by
                                                                                                                             the
                                                                                                                             court),
                                                                                                                             so
                                                                                                                             long
                                                                                                                             as
                                                                                                                             such
                                                                                                                             indemnification
                                                                                                                             is
                                                                                                                             limited
                                                                                                                             to
                                                                                                                             types
                                                                                                                             of
                                                                                                                             events
                                                                                                                             which,
                                                                                                                             in
                                                                                                                             the
                                                                                                                             board
                                                                                                                             of
                                                                                                                             directors&rsquo;
                                                                                                                             opinion,
                                                                                                                             are
                                                                                                                             foreseeable
                                                                                                                             at
                                                                                                                             the
                                                                                                                             time
                                                                                                                             of
                                                                                                                             granting
                                                                                                                             the
                                                                                                                             indemnity
                                                                                                                             undertaking
                                                                                                                             given
                                                                                                                             the
                                                                                                                             company&rsquo;s
                                                                                                                             actual
                                                                                                                             business,
                                                                                                                             and
                                                                                                                             in
                                                                                                                             such
                                                                                                                             amount
                                                                                                                             or
                                                                                                                             standard
                                                                                                                             as
                                                                                                                             the
                                                                                                                             board
                                                                                                                             of
                                                                                                                             directors
                                                                                                                             deems
                                                                                                                             reasonable
                                                                                                                             under
                                                                                                                             the
                                                                                                                             circumstances.
                                                                                                                             Such
                                                                                                                             undertaking
                                                                                                                             must
                                                                                                                             specify
                                                                                                                             the
                                                                                                                             events
                                                                                                                             that,
                                                                                                                             in
                                                                                                                             the
                                                                                                                             board
                                                                                                                             of
                                                                                                                             directors&rsquo;
                                                                                                                             opinion,
                                                                                                                             are
                                                                                                                             foreseeable
                                                                                                                             in
                                                                                                                             view
                                                                                                                             of
                                                                                                                             the
                                                                                                                             company&rsquo;s
                                                                                                                             actual
                                                                                                                             business
                                                                                                                             at
                                                                                                                             the
                                                                                                                             time
                                                                                                                             of
                                                                                                                             the
                                                                                                                             undertaking
                                                                                                                             and
                                                                                                                             the
                                                                                                                             amount
                                                                                                                             or
                                                                                                                             the
                                                                                                                             standards
                                                                                                                             that
                                                                                                                             the
                                                                                                                             board
                                                                                                                             of
                                                                                                                             directors
                                                                                                                             deemed
                                                                                                                             reasonable
                                                                                                                             at
                                                                                                                             the
                                                                                                                             time;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             provision
                                                                                                                             authorizing
                                                                                                                             the
                                                                                                                             company
                                                                                                                             to
                                                                                                                             indemnify
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             for
                                                                                                                             future
                                                                                                                             events
                                                                                                                             with
                                                                                                                             respect
                                                                                                                             to
                                                                                                                             reasonable
                                                                                                                             litigation
                                                                                                                             expenses,
                                                                                                                             including
                                                                                                                             counsel
                                                                                                                             fees,
                                                                                                                             incurred
                                                                                                                             by
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             in
                                                                                                                             which
                                                                                                                             he
                                                                                                                             is
                                                                                                                             ordered
                                                                                                                             to
                                                                                                                             pay
                                                                                                                             by
                                                                                                                             a
                                                                                                                             court,
                                                                                                                             in
                                                                                                                             proceedings
                                                                                                                             that
                                                                                                                             the
                                                                                                                             company
                                                                                                                             institutes
                                                                                                                             against
                                                                                                                             him
                                                                                                                             or
                                                                                                                             instituted
                                                                                                                             on
                                                                                                                             behalf
                                                                                                                             of
                                                                                                                             the
                                                                                                                             company
                                                                                                                             or
                                                                                                                             by
                                                                                                                             another
                                                                                                                             person,
                                                                                                                             or
                                                                                                                             in
                                                                                                                             a
                                                                                                                             criminal
                                                                                                                             charge
                                                                                                                             from
                                                                                                                             which
                                                                                                                             he
                                                                                                                             was
                                                                                                                             acquitted,
                                                                                                                             or
                                                                                                                             a
                                                                                                                             criminal
                                                                                                                             charge
                                                                                                                             in
                                                                                                                             which
                                                                                                                             he
                                                                                                                             was
                                                                                                                             convicted
                                                                                                                             for
                                                                                                                             a
                                                                                                                             criminal
                                                                                                                             offense
                                                                                                                             that
                                                                                                                             does
                                                                                                                             not
                                                                                                                             require
                                                                                                                             proof
                                                                                                                             of
                                                                                                                             criminal
                                                                                                                             intent;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<!-- Field: Page; Sequence: 80; Value: 4 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             provision
                                                                                                                             authorizing
                                                                                                                             the
                                                                                                                             company
                                                                                                                             to
                                                                                                                             indemnify
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             for
                                                                                                                             future
                                                                                                                             events
                                                                                                                             with
                                                                                                                             respect
                                                                                                                             to
                                                                                                                             reasonable
                                                                                                                             litigation
                                                                                                                             fees,
                                                                                                                             including
                                                                                                                             attorney&rsquo;s
                                                                                                                             fees,
                                                                                                                             incurred
                                                                                                                             by
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             due
                                                                                                                             to
                                                                                                                             an
                                                                                                                             investigation
                                                                                                                             or
                                                                                                                             proceeding
                                                                                                                             filed
                                                                                                                             against
                                                                                                                             him
                                                                                                                             by
                                                                                                                             an
                                                                                                                             authority
                                                                                                                             that
                                                                                                                             is
                                                                                                                             authorized
                                                                                                                             to
                                                                                                                             conduct
                                                                                                                             such
                                                                                                                             investigation
                                                                                                                             or
                                                                                                                             proceeding,
                                                                                                                             and
                                                                                                                             that
                                                                                                                             resulted
                                                                                                                             without
                                                                                                                             filing
                                                                                                                             an
                                                                                                                             indictment
                                                                                                                             against
                                                                                                                             him
                                                                                                                             and
                                                                                                                             without
                                                                                                                             imposing
                                                                                                                             on
                                                                                                                             him
                                                                                                                             financial
                                                                                                                             obligation
                                                                                                                             in
                                                                                                                             lieu
                                                                                                                             of
                                                                                                                             a
                                                                                                                             criminal
                                                                                                                             proceeding,
                                                                                                                             or
                                                                                                                             that
                                                                                                                             resulted
                                                                                                                             without
                                                                                                                             filing
                                                                                                                             an
                                                                                                                             indictment
                                                                                                                             against
                                                                                                                             him
                                                                                                                             but
                                                                                                                             with
                                                                                                                             imposing
                                                                                                                             on
                                                                                                                             him
                                                                                                                             a
                                                                                                                             financial
                                                                                                                             obligation
                                                                                                                             as
                                                                                                                             an
                                                                                                                             alternative
                                                                                                                             to
                                                                                                                             a
                                                                                                                             criminal
                                                                                                                             proceeding
                                                                                                                             in
                                                                                                                             respect
                                                                                                                             of
                                                                                                                             an
                                                                                                                             offense
                                                                                                                             that
                                                                                                                             does
                                                                                                                             not
                                                                                                                             require
                                                                                                                             the
                                                                                                                             proof
                                                                                                                             of
                                                                                                                             criminal
                                                                                                                             intent
                                                                                                                             or
                                                                                                                             in
                                                                                                                             connection
                                                                                                                             with
                                                                                                                             a
                                                                                                                             monetary
                                                                                                                             sanction;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             provision
                                                                                                                             authorizing
                                                                                                                             the
                                                                                                                             company
                                                                                                                             to
                                                                                                                             indemnify
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             for
                                                                                                                             future
                                                                                                                             events
                                                                                                                             with
                                                                                                                             respect
                                                                                                                             to
                                                                                                                             a
                                                                                                                             Party
                                                                                                                             Harmed
                                                                                                                             by
                                                                                                                             the
                                                                                                                             Breach;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             provision
                                                                                                                             authorizing
                                                                                                                             the
                                                                                                                             company
                                                                                                                             to
                                                                                                                             indemnify
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             for
                                                                                                                             future
                                                                                                                             events
                                                                                                                             with
                                                                                                                             respect
                                                                                                                             to
                                                                                                                             expenses
                                                                                                                             incurred
                                                                                                                             by
                                                                                                                             such
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             in
                                                                                                                             connection
                                                                                                                             with
                                                                                                                             an
                                                                                                                             administrative
                                                                                                                             proceeding,
                                                                                                                             including
                                                                                                                             reasonable
                                                                                                                             litigation
                                                                                                                             expenses,
                                                                                                                             including
                                                                                                                             legal
                                                                                                                             fees;
                                                                                                                             and</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             provision
                                                                                                                             authorizing
                                                                                                                             the
                                                                                                                             company
                                                                                                                             to
                                                                                                                             retroactively
                                                                                                                             indemnify
                                                                                                                             an
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director.</FONT></TD></TR></TABLE>

<P STYLE="font: italic bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Limitations
on Insurance, Exemption and Indemnification</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Israeli
Companies Law and our articles of association provide that a company may not exempt or indemnify an office holder nor enter into
an insurance contract, which would provide coverage for any monetary liability incurred as a result of any of the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             breach
                                                                                                                             by
                                                                                                                             the
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             of
                                                                                                                             his
                                                                                                                             duty
                                                                                                                             of
                                                                                                                             loyalty,
                                                                                                                             except
                                                                                                                             for
                                                                                                                             insurance
                                                                                                                             and
                                                                                                                             indemnification
                                                                                                                             where
                                                                                                                             the
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             acted
                                                                                                                             in
                                                                                                                             good
                                                                                                                             faith
                                                                                                                             and
                                                                                                                             had
                                                                                                                             a
                                                                                                                             reasonable
                                                                                                                             basis
                                                                                                                             to
                                                                                                                             believe
                                                                                                                             that
                                                                                                                             the
                                                                                                                             act
                                                                                                                             would
                                                                                                                             not
                                                                                                                             prejudice
                                                                                                                             the
                                                                                                                             company;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                             breach
                                                                                                                             by
                                                                                                                             the
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director
                                                                                                                             of
                                                                                                                             his
                                                                                                                             duty
                                                                                                                             of
                                                                                                                             care
                                                                                                                             if
                                                                                                                             the
                                                                                                                             breach
                                                                                                                             was
                                                                                                                             done
                                                                                                                             intentionally
                                                                                                                             or
                                                                                                                             recklessly,
                                                                                                                             except
                                                                                                                             if
                                                                                                                             the
                                                                                                                             breach
                                                                                                                             was
                                                                                                                             solely
                                                                                                                             as
                                                                                                                             a
                                                                                                                             result
                                                                                                                             of
                                                                                                                             negligence;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">any
                                                                                                                             act
                                                                                                                             or
                                                                                                                             omission
                                                                                                                             done
                                                                                                                             with
                                                                                                                             the
                                                                                                                             intent
                                                                                                                             to
                                                                                                                             derive
                                                                                                                             an
                                                                                                                             illegal
                                                                                                                             personal
                                                                                                                             benefit;
                                                                                                                             or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">any
                                                                                                                             fine,
                                                                                                                             civil
                                                                                                                             fine,
                                                                                                                             monetary
                                                                                                                             sanctions,
                                                                                                                             or
                                                                                                                             forfeit
                                                                                                                             imposed
                                                                                                                             on
                                                                                                                             the
                                                                                                                             officer
                                                                                                                             or
                                                                                                                             director.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
under the Israeli Companies Law, exemption of, indemnification of, and procurement of insurance coverage for, our officers and
directors must be approved by our audit committee and board of directors and, in specified circumstances, by our shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black"><B><I>Letters
of Indemnification</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt; color: Black">We
have issued our officers and directors letters of indemnification, pursuant to which we have agreed to indemnify each officer
and director in advance for any liability or expense imposed on or incurred by him in connection with acts performed by him in
the capacity of an officer</FONT> <FONT STYLE="font-size: 10pt">or director, subject to the provisions of the letters of indemnification
agreement. The amount of the advance indemnity is limited to the higher of 25% of our then consolidated shareholders&rsquo; equity
per our most recent consolidated annual financial statements or $3 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">As
part of the indemnification letters, we exempted our directors and officers, in advance, to the extent permitted under law, from
any liability for any damage incurred by them, either directly or indirectly, due to the breach of an officer&rsquo;s or director&rsquo;s
duty of care <I>vis- &agrave;-vis </I>us, within his acts in his capacity as an officer or director. The letter provides that
so long as not permitted under law, we do not exempt an officer or director in advance from his liability to us for a breach of
the duty of care upon distribution, to the extent applicable to the officer or director, if any. The letter also exempts an officer
or director from any liability for any damage incurred by him, either directly or indirectly, due to the breach of the officer
or director&rsquo;s duty of care <I>vis- &agrave;-vis </I>us, by his acts in his capacity as an officer or director prior to the
letter of exemption and indemnification becoming effective.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Committees
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">In addition to
the audit committee, which is described above, our board of directors has established a compensation committee. Our
compensation committee, which consists of Mr. Ofer Tzimchi (chairman), Ms. Aliza Rotbard and Dr. Shmuel Cabilly, administers
issues relating to our global compensation plan with respect to our employees, directors and consultants. Our compensation
committee is responsible for making recommendations to the board of directors regarding the issuance of employee share
options and for determining salaries and bonuses for our executive officers and incentive compensation for our other
employees and consultants. For information regarding the role of our audit committee see &ldquo;&ndash; C. Board Practices -
Audit Committees.&rdquo; Each of the members of the compensation committee is &ldquo;independent&rdquo; as such term is
defined in the Nasdaq Listing Rules.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>D.&#9;Employees</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"> As of December 2, 2012, we had seven
employees and also received services from eight consultants who provide services to us in the U.S., Canada and Belgium. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="22" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">As of December 31,</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">2009</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">2010</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">2011</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">Company Employees</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">Consultants</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">Company Employees</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">Consultants</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">Company Employees</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center">Consultants</TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; font-size: 10pt; color: Black; text-align: left">Management and administration</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-size: 10pt; color: Black; text-align: right">-</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-size: 10pt; color: Black; text-align: right">2</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-size: 10pt; color: Black; text-align: right">3</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-size: 10pt; color: Black; text-align: right">1</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-size: 10pt; color: Black; text-align: right">5</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="width: 7%; font-size: 10pt; color: Black; text-align: right">1</TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">Research and development</TD><TD STYLE="font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; text-align: right">-</TD><TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; text-align: right">1</TD><TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; text-align: right">6</TD><TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; text-align: right">1</TD><TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black">&nbsp;</TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD><TD STYLE="font-size: 10pt; color: Black; text-align: right">6</TD><TD STYLE="font-size: 10pt; color: Black; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 15pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">While none
of our employees is party to a collective bargaining agreement, certain provisions of the collective bargaining agreements between
the Histadrut (General Federation of Labor in Israel) and the Coordination Bureau of Economic Organizations (including the Industrialists&rsquo;
Associations) are applicable to our employees by order of the Israel Ministry of Labor. These provisions primarily concern the
length of the workday, minimum daily wages for professional workers, pension fund benefits for all employees, insurance for work-related
accidents, procedures for dismissing employees, determination of severance pay and other conditions of employment. We generally
provide our employees with benefits and working conditions beyond the required minimums.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have never
experienced any employment-related work stoppages and believe our relationship with our employees is good.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">E.&#9;Share
Ownership</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> The following
table sets forth information regarding the beneficial ownership of our outstanding ordinary shares as of December 2<FONT STYLE="font: 10pt Times New Roman, Times, Serif">,
2012 of each of our directors and executive officers individually and as a group based on information provided to us by our directors
and executive officers. The information in this table is based on 52,990,361 ordinary shares outstanding as of such date.&nbsp;The
number of ordinary shares beneficially owned by a person includes ordinary shares subject to options or warrants held by that
person that were currently exercisable at, or exercisable within 60 days of, December 2, 2012.&nbsp;The ordinary shares issuable
under these options and warrants are treated as if they were outstanding for purposes of computing the percentage ownership of
the person holding these options and warrants but not the percentage ownership of any other person.&nbsp;&nbsp;None of the holders
of the ordinary shares listed in this table have voting rights different from other holders of the ordinary shares.</FONT>&nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Number of
    <BR> Shares<BR> Beneficially<BR> Held </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; font-weight: bold"> &nbsp; </TD><TD STYLE="font: bold 10pt Times New Roman, Times, Serif; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font: bold 10pt Times New Roman, Times, Serif; text-align: center; border-bottom: Black 1pt solid"> Percent
    of <BR>Class </TD><TD STYLE="padding-bottom: 1pt; font: bold 10pt Times New Roman, Times, Serif"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify"> Directors </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 70%; font-size: 10pt; text-align: justify"> Eric Swenden (1) </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right"> 4,650,253 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; font-size: 10pt; text-align: right"> 7.94 </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"> Dr. Kenneth Reed (2) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 3,892,784 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 6.73 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify"> Dr. Shmuel Cabilly (3) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 2,739,837 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 4.83 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"> Dan Suesskind (4) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 623,333 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1.14 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify"> Ofer Tsimchi (5) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 87,500 </TD><TD STYLE="font-size: 10pt; text-align: left"> * </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"> Aliza Rotbard (6) <BR> </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 87,500 </TD><TD STYLE="font-size: 10pt; text-align: left"> * </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: justify"> Executive officers </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"> Dror Ben-Asher (7) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 4,679,168 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 7.98 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify"> Ori Shilo (8) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 4,258,548 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 7.32 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"> Gilead Raday (9) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 643,750 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1.18 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify"> Reza Fathi, Ph.D. (10) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 638,333 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 1.17 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"> Adi Frish (11) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 339,167 </TD><TD STYLE="font-size: 10pt; text-align: left"> * </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: justify"> Ira Kalfus (12) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 306,317 </TD><TD STYLE="font-size: 10pt; text-align: left"> * </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: justify"> Uri Hananel Aharon (13) </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 77,250 </TD><TD STYLE="font-size: 10pt; text-align: left"> * </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"> Guy Goldberg <BR> </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> - </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B> All
                                                                              directors and executive officers as a group (14
                                                                              persons) </B></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P></TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 23,023,741 </TD><TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: right"> 39.94 </TD><TD STYLE="font-size: 10pt; text-align: left"> % </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">*Less
than 1.0%</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (1) </TD><TD STYLE="text-align: justify"> Consists of (i) options
                                                                   to purchase 182,500 ordinary shares exercisable within 60 days
                                                                   of December 2, 2012 and (ii) tradable series 1 warrants to
                                                                   purchase 273,000 ordinary shares and non-tradable warrants
                                                                   to purchase 297,161 ordinary shares.&nbsp;The exercise price
                                                                   of these options range between $0.165 and $0.5 per share, and
                                                                   the options expiry date range between 2017 and 2018. See &ldquo;Item
                                                                   10. Additional Information &ndash; A. Share Capital&rdquo;
                                                                   for more information regarding the warrants. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (2) </TD><TD STYLE="text-align: justify"> Consists of (i) options
                                                                   to purchase 190,000 ordinary shares exercisable within 60 days
                                                                   of December 2, 2012 and (ii) tradable series 1 Warrants to
                                                                   purchase 12,000 ordinary shares.&nbsp;The exercise price of
                                                                   these options range between $0.165 and $0.5 per share, and
                                                                   the options expiry date range between 2017 and 2018. See &quot;Item
                                                                   10. Additional Information &ndash; A. Share Capital&quot; for
                                                                   more information regarding the warrants. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (3) </TD><TD STYLE="text-align: justify"> Consists of (i) options
                                                                   to purchase 167,500 ordinary shares exercisable within 60 days
                                                                   of December 2, 2012 and (ii) tradable series 1 warrants to
                                                                   purchase 497,500 ordinary shares and non-tradable warrants
                                                                   to purchase 174,801 ordinary shares.&nbsp;The exercise price
                                                                   of these options is $0.5 per share, and the options expiry
                                                                   date range between 2017 and 2018. See &ldquo;Item 10. Additional
                                                                   Information &ndash; A. Share Capital&rdquo; for more information
                                                                   regarding the warrants. As part of the private placement approved
                                                                   by our board of directors on November 26, 2012, it is expected
                                                                   that Dr. Cabilly will be issued 988,000 ordinary shares and
                                                                   warrants to acquire 494,000 additional ordinary shares. See
                                                                   &quot;Item 5. Operating and Financial Review and Prospects
                                                                   &ndash; B. Liquidity and Capital Resources&quot;. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (4) </TD><TD STYLE="text-align: justify"> Consists of options to purchase
                                                                   573,333 ordinary shares exercisable within 60 days of December
                                                                   2, 2012. The exercise price of these options is $0.5 per share,
                                                                   and the options expire in 2018. As part of the private placement
                                                                   approved by our board of directors on November 26, 2012, it
                                                                   is expected that Mr. Suesskind will be issued 74,100 ordinary
                                                                   shares and warrants to acquire 37,050 additional ordinary shares.
                                                                   See &quot;Item 5. Operating and Financial Review and Prospects
                                                                   &ndash; B. Liquidity and Capital Resources&quot;. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (5) </TD><TD STYLE="text-align: justify"> Consists of options to purchase
                                                                   87,500 ordinary shares exercisable within 60 days of December
                                                                   2 The exercise price of these options is $1.05 per share, and
                                                                   the options expire in 2018. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (6) </TD><TD STYLE="text-align: justify"> Consists of options to purchase
                                                                   87,500 ordinary shares exercisable within 60 days of December
                                                                   2, 2012. The exercise price of these options is $1.05 per share,
                                                                   and the options expire in 2018. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (7) </TD><TD STYLE="text-align: justify"> Consists of (i) options
                                                                   to purchase 1,926,667 ordinary shares exercisable within 60
                                                                   days of December 2, 2012 and (ii) tradable series 1 warrants
                                                                   to purchase 22,671 ordinary shares.&nbsp;The exercise price
                                                                   of these options range between $0.165 and $0.72 per share,
                                                                   and the options expiry date range between 2017 and 2019. See
                                                                   &quot;Item 10. Additional Information &ndash; A. Share Capital&quot;
                                                                   for more information regarding the warrants. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (8) </TD><TD STYLE="text-align: justify"> Consists of (i) options
                                                                   to purchase 1,663,333 Ordinary exercisable within 60 days of
                                                                   December 2, 2012 and (ii) tradable series 1 warrants to purchase
                                                                   33,883 ordinary shares and non-tradable warrants to purchase
                                                                   59,432 ordinary shares.&nbsp;The exercise price of these options
                                                                   range between $0.165 and $0.72 per share, and the options expiry
                                                                   date range between 2017 and 2019. See &quot;Item 10. Additional
                                                                   Information &ndash; A. Share Capital&quot; for more information
                                                                   regarding the warrants. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (9) </TD><TD STYLE="text-align: justify"> Consists of options to purchase
                                                                   643,750 ordinary shares exercisable within 60 days of December
                                                                   2, 2012. The exercise price of these options range between
                                                                   $0.165 and $0.72 per share, and the options expiry date range
                                                                   between 2017 and 2019. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (10) </TD><TD STYLE="text-align: justify"> Consists of options to
                                                                    purchase 638,333 ordinary shares exercisable within 60 days
                                                                    of December 2, 2012. The exercise price of these options range
                                                                    between $0.165 and $0.72 per share, and the options expiry
                                                                    date range between 2017 and 2019. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (11) </TD><TD STYLE="text-align: justify"> Consists of options to
                                                                    purchase 339,167 ordinary shares exercisable within 60 days
                                                                    of December 2, 2012. The exercise price of these options range
                                                                    between $0.165 and $0.72 per share, and the options expiry
                                                                    date range between 2017 and 2019. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (12) </TD><TD STYLE="text-align: justify"> Consists of (i) options
                                                                    to purchase 198,333 ordinary shares exercisable within 60
                                                                    days of December 2<FONT STYLE="font-family: Times New Roman, Times, Serif">,
                                                                    </FONT>2012 and (ii) non-tradable warrants to purchase 17,480
                                                                    ordinary shares.&nbsp;The exercise price of these options
                                                                    range between $0.165 and $0.69 per share, and the options
                                                                    expiry date range between 2017 and 2018. See &ldquo;Item 10.
                                                                    Additional Information &ndash; A. Share Capital&rdquo; for
                                                                    more information regarding the warrants. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -25.65pt"> &nbsp; </P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 10.45pt"></TD><TD STYLE="width: 25.65pt"> (13) </TD><TD STYLE="text-align: justify"> Consists of options to
                                                                    purchase 75,000 ordinary shares exercisable within 60 days
                                                                    of December 2, 2012. The exercise price of these options is
                                                                    $0.69 per share, and the options expire in 2018. </TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></P>


<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black"><B>Stock Option
Plans </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>2010
Option Plan </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> In 2010,
we adopted the RedHill Biopharma Ltd. 2010 Option Plan. The 2010 Option Plan provides for the granting of options to our directors,
officers, employees, consultants and service providers and individuals who are their employees, and to the directors, officers,
employees, consultants and service providers of our subsidiaries and affiliates. The 2010 Option Plan provides for options to
be issued at the determination of our board of directors in accordance with applicable laws. As of December 2, 2012, there were
12,015,000 ordinary shares issuable upon the exercise of outstanding options under the 2010 Option Plan. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Administration
of Our Option Plan </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black">Our
option plan is administered by our board of directors, or a compensation committee to be appointed thereby, regarding the granting
of options and the terms of option grants, including exercise price, method of payment, vesting schedule, acceleration of vesting
and the other matters necessary in the administration of these plans. Options granted under the 2010 Option Plan to eligible Israeli
employees, officers and directors are granted under Section 102 of the Israel Income Tax Ordinance pursuant to which the options
or the ordinary shares issued upon their exercise must be allocated or issued to a trustee and be held in trust for two years
from the date upon which such options were granted</FONT> <FONT STYLE="font-size: 10pt">in order to benefit from the provisions
of Section 102. Under Section 102, any tax payable by an employee from the grant or exercise of the options is deferred until
the transfer of the options or ordinary shares by the trustee to the employee or upon the sale of the options or ordinary shares,
and gains may qualify to be taxed as capital gains at a rate equal to 25%, subject to compliance with specified conditions. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Options granted
under our 2010 Option Plan generally vest over a period of 3 years and expire 7 years after the grant date. The 2010 Option Plan,
however, permits options to have a term of up to 10 years. If we terminate a grantee for cause (as such term is defined in the
2010 Option Plan) the right to exercise all the options granted to the grantee, the grantee&rsquo;s vested and unvested options
will expire immediately, on the earlier of:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">termination
                                                                                                                             of
                                                                                                                             the
                                                                                                                             engagement;
                                                                                                                             or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                                             date
                                                                                                                             of
                                                                                                                             the
                                                                                                                             notice
                                                                                                                             of
                                                                                                                             the
                                                                                                                             termination
                                                                                                                             of
                                                                                                                             the
                                                                                                                             engagement.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Upon termination
of employment for any other reason, other than in the event of death, disability, retirement after the age of 60 or for cause,
all unvested options will expire and all vested options will generally be exercisable for 90 days following termination, or such
other period as determined by the plan administrator, subject to the terms of the 2010 Option Plan and the governing option agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Under our
2010 Option Plan, in the event any person, entity or group that was not an interested party at the time of our initial public
offering becoming a controlling shareholder, options that granted by us to such grantee will be accelerated, so that the grantee
will be entitled to exercise all of those options. An &ldquo;interested party&rdquo; is defined in the Securities Law and includes,
among others:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20.7pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              holder
                                                                                                                              of
                                                                                                                              5%
                                                                                                                              or
                                                                                                                              more
                                                                                                                              of
                                                                                                                              the
                                                                                                                              outstanding
                                                                                                                              shares
                                                                                                                              or
                                                                                                                              voting
                                                                                                                              rights
                                                                                                                              of
                                                                                                                              an
                                                                                                                              entity;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 38.75pt; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20.7pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              person
                                                                                                                              entitled
                                                                                                                              to
                                                                                                                              appoint
                                                                                                                              one
                                                                                                                              or
                                                                                                                              more
                                                                                                                              of
                                                                                                                              the
                                                                                                                              directors
                                                                                                                              or
                                                                                                                              chief
                                                                                                                              executive
                                                                                                                              officer
                                                                                                                              of
                                                                                                                              an
                                                                                                                              entity;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 38.75pt; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20.7pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              director
                                                                                                                              of
                                                                                                                              an
                                                                                                                              entity
                                                                                                                              or
                                                                                                                              its
                                                                                                                              chief
                                                                                                                              executive
                                                                                                                              officer;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 38.75pt; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20.7pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                              entity,
                                                                                                                              in
                                                                                                                              which
                                                                                                                              an
                                                                                                                              individual
                                                                                                                              referred
                                                                                                                              to
                                                                                                                              above
                                                                                                                              holds
                                                                                                                              25%
                                                                                                                              or
                                                                                                                              more
                                                                                                                              of
                                                                                                                              its
                                                                                                                              outstanding
                                                                                                                              shares
                                                                                                                              or
                                                                                                                              voting
                                                                                                                              rights,
                                                                                                                              or
                                                                                                                              is
                                                                                                                              entitled
                                                                                                                              to
                                                                                                                              appoint
                                                                                                                              25%
                                                                                                                              or
                                                                                                                              more
                                                                                                                              of
                                                                                                                              its
                                                                                                                              directors;
                                                                                                                              or</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 38.75pt; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 20.7pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              person
                                                                                                                              who
                                                                                                                              initiated
                                                                                                                              the
                                                                                                                              establishment
                                                                                                                              of
                                                                                                                              the
                                                                                                                              entity.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A &ldquo;controlling
shareholder&rdquo; in this paragraph is a controlling shareholder, as defined in the Israel Securities Law, 1968, or any person,
entity or group becoming a holder, as defined in the Israel Securities Law, 1968, of 25% or more of the voting rights in us. This
option acceleration clause, however, only applies with respect to the 3,080,000 options granted to our employees and consultants
before our initial public offering in Israel and to the 6,210,000 options allocated upon completion of our initial public offering
in Israel to our employees and consultants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Under our 2010 Option Plan, options
which we granted after September 24, 2012 will be accelerated, so that the grantee will be entitled to exercise all of such options,
in the event any person, entity or group that was not an interested party at the time of our initial public offering becomes a
controlling shareholder. A &ldquo;controlling shareholder&rdquo; in this paragraph is a controlling shareholder, as defined in
the Israel Securities Law, 1968. The board of directors also approved that options granted to our directors under our 2010 Option
Plan after completion of our initial public offering and prior to September 24, 2012 will also be accelerated under the same circumstances
and it was approved by our shareholders on November 6, 2012 . See &ldquo; &ndash; B. Compensation &ndash; Executives and Directors
Compensation.&rdquo; </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Upon termination
of employment due to death or disability, or retirement after the age of 60, subject to the board of directors&rsquo; approval,
all the vested options at the time of termination will be exercisable for 24 months, or such other period as determined by the
plan administrator, subject to the terms of the 2010 Option Plan and the governing option agreement.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In the event
of the sale of all or a substantial part of our assets, or a merger transaction in which we are not the surviving corporation
and the surviving corporation does not assume the options granted under the 2010 Option Plan or otherwise grants options to purchase
the surviving corporation&rsquo;s shares in exchange for such option, all of the options that were scheduled to vest within 12
months of the date of such transaction shall vest immediately prior the closing of such transaction.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 57.55pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in"><FONT STYLE="text-transform: none; color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 57.55pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in"><FONT STYLE="text-transform: none; color: Black">ITEM
7.&#9;MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 57.55pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A.&#9;Major
Shareholders</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> The following
table sets forth certain information regarding the beneficial ownership of our outstanding ordinary shares as of December 2, 2012,
by each person or entity known to beneficially own 5.0% or more of our outstanding ordinary shares. The information with respect
to beneficial ownership of the ordinary shares is given based on information provided to us by the shareholders. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> The information
in this table is based on 52,990,361 ordinary shares outstanding as of such date. The number of ordinary shares beneficially owned
by a person includes ordinary shares subject to options held by that person that were currently exercisable at, or exercisable
within 60 days of, December 2, 2012.&nbsp;&nbsp;The ordinary shares issuable under these options are treated as if they were outstanding
for purposes of computing the percentage ownership of the person holding these options but not the percentage ownership of any
other person.&nbsp;None of the holders of the ordinary shares listed in this table have voting rights different from other holders
of ordinary shares. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; color: #1F497D"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Number
    of<BR> Shares<BR> Beneficially<BR> Held </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Percent
    of<BR> Class </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 72%; font-size: 10pt; color: Black; text-align: justify"> Mr. Dror Ben-Asher (1) </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 4,679,168 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 7.98 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Mr. Ori Shilo (2) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 4,258,548 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 7.32 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Mr. Eric Swenden (3) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 4,650,253 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 7.94 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Dr. Kenneth Reed (4) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3,892,784 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 6.73 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> % </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Mr. Saar Wilf (5) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3,109,352 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 5.45 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> % </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> (1) </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> Consists
                                                                 of (i) options to purchase 1,926,667 Ordinary Shares exercisable
                                                                 within 60 days of December 2, 2012 and (ii) Tradable Series 1
                                                                 Warrants to purchase 22,671 Ordinary Shares.&nbsp;The exercise
                                                                 price of these options range between $0.165 and $0.72 per share,
                                                                 and the options expiry date range between 2017 and 2019. See
                                                                 &quot;Item 10. Additional Information &ndash; A. Share Capital&quot;
                                                                 for more information regarding the warrants. </TD></TR>                                                                                                                <TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD> &nbsp; </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> &nbsp; </TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> (2) </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> Consists
                                                                 of (i) options to purchase 1,663,333 Ordinary exercisable within
                                                                 60 days of December 2, 2012 and (ii) Tradable Series 1 Warrants
                                                                 to purchase 33,883 Ordinary Shares and non-tradable Warrants
                                                                 to purchase 59,432 Ordinary Shares.&nbsp;The exercise price of
                                                                 these options range between $0.165 and $0.72 per share, and the
                                                                 options expiry date range between 2017 and 2019. See &quot;Item
                                                                 10. Additional Information &ndash; A. Share Capital&quot; for
                                                                 more information regarding the warrants. </TD></TR>                                 <TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD> &nbsp; </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> &nbsp; </TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> (3) </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> Consists
                                                                 of (i) options to purchase 182,500 Ordinary Shares exercisable
                                                                 within 60 days of December 2, 2012 and (ii) Tradable Series 1
                                                                 Warrants to purchase 273,000 Ordinary Shares and non-tradable
                                                                 Warrants to purchase 297,161 Ordinary Shares.&nbsp;The exercise
                                                                 price of these options range between $0.165 and $0.5 per share,
                                                                 and the options expiry date range between 2017 and 2018. See
                                                                 &quot;Item 10. Additional Information &ndash; A. Share Capital&quot;
                                                                 for more information regarding the warrants. </TD></TR>                                             <TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD> &nbsp; </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> &nbsp; </TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"> (4) </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> Consists
                                                                 of (i) options to purchase 190,000 Ordinary Shares exercisable
                                                                 within 60 days of December 2, 2012 and (ii) Tradable Series 1
                                                                 Warrants to purchase 12,000 Ordinary Shares.&nbsp;The exercise
                                                                 price of these options range between $0.165 and $0.5 per share,
                                                                 and the options expiry date range between 2017 and 2018. See
                                                                 &quot;Item 10. Additional Information &ndash; A. Share Capital&quot;
                                                                 for more information regarding the warrants. </TD></TR>                                                                                                                <TR STYLE="vertical-align: top">
<TD> &nbsp; </TD><TD> &nbsp; </TD><TD STYLE="text-align: justify; padding-right: 5.75pt"> &nbsp; </TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">(5)</TD><TD STYLE="text-align: justify; padding-right: 5.75pt">Consists
                                                                        of Tradable Series 1 Warrants to purchase 125,999 Ordinary
                                                                        Shares and non-tradable Warrants to purchase 146,602 Ordinary
                                                                        Shares. See &quot;Item 10. Additional Information &ndash;
                                                                        A. Share Capital&quot; for more information regarding
                                                                        the warrants.</TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> As of December
2, 2012, there was one shareholder of record of our ordinary shares, which was located in Israel. The number of record holders
is not representative of the number of beneficial holders of our ordinary shares, as the shares of all shareholders listed on
the Tel Aviv Stock Exchange are recorded in the name of our Israeli share registrar, Bank Leumi Le&rsquo;Israel Registration Company
Ltd. There were no record holders of our ordinary shares in the U.S. as of December 2, 2012. Based on information obtained from
the Tel Aviv Stock Exchange Clearing House Ltd., as of June 28, 2012, residents of Israel beneficially owned approximately 77.5%
of our shares and residents of the U.S. beneficially owned approximately 8.4% of our shares. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">At the time
of our incorporation in 2009, ProSeed Capital Holdings CVA held approximately 46% of our outstanding shares. Following the issuance
by us of additional shares, including in connection with our initial public offering in Israel, and the distribution by ProSeed
Capital Holdings CVA in November 2011 of substantially of all of its shares in us to its shareholders, it currently holds less
than one percent of our shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">At the time
of our incorporation in 2009, Benjamin Van Oudenhove, the chief executive officer and chairman of ProSeed Capital Holdings CVA,
held approximately 10.5% of our outstanding shares, in addition to his indirect holdings through ProSeed Capital Holdings CVA.
Following the issuances of additional shares, including in connection with our initial public offering in Israel, he currently
beneficially holds less than 5% of our shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>B.&#9;Related
Party Transactions </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Consulting
Agreement with ProSeed Capital Holdings CVA</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On June 3,
2010, we entered into a consulting agreement with ProSeed Capital Holdings CVA, which at the time was one of our major shareholders
and whose security holders included a number of our own shareholders, pursuant to which ProSeed Capital Holdings CVA agreed to
promote our business with potential investors and partners. According to the agreement, ProSeed Capital Holdings CVA was entitled
to success fees in the amount of 6%, plus value added tax, if necessary, of any investment where the investor was introduced to
us by ProSeed Capital Holdings CVA. ProSeed Capital Holdings CVA was to be entitled to such commission for a period of 18 months
from the date of termination of the agreement. In accordance with the terms of this agreement, we paid ProSeed Capital Holdings
CVA $66,000 and $75,000 in 2011 and 2010, respectively. This agreement was terminated by the parties on September 5, 2010.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In December
2011, ProSeed Capital Holdings CVA distributed substantially all of its holdings in us to its security holders. Until such distribution,
ProSeed Capital Holdings CVA was considered, pursuant to instructions from the Israeli Securities Authority, as jointly holding
our shares together with ProSeed Capital Holdings CVA&rsquo;s security holders, Dror Ben-Asher, Ori Shilo, Eric Swenden, Benjamin
Van Oudenhove and Pascal Weerts. Accordingly, such persons were deemed as interested parties for reporting and the approval of
transactions under Israeli law. See &quot;Item 7. Major Shareholders and Related Party Transactions &ndash; A. Major Shareholders&quot;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Agreement
with R.E. Investments</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On August 7,
2010, we entered into an agreement with R.E. Investments, an entity owned by Benjamin Van Oudenhove, pursuant to which R.E. Investments
provides us with strategic consulting services in the fields of finance, mergers and acquisitions and business development, with
an emphasis on Europe.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Pursuant to
this agreement, R.E. Investments is entitled to success fees of 3%, plus value added tax, if necessary, of the value of any transaction
resulting from its introductions. R.E. Investments is entitled to such payment for a period of 12 months from the date of termination
of the agreement. Pursuant to this agreement, we paid R.E. Investments $4,000 and $56,000 in 2011 and 2010, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> On November 6, 2012, we entered into
an amendment to this agreement pursuant to which the success fees were increased to 5%, plus value added tax, if applicable, of
the value of any transaction resulting from the introductions made by R.E. Investments from November 6, 2012 through December
31, 2012 which result in investments in the Company </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In the agreement,
R.E. Investments agreed that so long as it serves as our consultant, and for a period of 2 years from the date of termination
of the agreement, it will not interfere in our relationship with customers, suppliers, employees, consultants, investment partners,
investors and creditors during this period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Pursuant to
the agreement, R.E. Investments was granted options to acquire 400,000 of our ordinary shares at an exercise price of $0.55 per
share and Mr. Van Oudenhove was granted options to acquire 100,000 of our ordinary shares at an exercise price of $0.55 per share
(all which numbers reflect adjustments made following the distribution of bonus shares to our shareholders at the time of our
initial public offering on the Tel Aviv Stock Exchange). All of these unexercised options granted to R. E. Investments and Mr.
Van Oudenhove will lapse upon the earlier of our merger or acquisition or on September 1, 2012. On August 29, 2012 all these options
were exercised into 500,000 ordinary shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Agreement
with Pascal Weerts</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On October
1, 2010, we entered into a consultancy agreement with Pascal Weerts through UpperWest BVBA, one of our shareholders. This agreement
was amended on December 1, 2010 and on October 1, 2011 and January 5, 2012. Pursuant to this agreement, Mr. Weerts is entitled,
in consideration for his provision to us of consulting services as Director of Corporate and Legal Affairs, to $8,000 per month
and an expense reimbursement of $200 per month. Either of the parties may terminate this agreement upon 30 days&rsquo; notice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On October
1, 2010, Mr. Weerts was granted 7 year options to purchase 60,000 ordinary shares at an exercise price of $0.165 per share. 20,000
of these options vested on October 1, 2011 with the remaining 40,000 options vesting in 8 subsequent installments of 5,000 options
every three months following October 1 (which numbers reflect adjustments made following the distribution of bonus shares to our
shareholders at the time of our initial public offering on the Tel Aviv Stock Exchange).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Upon completion
of our initial public offering, Mr. Weerts was granted 7 year options to purchase 90,000 ordinary shares at an exercise price
of $0.50 per share. 30,000 of these options vested on February 3, 2012, with the remaining 60,000 options vesting in 8 subsequent
equal installments of 7,500 options every three months following February 3, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On January
5, 2012, we granted Mr. Weerts 7 year options to purchase 75,000 ordinary shares at an exercise price of $0.72 per share. These
options vest in 6 equal installments of 12,500 options every 6 months following January 1, 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>September
2009 Share Purchase Agreement </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In September
2009, we entered into a share purchase agreement with a number of investors for the issuance of preferred shares and warrants
to acquire preferred shares, pursuant to which Dr. Reed invested $150,000 and Mr. Swenden invested $112,500, out of a total amount
of approximately $1 million, at a price of $0.15 per ordinary share. Each investor was issued warrants to acquire additional preferred
shares in an amount representing 20% of the number of preferred shares acquired by such investor pursuant to the share purchase
agreement. Pursuant to the share purchase agreement, all preferred shares were converted into ordinary shares in connection with
the completion of our initial public offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>August
2010 Mandatory Convertible Loan Agreements </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> From June
2010 to August 2010, we entered into a loan agreement with a number of investors, under which Mr. Swenden invested $650,000, Dr.
Cabilly invested $500,000, Dr. Reed invested $350,000, and Amram Hayut, a brother-in-law of Mr. Shilo, invested $85,000, out of
a total amount of approximately $3.5 million. Under the terms of the loan agreement, we agreed to pay the investors certain royalty
payments with regard to two of our therapeutic candidates. In August 2010, the loan agreement was replaced in its entirely by
a new convertible loan agreement under which all the loans thereunder, accrued interest at an annual rate of 8% and was converted
into ordinary shares and ordinary share warrants upon the completion of our initial public offering. However, the obligation to
pay the investors the royalty payments described above remains in full force and effect. Our board of directors approved a proposed
acquisition and termination of the royalty rights granted to the investors. See &quot;Item 10. Additional Information &ndash;
C. Material Contracts &ndash; Loan Agreements &ndash; August 2010 Mandatory Convertible Loan Agreements&quot; for more information. </FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>November
2010 Mandatory Convertible Loan Agreement</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In November
2010, we entered into a convertible loan agreement with a number of investors, under which Dr. Reed invested $500,000, Mr. Swenden
invested $200,000 and Mr. Shilo invested $170,000, out of a total amount of approximately $7.6 million. Under the terms of the
convertible loan agreement, the loan accrued interest at an annual rate of 8% and was converted into ordinary shares and ordinary
share warrants upon the completion of the initial public offering. See &quot;Item 10. Additional Information &ndash; C. Material
Contracts &ndash; Loan Agreements &ndash; November 2010 Mandatory Convertible Loan Agreement&quot; for more information.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>February
2011 Initial Public Offering</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In February
2011, we completed our initial public offering in Israel, under which Dr. Cabilly invested $975,000, Mr. Swenden invested $535,000,
Mr. Shilo invested $29,000 and Dr. Reed invested $24,000 out of a total amount of approximately $14 million. See &quot;Item 5.
Operating and Financial Review and Prospects &ndash; B. Liquidity and Capital Resources&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Please see
&ldquo;Item 6. Directors, Senior Management and Employees &ndash; B. Compensation &ndash; Executives and Director Compensation&rdquo;
for a description of our employment agreements with Dror Ben-Asher and Ori Shilo.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">C.&#9;Interests
of Experts and Counsel</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
8.&#9;FINANCIAL INFORMATION</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A.&#9;Financial
Statements and Other Financial Information</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
financial statements required by this item are found at the end of this Registration Statement, beginning on page F-1.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Legal Proceedings
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">From
time to time, we may become party to legal proceedings and claims in the ordinary course of business. We are not currently a party
to any significant legal proceedings.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Dividend
Policy </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have never
declared or paid cash dividends to our shareholders. Currently we do not intend to pay cash dividends. We currently intend to
reinvest any future earnings in developing and expanding our business. Any future determination relating to our dividend policy
will be at the discretion of our board of directors and will depend on a number of factors, including future earnings, our financial
condition, operating results, contractual restrictions, capital requirements, business prospects, applicable Israeli law and other
factors our board of directors may deem relevant.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">B.&#9;Significant
Changes</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Except
as otherwise disclosed in this Registration Statement on Form 20-F, no significant change has occurred since December 31, 2011.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
9.&#9;THE OFFER AND LISTING </FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A.&#9;Offer
and Listing Details</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our ordinary
shares have been trading on the Tel Aviv Stock Exchange under the symbol &ldquo;RDHL&rdquo; since February 2011. No trading market
currently exists for our American Depositary Shares or ordinary shares in the U.S. We have applied to have our American Depositary
Shares listed on the Nasdaq Capital Market under the symbol &ldquo;RDHL.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The following
table sets forth, for the periods indicated, the reported high and low closing sales prices of our ordinary shares on the Tel
Aviv Stock Exchange in NIS and U.S. dollars. U.S. dollar per ordinary share amounts are calculated using the U.S. dollar representative
rate of exchange on the date to which the high or low market price is applicable, as reported by the Bank of Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.3pt; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; color: Black; text-align: center; border-bottom: Black 1pt solid"> NIS </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font-size: 10pt; color: Black; text-align: center; border-bottom: Black 1pt solid"> $ U.S. </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify; padding: 0"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; color: Black"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; color: Black; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> Price
                                                                                                                                                   Per </FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> Ordinary
                                                                                                                                                                  Share </FONT></P></TD><TD STYLE="padding: 0; font: 10pt Times New Roman, Times, Serif; color: Black"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; color: Black"> &nbsp; </TD>
    <TD COLSPAN="6" STYLE="font: 10pt Times New Roman, Times, Serif; padding: 0; color: Black; text-align: center; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"> Price
                                                                                                                                                   Per </FONT></P> <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; text-indent: 0"><FONT STYLE="color: Black"> Ordinary
                                                                                                                                                                  Share </FONT></P></TD><TD STYLE="padding: 0; font: 10pt Times New Roman, Times, Serif; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: center; border-bottom: Black 1pt solid"> High </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: center; border-bottom: Black 1pt solid"> Low </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: center; border-bottom: Black 1pt solid"> High </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" STYLE="font-size: 10pt; color: Black; text-align: center; border-bottom: Black 1pt solid"> Low </TD><TD STYLE="padding-bottom: 1pt; font-size: 10pt; color: Black"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; font-weight: bold; text-align: justify"> Annual </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 44%; font-size: 10pt; color: Black; text-align: justify"> 2012 (through December, 2012) </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 4.19 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 1.71 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 1.08 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="width: 11%; font-size: 10pt; color: Black; text-align: right"> 0.45 </TD><TD STYLE="width: 1%; font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> 2011 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.80 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.82 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.05 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.49 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: Black; padding-left: 5.4pt"> &nbsp;<BR>Quarterly </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Fourth Quarter 2012 (through December 2, 2012) </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 4.19 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.04 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.08 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.78 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Third Quarter 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.99 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.19 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.76 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.55 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Second Quarter 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.95 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.91 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.78 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.51 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> First Quarter 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.52 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.71 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.66 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.45 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Fourth Quarter 2011 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.80 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.17 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.77 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.57 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Third Quarter 2011 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.00 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.82 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.88 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.49 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> Second Quarter 2011 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.55 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.71 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.02 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.78 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> First Quarter 2011 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.80 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.00 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.05 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.82 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font: bold 10pt Times New Roman, Times, Serif; color: Black; text-align: justify; padding-left: 5.4pt"> &nbsp;<BR>Most
    Recent Six Months </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black"> &nbsp; </TD>
    <TD STYLE="font: 10pt Symbol; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black"> &nbsp; </TD>
    <TD STYLE="font: 10pt Symbol; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black"> &nbsp; </TD>
    <TD STYLE="font: 10pt Symbol; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black; text-align: right"> &nbsp; </TD><TD STYLE="font: 10pt Symbol; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> November 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 4.02 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.59 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.05 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.93 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> October 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 4.19 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 3.04 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 1.08 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.78 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> September 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.99 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.23 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.76 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.55 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> August 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.38 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.19 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.60 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.55 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> July 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.54 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.22 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.64 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.57 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; color: Black; text-align: justify"> June 2012 </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.87 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 2.23 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.74 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD><TD STYLE="font-size: 10pt; color: Black; text-align: right"> 0.56 </TD><TD STYLE="font-size: 10pt; color: Black; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> On December
2, 2012, the last reported sales price of our ordinary shares on the Tel Aviv Stock Exchange was NIS 3.99 per share, or $1.05
per share (based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012). As of December
2, 2012, there was one shareholder of record of our ordinary shares. The number of record holders is not representative of the
number of beneficial holders of our ordinary shares, as the shares of all shareholders listed on the Tel Aviv Stock Exchange are
recorded in the name of our Israeli share registrar, Bank Leumi Le&rsquo;Israel Registration Company Ltd. There were no record
holders of our ordinary shares in the U.S. as of December 2, 2012. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Our tradable Series 1 Warrants are
also traded on the Tel Aviv Stock Exchange. Currently there are 7,151,150 tradable Series 1 Warrants outstanding, each of which
is exercisable into one ordinary share at a per share price of NIS 4.60 or $1.2 (based on the representative U.S. dollar <I>&ndash;
</I>NIS rate of exchange of 3.81 on December 2, 2012). The exercise price is linked to the last known representative rate of the
U.S. dollar on the exercise date as published by the Bank of Israel. The base rate for linkage is the representative rate of the
U.S. dollar published by the Bank of Israel on January 28, 2011 (NIS 3.68 = $1). As of December 2, 2012, there was one holder
of record of tradable Series 1 Warrants. The number of record holders of our tradable Series 1 Warrants is not representative
of the number of beneficial holders of our tradable Series 1 Warrants, as all tradable Series 1 Warrants listed on the Tel Aviv
Stock Exchange are recorded in the name of our Israeli share registrar, Bank Leumi Le&rsquo;Israel Registration Company Ltd. On
December 2, 2012, the last reported sales price of our tradable Series 1 Warrants on the Tel Aviv Stock Exchange was NIS 0.8,
or $0.2 per Warrant (based on the representative U.S. dollar <I>&ndash;</I> NIS rate of exchange of 3.81 on December 2, 2012). </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>B.&#9;Plan
of Distribution</B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">C. Markets</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our ordinary
shares are listed and traded on the Tel Aviv Stock Exchange. We intend to apply to the Nasdaq Capital Market to have our ordinary
shares in the form of American Depositary Shares traded on the Nasdaq Capital Market.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">D.&#9;Selling
Shareholders</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">E.&#9;Dilution</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>F.
Expenses of the Issue</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="text-transform: none; color: Black">ITEM
10.&#9;ADDITIONAL INFORMATION</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">A.&#9;Share
Capital</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our registered
share capital consists of a single class of 100,000,000 ordinary shares, par value NIS 0.01 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> As of December
31, 2011, we had 52,320,361 issued and outstanding ordinary shares, and outstanding share options to purchase an aggregate of
10,660,000 ordinary shares at a weighted average exercise price of $0.43 per share, with the latest expiration date of these options
being August 10, 2018 (of which options to purchase an aggregate of 1,883,750 ordinary shares were exercisable as of December
31, 2011). As of December 2, 2012 we had 52,990,361 issued and outstanding ordinary shares. All outstanding ordinary shares are
validly issued, fully paid and non-assessable. The ordinary shares do not have preemptive rights. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As of December 2, 2012, we had outstanding
options under our 2010 Option Plan to purchase an aggregate of 12,015,000 ordinary shares, of which 6,912,916 are exercisable.
Each of these options is exercisable into one ordinary share for an exercise price of between $0.165 and $1.05 per share. The
options will be fully vested after three years. These options have an expiration date of between May 2017 and July 2019. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As of December 2, 2012, our remaining
warrants issued in connection with our mandatory convertible loans are exercisable into an aggregate of 3,180,860 ordinary shares
for at exercise price per share of approximately $0.86 and have expiration dates between August 11, 2013 and November 9, 2013. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> As of December 2, 2012, our outstanding
tradable Series 1 warrants are exercisable into an aggregate of 7,151,150 ordinary shares at a U.S dollar-adjusted exercise price
of NIS 3.8 through February 2, 2012 and NIS 4.6 from February 3, 2012 to February 2, 2014, subject to adjustment. All the tradable
Series 1 warrants expire on February 2, 2014. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt"> On November
26, 2012, our board of directors approved the private issuance of up to 7,063,000 ordinary shares at a price per-share of NIS
4.00 and up to 3,531,500 non-tradable warrants </FONT> <FONT STYLE="font-size: 10pt">exercisable for ordinary shares for
a total investment amount of approximately $7 million. As of December 2, 2012, we had entered into investment agreements with
investors for an aggregate investment amount of approximately $6.5 million. Investors will include existing shareholders. The
transaction is subject to the approval of the Tel Aviv Stock Exchange. For more information, see &quot;Item 5. Operating and Financial
Review and Prospects &ndash; B. Liquidity and Capital Resources&quot;. </FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> Below is information regarding changes
in our ordinary share capital since August 3, 2009 through December 2, 2012. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"> &nbsp; </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center; vertical-align: bottom"> Period </TD><TD STYLE="font-size: 10pt; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center"> Description </TD><TD STYLE="font-size: 10pt; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center"> Number of Convertible Preferred Shares </TD><TD STYLE="font-size: 10pt; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; font-weight: bold; text-align: center"> Number of Ordinary Shares </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 58%; font-size: 10pt; text-align: left; vertical-align: top"> Balance on August 3, 2009 (date of formation)* </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="width: 13%; font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> Issuance
    of Ordinary Shares to Founders </TD><TD STYLE="width: 1%; font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="width: 13%; font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> - </TD><TD STYLE="width: 1%; font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="width: 13%; font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> 9,600,000 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 1pt; vertical-align: top"> During 2009 </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: top"> Issuance
    of Convertible Preferred Shares </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 1pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: top"> 6,496,733 </TD><TD STYLE="font-size: 10pt; padding-bottom: 1pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 1pt; padding-left: 5.4pt; vertical-align: top"> - </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: top"> Balance on December 31, 2009 and 2010 </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> &nbsp; </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> 6,496,733 </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> 9,600,000 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: top"> During 2011 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> Exercise
    of Warrants </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> 1,299,347 </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> - </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: top"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> Conversion
    of convertible preferred shares into ordinary shares </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> (7,796,080) </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> 7,796,080 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: top"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> Conversion of mandatory convertible
    loans to equity </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> - </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> 19,818,314 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: top"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> Issuance
    of ordinary shares and warrants under public offering </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> = </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> 14,302,300 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: top"> &nbsp; </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> Exercise of Warrants </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> - </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> 803,667 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; vertical-align: top"> Balance on December 31, 2011 </TD><TD STYLE="font-size: 10pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"></TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> - </TD><TD STYLE="font-size: 10pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-left: 5.4pt; vertical-align: top"> 52,320,361 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: left; vertical-align: top"> Ordinary shares issued during
    2012 </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> Exercise
    of options </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> - </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-left: 5.4pt; vertical-align: top"> 670,000 </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-size: 10pt; text-align: left; padding-bottom: 2.5pt; vertical-align: top"> Balance on December 2, 2012 </TD><TD STYLE="font-size: 10pt; padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="font-size: 10pt; text-align: center; padding-bottom: 2.5pt; padding-left: 5.4pt; vertical-align: top"> &nbsp; </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 2.5pt; padding-left: 5.4pt; vertical-align: top"> - </TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; padding-bottom: 2.5pt; text-align: center; vertical-align: top"> &nbsp; </TD>
    <TD STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; padding-bottom: 2.5pt; padding-left: 5.4pt; vertical-align: top"> 52,990,361 </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">* In connection
with our February 3, 2011 initial public offering, we modified our share capital such that (i) there is only one class of shares
(ordinary shares); and (ii) nine (9) bonus shares were granted for each option previously granted to our employees, directors
and consultants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">B.&#9;Memorandum
and Articles of Association</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Securities
Registers</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Our
transfer agent and register is Bank of New York Mellon and its address is 101 Barclay Street, New York, NY.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Objects
and Purposes</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">According
to Section 4 of our articles of association, we shall engage in any legal business. Our number with the Israeli Registrar of Companies
is 514304005.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Private
Placements</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, if (i) as a result of a private placement a person would become a controlling shareholder or (ii) a
private placement will entitle investors to receive 20% or more of the voting rights of a company as calculated before the private
placement, and all or part of the private placement consideration is not in cash or in public traded securities or is not in market
terms and if as a result of the private placement the holdings of a substantial shareholder shall increase or as a result of it
a person shall become a substantial shareholder, then in either case, the allotment must be approved by the board of directors
and by the shareholders of the company. A &ldquo;substantial shareholder&rdquo; is defined as a shareholder who holds five percent
or more of the company&rsquo;s outstanding share capital, assuming the exercise of all of the securities convertible into shares
held by that person. In order for the private placement to be on &ldquo;market terms&rdquo; the board of directors has to determine,
on the base of detailed explanation, that the private placement is on market terms, unless proven otherwise.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Board of
Directors </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Under our articles
of association, resolutions by the board of directors shall be decided by a majority of votes of the directors present, or participating,
in the case of voting by media, and voting, each director having one vote.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">In
addition, the Israeli Companies Law requires that certain transactions, actions and arrangements be approved as provided for in
a company&rsquo;s articles of association and in certain circumstances by the audit committee and by the board of directors itself.
Those transactions that require such approval pursuant to a company&rsquo;s articles of association must be approved by its board
of directors. In certain circumstances, audit committee and shareholder approval is also required. The vote required by the audit
committee and the board of directors for approval of such matters, in each case, is a majority of the directors participating
in a duly convened meeting. Under the Israeli Companies Law, the audit committee is to be comprised of at least three members
appointed by the board of directors, which members must include all of the external directors. The majority of members of the
audit committee should be independent directors, and the chairman of the audit committee should be an external director.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law requires that a member of the board of directors or senior management of the company promptly and, in any
event, not later than the first board meeting at which the transaction is discussed, disclose any personal interest that he or
she may have, either directly or by way of any corporation in which he or she is, directly or indirectly, a 5%<I> </I>or greater
shareholder, director or general manager or in which he or she has the right to appoint at least one director or the general manager,
as well as all related material information known to him or her, in connection with any existing or proposed transaction by the
company. In addition, if the transaction is an extraordinary transaction, (that is, a transaction other than in the ordinary course
of business, otherwise than on market terms, or is likely to have a material impact on the company&rsquo;s profitability, assets
or liabilities), the member of the board of directors or senior management must also disclose any personal interest held by his
or her spouse, siblings, parents, grandparents, descendants,<SUB> </SUB>spouse&rsquo;s descendants, siblings and parents, and
the spouses of any of the foregoing.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Once
the member of the board of directors or senior management complies with the above disclosure requirement, a company may approve
the transaction in accordance with the provisions of its articles of association. Under the provisions of the Israeli Companies
Law, whoever has a personal interest in a matter, which is considered at a meeting of the board of directors or the audit committee,
may not be present at this meeting or vote on this matter, unless it is not an extraordinary transaction as defined in the Israeli
Companies Law. However, if the chairman of the board of directors or the chairman of the audit committee has determined that the
presence of an office holder with a personal interest is required for the presentation of a matter, such officer holder may be
present at the meeting. Notwithstanding the foregoing, if the majority of the directors have a personal interest in a matter,
they shall be allowed to participate and vote on this matter, but an approval of the transaction by the shareholders in the general
meeting shall be required.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Our
articles of association provide that, subject to the Israeli Companies Law, all actions executed in good faith by the board of
directors or by a committee thereof or by any person acting as a director or a member of a committee of the board of directors,
will be deemed to be valid even if, after their execution, it is discovered that there was a flaw in the appointment of these
persons or that any one of these persons was disqualified from serving at his or her office.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Our
articles of association provide that, subject to the provisions of the Israeli Companies Law, the board of directors may appoint
board of directors&rsquo; committees. The committees of the board of directors shall report to the board of directors their resolutions
or recommendations on a regular basis, as shall be prescribed by the board of directors. The board of directors may cancel the
resolution of a committee that has been appointed by it; however, such cancellation shall not affect the validity of any resolution
of a committee, pursuant to which we acted, vis-&agrave;-vis another person, who was not aware of the cancellation thereof. Decisions
or recommendations of the committee of the board which require the approval of the board of directors will be brought to the directors&rsquo;
attention a reasonable time prior to the discussion at the board of directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">According
to the Israeli Companies Law, a contract of a company with its directors, regarding their conditions of service, including the
grant to them of exemption from liability from certain actions, insurance, and indemnification as well as the company&rsquo;s
contract with its directors on conditions of their employment, in other capacities, require the approval of the audit committee,
the board of directors, and the shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Description
of Securities </B></FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Ordinary
Shares</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
following is a description of our ordinary shares. Our authorized share capital is 100,000,000 ordinary shares, par value NIS
0.01 per share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
ordinary shares do not have preemptive rights, preferred rights or any other right to purchase our securities. Neither our articles
of association nor the laws of the State of Israel restrict the ownership or voting of ordinary shares by non-residents of Israel,
except for subjects of countries which are enemies of Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>Transfer
of Shares</I>. Fully paid ordinary shares are issued in registered form and may be freely transferred pursuant to our articles
of association unless that transfer is restricted or prohibited by another instrument.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>Notices</I>.
Under the Israeli Companies Law and our articles of association, we are required to publish notices in two Hebrew-language daily
newspapers at least 14 calendar days&rsquo; prior notice of a shareholders&rsquo; meeting. However, under regulations promulgated
under the Israeli Companies Law, we are required to publish notice in two daily newspapers at least 35 calendar days prior any
shareholders&rsquo; meeting in which the agenda includes matters which may be voted on by voting instruments. Regulations under
the Israeli Companies Law exempt companies whose shares are listed for trading both on a stock exchange in and outside of Israel,
from some provisions of the Israeli Companies Law. An amendment to these regulations exempts us from the requirements of the Israeli
proxy regulation, under certain circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">According
to the Israeli Companies Law and the regulations promulgated thereunder, for purposes of determining the shareholders entitled
to notice and to vote at such meeting, the board of directors may fix the record date not more than 40 nor less than four calendar
days prior to the date of the meeting, provided that an announcement regarding the general meeting shall be given prior to the
record date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>Election
of Directors</I>. The number of directors on the board of directors shall be no less than five but no more than seven, not including
at least two external directors. The general meeting is entitled, at any time and from time to time, in a resolution approved
by a majority of 75% or more of the votes cast by those shareholders present and voting at the meeting in person, by proxy or
by a voting instrument, not taking into consideration abstaining votes, to change the minimum and/or maximum number of directors
as stated above. For more information, please see &ldquo;Item 6. Directors, Senior Management and Employees &ndash; C. Board Practices
&ndash; Appointment of Directors and Terms of Office.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>Dividend
and Liquidation Rights</I>. Our profits, in respect of which a resolution was passed to distribute them as dividend or bonus shares,
shall be paid pro rata to the amount paid or credited as paid on account of the nominal value of shares held by the shareholders.
In the event of our liquidation, the liquidator may, with the general meeting&rsquo;s approval, distribute parts of our property
in specie among the shareholders and he may, with similar approval, deposit any part of our property with trustees in favor of
the shareholders as the liquidator, with the approval mentioned above deems fit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>Voting,
Shareholders&rsquo; Meetings and Resolutions</I>.<I> </I>Holders of ordinary shares are entitled to one vote for each ordinary
share held on all matters submitted to a vote of shareholders. The quorum required for an ordinary meeting of shareholders consists
of at least two shareholders present, in person or by proxy, or who has sent us a voting instrument indicating the way in which
he is voting, who hold or represent, in the aggregate, at least 25% of the voting rights of our outstanding share capital. A meeting
adjourned for lack of a quorum is adjourned to the same day in the following week at the same time and place or any time and place
as prescribed by the board of directors in notice to the shareholders. At the reconvened meeting one shareholder at least, present
in person or by proxy constitutes a quorum except where such meeting was called at the demand of shareholders. With the agreement
of a meeting at which a quorum is present, the chairman may, and on the demand of the meeting he must, adjourn the meeting from
time to time and from place to place, as the meeting resolves. Annual general meetings of shareholders are held once every year
within a period of not more than 15 months after the last preceding annual general shareholders&rsquo; meeting. The board of directors
may call special general meetings of shareholders. The Israeli Companies Law provides that a special general meeting of shareholders
may be called by the board of directors or by a request of two directors or 25% of the directors in office, whichever is the lower,
or by shareholders holding at least 5% of our issued share capital and at least 1% of the voting rights, or of shareholders holding
at least 5% of our voting rights.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">An
ordinary resolution requires approval by the holders of a majority of the voting rights present, in person or by proxy, at the
meeting and voting on the resolution.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><I>Allotment
of Shares.</I> Our board of directors has the power to allot or to issue shares to any person, with restrictions and condition
as it deems fit.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Private
Placements </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">For
information on private placements, see &ldquo;Item 10. Additional Information - B. Memorandum and Articles - Private Placements.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>Acquisitions
under Israeli Law </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>Full
Tender Offer</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">A
person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the target company&rsquo;s
issued and outstanding share capital is required by the Israeli Companies Law to make a tender offer to all of the company&rsquo;s
shareholders for the purchase of all of the issued and outstanding shares of the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">A
person wishing to acquire shares of an Israeli public company and who would as a result hold over 90% of the issued and outstanding
share capital of a certain class of shares is required to make a tender offer to all of the shareholders who hold shares of the
same class for the purchase of all of the issued and outstanding shares of the same class.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
the shareholders who do not respond to or accept the offer hold less than 5% of the issued and outstanding share capital of the
company or of the applicable class of the shares, and more than half of the shareholders who do not have a personal interest in
the offer accept the offer, all of the shares that the acquirer offered to purchase will be transferred to the acquirer by operation
of law. However, a tender offer will be accepted if the shareholders who do not accept it hold less than 2% of the issued and
outstanding share capital of the company or of the applicable class of the shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Upon
a successful completion of such a full tender offer, any shareholder that was an offeree in such tender offer, whether such shareholder
accepted the tender offer or not, may, within six months from the date of acceptance of the tender offer, petition the Israeli
court to determine whether the tender offer was for less than fair value and that the fair value should be paid as determined
by the court. However, under certain conditions, the offeror may determine in the terms of the tender offer that an offeree who
accepted the offer will not be entitled to petition the Israeli court as described above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
the shareholders who did not respond or accept the tender offer hold at least 5% of the issued and outstanding share capital of
the company or of the applicable class, the acquirer may not acquire shares of the company that will increase its holdings to
more than 90% of the company&rsquo;s issued and outstanding share capital or of the applicable class from shareholders who accepted
the tender offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
description above regarding a full tender offer shall also apply, with necessary changes, when a full tender offer is accepted
and the offeror has also offered to acquire all of the company&rsquo;s securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>Special
tender offer</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law provides that an acquisition of shares of an Israeli public company must be made by means of a special tender
offer if as a result of the acquisition the purchaser would become a holder of at least 25% of the voting rights in the company.
This rule does not apply if there is already another holder of at least 25% of the voting rights in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Similarly,
the Israeli Companies Law provides that an acquisition of shares in a public company must be made by means of a special tender
offer if as a result of the acquisition the purchaser would become a holder of more than 45% of the voting rights in the company,
if there is no other shareholder of the company who holds more than 45% of the voting rights in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">These
requirements do not apply if the acquisition (i) occurs in the context of a private offering, on the condition that the shareholders
meeting approved the acquisition as a private offering whose purpose is to give the acquirer at least 25% of the voting rights
in the company if there is no person who holds at least 25% of the voting rights in the company, or as a private offering whose
purpose is to give the acquirer 45% of the voting rights in the company, if there is no person who holds 45% of the voting rights
in the company; (ii) was from a shareholder holding at least 25% of the voting rights in the company and resulted in the acquirer
becoming a holder of at least 25% of the voting rights in the company; or (iii) was from a holder of more than 45% of the voting
rights in the company and resulted in the acquirer becoming a holder of more than 45% of the voting rights in the company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
special tender offer may be consummated only if (i) at least 5% of the voting power attached to the company&rsquo;s outstanding
shares will be acquired by the offeror and (ii) the special tender offer is accepted by a majority of the votes of those offerees
who gave notice of their position in respect of the offer; in counting the votes of offerees, the votes of a holder in control
of the offeror, a person who has personal interest in acceptance of the special tender offer, a holder of at least 25% of the
voting rights in the company, or any person acting on their or on the offeror&rsquo;s behalf, including their relatives or companies
under their control, are not taken into account.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">In
the event that a special tender offer is made, a company&rsquo;s board of directors is required to express its opinion on the
advisability of the offer or shall abstain from expressing any opinion if it is unable to do so, provided that it gives the reasons
for its abstention.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">An
office holder in a target company who, in his or her capacity as an office holder, performs an action the purpose of which is
to cause the failure of an existing or foreseeable special tender offer or is to impair the chances of its acceptance, is liable
to the potential purchaser and shareholders for damages resulting from his acts, unless such office holder acted in good faith
and had reasonable grounds to believe he or she was acting for the benefit of the company. However, office holders of the target
company may negotiate with the potential purchaser in order to improve the terms of the special tender offer, and may further
negotiate with third parties in order to obtain a competing offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
a special tender offer was accepted by a majority of the shareholders who announced their stand on such offer, then shareholders
who did not respond to the special offer or had objected to the special tender offer may accept the offer within four days of
the last day set for the acceptance of the offer. In the event that a special tender offer is accepted, then the purchaser or
any person or entity controlling it and any corporation controlled by them shall refrain from making a subsequent tender offer
for the purchase of shares of the target company and may not execute a merger with the target company for a period of one year
from the date of the offer, unless the purchaser or such person or entity undertook to effect such an offer or merger in the initial
special tender offer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>Merger</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law permits merger transactions if approved by each party&rsquo;s board of directors and, unless certain requirements
described under the Israeli Companies Law are met, a majority of each party&rsquo;s shareholders, by a majority of each party&rsquo;s
shares that are voted on the proposed merger at a shareholders&rsquo; meeting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
board of directors of a merging company is required pursuant to the Israeli Companies Law to discuss and determine whether in
its opinion there exists a reasonable concern that, as a result of a proposed merger, the surviving company will not be able to
satisfy its obligations towards its creditors, taking into account the financial condition of the merging companies. If the board
of directors has determined that such a concern exists, it may not approve a proposed merger. Following the approval of the board
of directors of each of the merging companies, the boards of directors must jointly prepare a merger proposal for submission to
the Israeli Registrar of Companies.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">For
purposes of the shareholder vote, unless a court rules otherwise, the merger will not be deemed approved if a majority of the
shares voting at the shareholders meeting (excluding abstentions) that are held by parties other than the other party to the merger,
any person who holds 25% or more of the means of control (See &ldquo;Management &ndash; Audit Committee &ndash; Approval of Transactions
with Related Parties&rdquo; for a definition of means of control) of the other party to the merger or any one on their behalf
including their relatives (See &ldquo;Management &ndash; External Directors &ndash; Qualifications of External Directors&rdquo;
for a definition of relatives) or corporations controlled by any of them, vote against the merger.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">In
addition, if the non-surviving entity of the merger has more than one class of shares, the merger must be approved by each class
of shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
the transaction would have been approved but for the separate approval of each class of shares or the exclusion of the votes of
certain shareholders as provided above, a court may still rule that the company has approved the merger upon the request of holders
of at least 25% of the voting rights of a company, if the court holds that the merger is fair and reasonable, taking into account
the appraisal of the merging companies&rsquo; value and the consideration offered to the shareholders.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Israeli Companies Law, each merging company must send a copy of the proposed merger plan to its secured creditors. Unsecured
creditors are entitled to receive notice of the merger, as provided by the regulations promulgated under the Israeli Companies
Law. Upon the request of a creditor of either party to the proposed merger, the court may delay or prevent the merger if it concludes
that there exists a reasonable concern that, as a result of the merger, the surviving company will be unable to satisfy the obligations
of the target company. The court may also give instructions in order to secure the rights of creditors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">In
addition, a merger may not be completed unless at least 50 days have passed from the date that a proposal for approval of the
merger was filed with the Israeli Registrar of Companies and 30 days from the date that shareholder approval of both merging companies
was obtained.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>Anti-takeover
Measures</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
Israeli Companies Law allows us to create and issue shares having rights different from those attached to our ordinary shares,
including shares providing certain preferred or additional rights to voting, distributions or other matters and shares having
preemptive rights. We do not have any authorized or issued shares other than ordinary shares. In the future, if we do create and
issue a class of shares other than ordinary shares, such class of shares, depending on the specific rights that may be attached
to them, may delay or prevent a takeover or otherwise prevent our shareholders from realizing a potential premium over the market
value of their ordinary shares. The authorization of a new class of shares will require an amendment to our articles of association
which requires the prior approval of a majority of our shares represented and voting at a general meeting. Shareholders voting
at such a meeting will be subject to the restrictions under the Israeli Companies Law described in &ldquo;&mdash; Voting.&rdquo;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">C.&#9;Material
Contracts</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Loan Agreements
</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>August 2010
Mandatory Convertible Loan Agreements </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">From June 2010
to August 2010, we entered into loan agreements with a number of investors, pursuant to which we received gross proceeds of approximately
$3.5 million. The loans we received under these loan agreements accrued interest at an annual rate of 8%, which was payable upon
the conversion of the loans. We agreed to use the proceeds from this financing to finance the acquisition of additional products,
licensing transactions, clinical trials and current expenditures (general corporate activity).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Under the terms
of the loan agreements, we agreed to pay the investors 5% of the proceeds of (i) net sales by us or our sublicensees or distributors;
and (ii) down payments and milestone payments from sublicenses or distributor transactions paid to us in connection with the first
two new products purchased by us subsequent to the closing of this loan financing. Such royalties are payable (i) with regard
to net sales over a period of 5 years from the date of the first commercial sale of either of these products; and (ii) with regard
to down payments and milestone payments over a period of 5 years commencing from August 11, 2010. Following approvals from our
board of directors and shareholders, it was determined that the investors would be entitled to royalties with respect to RHB-103
for the treatment of acute migraine headaches and RHB-104 for the treatment of Crohn's disease.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On August 31,
2010, each of these loan agreements was replaced in their entirety by a new convertible loan agreement, pursuant to which the
loans accrued interest at an annual rate of 8% and were automatically convertible into ordinary shares and ordinary share warrants
upon the occurrence of specified events, including an initial public offering of our shares. However, the obligation to pay the
investors the royalty payments described above remained in full force and effect.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Immediately
prior to the completion of our initial public offering on the Tel Aviv Stock Exchange, all outstanding loans under the loan agreements,
together with accrued interest, were converted into (i) 6,281,858 ordinary shares at a conversion price of NIS 2.11 ($0.5721)
per share and (ii) warrants exercisable for an aggregate number of ordinary shares equal to approximately $1 million (representing
30% of the aggregate original loan amount) divided by the exercise price, as determined below. Investors became entitled to receive
their pro rata share of the shares and warrants based on their respective loan amounts. The exercise price for the warrants was
calculated as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">for
                                                                                                                             warrants
                                                                                                                             exercised
                                                                                                                             within
                                                                                                                             6
                                                                                                                             months
                                                                                                                             of
                                                                                                                             our
                                                                                                                             initial
                                                                                                                             public
                                                                                                                             offering
                                                                                                                             on
                                                                                                                             the
                                                                                                                             Tel
                                                                                                                             Aviv
                                                                                                                             Stock
                                                                                                                             Exchange,
                                                                                                                             the
                                                                                                                             exercise
                                                                                                                             price
                                                                                                                             per
                                                                                                                             share
                                                                                                                             would
                                                                                                                             have
                                                                                                                             been
                                                                                                                             130%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             conversion
                                                                                                                             price
                                                                                                                             per
                                                                                                                             share,
                                                                                                                             or
                                                                                                                             $0.74;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">for
                                                                                                                             warrants
                                                                                                                             exercised
                                                                                                                             between
                                                                                                                             6
                                                                                                                             and
                                                                                                                             12
                                                                                                                             months
                                                                                                                             following
                                                                                                                             our
                                                                                                                             initial
                                                                                                                             public
                                                                                                                             offering
                                                                                                                             on
                                                                                                                             the
                                                                                                                             Tel
                                                                                                                             Aviv
                                                                                                                             Stock
                                                                                                                             Exchange,
                                                                                                                             the
                                                                                                                             exercise
                                                                                                                             price
                                                                                                                             per
                                                                                                                             share
                                                                                                                             would
                                                                                                                             have
                                                                                                                             been
                                                                                                                             140%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             conversion
                                                                                                                             price
                                                                                                                             per
                                                                                                                             share,
                                                                                                                             or
                                                                                                                             $0.8;</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">for
                                                                                                                             warrants
                                                                                                                             exercised
                                                                                                                             between
                                                                                                                             12
                                                                                                                             months
                                                                                                                             following
                                                                                                                             our
                                                                                                                             initial
                                                                                                                             public
                                                                                                                             offering
                                                                                                                             on
                                                                                                                             the
                                                                                                                             Tel
                                                                                                                             Aviv
                                                                                                                             Stock
                                                                                                                             Exchange
                                                                                                                             through
                                                                                                                             their
                                                                                                                             expiration
                                                                                                                             date
                                                                                                                             which
                                                                                                                             is
                                                                                                                             August
                                                                                                                             11,
                                                                                                                             2013,
                                                                                                                             the
                                                                                                                             exercise
                                                                                                                             price
                                                                                                                             per
                                                                                                                             share
                                                                                                                             is
                                                                                                                             150%
                                                                                                                             of
                                                                                                                             the
                                                                                                                             conversion
                                                                                                                             price
                                                                                                                             per
                                                                                                                             share,
                                                                                                                             or
                                                                                                                             $0.86.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> In October and November 2012, our board
of directors approved a proposed acquisition and termination of the royalty rights granted to investors pursuant to the August
<B>2010</B> mandatory convertible loan agreement in consideration for total consideration of $1.483 million to be paid through
the issuance of 2, 317,186 ordinary shares, pursuant to which each investor will receive a number of shares on a pro-rata basis
in accordance with their respective royalty rights (the &quot;Royalty Acquisition&quot;). </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> For the purpose of calculating the
number of shares to be issued to the investors under the August 2010 mandatory convertible loan agreements, our audit committee
and our board of directors determined, based on the recommendations of a special committee of our board of directors, to use an
average closing share price over the 10 trading days ending on September 23, 2012, the day before the Royalties Acquisition was
first approved by our board of directors. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The special committee of our board
of directors estimated the value of the relevant royalty liability to the investors as of August 31, 2012 to be $1.483 million
based on the following projected royalty payments due to the investors (U.S. dollars in thousands) according to the special committee: </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD NOWRAP STYLE="text-align: justify; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2010 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2013 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2014 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2015 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2016 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2017 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2018 </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: left; border-bottom: Black 1pt solid"> 2019* </TD><TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; width: 10%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="text-align: left; width: 1%"> &nbsp; </TD><TD STYLE="text-align: right; width: 6%"> &nbsp; </TD><TD STYLE="text-align: left; width: 1%"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="color: black; text-align: justify"> RHB-103 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 18 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 123 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 146 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 166 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 187 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 208 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 104 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="color: black; text-align: justify"> RHB-104 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 126 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 113 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 180 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 315 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 405 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 450 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 225 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> * Assuming the period of 5 years from
the date of the first commercial sale of the first of the two products will end during the first half of 2019. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> These projected amounts are based on
the potential market of RHB-103 and RHB-104 and their stages of development and are subject to various assumptions and estimates
that may not occur at all, or only in part. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The Committee then determined the interest
rate to apply to discount such projected cash flows to a net present value. The net present value of $1.483 million was calculated
using a discount rate of 14.57%, which was lowered from the interest rate of approximately 28% applied as of June 30, 2012. The
discount rate of 14.57% was based on an independent expert analysis received by the special committee reflecting the reduced underlying
risk as of the date of the calculation. The previous discount rate of approximately 28%, which yielded a net present value of
$948,000, was determined at the time the obligation was created in August 2010 (prior to our listing on the Tel Aviv Stock Exchange)
and was based on the estimated net revenues at such time, taking into account at such time the market size, the estimated market
share of each product, and an estimate as to the likelihood of successful development and commercialization of the products. With
the passage of time and the continuation of the development process of the therapeutic candidate, our assumptions with respect
to risks evolve and are updated. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"> The Royalty Acquisition is subject
to the approval of a special majority of our shareholders, and the approval of the Tel Aviv Stock Exchange. A shareholder meeting
will be convened on December 26, 2012 to vote on this transaction. The required special majority of shareholders required to approve
the Royalty Acquisition is (i) a majority of votes at the shareholder meeting which includes a majority of the votes of shareholders
who do not have a personal interest in the transaction and who vote; or (ii) the total amount of votes against the transaction
by the shareholders who do not have a personal interest in the transaction does not exceed 2% of the total voting rights in the
Company. </P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>November
2010 Mandatory Convertible Loan Agreement </I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">On November
7, 2010, we completed a financing of approximately $7.6 million pursuant to a convertible loan agreement we signed with investors.
Under this convertible loan agreement, the loan accrued interest at an annual rate of 8% and was automatically convertible into
ordinary shares and ordinary share warrants upon the occurrence of specified events, including an initial public offering of our
shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Immediately
prior to the completion of our initial public offering on the Tel Aviv Stock Exchange, outstanding loans under this convertible
loan agreement, together with accrued interest, were converted into (i) 13,536,456 ordinary shares at a conversion price of NIS
2.11 ($0.5721) per share and (ii) warrants exercisable for an aggregate number of ordinary shares equal to approximately $2.3
million (representing 30% of the aggregate original loan amount) divided by the exercise price of the warrants, as calculated
in the same manner as the warrants described above. The warrant contain the same terms as the warrants described above other than
their expiration date which is November 9, 2013. Investors became entitled to receive their pro rata share of the shares and warrants
based on their respective loan amounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Underwriting
Agreement</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In connection
with our February 2011 initial public offering of shares on the Tel Aviv Stock Exchange, on January 30, 2011, we entered into
an underwriting agreement with Poalim I.B.I. Underwriting and Issuing Ltd. as the leading underwriter and Apex Underwriting and
Issue Management Ltd., Excellence Nessuah Underwriting (1993) Ltd., Meitav Issuing Finance Ltd. and Rosario Underwriting Services
(A.S.) Ltd.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Pursuant to
this agreement, the underwriters agreed to irrevocably acquire from us, each according to a rate set forth in the agreement, an
aggregate of 16,400 units (each unit comprised of 100 shares and 50 warrants) offered according to the prospectus with respect
to which we would provide notice if no requests had been submitted for the acquisition thereof, or if the full price had not been
paid to us with respect thereto, in connection with the public offering. Since requests were received for the purchase of all
the securities offered to the public under the prospectus, the underwriters were not required to acquire any securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In consideration
for the undertakings and services of the principal managers and underwriters pursuant to the Underwriting Agreement, including
issue coordination services, we paid, by means of the leading underwriter, a total of approximately $913,000 placement agent fee
and cost reimbursement of approximately $198,000. We also provided the underwriters with certain indemnification undertakings
in connection with the public offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">For a description
of other material agreements please see also &quot;Information on the Company &ndash; B. Business Overview &ndash; Acquisition
and License Agreements&quot; and &quot;Information on the Company &ndash; B. Business Overview &ndash; Manufacturing Agreements
Manufacturing Agreement Related to RHB-104.&rdquo;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">D.&#9;Exchange
Controls</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Israeli
law and regulations do not impose any material foreign exchange restrictions on non-Israeli holders of our ordinary shares. In
May&nbsp;1998, a new &ldquo;general permit&rdquo; was issued under the Israeli Currency Control Law, 1978, which removed most
of the restrictions that previously existed under the law and enabled Israeli citizens to freely invest outside of Israel and
freely convert Israeli currency into non-Israeli currencies. Dividends, if any, paid to holders of our ordinary shares, and any
amounts payable upon our dissolution, liquidation or winding up, as well as the proceeds of any sale in Israel of our ordinary
shares to an Israeli resident, may be paid in non-Israeli currency or, if paid in Israeli currency, may be converted into U.S.
dollars at the rate of exchange prevailing at the time of conversion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>E.</B>&#9;<B>Taxation</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black"><B>Israeli
Tax Considerations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black"><B><I>General</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary of the material
tax consequences under Israeli law concerning the purchase, ownership and disposition of our ordinary shares or American Depositary
Shares (the &ldquo;Shares&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">This
discussion does not purport to constitute a complete analysis of all potential tax consequences applicable to investors upon purchasing,
owning or disposing of our Shares. In particular, this discussion does not take into account the specific circumstances of any
particular investor (such as tax-exempt entities, financial institutions, certain financial companies, broker-dealers, investors
that own, directly or indirectly, 10% or more of our outstanding voting rights, or foreign companies, Israeli residents holding
25% or more of their shares or having the right to 25% or more of their income or profit, all of whom are subject to special tax
regimes not covered under this discussion). To the extent that issues discussed herein are based on legislation which has yet
to be subject to judicial or administrative interpretation, there can be no assurance that the views expressed herein will accord
with any such interpretation in the future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Potential investors
are urged to consult their own tax advisors as to the Israeli or other tax consequences of the purchase, ownership and disposition
of the Shares, including, in particular, the effect of any foreign, state or local taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>General
Corporate Tax Structure in Israel</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The Israeli
corporate tax rate applicable to Israeli resident companies in 2012 is 25% (24% in 2011). Prior to the enactment of the Law for
Changing the Tax Burden in Israel, which entered into effect as of January 1, 2012 (the &ldquo;Tax Change Law&rdquo;), the corporate
tax rates were scheduled to be reduced to 23% in 2012 and ultimately to 18% by 2016. This scheduled gradual reduction in corporate
tax rates was repealed. Instead, the Tax Change Law provides that the corporate tax rate will be increased to 25% in 2012.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;<B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Taxation
of Shareholders </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Capital
Gains </I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Capital gains
tax is imposed on the disposal of capital assets by an Israeli resident and on the disposal of such assets by a non-Israeli resident
if those assets are either (i) located in Israel; (ii) are shares or a right to a share in an Israeli resident corporation, or
(iii) represent, directly or indirectly, rights to assets located in Israel. The Israeli Income Tax Ordinance distinguishes between
&ldquo;Real Gain&rdquo; and the &ldquo;Inflationary Surplus.&rdquo; Real Gain is the excess of the total capital gain over Inflationary
Surplus computed generally on the basis of the increase in the Israeli Consumer Price Index between the date of purchase and the
date of disposal.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As of January
1, 2012, the real capital gain accrued by individuals on the sale of the Shares will be taxed at the rate of 25% (20% in 2011).
However, if the individual shareholder is a &ldquo;Controlling Shareholder&rdquo; (<I>i.e</I>., a person who holds, directly or
indirectly, alone or together with another, 10% or more of one of the Israeli resident company&rsquo;s means of control) at the
time of sale or at any time during the preceding 12 month period, such gain will be taxed at the rate of 30% (25% in 2011). In
addition, capital gains generated by an individual claiming deduction of financing expenses in respect of such gain will be taxed
at the rate of 30%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Individual
and corporate shareholders dealing in securities in Israel are taxed at the tax rates applicable to business income - 25% for
corporations in 2012 (up from 24% in 2011) and a marginal tax rate of up to 48% in 2012 for individuals (up from 45% in 2011).
Notwithstanding the foregoing, capital gains generated from the sale of our Shares by a non-Israeli shareholder may be exempt
from Israeli tax under the Israeli Income Tax Ordinance provided that the following cumulative conditions are met: (i) the Shares
were purchased upon or after the registration of the Shares on the stock exchange (not applicable in respect of Shares purchased
on or after January 1, 2009), (ii) the seller does not have a permanent establishment in Israel to which the generated capital
gain is attributed, and (iii) if the seller is a corporation, less than 25% of its means of control or the rights to its profit
or income are held by or attributed to Israeli resident shareholders. In addition, the sale of the Shares may be exempt from Israeli
capital gains tax under the provisions of an applicable double tax treaty. For example, the Convention between the Government
of the U.S. and the Government of the State of Israel with respect to Taxes on Income (the &ldquo;U.S.- Israel Double Tax Treaty&rdquo;)
exempts a U.S. resident from Israeli capital gain tax in connection with the sale of the Shares, provided that: (i) the U.S. resident
owned, directly or indirectly, less than 10% of the voting power of the company at any time within the 12 month period preceding
such sale; (ii) the U.S. resident, being an individual, is present in Israel for a period or periods of less than 183 days during
the taxable year; and (iii) the capital gain from the sale was not derived through a permanent establishment of the U.S. resident
in Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Either the
purchaser, the Israeli stockbroker or the financial institution through which the Shares are held are obligated, subject to the
above mentioned exemptions, to withhold tax upon the sale of Shares at a 25% tax rate for corporations and individuals (the withholding
tax rate applicable to individuals in this respect had been 20% in 2011).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Upon the sale
of traded securities, a detailed return, including a computation of the tax due, must be filed and an advanced payment must be
paid to the Israeli Tax Authority on January 31 and June 30 of every tax year in respect of sales of traded securities made within
the previous six months. However, if all tax due was withheld at source according to applicable provisions of the Israeli Income
Tax Ordinance and regulations promulgated thereunder, such return need not be filed and no advance payment must be paid. Capital
gains are also reportable on annual income tax returns.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>&nbsp;</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Dividends</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As of January
1, 2012, dividends distributed by a company to a shareholder who is an Israeli resident individual will be generally subject to
income tax at a rate of 25%. However, a 30% tax rate will apply if the dividend recipient is a Controlling Shareholder, at the
time of distribution or at any time during the preceding 12 month period. If the recipient of the dividend is an Israeli resident
corporation, such dividend will be generally exempt from Israeli income tax provided that the income from which such dividend
is distributed, derived or accrued within Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As of January
1, 2012, dividends distributed by an Israeli resident company to a non-Israeli resident (either individual or corporation) are
generally subject to tax on the receipt of such dividends at the rate of 25% (30% if the dividend recipient is a Controlling Shareholder
at the time of distribution or at any time during the preceding 12 month period). These rates may be reduced under the provisions
of an applicable double tax treaty. Thus, under the U.S.-Israel Double Tax Treaty, the following tax rates will apply in respect
of dividends distributed by an Israeli resident company to a U.S. resident: (i) if the U.S. resident is a corporation which holds
during that portion of the taxable year which precedes the date of payment of the dividend and during the whole of its prior taxable
year (if any), at least 10% of the outstanding shares of the voting stock of the Israeli resident paying corporation and not more
than 25% of the gross income of the Israeli resident paying corporation for such prior taxable year (if any) consists of certain
types of interest or dividends the tax rate is 12.5%; (ii) if both the conditions mentioned in section (i) above are met and the
dividend is paid from an Israeli resident company&rsquo;s income which was entitled to a reduced tax rate applicable to an Approved
Enterprise/Benefited Enterprise/Preferred Enterprise &ndash; the tax rate is 15%; and (iii) in all other cases, the tax rate is
25%. The aforementioned rates under the U.S.-Israel Double Tax Treaty will not apply if the dividend income is attributed to a
permanent establishment of the U.S. resident in Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We are obligated
to withhold tax upon the distribution of dividends at the following withholding tax rates: (A) for securities registered and held
by a clearing corporation: (i) Israeli resident corporations &ndash; 0%, (ii) Israeli resident individuals &ndash; 25%, and (iii)
non-Israeli residents - 25%, unless reduced under the provisions of an applicable double tax treaty; and (B) in all other cases:
(i) Israeli resident corporations &ndash; 0%, (ii) Israeli resident individuals &ndash; 25%/30% (the 30% tax rate shall apply
if the dividend recipient is a &ldquo;controlling shareholder&rdquo; (as defined above) at the time of the distribution or at
any time during the preceding 12 months period)), and (iii) non-Israeli residents - 25%/30% as referred to above with respect
to Israeli resident individuals, unless reduced under the provisions of an applicable double tax treaty.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Foreign
Exchange Regulations</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Non-residents
of Israel who hold our Shares are able to receive any dividends, and any amounts payable upon the dissolution, liquidation and
winding up of our affairs, repayable in non-Israeli currency at the rate of exchange prevailing at the time of conversion. However,
Israeli income tax is generally required to have been paid or withheld on these amounts. In addition, the statutory framework
for the potential imposition of currency exchange control has not been eliminated, and may be restored at any time by administrative
action.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>U.S Federal
Income Tax Considerations</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
following is a summary of the material U.S. federal income tax consequences that apply to U.S. Holders who hold our Shares as
capital assets for tax purposes. This summary is based on current provisions of the Internal Revenue Code of 1986, as amended
(the &ldquo;Code&rdquo;), current and proposed Treasury regulations promulgated thereunder, and administrative and judicial decisions
as of the date hereof, all of which are subject to change, possibly on a retroactive basis. This summary does not address all
U.S. federal income tax matters that may be relevant to a particular perspective holder or all tax considerations that may be
relevant with respect to an investment in our Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">This
summary does not address tax considerations applicable to a holder of our Shares that may be subject to special tax rules including,
without limitation, the following:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left">&bull;</TD><TD STYLE="text-align: justify">dealers
                                                                                      or traders in securities, currencies or
                                                                                      notional principal contracts;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">financial
                                                                                                                        institutions;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">insurance
                                                                                                                        companies;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">real
                                                                                                                        estate
                                                                                                                        investment
                                                                                                                        trusts;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">banks;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">investors
                                                                                                                        subject
                                                                                                                        to the
                                                                                                                        alternative
                                                                                                                        minimum
                                                                                                                        tax;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">tax-exempt
                                                                                                                        organizations;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">traders
                                                                                                                        that have
                                                                                                                        elected
                                                                                                                        mark-to-market
                                                                                                                        accounting;</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 14.2pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">investors
                                                                                                                        that hold
                                                                                                                        Shares
                                                                                                                        as part
                                                                                                                        of a &ldquo;straddle&rdquo;,
                                                                                                                        &ldquo;hedge&rdquo;,
                                                                                                                        or &ldquo;conversion
                                                                                                                        transaction&rdquo;
                                                                                                                        with other
                                                                                                                        investments;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">regulated
                                                                                                                        investment
                                                                                                                        companies;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">investors
                                                                                                                        that actually
                                                                                                                        or constructively
                                                                                                                        own 10
                                                                                                                        percent
                                                                                                                        or more
                                                                                                                        of our
                                                                                                                        voting
                                                                                                                        shares;</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">investors
                                                                                                                        that are
                                                                                                                        treated
                                                                                                                        as partnerships
                                                                                                                        or other
                                                                                                                        pass through
                                                                                                                        entities
                                                                                                                        for U.S.
                                                                                                                        federal
                                                                                                                        income
                                                                                                                        purposes
                                                                                                                        and persons
                                                                                                                        who hold
                                                                                                                        the Shares
                                                                                                                        through
                                                                                                                        partnerships
                                                                                                                        or other
                                                                                                                        pass through
                                                                                                                        entities;
                                                                                                                        and</FONT></TD>
</TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">U.S.
                                                                                                                        Holders,
                                                                                                                        as defined
                                                                                                                        below,
                                                                                                                        whose
                                                                                                                        functional
                                                                                                                        currency
                                                                                                                        is not
                                                                                                                        the U.S.
                                                                                                                        dollars.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">This
summary does not address the effect of any U.S. federal taxation other than U.S. federal income taxation. In addition, this summary
does not include any discussion of state, local, or foreign tax consequences to a holder of our Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>You
are urged to consult your own tax advisor regarding the foreign and U.S. federal, state, and local and other tax consequences
of an investment in the Shares.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 39.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">For
                                                                                                                              purposes
                                                                                                                              of
                                                                                                                              this
                                                                                                                              summary,
                                                                                                                              a
                                                                                                                              &ldquo;U.S.
                                                                                                                              Holder&rdquo;
                                                                                                                              means
                                                                                                                              a
                                                                                                                              beneficial
                                                                                                                              owner
                                                                                                                              of
                                                                                                                              a
                                                                                                                              Share
                                                                                                                              that
                                                                                                                              is
                                                                                                                              for
                                                                                                                              U.S.
                                                                                                                              federal
                                                                                                                              income
                                                                                                                              tax
                                                                                                                              purposes:</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                              individual
                                                                                                                              who
                                                                                                                              is
                                                                                                                              a
                                                                                                                              citizen
                                                                                                                              or
                                                                                                                              resident
                                                                                                                              of
                                                                                                                              the
                                                                                                                              U.S.;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              corporation
                                                                                                                              (or
                                                                                                                              other
                                                                                                                              entity
                                                                                                                              taxable
                                                                                                                              as
                                                                                                                              a
                                                                                                                              corporation
                                                                                                                              for
                                                                                                                              U.S.
                                                                                                                              federal
                                                                                                                              income
                                                                                                                              tax
                                                                                                                              purposes)
                                                                                                                              created
                                                                                                                              or
                                                                                                                              organized
                                                                                                                              in
                                                                                                                              the
                                                                                                                              U.S.
                                                                                                                              or
                                                                                                                              under
                                                                                                                              the
                                                                                                                              laws
                                                                                                                              of
                                                                                                                              the
                                                                                                                              U.S.
                                                                                                                              or
                                                                                                                              any
                                                                                                                              political
                                                                                                                              subdivision
                                                                                                                              thereof;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">an
                                                                                                                              estate,
                                                                                                                              the
                                                                                                                              income
                                                                                                                              of
                                                                                                                              which
                                                                                                                              is
                                                                                                                              subject
                                                                                                                              to
                                                                                                                              U.S.
                                                                                                                              federal
                                                                                                                              income
                                                                                                                              tax
                                                                                                                              regardless
                                                                                                                              of
                                                                                                                              its
                                                                                                                              source;
                                                                                                                              or</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 25.05pt"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                                              trust
                                                                                                                              (1)
                                                                                                                              if
                                                                                                                              (a)
                                                                                                                              a
                                                                                                                              court
                                                                                                                              within
                                                                                                                              the
                                                                                                                              U.S.
                                                                                                                              is
                                                                                                                              able
                                                                                                                              to
                                                                                                                              exercise
                                                                                                                              primary
                                                                                                                              supervision
                                                                                                                              over
                                                                                                                              the
                                                                                                                              administration
                                                                                                                              of
                                                                                                                              the
                                                                                                                              trust;
                                                                                                                              and
                                                                                                                              (b)
                                                                                                                              one
                                                                                                                              or
                                                                                                                              more
                                                                                                                              U.S.
                                                                                                                              persons
                                                                                                                              have
                                                                                                                              the
                                                                                                                              authority
                                                                                                                              to
                                                                                                                              control
                                                                                                                              all
                                                                                                                              substantial
                                                                                                                              decisions
                                                                                                                              of
                                                                                                                              the
                                                                                                                              trust;
                                                                                                                              or
                                                                                                                              (2)
                                                                                                                              that
                                                                                                                              has
                                                                                                                              a
                                                                                                                              valid
                                                                                                                              election
                                                                                                                              in
                                                                                                                              effect
                                                                                                                              under
                                                                                                                              applicable
                                                                                                                              U.S.
                                                                                                                              Treasury
                                                                                                                              regulations
                                                                                                                              to
                                                                                                                              be
                                                                                                                              treated
                                                                                                                              as
                                                                                                                              a
                                                                                                                              U.S.
                                                                                                                              person.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.25pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
an entity that is classified as a partnership for U.S. federal tax purposes holds Shares, the U.S. federal tax treatment of its
partners will generally depend upon the status of the partners and the activities of the partnership. Entities that are classified
as partnerships for U.S. federal tax purposes and persons holding Shares through such entities should consult their own tax advisors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">In
general, if you hold American Depositary Shares, you will be treated as the holder of the underlying shares represented by those
American Depositary Shares for U.S. federal income tax purposes. Accordingly, no gain or loss will be recognized if you exchange
American Depositary Shares for the underlying Shares represented by those American Depositary Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black">Distributions</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Subject
to the discussion under &ldquo;Passive Foreign Investment Companies&rdquo; below, the gross amount of any distribution, including
the amount of any Israeli taxes withheld from these distributions (see &ldquo;Israeli Tax Considerations&rdquo;), actually or
constructively received by a U.S. Holder with respect to Shares will be taxable to the U.S. Holder as foreign source dividend
income to the extent of our current and accumulated earnings and profits as determined under U.S. federal income tax principles.
The U.S. Holder will not be eligible for any dividends received deduction in respect of the dividends paid by domestic corporations.
Distributions in excess of earnings and profits will be non-taxable to the U.S. Holder to the extent of the U.S. Holder&rsquo;s
adjusted tax basis in its Shares. Distributions in excess of such adjusted tax basis will generally be taxable to the U.S. Holder
as capital gain from the sale or exchange of property as described below under &ldquo;Sale or Other Disposition of Shares.&rdquo;
If we do not report to a U.S. Holder the portion of a distribution that exceeds earnings and profits, the distribution will generally
be taxable as a dividend even if that distribution would otherwise be treated as a non-taxable return of capital or as capital
gain under the rules described above. The amount of any distribution of property other than cash will be the fair market value
of that property on the date of distribution.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Under
the Code, certain dividends received by non-corporate U.S. Holders before January 1, 2013 will be subject to a maximum income
tax rate of 15%. This reduced income tax rate is only applicable to dividends paid by a &ldquo;qualified foreign corporation&rdquo;
that is not a PFIC and only with respect to shares held by a qualified U.S. Holder (i.e., a non-corporate holder) for a minimum
holding period (generally 61 days during the 121-day period beginning 60 days before the ex-dividend date). We should be considered
a qualified foreign corporation if we are not treated as a PFIC because (i) we are eligible for the benefits of a comprehensive
tax treaty between Israel and the U.S., which includes an exchange of information program, and (ii) the American Depositary Shares
are readily tradable on an established securities market in the U.S. As discussed below, however, we may be classified as a &ldquo;passive
foreign investment company&rdquo; (see &ldquo;Passive Foreign Investment Companies&rdquo; below). Accordingly, dividends paid
by us to individual U.S. Holders may not be eligible for the reduced income tax rate applicable to qualified dividends.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
amount of any distribution paid in a currency other than U.S. dollars (a &ldquo;foreign currency&rdquo;) including the amount
of any withholding tax thereon, will be included in the gross income of a U.S. Holder in an amount equal to the U.S. dollar value
of the foreign currency calculated by reference to the exchange rate in effect on the date of the U.S. Holder&rsquo;s (or, in
the case of American Depositary Shares, the depositary&rsquo;s) receipt of the dividend, regardless of whether the foreign currency
is converted into U.S. dollars. If the foreign currency is converted into U.S. dollars on the date of receipt, a U.S. Holder generally
should not be required to recognize a foreign currency gain or loss in respect of the dividend. If the foreign currency received
in the distribution is not converted into U.S. dollars on the date of receipt, a U.S. Holder will have a basis in the foreign
currency equal to its U.S. dollar value on the date of receipt. Any gain or loss on a subsequent conversion or other disposition
of the foreign currency will be treated as U.S. source ordinary income or loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Subject
to certain conditions and limitations, any Israeli taxes withheld on dividends may be creditable against a U.S. Holder&rsquo;s
U.S. federal income tax liability, subject to generally applicable limitations. The rules relating to foreign tax credits and
the timing thereof are complex. U.S. Holders should consult their own tax advisors regarding the availability of a foreign tax
credit in their particular situation (including, in the case of a U.S. corporation that owns 10 percent or more of our voting
stock, the possible application of Section 902 of the Code).</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black">Sale
or Other Disposition of Shares</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
a U.S. Holder sells or otherwise disposes of its Shares, gain or loss will be recognized for U.S. federal income tax purposes
in an amount equal to the difference between the amount realized on the sale or other disposition and such holder&rsquo;s adjusted
basis in the Shares. Subject to the discussion below under the heading &ldquo;Passive Foreign Investment Companies,&rdquo; such
gain or loss generally will be a capital gain or loss and will be a long-term capital gain or loss if the holder had held the
Shares for more than one year at the time of the sale or other disposition. Long-term capital gains realized by non-corporate
U.S. Holders are generally subject to a preferential U.S. federal income tax rate. In general, gain or loss recognized by a U.S.
Holder on the sale or other disposition or our Shares will be U.S. source gain or loss for purposes of the foreign tax credit
limitation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">If
a U.S. Holder receives foreign currency upon a sale or exchange of Shares, gain or loss will be recognized in the manner described
above under &ldquo;Distributions.&rdquo; In addition, gain or loss, if any, recognized on the subsequent sale, conversion, or
disposition of such foreign currency will be U.S. source ordinary income or loss for foreign tax credit limitation purposes. However,
if such foreign currency is converted into U.S. dollars on the date received by the U.S. Holder, the U.S. Holder generally should
not be required to recognize any foreign currency gain or loss on such conversion.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">A
U.S. Holder who holds Shares through an Israeli broker or other Israeli intermediary may be subject to Israeli withholding tax
on any capital gains recognized on a sale or other disposition of the Shares if the U.S. Holder does not obtain approval of an
exemption from the Israeli Tax Authorities or claim any allowable refunds or reductions. U.S. Holders are advised that any Israeli
tax paid under circumstances in which an exemption from (or a refund of or a reduction in) such tax was available will not be
creditable for U.S. federal income tax purposes. U.S. Holders are advised to consult their Israeli broker or intermediary regarding
the procedures for obtaining an exemption or reduction.</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black">Medicare
Tax on Unearned Income</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; margin-left: 0.25in; text-indent: 0in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">For
taxable years beginning after December 31, 2012, certain U.S. Holders that are individuals, estates or trusts will be required
to pay an additional 3.8% tax on their investment income, including dividends paid on the Shares and capital gains from the sale
or other disposition of the Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black">Passive
Foreign Investment Companies</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">For
U.S. federal income tax purposes, we will be considered a passive foreign investment company (&ldquo;PFIC&rdquo;) for any taxable
year in which either 75% or more of our gross income is passive income, or at least 50% of the average value of all of our assets
for the taxable year produce or are held for the production of passive income. For this purpose, passive income includes dividends,
interest, royalties, rents, annuities, and the excess of gains over losses from the disposition of assets which produce passive
income. If we were determined to be a PFIC for U.S. federal income tax purposes, highly complex rules would apply to U.S. Holders
owning Shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Based
on our estimated gross income, the average value of our gross assets, and the nature of our business, we believe that we may be
classified as a PFIC in the current taxable year and in future years. Our status as a PFIC will depend on the composition of our
assets and activities in each year and because this is a factual determination there can be no assurance that we will not be considered
a PFIC for the current taxable year or for any future taxable year. If we are treated as a PFIC in any year during which a U.S.
Holder owns Shares, certain adverse tax consequences could apply, as described below. If we are treated as a PFIC for any taxable
year,</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt">&bull;</TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                     U.S. Holder would be required to allocate income recognized
                                                                     upon receiving certain dividends or gain recognized upon
                                                                     the disposition of Shares ratably over its holding period
                                                                     for such Shares,</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                       amount allocated to each
                                                                                                       year during which we are
                                                                                                       considered a PFIC other
                                                                                                       than the year of the dividend
                                                                                                       payment or disposition
                                                                                                       would be subject to tax
                                                                                                       at the highest individual
                                                                                                       or corporate tax rate,
                                                                                                       as the case may be, and
                                                                                                       an interest charge would
                                                                                                       be imposed with respect
                                                                                                       to the resulting tax liability
                                                                                                       allocated to each such
                                                                                                       year,</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                       amount allocated to the
                                                                                                       year of the dividend payment
                                                                                                       or disposition would be
                                                                                                       taxable as ordinary income,</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">a
                                                                                                       U.S. Holder would be required
                                                                                                       to make an annual return
                                                                                                       on IRS Form 8621 regarding
                                                                                                       distributions received
                                                                                                       and gains realized with
                                                                                                       respect to the Shares,
                                                                                                       and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 14.2pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="color: Black">&bull;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">the
                                                                                                       favorable dividend rate
                                                                                                       discussed above with respect
                                                                                                       to dividends paid to certain
                                                                                                       non-corporate U.S. Holders
                                                                                                       prior to January 1, 2013
                                                                                                       would not apply.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">As
described below, certain elections may be available that would result in alternative treatments (such as mark-to-market or qualified
electing fund treatment) to U.S. Holders of our Shares. A U.S. Holder that makes an election to treat us as a qualified electing
fund (an &ldquo;electing U.S. Holder&rdquo;) is required for each taxable year to include in income a pro rata share of the ordinary
earnings of the qualified electing fund as ordinary income and a pro rata share of the net capital gain of the qualified electing
fund as long-term capital gain, subject to a separate election to defer payment of taxes, which deferral is subject to an interest
charge. A U.S. Holder may make a qualified electing fund election only if we furnish the U.S. Holder with certain tax information.
We have agreed to supply an electing U.S. Holder with the information necessary to report income and gain pursuant to a qualified
election in the event we are classified as a PFIC. Alternatively, another method to avoid the aforementioned treatment is for
a U.S. Holder to make a timely mark-to-market election in respect of its Shares. If a U.S. Holder elects to mark-to-market its
Shares, the excess of the fair market value of the Shares at the close of each tax year over such U.S. Holder&rsquo;s adjusted
tax basis in such Shares will be included in income. If the fair market value of the Shares is less than the U.S. Holder&rsquo;s
adjusted tax basis in its Shares at the close of the tax year, the U.S. Holder may generally deduct the excess of the adjusted
tax basis of the Shares over their fair market value at such time. However, such deductions generally would be limited to the
net mark-to-market gains, if any, that were included in income by such holder with respect to our Shares in prior years. Income
recognized and deductions allowed under the mark-to-market provisions, as well as any gain or loss on the disposition of Shares
with respect to which the mark-to-market election is made, are treated as ordinary income or loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>You
are urged to consult your own tax advisor regarding the possibility of us being classified as a PFIC and the potential tax consequences
arising from the ownership and disposition of an interest in a PFIC.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: normal italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><FONT STYLE="color: Black">Backup
Withholding and Information Reporting</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Payments
of dividends with respect to Shares and the proceeds from the sale, retirement, or other disposition of Shares made by a U.S.
paying agent or other U.S. intermediary will be reported to the IRS and to the U.S. Holder as may be required under applicable
U.S. Treasury regulations. We, or an agent, a broker, or any paying agent, as the case may be, may be required to withhold tax
(backup withholding), currently at the rate of 28%, if a non-corporate U.S. Holder that is not otherwise exempt fails to provide
an accurate taxpayer identification number and comply with other IRS requirements concerning information reporting. Certain U.S.
Holders (including, among others, corporations and tax-exempt organizations) are not subject to backup withholding. Any amount
of backup withholding withheld may be used as a credit against your U.S. federal income tax liability provided that the required
information is furnished to the IRS. U.S. Holders should consult their tax advisors as to their qualification for exemption from
backup withholding and the procedure for obtaining an exemption.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">F.&#9;Dividends
and Paying Agents</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We have never
declared or paid cash dividends to our shareholders. Currently, we do not intend to pay cash dividends. We intend to reinvest
any earnings in developing and expanding our business. Any future determination relating to our dividend policy will be at the
discretion of our board of directors and will depend on a number of factors, including future earnings, our financial condition,
operating results, contractual restrictions, capital requirements, business prospects, applicable Israeli law and other factors
that our board of directors may deem relevant. Accordingly, we have not appointed any paying agent.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">G.&#9;Statement
by Experts</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">H.&#9;Documents
on Display</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">When this Registration
Statement on Form 20-F becomes effective, we will be subject to the information reporting requirements of the Securities Exchange
Act of 1934, as amended, applicable to foreign private issuers, and under those requirements we will file reports with the Securities
and Exchange Commission. Those other reports or other information may be inspected without charge at the Securities and Exchange
Commission&rsquo;s public reference room at 100 F Street, N.E., Room 1580, Washington, D.C. 20549. Copies of the material may
be obtained by mail from the Public Reference Branch of the Securities and Exchange Commission at such address, at prescribed
rates. Please call the Securities and Exchange Commission at 1-800-SEC-0330 for further information on the public reference room.
Our filings with the Securities and Exchange Commission are also available to the public through the Securities and Exchange Commission&rsquo;s
website at <I><U>http://www.sec.gov</U></I>.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">As a foreign
private issuer, we will be exempt from the rules under the Securities Exchange Act of 1934, as amended, related to the furnishing
and content of proxy statements, and our officers, directors and principal shareholders will be exempt from the reporting and
short-swing profit recovery provisions contained in Section 16 of the Securities Exchange Act of 1934, as amended. In addition,
we will not be required under the Securities Exchange Act of 1934, as amended, to file annual, quarterly and current reports and
financial statements with the Securities and Exchange Commission as frequently or as promptly as U.S. companies whose securities
are registered under the Securities Exchange Act of 1934, as amended. However, we will be required to comply with the informational
requirements of the Securities Exchange Act of 1934, as amended, and, accordingly, will file current reports on Form 6-K, annual
reports on Form 20-F and other information with the Securities and Exchange Commission.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">In addition,
since our ordinary shares are traded on the Tel Aviv Stock Exchange, we have filed Hebrew language periodic and immediate reports
with, and furnish information to, the Tel Aviv Stock Exchange and the Israeli Securities Authority, as required under Chapter
Six of the Israel Securities Law, 1968. Copies of our filings with the Israeli Securities Authority can be retrieved electronically
through the MAGNA distribution site of the Israeli Securities Authority (<I><U>www.magna.isa.gov.il</U></I>) and the Tel Aviv
Stock Exchange website (<I><U>www.maya.tase.co.il</U></I>).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We maintain
a corporate website at <I><U>www.redhillbio.com</U>. </I>Information contained on, or that can be accessed through, our website
does not constitute a part of this Registration Statement on Form 20-F.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: Black">I.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Subsidiary
                                                                                                 Information</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 6.75pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in"><FONT STYLE="text-transform: none; color: Black">ITEM
11.&#9;QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 6.75pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Market risk
is the risk of loss related to changes in market prices, including interest rates and foreign exchange rates, of financial instruments
that may adversely impact our financial position, results of operations or cash flows. Our overall risk management program focuses
on the unpredictability of financial markets and seeks to minimize potential adverse effects on our financial performance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Risk of
Interest Rate Fluctuation</I> <I>and Credit Exposure Risk</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We do not anticipate
undertaking any significant long-term borrowings. At present, our credit and interest risk arises from cash and cash equivalents,
deposits with banks as well as accounts receivable. A substantial portion of our liquid instruments is invested in short-term
deposits in highly-rated institutions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We estimate
that because the liquid instruments are invested mainly for the short-term and with highly-rated institutions, the credit and
interest risk associated with these balances is immaterial. The primary objective of our investment activities is to preserve
principal while maximizing the income we receive from our investments without significantly increasing risk and loss. Our investments
are exposed to market risk due to fluctuations in interest rates, which may affect our interest income and the fair market value
of our investments. We manage this exposure by performing ongoing evaluations of our investments.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Equity Price
Risk</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">We may be exposed
to equity securities price risk because of investments held by us and classified in our financial statements on as financial assets
at fair value through profit or loss. To manage the price risk arising from investments in equity securities, we invest in marketable
securities with high ratings and diversify our investment portfolio.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><I>Foreign
Currency Exchange Risk</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Our foreign
currency exposures give rise to market risk associated with exchange rate movements of the U.S. dollar, our functional and reporting
currency, mainly against the NIS and other currencies. Although the U.S. dollar is our functional currency and reporting currency,
a portion of our expenses are denominated in NIS. Our NIS expenses consist principally of payments to employees or service providers
and short term investments in currencies other than the U.S. dollar. We anticipate that a sizable portion of our expenses will
continue to be denominated in currencies other than the U.S. dollar. If the U.S. dollar fluctuates significantly against the NIS
it may have a negative impact on our results of operations. We manage our foreign exchange risk by aligning the currencies for
holding short term investments with the currencies of expected expenses, based on our expected cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">Portfolio diversification
is performed based on risk level limits that we set. To date, we have not engaged in hedging transactions. In the future, we may
enter into currency hedging transactions to decrease the risk of financial exposure from fluctuations in the exchange rates of
our principal operating currencies. These measures, however, may not adequately protect us from the material adverse effects of
such fluctuations.</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2.2pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="color: Black">(A)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">Set
                                                                                                   forth below is a sensitivity
                                                                                                   test to possible changes in
                                                                                                   U.S. dollars/ NIS exchange
                                                                                                   rate as of December 31, 2011:</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border: black 1pt solid; padding-left: 5.4pt; text-align: left; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Sensitive
    instrument</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Income
    (loss) from change in exchange rate (U.S. dollars in thousands)</FONT></TD>
    <TD ROWSPAN="2" STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"><B>Value</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"><B>(U.S.
        dollars in thousands)</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-top: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Income
    (loss) from change in exchange rate (U.S dollars in thousands)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-left: 5.4pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">&nbsp;</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Down
    2%</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Down
    5%</FONT></TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Up
    5%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold; border-top: Black 1pt solid"><FONT STYLE="color: Black">Up
    2%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-left: 5.4pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">Cash
    and cash equivalents&nbsp;</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(71)</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">&nbsp;14,070</FONT></TD>
    <TD STYLE="width: 19%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">177</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">71</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(177)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 12pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">Bank
    deposits</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(62)</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">&nbsp;3,086</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">154</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">62</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(154)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 12pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">Financial
    asset at fair value</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(31)</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">&nbsp;1,564</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">78</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">31</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(78)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 12pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">Accounts
    receivable</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(0)</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">89</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">1</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">0</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(1)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-bottom: 12pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">Accounts
    payable</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">3</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(513)</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(17)</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(3)</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">17</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-left: 5.4pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">Total
    loss</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(161)</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">&nbsp;</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">393</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-bottom: 12pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">161</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(393)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">Set forth below
is a sensitivity test to possible changes in U.S. dollars/ Euro as of December 31, 2011:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border: black 1pt solid; padding-left: 5.4pt; text-align: left; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Sensitive
    instrument</FONT></TD>
    <TD COLSPAN="2" STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Income
    (loss) from change in exchange rate (U.S. dollars in thousands)</FONT></TD>
    <TD ROWSPAN="2" STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"><B>Value</B></FONT></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"><B>(U.S.
        dollars in thousands)</B></FONT></P></TD>
    <TD COLSPAN="2" STYLE="border-top: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Income
    (loss) from change in exchange rate (U.S dollars in thousands)</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-left: 5.4pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">&nbsp;</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Down
    2%</FONT></TD>
    <TD STYLE="border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Down
    5%</FONT></TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold"><FONT STYLE="color: Black">Up
    5%</FONT></TD>
    <TD STYLE="border-right: Black 1pt solid; border-bottom: Black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed; font-weight: bold; border-top: Black 1pt solid"><FONT STYLE="color: Black">Up
    2%</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%; border-right: black 1pt solid; border-bottom: black 1pt solid; border-left: black 1pt solid; padding-left: 5.4pt; text-align: justify; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">Cash
    and cash equivalents&nbsp;</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(13)</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">(34)</FONT></TD>
    <TD STYLE="width: 19%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">14,070</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">34</FONT></TD>
    <TD STYLE="width: 13%; border-bottom: black 1pt solid; border-right: black 1pt solid; padding-left: 5.4pt; text-align: center; direction: rtl; unicode-bidi: embed"><FONT STYLE="color: Black">13</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">(B) As of the
date of this Registration Statement on Form 20-F, our interest rate risk exposure is in respect to bank deposits, which expose
us to risk due to change in fair value interest rates. As of December 31, 2011, these deposits carry annual interest of 0.25%-2.45%.
Under these low interest rates, reasonable changes in interest rates are expected have negligible impact on the fair value of
these assets.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 6.75pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 6.75pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in"><FONT STYLE="text-transform: none; color: Black">ITEM
12.&#9;DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 6.75pt 0pt 1in; text-transform: uppercase; text-align: left; text-indent: -1in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: Black"><B>A.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B>Debt
                                                                                                   Securities</B></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 58.5pt; text-align: justify; text-indent: -23.05pt"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 58.5pt; text-align: justify; text-indent: -23.05pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: Black"><B>B.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B>Warrants
                                                                                                   and Rights</B></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="color: Black"><B>C.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B>Other
                                                                                                   Securities</B></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;<B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="color: Black"><B>D.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B>American
                                                                                                                              Depositary
                                                                                                                              Shares</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Bank of New York Mellon, as depositary,
will register and deliver American Depositary Shares. Each American Depositary Share will represent ten of our ordinary shares
(or a right to receive ten of our ordinary shares) deposited with the principal Tel Aviv office of either of Bank Leumi Le-Israel
or Bank Hapoalim B.M., as custodian for the depositary. Each American Depositary Share will also represent any other securities,
cash or other property which may be held by the depositary. The depositary&rsquo;s corporate trust office at which the American
Depositary Shares will be administered is located at 101 Barclay Street, New York, New York 10286. The Bank of New York Mellon&rsquo;s
principal executive office is located at One Wall Street, New York, New York 10286.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You may hold American Depositary Shares
either (A) directly (i) by having an American Depositary Receipt, which is a certificate evidencing a specific number of American
Depositary Shares, registered in your name, or (ii) by having American Depositary Shares registered in your name in the Direct
Registration System, or (B) indirectly by holding a security entitlement in American Depositary Shares through your broker or
other financial institution. If you hold American Depositary Shares directly, you are a registered American Depositary Share holder.
This description assumes you are an American Depositary Share holder. If you hold the American Depositary Shares indirectly, you
must rely on the procedures of your broker or other financial institution to assert the rights of American Depositary Share holders
described in this section. You should consult with your broker or financial institution to find out what those procedures are.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">The Direct Registration System, or DRS, is a system administered by The <FONT STYLE="font: 10pt Times New Roman, Times, Serif">Depository
Trust Company, also referred to as DTC, pursuant to which the depositary may register the ownership of uncertificated American
Depositary Shares, which ownership is confirmed by periodic statements sent by the depositary to the registered holders of uncertificated
American Depositary Shares.</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As an American Depositary Share holder,
we will not treat you as one of our shareholders and you will not have shareholder rights. Israeli law governs shareholder rights.
The depositary will be the holder of the ordinary shares underlying your American Depositary Shares. As a registered holder of
American Depositary Shares, you will have American Depositary Share holder rights. A deposit agreement among us, the depositary
and you, as an American Depositary Share holder, and all other persons indirectly holding American Depositary Shares sets out
American Depositary Share holder rights as well as the rights and obligations of the depositary. New York law governs the deposit
agreement and the American Depositary Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with this Registration
Statement on Form 20-F, a Registration Statement on Form F-6 has been filed with the Securities and Exchange Commission to register
our American Depositary Shares under the Securities Act of 1933, as amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The following is a summary of the material
provisions of the deposit agreement. For more complete information, you should read the entire deposit agreement and the form
of American Depositary Receipt, each of which has been filed as an exhibit to our Registration Statement on Form F-6 filed with
the Securities and Exchange Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Dividends and Other Distributions</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>How will you receive dividends and
other distributions on the shares? </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The depositary
has agreed to pay to American Depositary Share holders the cash dividends or other distributions it or the custodian receives
on shares or other deposited securities, after deducting its fees and expenses. You will receive these distributions in proportion
to the number of shares your American Depositary Shares represent.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B><I>Cash</I></B>.
                                                                                                                              The
                                                                                                                              depositary
                                                                                                                              will
                                                                                                                              convert
                                                                                                                              any
                                                                                                                              cash
                                                                                                                              dividend
                                                                                                                              or
                                                                                                                              other
                                                                                                                              cash
                                                                                                                              distribution
                                                                                                                              we
                                                                                                                              pay
                                                                                                                              on
                                                                                                                              the
                                                                                                                              shares
                                                                                                                              into
                                                                                                                              U.S.
                                                                                                                              dollars,
                                                                                                                              if
                                                                                                                              it
                                                                                                                              can
                                                                                                                              do
                                                                                                                              so
                                                                                                                              on
                                                                                                                              a
                                                                                                                              reasonable
                                                                                                                              basis
                                                                                                                              and
                                                                                                                              can
                                                                                                                              transfer
                                                                                                                              the
                                                                                                                              U.S.
                                                                                                                              dollars
                                                                                                                              to
                                                                                                                              the
                                                                                                                              U.S.
                                                                                                                              If
                                                                                                                              that
                                                                                                                              is
                                                                                                                              not
                                                                                                                              possible
                                                                                                                              or
                                                                                                                              if
                                                                                                                              any
                                                                                                                              government
                                                                                                                              approval
                                                                                                                              is
                                                                                                                              needed
                                                                                                                              and
                                                                                                                              cannot
                                                                                                                              be
                                                                                                                              obtained,
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement
                                                                                                                              allows
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              to
                                                                                                                              distribute
                                                                                                                              the
                                                                                                                              foreign
                                                                                                                              currency
                                                                                                                              only
                                                                                                                              to
                                                                                                                              those
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Share
                                                                                                                              holders
                                                                                                                              to
                                                                                                                              whom
                                                                                                                              it
                                                                                                                              is
                                                                                                                              possible
                                                                                                                              to
                                                                                                                              do
                                                                                                                              so.
                                                                                                                              It
                                                                                                                              will
                                                                                                                              hold
                                                                                                                              the
                                                                                                                              foreign
                                                                                                                              currency
                                                                                                                              it
                                                                                                                              cannot
                                                                                                                              convert
                                                                                                                              for
                                                                                                                              the
                                                                                                                              account
                                                                                                                              of
                                                                                                                              the
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Share
                                                                                                                              holders
                                                                                                                              who
                                                                                                                              have
                                                                                                                              not
                                                                                                                              been
                                                                                                                              paid.
                                                                                                                              It
                                                                                                                              will
                                                                                                                              not
                                                                                                                              invest
                                                                                                                              the
                                                                                                                              foreign
                                                                                                                              currency
                                                                                                                              and
                                                                                                                              it
                                                                                                                              will
                                                                                                                              not
                                                                                                                              be
                                                                                                                              liable
                                                                                                                              for
                                                                                                                              any
                                                                                                                              interest.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">Before
making a distribution, any withholding taxes, or other governmental charges that must be paid will be deducted. See &ldquo;Item
10. Additional Information &ndash; E. Taxation &ndash; U.S. Federal Income Tax Considerations &ndash; Distributions.&rdquo; It
will distribute only whole U.S. dollars and cents and will round fractional cents to the nearest whole cent. <I>If the exchange
rates fluctuate during a time when the depositary cannot convert the foreign currency, you may lose some or all of the value of
the distribution.</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.75in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B><I>Shares</I></B><I>.
                                                                                                                              </I>The
                                                                                                                              depositary
                                                                                                                              may,
                                                                                                                              and
                                                                                                                              will
                                                                                                                              if
                                                                                                                              we
                                                                                                                              so
                                                                                                                              request,
                                                                                                                              distribute
                                                                                                                              additional
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares
                                                                                                                              representing
                                                                                                                              any
                                                                                                                              shares
                                                                                                                              we
                                                                                                                              distribute
                                                                                                                              as
                                                                                                                              a
                                                                                                                              dividend
                                                                                                                              or
                                                                                                                              free
                                                                                                                              distribution.
                                                                                                                              The
                                                                                                                              depositary
                                                                                                                              will
                                                                                                                              only
                                                                                                                              distribute
                                                                                                                              whole
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares.
                                                                                                                              It
                                                                                                                              will
                                                                                                                              sell
                                                                                                                              shares
                                                                                                                              which
                                                                                                                              would
                                                                                                                              require
                                                                                                                              it
                                                                                                                              to
                                                                                                                              deliver
                                                                                                                              a
                                                                                                                              fractional
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Share
                                                                                                                              and
                                                                                                                              distribute
                                                                                                                              the
                                                                                                                              net
                                                                                                                              proceeds
                                                                                                                              in
                                                                                                                              the
                                                                                                                              same
                                                                                                                              way
                                                                                                                              as
                                                                                                                              it
                                                                                                                              does
                                                                                                                              with
                                                                                                                              cash.
                                                                                                                              If
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              does
                                                                                                                              not
                                                                                                                              distribute
                                                                                                                              additional
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares,
                                                                                                                              the
                                                                                                                              outstanding
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares
                                                                                                                              will
                                                                                                                              also
                                                                                                                              represent
                                                                                                                              the
                                                                                                                              new
                                                                                                                              shares.
                                                                                                                              The
                                                                                                                              depositary
                                                                                                                              may
                                                                                                                              sell
                                                                                                                              a
                                                                                                                              portion
                                                                                                                              of
                                                                                                                              the
                                                                                                                              distributed
                                                                                                                              shares
                                                                                                                              sufficient
                                                                                                                              to
                                                                                                                              pay
                                                                                                                              its
                                                                                                                              fees
                                                                                                                              and
                                                                                                                              expenses
                                                                                                                              in
                                                                                                                              connection
                                                                                                                              with
                                                                                                                              that
                                                                                                                              distribution.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B><I>Rights
                                                                                                                              to
                                                                                                                              purchase
                                                                                                                              additional
                                                                                                                              shares</I></B><I>.
                                                                                                                              </I>If
                                                                                                                              we
                                                                                                                              offer
                                                                                                                              holders
                                                                                                                              of
                                                                                                                              our
                                                                                                                              securities
                                                                                                                              any
                                                                                                                              rights
                                                                                                                              to
                                                                                                                              subscribe
                                                                                                                              for
                                                                                                                              additional
                                                                                                                              shares
                                                                                                                              or
                                                                                                                              any
                                                                                                                              other
                                                                                                                              rights,
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              may
                                                                                                                              make
                                                                                                                              these
                                                                                                                              rights
                                                                                                                              available
                                                                                                                              to
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Share
                                                                                                                              holders.
                                                                                                                              If
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              decides
                                                                                                                              it
                                                                                                                              is
                                                                                                                              not
                                                                                                                              legal
                                                                                                                              and
                                                                                                                              practical
                                                                                                                              to
                                                                                                                              make
                                                                                                                              the
                                                                                                                              rights
                                                                                                                              available
                                                                                                                              but
                                                                                                                              that
                                                                                                                              it
                                                                                                                              is
                                                                                                                              practical
                                                                                                                              to
                                                                                                                              sell
                                                                                                                              the
                                                                                                                              rights,
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              will
                                                                                                                              use
                                                                                                                              reasonable
                                                                                                                              efforts
                                                                                                                              to
                                                                                                                              sell
                                                                                                                              the
                                                                                                                              rights
                                                                                                                              and
                                                                                                                              distribute
                                                                                                                              the
                                                                                                                              proceeds
                                                                                                                              in
                                                                                                                              the
                                                                                                                              same
                                                                                                                              way
                                                                                                                              as
                                                                                                                              it
                                                                                                                              does
                                                                                                                              with
                                                                                                                              cash.
                                                                                                                              The
                                                                                                                              depositary
                                                                                                                              will
                                                                                                                              allow
                                                                                                                              rights
                                                                                                                              that
                                                                                                                              are
                                                                                                                              not
                                                                                                                              distributed
                                                                                                                              or
                                                                                                                              sold
                                                                                                                              to
                                                                                                                              lapse.
                                                                                                                              <I>In
                                                                                                                              that
                                                                                                                              case,
                                                                                                                              you
                                                                                                                              will
                                                                                                                              receive
                                                                                                                              no
                                                                                                                              value
                                                                                                                              for
                                                                                                                              them.</I></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">If
the depositary makes rights available to American Depositary Share holders, it will exercise the rights and purchase the shares
on your behalf. The depositary will then deposit the shares and deliver American Depositary Shares to the persons entitled to
them. It will only exercise rights if you pay it the exercise price and any other charges the rights require you to pay.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">U.S.
securities laws may restrict transfers and cancellation of the American Depositary Shares represented by shares purchased upon
exercise of rights. For example, you may not be able to trade these American Depositary Shares freely in the U.S. In this case,
the depositary may deliver restricted depositary shares that have the same terms as the American Depositary Shares described in
this section except for changes needed to put the necessary restrictions in place.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B><I>Other
                                                                                                                              Distributions</I></B><I>.
                                                                                                                              </I>The
                                                                                                                              depositary
                                                                                                                              will
                                                                                                                              send
                                                                                                                              to
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Share
                                                                                                                              holders
                                                                                                                              anything
                                                                                                                              else
                                                                                                                              we
                                                                                                                              distribute
                                                                                                                              on
                                                                                                                              deposited
                                                                                                                              securities
                                                                                                                              by
                                                                                                                              any
                                                                                                                              means
                                                                                                                              it
                                                                                                                              thinks
                                                                                                                              is
                                                                                                                              legal,
                                                                                                                              fair
                                                                                                                              and
                                                                                                                              practical.
                                                                                                                              If
                                                                                                                              it
                                                                                                                              cannot
                                                                                                                              make
                                                                                                                              the
                                                                                                                              distribution
                                                                                                                              in
                                                                                                                              that
                                                                                                                              way,
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              has
                                                                                                                              a
                                                                                                                              choice.
                                                                                                                              After
                                                                                                                              consultation
                                                                                                                              with
                                                                                                                              us
                                                                                                                              to
                                                                                                                              the
                                                                                                                              extent
                                                                                                                              practicable,
                                                                                                                              it
                                                                                                                              may
                                                                                                                              decide
                                                                                                                              to
                                                                                                                              sell
                                                                                                                              what
                                                                                                                              we
                                                                                                                              distributed
                                                                                                                              and
                                                                                                                              distribute
                                                                                                                              the
                                                                                                                              net
                                                                                                                              proceeds,
                                                                                                                              in
                                                                                                                              the
                                                                                                                              same
                                                                                                                              way
                                                                                                                              as
                                                                                                                              it
                                                                                                                              does
                                                                                                                              with
                                                                                                                              cash.
                                                                                                                              Or,
                                                                                                                              it
                                                                                                                              may
                                                                                                                              decide
                                                                                                                              to
                                                                                                                              hold
                                                                                                                              what
                                                                                                                              we
                                                                                                                              distributed,
                                                                                                                              in
                                                                                                                              which
                                                                                                                              case
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares
                                                                                                                              will
                                                                                                                              also
                                                                                                                              represent
                                                                                                                              the
                                                                                                                              newly
                                                                                                                              distributed
                                                                                                                              property.
                                                                                                                              However,
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              is
                                                                                                                              not
                                                                                                                              required
                                                                                                                              to
                                                                                                                              distribute
                                                                                                                              any
                                                                                                                              securities
                                                                                                                              (other
                                                                                                                              than
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares)
                                                                                                                              to
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Share
                                                                                                                              holders
                                                                                                                              unless
                                                                                                                              it
                                                                                                                              receives
                                                                                                                              satisfactory
                                                                                                                              evidence
                                                                                                                              from
                                                                                                                              us
                                                                                                                              that
                                                                                                                              it
                                                                                                                              is
                                                                                                                              legal
                                                                                                                              to
                                                                                                                              make
                                                                                                                              that
                                                                                                                              distribution.
                                                                                                                              The
                                                                                                                              depositary
                                                                                                                              may
                                                                                                                              sell
                                                                                                                              a
                                                                                                                              portion
                                                                                                                              of
                                                                                                                              the
                                                                                                                              distributed
                                                                                                                              securities
                                                                                                                              or
                                                                                                                              property
                                                                                                                              sufficient
                                                                                                                              to
                                                                                                                              pay
                                                                                                                              its
                                                                                                                              fees
                                                                                                                              and
                                                                                                                              expenses
                                                                                                                              in
                                                                                                                              connection
                                                                                                                              with
                                                                                                                              that
                                                                                                                              distribution.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0.55pt">The
depositary is not responsible if it decides that it is unlawful or impractical to make a distribution available to any American
Depositary Share holders. We have no obligation to register American Depositary Shares, shares, rights or other securities under
the Securities Act. We also have no obligation to&nbsp;take any other action to permit the distribution of American Depositary
Shares, shares, rights or anything else to American Depositary Share holders. <I>This means that you may not receive the distributions
we make on our shares or any value for them if it is illegal or impractical for us to make them available to you</I>.</P>



<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Deposit, Withdrawal and Cancellation</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>How are American Depositary Shares
issued?</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The depositary will deliver American
Depositary Shares if you or your broker deposits shares or evidence of rights to receive shares with the custodian. Upon payment
of its fees and expenses and of any taxes or charges, such as stamp taxes or stock transfer taxes or fees, the depositary will
register the appropriate number of American Depositary Shares in the names you request and will deliver the American Depositary
Shares to or upon the order of the person or persons that made the deposit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>How can American Depositary Share
holders withdraw the deposited securities?</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You may surrender your American Depositary
Shares at the depositary&rsquo;s corporate trust office. Upon payment of its fees and expenses and of any taxes or charges, such
as stamp taxes or stock transfer taxes or fees, the depositary will deliver the shares&nbsp;and any other deposited securities
underlying the American Depositary Shares to the American Depositary Share holder or a person the American Depositary Share holder
designates at the office of the custodian. Or, at your request, risk and expense, the depositary will deliver the deposited securities
at its corporate trust office, if feasible.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>How do American Depositary Share
holders interchange between certificated American Depositary Shares and uncertificated American Depositary Shares? </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">You may surrender your American Depositary
Receipt to the depositary for the purpose of exchanging your American Depositary Receipt for uncertificated American Depositary
Shares. The depositary will cancel that American Depositary Receipt and will send to the American Depositary Share holder a statement
confirming that the American Depositary Share holder is the registered holder of uncertificated American Depositary Shares. Alternatively,
upon receipt by the depositary of a proper instruction from a registered holder of uncertificated American Depositary Shares requesting
the exchange of uncertificated American Depositary Shares for certificated American Depositary Shares, the depositary will execute
and deliver to the American Depositary Share holder an American Depositary Receipt evidencing those American Depositary Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Voting Rights</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>How do you vote?</I></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">American Depositary Share holders may
instruct the depositary to vote the number of deposited shares their American Depositary Shares represent. The depositary will
notify American Depositary Share holders of shareholders&rsquo; meetings and arrange to deliver our voting materials to them if
we ask it to. Those materials will describe the matters to be voted on and explain how American Depositary Share holders may instruct
the depositary how to vote. For instructions to be valid, they must reach the depositary by a date set by the depositary. <I>Otherwise,
you won&rsquo;t be able to exercise your right to vote unless you withdraw the shares. However, you may not know about the meeting
enough in advance to withdraw the shares.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The depositary will try, as far as
practical, subject to the laws of Israel and of our articles of association or similar documents, to vote or to have its agents
vote the shares or other deposited securities as instructed by American Depositary Share holders. The depositary will only vote
or attempt to vote as instructed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="margin: 0pt 0">If the depositary solicited your voting instructions but does not receive instructions by the date
specified, the depositary will consider you to have instructed it to give a proxy to a person designated by us to vote the deposited
shares, unless we notify the depositary that:</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: Black">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="color: Black">we
                                                                                                       do not wish to receive
                                                                                                       a proxy;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: Black">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="color: Black">substantial
                                                                                                       opposition exists; or</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.25in"><FONT STYLE="color: Black">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="color: Black">the
                                                                                                       matter would materially
                                                                                                       and adversely affect the
                                                                                                       rights of holders of our
                                                                                                       ordinary shares.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We cannot assure you that you will
receive the voting materials in time to ensure that you can instruct the depositary to vote your shares. In addition, the depositary
and its agents are not responsible for failing to carry out voting instructions or for the manner of carrying out voting instructions.
<I>This means that you may not be able to exercise your right to vote and there may be nothing you can do if your shares are not
voted as you requested.</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In order to give you a reasonable opportunity
to instruct the depositary as to the exercise of voting rights relating to deposited securities, if we request the depositary
to act, we agree to give the depositary notice of any such meeting and details concerning the matters to be voted upon at least
30 days in advance of the meeting date.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Fees
and Expenses</I></B></FONT></P>

<DIV STYLE="border: Black 1pt solid; width: 99%"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 99%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; padding: 0; text-align: justify; text-indent: 0in; font-weight: bold"><B><I>Persons depositing or withdrawing
    shares or American Depositary Share holders must pay</I>:</B></TD>
    <TD STYLE="width: 5%; padding: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 45%; padding: 0; text-align: left; text-indent: 0in; font-weight: bold"><B><I>For</I>:</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0in">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; text-indent: 0in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: baseline">
    <TD STYLE="padding: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">$5.00 (or less) per 100 American Depositary Shares (or portion of 100 American Depositary Shares)</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center; vertical-align: top">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">Issuance of American Depositary Shares, including issuances resulting from
    a distribution of shares or rights or other property</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-family: Symbol">&nbsp;</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">Cancellation of American Depositary Shares for the purpose of withdrawal, including
    if the deposit agreement terminates</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">$.05 (or less) per American Depositary Share</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">Any cash distribution to American Depositary Share holders</TD></TR>
<TR STYLE="vertical-align: baseline">
    <TD STYLE="padding: 0; text-align: left; direction: rtl; unicode-bidi: embed">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center; direction: rtl; unicode-bidi: embed">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left; direction: rtl; unicode-bidi: embed">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">A fee equivalent to the fee that would be payable if securities distributed to
    you had been shares and the shares had been deposited for issuance of American Depositary Shares</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">Distribution of securities distributed to holders of deposited securities which
    are distributed by the depositary to American Depositary Share holders</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">$.05 (or less) per American Depositary Shares per calendar year</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">Depositary services</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">Registration or transfer fees</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">Transfer and registration of shares on our share register to or from the name
    of the depositary or its agent when you deposit or withdraw shares</TD></TR>
<TR STYLE="vertical-align: baseline">
    <TD STYLE="padding: 0; text-align: left; direction: rtl; unicode-bidi: embed">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center; direction: rtl; unicode-bidi: embed">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left; direction: rtl; unicode-bidi: embed">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">Expenses of the depositary</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">Cable, telex and facsimile transmissions (when expressly provided in the deposit
    agreement)</TD></TR>
<TR STYLE="vertical-align: baseline">
    <TD STYLE="padding: 0; text-align: justify; direction: rtl; unicode-bidi: embed">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center; direction: rtl; unicode-bidi: embed">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: justify; direction: rtl; unicode-bidi: embed">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; font-family: Symbol">&nbsp;</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">converting foreign currency to U.S. dollars</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">Taxes and other governmental charges the depositary or the custodian have to pay
    on any American Depositary Share or share underlying an American Depositary Share, for example, stock transfer taxes, stamp
    duty or withholding taxes</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">As necessary</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&nbsp;</TD>
    <TD STYLE="padding: 0; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-align: justify">Any charges incurred by the depositary or its agents for servicing the deposited
    securities</TD>
    <TD STYLE="padding: 0; font-family: Symbol; text-align: center">&middot;</TD>
    <TD STYLE="padding: 0; text-align: justify">As necessary</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

</DIV>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">The depositary
collects its fees for delivery and surrender of American Depositary Shares directly from investors depositing shares or surrendering
American Depositary Shares for the purpose of withdrawal or from intermediaries acting for them. The depositary collects fees
for making distributions to investors by deducting those fees from the amounts distributed or by selling a portion of distributable
property to pay the fees. The depositary may collect its annual fee for depositary services by deduction from cash distributions
or by directly billing investors or by charging the book-entry system accounts of participants acting for them. The depositary
may generally refuse to provide fee-attracting services until its fees for those services are paid.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">From time
to time, the depositary may make payments to us to reimburse and/or share revenue from the fees collected from American Depositary
Share holders, or waive fees and expenses for services provided, generally relating to costs and expenses arising out of establishment
and maintenance of the American Depositary Share program. In performing its duties under the deposit agreement, the depositary
may use brokers, dealers or other service providers that are affiliates of the depositary and that may earn or share fees or commissions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Payment
of Taxes</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">You will
be responsible for any taxes or other governmental charges payable on your American Depositary Shares or on the deposited securities
represented by any of your American Depositary Shares. The depositary may refuse to register any transfer of your American Depositary
Shares or allow you to withdraw the deposited securities represented by your American Depositary Shares until such taxes or other
charges are paid. It may apply payments owed to you or sell deposited securities represented by your American Depositary Shares
to pay any taxes owed and you will remain liable for any deficiency. If the depositary sells deposited securities, it will, if
appropriate, reduce the number of American Depositary Shares to reflect the sale and pay to American Depositary Share holders
any proceeds, or send to American Depositary Share holders any property, remaining after it has paid the taxes.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Reclassifications,
Recapitalizations and Mergers</I></B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="border: black 1pt solid; font-style: italic; font-weight: bold">If we:</TD>
    <TD STYLE="border-top: black 1pt solid; border-right: black 1pt solid; border-bottom: black 1pt solid; font-style: italic; font-weight: bold; text-align: justify">Then:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%; border-left: black 1pt solid; font-family: Symbol">&middot;</TD>
    <TD STYLE="width: 45%; border-right: black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in; text-align: justify">Change the nominal
        or par value of our shares</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.5in 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P></TD>
    <TD STYLE="width: 50%; border-right: black 1pt solid; text-align: justify">The cash, shares or other securities received
    by the depositary will become deposited securities.&nbsp; Each American Depositary Share will automatically represent its
    equal share of the new deposited securities.&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-right: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-right: black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: black 1pt solid; font-family: Symbol">&middot;</TD>
    <TD STYLE="border-right: black 1pt solid; text-align: justify">Reclassify, split up or consolidate any of the deposited securities</TD>
    <TD ROWSPAN="5" STYLE="border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: justify">The depositary
    may, and will if we ask it to, distribute some or all of the cash, shares or other securities it received.&nbsp; It may also
    deliver new American Depositary Receipts or ask you to surrender your outstanding American Depositary Receipts in exchange
    for new American Depositary Receipts identifying the new deposited securities.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-right: black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: black 1pt solid; font-family: Symbol">&middot;</TD>
    <TD STYLE="border-right: black 1pt solid; text-align: justify">Distribute securities on the shares that are not distributed to you</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: black 1pt solid">&nbsp;</TD>
    <TD STYLE="border-right: black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-left: black 1pt solid; border-bottom: black 1pt solid; padding-left: 0.5in; font-family: Symbol; text-indent: -0.5in">&middot;</TD>
    <TD STYLE="border-bottom: black 1pt solid; border-right: black 1pt solid; text-align: justify">Recapitalize, reorganize, merge, liquidate, sell
    all or substantially all of our assets, or take any similar action</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Amendment and Termination</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>How may the deposit agreement be
amended?</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We may agree with the depositary to
amend the deposit agreement and the American Depositary Receipts without your consent for any reason. If an amendment adds or
increases fees or charges, except for taxes and other governmental charges or expenses of the depositary for registration fees,
facsimile costs, delivery charges or similar items, or prejudices a substantial right of American Depositary Share holders, it
will not become effective for outstanding American Depositary Shares until 30 days after the depositary notifies American Depositary
Share holders of the amendment. At the time an amendment becomes effective, you are considered, by continuing to hold your American
Depositary Shares, to agree to the amendment and to be bound by the American Depositary Receipts and the deposit agreement as
amended.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>How may the deposit agreement be
terminated?</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The depositary will terminate the deposit
agreement at our direction by mailing notice of termination to the American Depositary Share holders then outstanding at least
30 days prior to the date fixed in such notice for such termination. The depositary may also terminate the deposit agreement by
mailing notice of termination to us and the American Depositary Share holders if 60 days have passed since the depositary told
us it wants to resign but a successor depositary has not been appointed and accepted its appointment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">After
termination, the depositary and its agents will do the following under the deposit agreement but nothing else: collect
distributions on the deposited securities, sell rights and other property, and deliver shares and other deposited securities
upon cancellation of American Depositary Shares. Four months after termination, the depositary may sell any remaining
deposited securities by public or private sale. After that, the depositary will hold the money it received on the sale, as
well as any other cash it is holding under the deposit agreement for the pro rata benefit of the American Depositary Share
holders that have not surrendered their American Depositary Shares. It will not invest the money and has no liability for
interest. The depositary&rsquo;s only obligations will be to account for the money and other cash. After termination our only
obligations will be to indemnify the depositary and to pay fees and expenses of the depositary that we agreed to pay.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Limitations on Obligations and
Liability</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Limits on our Obligations and the
Obligations of the Depositary; Limits on Liability to Holders of American Depositary Shares</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="margin: 0pt 0">The deposit agreement expressly limits our obligations and the obligations of the depositary. It also
limits our liability and the liability of the depositary. We and the depositary:</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">are
                                                                                                                              only
                                                                                                                              obligated
                                                                                                                              to
                                                                                                                              take
                                                                                                                              the
                                                                                                                              actions
                                                                                                                              specifically
                                                                                                                              set
                                                                                                                              forth
                                                                                                                              in
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement
                                                                                                                              without
                                                                                                                              negligence
                                                                                                                              or
                                                                                                                              bad
                                                                                                                              faith;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">are
                                                                                                                              not
                                                                                                                              liable
                                                                                                                              if
                                                                                                                              we
                                                                                                                              are
                                                                                                                              or
                                                                                                                              it
                                                                                                                              is
                                                                                                                              prevented
                                                                                                                              or
                                                                                                                              delayed
                                                                                                                              by
                                                                                                                              law
                                                                                                                              or
                                                                                                                              circumstances
                                                                                                                              beyond
                                                                                                                              our
                                                                                                                              control
                                                                                                                              from
                                                                                                                              performing
                                                                                                                              our
                                                                                                                              or
                                                                                                                              its
                                                                                                                              obligations
                                                                                                                              under
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">are
                                                                                                                              not
                                                                                                                              liable
                                                                                                                              if
                                                                                                                              we
                                                                                                                              or
                                                                                                                              it
                                                                                                                              exercises
                                                                                                                              discretion
                                                                                                                              permitted
                                                                                                                              under
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">are
                                                                                                                              not
                                                                                                                              liable
                                                                                                                              for
                                                                                                                              the
                                                                                                                              inability
                                                                                                                              of
                                                                                                                              any
                                                                                                                              holder
                                                                                                                              of
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares
                                                                                                                              to
                                                                                                                              benefit
                                                                                                                              from
                                                                                                                              any
                                                                                                                              distribution
                                                                                                                              on
                                                                                                                              deposited
                                                                                                                              securities
                                                                                                                              that
                                                                                                                              is
                                                                                                                              not
                                                                                                                              made
                                                                                                                              available
                                                                                                                              to
                                                                                                                              holders
                                                                                                                              of
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares
                                                                                                                              under
                                                                                                                              the
                                                                                                                              terms
                                                                                                                              of
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement,
                                                                                                                              or
                                                                                                                              for
                                                                                                                              any
                                                                                                                              special,
                                                                                                                              consequential
                                                                                                                              or
                                                                                                                              punitive
                                                                                                                              damages
                                                                                                                              for
                                                                                                                              any
                                                                                                                              breach
                                                                                                                              of
                                                                                                                              the
                                                                                                                              terms
                                                                                                                              of
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">have
                                                                                                                              no
                                                                                                                              obligation
                                                                                                                              to
                                                                                                                              become
                                                                                                                              involved
                                                                                                                              in
                                                                                                                              a
                                                                                                                              lawsuit
                                                                                                                              or
                                                                                                                              other
                                                                                                                              proceeding
                                                                                                                              related
                                                                                                                              to
                                                                                                                              the
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares
                                                                                                                              or
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement
                                                                                                                              on
                                                                                                                              your
                                                                                                                              behalf
                                                                                                                              or
                                                                                                                              on
                                                                                                                              behalf
                                                                                                                              of
                                                                                                                              any
                                                                                                                              other
                                                                                                                              person;
                                                                                                                              and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">may
                                                                                                                              rely
                                                                                                                              upon
                                                                                                                              any
                                                                                                                              documents
                                                                                                                              we
                                                                                                                              believe
                                                                                                                              or
                                                                                                                              it
                                                                                                                              believes
                                                                                                                              in
                                                                                                                              good
                                                                                                                              faith
                                                                                                                              to
                                                                                                                              be
                                                                                                                              genuine
                                                                                                                              and
                                                                                                                              to
                                                                                                                              have
                                                                                                                              been
                                                                                                                              signed
                                                                                                                              or
                                                                                                                              presented
                                                                                                                              by
                                                                                                                              the
                                                                                                                              proper
                                                                                                                              person.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the deposit agreement, we and the
depositary agree to indemnify each other under certain circumstances.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><I>Requirements for Depositary Actions
</I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Before the depositary will deliver
or register a transfer of an American Depositary Share, make a distribution on an American Depositary Share, or permit withdrawal
of shares, the depositary may require:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">payment
                                                                                                                              of
                                                                                                                              stock
                                                                                                                              transfer
                                                                                                                              or
                                                                                                                              other
                                                                                                                              taxes
                                                                                                                              or
                                                                                                                              other
                                                                                                                              governmental
                                                                                                                              charges
                                                                                                                              and
                                                                                                                              transfer
                                                                                                                              or
                                                                                                                              registration
                                                                                                                              fees
                                                                                                                              charged
                                                                                                                              by
                                                                                                                              third
                                                                                                                              parties
                                                                                                                              for
                                                                                                                              the
                                                                                                                              transfer
                                                                                                                              of
                                                                                                                              any
                                                                                                                              shares
                                                                                                                              or
                                                                                                                              other
                                                                                                                              deposited
                                                                                                                              securities;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">satisfactory
                                                                                                                              proof
                                                                                                                              of
                                                                                                                              the
                                                                                                                              identity
                                                                                                                              and
                                                                                                                              genuineness
                                                                                                                              of
                                                                                                                              any
                                                                                                                              signature
                                                                                                                              or
                                                                                                                              other
                                                                                                                              information
                                                                                                                              it
                                                                                                                              deems
                                                                                                                              necessary;
                                                                                                                              and</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">compliance
                                                                                                                              with
                                                                                                                              regulations
                                                                                                                              it
                                                                                                                              may
                                                                                                                              establish,
                                                                                                                              from
                                                                                                                              time
                                                                                                                              to
                                                                                                                              time,
                                                                                                                              consistent
                                                                                                                              with
                                                                                                                              the
                                                                                                                              deposit
                                                                                                                              agreement,
                                                                                                                              including
                                                                                                                              presentation
                                                                                                                              of
                                                                                                                              transfer
                                                                                                                              documents.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">The
depositary may refuse to deliver American Depositary Shares or register transfers of American Depositary Shares generally when
the transfer books of the depositary or our transfer books are closed or at any time if the depositary or we think it advisable
to do so.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><FONT STYLE="color: Black"><I>Your
Right to Receive the Shares Underlying your American Depositary Shares</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">American
Depositary Share holders have the right to cancel their American Depositary Shares and withdraw the underlying shares at any time
except:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">when
                                                                                                                              temporary
                                                                                                                              delays
                                                                                                                              arise
                                                                                                                              because:
                                                                                                                              (i)
                                                                                                                              the
                                                                                                                              depositary
                                                                                                                              has
                                                                                                                              closed
                                                                                                                              its
                                                                                                                              transfer
                                                                                                                              books
                                                                                                                              or
                                                                                                                              we
                                                                                                                              have
                                                                                                                              closed
                                                                                                                              our
                                                                                                                              transfer
                                                                                                                              books;
                                                                                                                              (ii)
                                                                                                                              the
                                                                                                                              transfer
                                                                                                                              of
                                                                                                                              shares
                                                                                                                              is
                                                                                                                              blocked
                                                                                                                              to
                                                                                                                              permit
                                                                                                                              voting
                                                                                                                              at
                                                                                                                              a
                                                                                                                              shareholders&rsquo;
                                                                                                                              meeting;
                                                                                                                              or
                                                                                                                              (iii)
                                                                                                                              we
                                                                                                                              are
                                                                                                                              paying
                                                                                                                              a
                                                                                                                              dividend
                                                                                                                              on
                                                                                                                              our
                                                                                                                              shares;</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">when
                                                                                                                              you
                                                                                                                              owe
                                                                                                                              money
                                                                                                                              to
                                                                                                                              pay
                                                                                                                              fees,
                                                                                                                              taxes
                                                                                                                              and
                                                                                                                              similar
                                                                                                                              charges;
                                                                                                                              or</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><FONT STYLE="font-family: Symbol; color: Black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black">when
                                                                                                                              it
                                                                                                                              is
                                                                                                                              necessary
                                                                                                                              to
                                                                                                                              prohibit
                                                                                                                              withdrawals
                                                                                                                              in
                                                                                                                              order
                                                                                                                              to
                                                                                                                              comply
                                                                                                                              with
                                                                                                                              any
                                                                                                                              laws
                                                                                                                              or
                                                                                                                              governmental
                                                                                                                              regulations
                                                                                                                              that
                                                                                                                              apply
                                                                                                                              to
                                                                                                                              American
                                                                                                                              Depositary
                                                                                                                              Shares
                                                                                                                              or
                                                                                                                              to
                                                                                                                              the
                                                                                                                              withdrawal
                                                                                                                              of
                                                                                                                              shares
                                                                                                                              or
                                                                                                                              other
                                                                                                                              deposited
                                                                                                                              securities.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This right of withdrawal may not be
limited by any other provision of the deposit agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Pre-release of American Depositary
Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The deposit agreement permits the depositary
to deliver American Depositary Shares before deposit of the underlying shares. This is called a pre-release of the American Depositary
Shares. The depositary may also deliver shares upon cancellation of pre-released American Depositary Shares (even if the American
Depositary Shares are canceled before the pre-release transaction has been closed out). A pre-release is closed out as soon as
the underlying shares are delivered to the depositary. The depositary may receive American Depositary Shares instead of shares
to close out a pre-release. The depositary may pre-release American Depositary Shares only under the following conditions: (1)
before or at the time of the pre-release, the person to whom the pre-release is being made represents to the depositary in writing
that it or its customer owns the shares or American Depositary Shares to be deposited; (2) the pre-release is fully collateralized
with cash or other collateral that the depositary considers appropriate; and (3) the depositary must be able to close out the
pre-release on not more than five business days&rsquo; notice. In addition, the depositary will limit the number of American Depositary
Shares that may be outstanding at any time as a result of pre-release, although the depositary may disregard the limit from time
to time, if it thinks it is appropriate to do so.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Direct Registration System</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In the deposit agreement, all parties
to the deposit agreement acknowledge that the DRS and Profile Modification System, or Profile, will apply to uncertificated American
Depositary Shares upon acceptance thereof to DRS by DTC. DRS is the system administered by DTC under which the depositary may
register the ownership of uncertificated American Depositary Shares, which ownership will be evidenced by periodic statements
sent by the depositary to the registered holders of uncertificated American Depositary Shares. Profile is a required feature of
DRS that allows a DTC participant, claiming to act on behalf of a registered holder of American Depositary Shares, to direct the
depositary to register a transfer of those American Depositary Shares to DTC or its nominee and to deliver those American Depositary
Shares to the DTC account of that DTC participant without receipt by the depositary of prior authorization from the American Depositary
Share holder to register that transfer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In connection with and in accordance
with the arrangements and procedures relating to DRS/Profile, the parties to the deposit agreement understand that the depositary
will not determine whether the DTC participant that is claiming to be acting on behalf of an American Depositary Share holder
in requesting registration of transfer and delivery described in the paragraph above has the actual authority to act on behalf
of the American Depositary Share holder (notwithstanding any requirements under the Uniform Commercial Code). In the deposit agreement,
the parties agree that the depositary&rsquo;s reliance on and compliance with instructions received by the depositary through
the DRS/Profile System and in accordance with the deposit agreement will not constitute negligence or bad faith on the part of
the depositary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Shareholder communications; inspection
of register of holders of American Depositary Shares</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The depositary will make available
for your inspection at its office all communications that it receives from us as a holder of deposited securities that we make
generally available to holders of deposited securities. The depositary will send you copies of those communications if we ask
it to. You have a right to inspect the register of holders of American Depositary Shares, but not for the purpose of contacting
those holders about a matter unrelated to our business or the American Depositary Shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Disclosure of beneficial ownership</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="margin: 0pt 0; text-align: justify">Each holder of American Depositary Shares must comply with applicable laws and reasonable requests
made by us that the holder disclose information regarding beneficial ownership of American Depositary Shares as if the American
Depositary Shares were the ordinary shares they represent. Applicable law may require disclosure to us of beneficial ownership
of 5% or more of our outstanding ordinary shares.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="color: Black"><B>Glossary
of Industry Terms</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">Certain
standards and other terms specific to our industry that are used in this registration statement on Form 20-F are defined below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>5-HT3 family
receptor inhibitors</B> &ndash;play a role in mediating nausea and vomiting, and as such, demonstrate anti-emetic efficacy.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Bioequivalence
</B>- the absence of a significant difference in the rate and extent to which the active ingredient or active moiety in pharmaceutical
equivalents or pharmaceutical alternatives becomes available at the site of drug action when administered at the same molar dose
under similar conditions in an appropriately designed study. To be considered &ldquo;bioequivalent&rdquo;, certain standards specified
by the US Food and Drug Administration must be met.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Carvedilol
</B>&ndash; a non-selective beta blocker/alpha-1 blocker indicated in the treatment of hypertension and/or congestive heart failure
(CHF). </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black"><B>cGMP
Current Good Manufacturing Practice -</B></FONT> <FONT STYLE="font-size: 10pt">Standards, procedures and guidelines designed
for production quality control. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>Clinical trial
material (CTM) manufacturing</B> - manufacturing of study supplies provided by the study sponsor to the clinical investigator.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>CRO &ndash;
</B>a Contract Research Organization, also called a clinical research organization (CRO) is a service organization that provides
outsourced pharmaceutical research services.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B><I>Helicobacter
pylori</I></B> - a <FONT STYLE="text-underline-style: none">Gram-negative</FONT> <FONT STYLE="text-underline-style: none">bacterium
</FONT>found in the <FONT STYLE="text-underline-style: none">stomach</FONT>. It was identified in 1982 by Dr. <FONT STYLE="text-underline-style: none">Barry
Marshall</FONT> and Dr. <FONT STYLE="text-underline-style: none">Robin Warren</FONT> and is associated with peptic ulcer disease
and development of gastric cancer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>IND - Investigational
New Drug </B>- a status assigned by the Food and Drug Administration to a drug before allowing its use in humans, so that experimental
clinical trials may be conducted.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>MAP bacterium
</B>(<I>Mycobacterium avium subspecies paratuberculosis</I> (MAP)) - an obligate pathogenic bacterium in the genus Mycobacterium.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>NDA &ndash;
New Drug Application - </B>an application by drug sponsors to the Food and Drug Administration for approval of a new pharmaceutical
for sale and marketing in the U.S.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Ondansetron
</B>&ndash; Ondansetron is a drug in class of medications called serotonin 5-HT<SUB>3</SUB> receptor antagonists. Ondansetron
works by blocking the action of serotonin, a natural substance that may cause nausea and vomiting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Orphan Drug
Status</B> - the designation of Orphan Drug status to drugs that are in the process of development for the treatment of rare diseases.
This status provides tax reductions and the exclusive rights to the cure for a specific condition for a period of seven years
post-approval.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Pivotal
Bioequivalence (BE) Clinical Trial</B> <B>&ndash; </B>a study the data from which is submitted to the Food and Drug Administration
in support of a marketing application of a test drug that is being compared to a referenced existing (already approved) drug.
Sufficient similarity between the test and the reference drug is required, according to certain standards specified by the Food
and Drug Administration, which must be met.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="color: Black"><B>Stability Testing
</B>- as part of the cGMP regulations, the Food and Drug Administration requires that drug products bear an expiration date determined
by appropriate stability testing. The stability of drug products needs to be evaluated over time in the same container-closure
system in which the drug product is marketed.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt; color: Black"><B>Triptans
</B>- serotonin 5-hydroxytryptamine (5-HT) receptor agonists</FONT> <FONT STYLE="font-size: 10pt">drugs used for the treatment
of migraine.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: Black"><B>Rizatripan
</B>- a serotonin 5-HT 1B/1D receptor agonist of the triptan class of drugs.</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 20.9pt 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="text-transform: none; color: Black">&nbsp;</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 20.9pt 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 13.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">DEFAULTS,
DIVIDEND ARREARAGES AND DELINQUENCIES</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 20.9pt 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 58.5pt; text-align: justify; text-indent: 12.4pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 14.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">MATERIAL
MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 6.75pt 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-weight: normal; text-transform: none; color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 6.75pt 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -1.8pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 15.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">CONTROLS
AND PROCEDURES</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 58.5pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">[RESERVED]</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16A.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">AUDIT
COMMITTEE FINANCIAL EXPERT</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16B.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">CODE
OF ETHICS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 57.55pt 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16C.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">PRINCIPAL
ACCOUNTANT FEES AND SERVICES</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 57.55pt 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-weight: normal; text-transform: none; color: Black">Not
applicable </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16D.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES.</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16E.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS.</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16F.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">CHANGE
IN REGISTRANT&rsquo;S CERTIFYING ACCOUNTANT.</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 16G.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">CORPORATE
GOVERNANCE</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="color: Black"><B>ITEM 16H.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: Black"><B>MINE SAFETY DISCLOSURE</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 17.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">FINANCIAL
STATEMENTS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-transform: uppercase; text-align: left; text-indent: -70.9pt"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0"><FONT STYLE="font-weight: normal; text-transform: none; color: Black">Not
applicable</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in 0pt 34.9pt; text-transform: uppercase; text-align: left; text-indent: 0.5in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="text-transform: none; color: Black">ITEM 18.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-transform: none; color: Black">FINANCIAL
STATEMENTS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0.8in 0pt 0; text-transform: uppercase; text-align: left; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">The
financial statements required by this item are found at the end of this Registration Statement, beginning on page F-1.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="color: Black">&nbsp;</FONT></P>



<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Redhill Biopharma Ltd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Index to Financial Statements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>



<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 91%; text-align: left"> &nbsp; </TD>
    <TD STYLE="width: 9%; text-align: center; font-weight: bold"> Page </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-right: 18.8pt; text-align: left; font-weight: bold; text-decoration: none"> Unaudited condensed interim
    statements as of September 30, 2012&nbsp; and for the nine months then ended </TD>
    <TD STYLE="padding-right: 18.8pt; text-align: center; text-decoration: none"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Condensed interim statements of comprehensive loss </TD>
    <TD STYLE="text-align: center"> F-1 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Condensed interim statements of financial position </TD>
    <TD STYLE="text-align: center"> F-2 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Condensed interim statements of changes in equity </TD>
    <TD STYLE="text-align: center"> F-3 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Condensed interim statements of cash flows </TD>
    <TD STYLE="text-align: center"> F-4 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Notes to the condensed interim statements </TD>
    <TD STYLE="text-align: center"> F-5 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold"> Audited financial statements as of December 31, 2011 and 2010 for each of the two years ending
    on those dates and for the period from August 3, 2009 (date of incorporation) through December 31, 2009 </TD>
    <TD STYLE="font-weight: bold; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left"> Report of Independent Registered Public Accounting Firm </TD>
    <TD STYLE="text-align: center"> F-9 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left"> Statements of Comprehensive Loss </TD>
    <TD STYLE="text-align: center"> F-10 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Statements of Financial Position </TD>
    <TD STYLE="text-align: center"> F-11 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Statements of Changes in Equity </TD>
    <TD STYLE="text-align: center"> F-12 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Statements of Cash Flows </TD>
    <TD STYLE="text-align: center"> F-13 </TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="padding-left: 9pt; text-align: left"> &nbsp; </TD>
    <TD STYLE="text-align: center"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="padding-left: 9pt; text-align: left; text-decoration: none"> Notes to the Financial Statements </TD>
    <TD STYLE="text-align: center"> F-14 </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CONDENSED STATEMENTS OF COMPREHENSIVE LOSS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Nine months<BR> ended
    September 30 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Three months ended<BR>
    September 30 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 48%; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> REVENUE </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 12 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 20 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 3 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> 11 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> RESEARCH AND DEVELOPMENT EXPENSES </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (5,207 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,559 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,379 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,540 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 1pt"> GENERAL
    AND ADMINISTRATIVE EXPENSES </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (1,730 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (1,875 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (550 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (687 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 1pt"> OPERATING
    LOSS </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (6,925 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (5,414 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (1,926 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (2,216 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> FINANCIAL INCOME </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 145 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 685 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 57 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 20 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 1pt"> FINANCIAL
    EXPENSES </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (194 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (8,154 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (98 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (533 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 1pt"> FINANCIAL
    INCOME (EXPENSES) ,NET </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (49 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (7,469 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (41 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (513 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 2.5pt"> LOSS AND
    COMPREHENSIVE LOSS </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> (6,974 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> (12,883 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> (1,967 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> (2,729 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD STYLE="font-weight: bold"> &nbsp; </TD>
    <TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: right"> &nbsp; </TD><TD STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="14" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"><B> LOSS PER ORDINARY SHARE - </B> basic and
    diluted </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.13 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.28 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.04 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 0.05 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B> The accompanying notes are an integral
part of these condensed financial statements. </B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>REDHILL BIOPHARMA
LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CONDENSED STATEMENTS OF FINANCIAL POSITION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> September 30, </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center"> December 31, </TD><TD NOWRAP STYLE="font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: right; padding-bottom: 1pt"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"> CURRENT ASSETS: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: justify; padding-left: 9pt"> Cash and cash equivalents </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 9,573 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; text-align: right"> 14,070 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt"> Bank deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,516 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3,013 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt"> Financial assets at fair value through profit or loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,564 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,564 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt; padding-bottom: 1pt"> Prepaid expenses and receivables </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 120 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 89 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 13,773 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 18,736 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"> NON-CURRENT ASSETS: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt"> Restricted bank deposit </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 72 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 73 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt"> Fixed assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 119 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 132 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt; padding-bottom: 1pt"> Intangible assets </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 1,345 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 1,245 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 1,536 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 1,450 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 27pt; padding-bottom: 2.5pt"> Total assets </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> 15,309 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> 20,186 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> CURRENT LIABILITIES - </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 0.25in; padding-bottom: 1pt"> accounts payable and accruals </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 816 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 513 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"> NON-CURRENT LIABILITIES - </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt; padding-bottom: 1pt"> royalty obligations to investors </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 1,015 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 886 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 0.25in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 27pt; padding-bottom: 1pt"> Total liabilities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 1,831 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 1,399 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify"> EQUITY: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt"> Ordinary shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 143 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 142 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt"> Additional paid-in capital </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 31,469 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 31,168 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt"> Warrants </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,686 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,686 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt; padding-bottom: 1pt"> Accumulated deficit </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (20,820 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> (15,209 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 27pt; padding-bottom: 1pt"> Total equity </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 13,478 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 1pt solid"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 1pt solid"> 18,787 </TD><TD STYLE="text-align: left; padding-bottom: 1pt"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 27pt; padding-bottom: 2.5pt"> Total liabilities and equity </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> 15,309 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="text-align: left; border-bottom: Black 2.5pt double"> &nbsp; </TD><TD STYLE="text-align: right; border-bottom: Black 2.5pt double"> 20,186 </TD><TD STYLE="text-align: left; padding-bottom: 2.5pt"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>The accompanying
notes are an integral part of these condensed financial statement </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>REDHILL BIOPHARMA
LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">CONDENSED STATEMENTS
OF CHANGES IN EQUITY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 8pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Ordinary<BR> shares </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Convertible<BR> preferred<BR>
    shares </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Additional<BR> paid-in<BR>
    capital </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Warrants </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Accumulated<BR> deficit </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Total<BR> equity </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="22" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 40%; font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> BALANCE AT JANUARY
    1, 2012 </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 142 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> - </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 31,168 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 2,686 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> (15,209 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 7%; text-align: right"> 18,787 </TD><TD STYLE="width: 1%; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"><B> CHANGES IN THE NINE-MONTH PERIOD ENDED SEPTEMBER
    30, 2012 </B> : </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Exercise of options into ordinary shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 301 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 302 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Share-based compensation to employees and service
    providers </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,363 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,363 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Comprehensive loss </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (6,974 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (6,974 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"> BALANCE
    AT SEPTEMBER 30, 2012 </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 143 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 31,469 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,686 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (20,820 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 13,478 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> BALANCE AT JANUARY 1, 2011 </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 925 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 45 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2,569 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,594 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"><B> CHANGES IN THE NINE-MONTH PERIOD ENDED SEPTEMBER
    30, 2011 </B> : </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Exercise of warrants into convertible preferred
    shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> * </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 629 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (45 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 584 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Conversion of convertible preferred shares into
    ordinary&nbsp; shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Distribution of bonus shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 42 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (42 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Conversion of mandatory convertible loans to equity </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 53 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 17,381 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,749 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 19,183 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Issuance of ordinary shares and warrants under
    public offering </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 39 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 11,352 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,271 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 12,662 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Exercise of warrants into ordinary shares </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 3 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 923 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (334 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 592 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Share-based compensation to employees and service
    providers </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,100 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,100 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Comprehensive loss </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (12,883 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (12,883 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"> BALANCE
    AT SEPTEMBER 30, 2011 </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 142 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 31,168 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 2,686 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> (13,352 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 20,644 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">* Represents amount less than $1 thousand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The accompanying notes are an integral
part of these condensed financial statements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CONDENSED STATEMENTS OF CASH FLOWS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">(Unaudited)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Nine months ended
    September 30 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2012 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> U.S. dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> CASH FLOWS FROM OPERATING ACTIVITIES: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Loss </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right"> (6,974 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="width: 1%; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="width: 1%; border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="width: 12%; border-bottom: Black 1pt solid; text-align: right"> (12,883 </TD><TD STYLE="width: 1%; padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Adjustments in respect of income and expenses not
    involving cash flows: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Share-based compensation to employees and service
    providers </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,363 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,100 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Fair value losses on mandatory convertible loans </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7,938 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Depreciation </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 9 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Fair value losses (gains) on financial assets at
    fair value through profit or loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Revaluation of bank deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (31 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 6 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Accretion of royalty obligations to investors </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 129 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 151 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in"> Exchange differences relating
    to cash and cash equivalents </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (28 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (524 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,450 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 9,679 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Changes in asset and liability items: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Decrease (increase) in prepaid expenses and&nbsp;
    receivables </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (31 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 60 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in"> Increase in accounts payable
    and accruals </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 306 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 21 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 275 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 81 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Net cash used in operating
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (5,249 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (3,123 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> CASH FLOWS FROM INVESTING ACTIVITIES: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Purchase of fixed assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (5 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (135 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Purchase of intangible assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (100 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Net Investment in bank deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 529 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (80 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Acquisition of financial assets at fair value through
    profit or loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,032 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,506 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Proceeds from sale of financial
    assets at fair value through profit or loss </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,030 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Net cash (used in) from investing
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 422 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,721 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> CASH FLOWS FROM FINANCING ACTIVITIES: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Proceeds from issuance of shares and warrants under
    public offering, net of issuance expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 12,662 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Exercise of warrants and options
    into shares, net of expenses </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 302 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 1,176 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Net cash provided by financing
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 302 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 13,838 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> INCREASE (DECREASE) IN CASH AND
    CASH EQUIVALENTS </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (4,525 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8,994 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> EXCHANGE DIFFERENCES ON CASH
    AND CASH EQUIVALENTS </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 28 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 524 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in"> BALANCE
    OF CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 14,070 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 9,050 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"> BALANCE
    OF CASH AND CASH EQUIVALENTS AT END OF PERIOD </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 9,573 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 18,568 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"> Supplementary
    information on interest received in cash </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 50 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Supplementary Information on
    financing activities not involving cash flows: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt"> Conversion of convertible
    loans into shares </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 17,434 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt"> Issuance of warrants </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 1,749 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The accompanying notes are an integral
part of these condensed financial statements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>REDHILL BIOPHARMA
LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">NOTES TO THE CONDENSED
INTERIM FINANCIAL INFORMATION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 1 &ndash; GENERAL:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.3pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 21pt; text-align: left"><FONT STYLE="text-underline-style: none"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="text-underline-style: none"><B>General</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 48.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.1pt; text-align: justify"> RedHill Biopharma Ltd (the
&quot;Company&quot;) was incorporated in Israel on August 3, 2009 and is active in the pharmaceutical industry. Its activities
include the development of therapeutic candidates ( the &quot;drugs&quot;) in which the Company acquires intellectual property
rights (either through license agreements or acquiring the intellectual property itself) with the objective of obtaining marketing
approvals for these drugs. Additionally, the Company works to commercialize these drugs (in cooperation and/or through international
drug companies) and to acquire rights in additional drugs. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.1pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.1pt; text-align: justify">Upon completion of an initial
public offering on February 3, 2011 on the Tel Aviv Stock Exchange (TASE), the Company became a public Company governed by the
Israel Securities Law, 1968 and its regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.1pt; text-align: justify">The Company's registered address
is at 21 Ha'arba'a St, Tel Aviv, Israel.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"> The Company is still in
research and development of its therapeutic candidates. Accordingly the Company is unable to estimate if and when its business
will generate positive cash flow. Through September 30, 2012, the Company has accumulated an operating loss and its activities
have been funded through public and private offerings of the Company's securities. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The Company plans to fund its
future operations through commercialization of its therapeutic candidates, out-licensing certain programs and raising additional
capital. The Company's current cash resources are not sufficient to complete the research and development of all of the Company's
therapeutic candidates. Management expects that the Company will incur more losses, as it continues to focus its resources on
advancing its therapeutic candidates based on a prioritized plan that will result in negative cash flows from operating activities.
The Company believes its existing capital resources should be sufficient to fund its current and planned operations for at least
the next 12 months.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">If the Company is unable to
commercialize or out-license its therapeutic candidates or obtaining future financing, the Company may be forced to delay, reduce
the scope of, or eliminate one or more of its research and development programs related to the therapeutic candidates, which may
have material adverse effect on the Company's business, financial condition and results of operations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.1pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 21pt; text-align: left"><B>b.</B></TD><TD STYLE="text-align: justify"><B>Approval
                                                                                     of condensed interim financial statements</B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.7in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"> These financial statements
were approved by the Board of Directors on <FONT STYLE="font: 10pt Times New Roman, Times, Serif">December 2, 2012.</FONT> </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NOTES TO THE CONDENSED INTERIM FINANCIAL
INFORMATION (continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt; text-align: justify; text-indent: -42.55pt"><B>NOTE
2 - BASIS OF PREPARATION OF CONDENSED INTERIM FINANCIAL INFORMATION:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><B> a. </B></TD><TD STYLE="text-align: justify"> The Company's condensed
                                                                         interim financial statements as of September 30, 2012
                                                                         and for the three and nine months then ended (the &quot;interim
                                                                         financial statements&quot;) have been prepared in accordance
                                                                         with International Accounting Standard IAS 34, &ldquo;Interim
                                                                         Financial Reporting&rdquo;. These interim financial statements,
                                                                         which are unaudited, do not include all disclosures necessary
                                                                         for a complete presentation of financial position, results
                                                                         of operations, and cash flows in conformity with generally
                                                                         accepted accounting principles. The condensed interim
                                                                         financial statements should be read in conjunction with
                                                                         the annual financial statements as of December 31, 2011
                                                                         and for the year then ended and their accompanying notes,
                                                                         which have been prepared in accordance with International
                                                                         Financial Reporting Standards (&ldquo;IFRS&rdquo;) as
                                                                         published by the International Accounting Standards Board
                                                                         (&ldquo;IASB&rdquo;). The results of operations for the
                                                                         three and nine months ended September 30, 2012 are not
                                                                         necessarily indicative of the results that may be expected
                                                                         for the entire fiscal year or for any other interim period. </TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.75pt; text-align: justify; text-indent: -14.15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The accounting policies and
calculation methods applied in the preparation of the interim financial statements are consistent with those applied in the preparation
of the annual financial statements as of December 31, 2011 and for the year then ended</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.75pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.7pt"></TD><TD STYLE="width: 23.8pt"><B>b.</B></TD><TD STYLE="text-align: justify">New IFRSs not yet effective
                                                                       and which the Company did not elect to adopt early were
                                                                       listed in the 2011 annual financial statements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 3 - AGREEMENTS TO PURCHASE INTELLECTUAL
PROPERTY OF DRUGS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify">In May 2012, under an agreement
for the co-development of a drug for treating of acute migraine (dated August 26, 2010) the Company paid a Canadian Company $100
thousand for rights in the drug after reaching a milestone under the agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify; text-indent: -49.6pt"><B>NOTE
4 - EQUITY:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 21pt"><B>a.</B></TD><TD STYLE="text-align: left">In April 2012 the Company<B> </B>received
                                                                   a notice on the exercise of some of the non-tradable options
                                                                   issued to a service provider in August 2010. Accordingly, the
                                                                   Company issued 100,000 ordinary shares for $17 thousand.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 67.6pt; text-align: left; text-indent: -0.25in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 21pt"><B>b.</B></TD><TD STYLE="text-align: left">In June 2012 the Company<B> </B>received
                                                                   a notice on the exercise of options issued to a consultant
                                                                   in August 2010. Accordingly, the Company issued 70,000 ordinary
                                                                   shares for $11 thousand.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 67.6pt; text-align: left; text-indent: -0.25in"><B></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 67.6pt; text-align: left; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.7pt"></TD><TD STYLE="width: 23.8pt"><B> c. </B></TD><TD STYLE="text-align: justify; padding-right: 0"> In
                                                                       August 2012, the Company was given notice of exercise of
                                                                       non-tradable options, which were granted in August 2010
                                                                       and in January 2011 to a service provider. Accordingly,
                                                                       the Company allocated 500,000 ordinary shares in consideration
                                                                       for $275 thousands. </TD></TR></TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 67.6pt; text-align: left; text-indent: -0.25in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NOTES TO THE CONDENSED INTERIM FINANCIAL
INFORMATION (continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 5 - SHARE-BASED PAYMENTS:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 21pt"><B>a.</B></TD><TD STYLE="text-align: left">On February 15, 2012, an extraordinary
                                                                   general meeting of Company's shareholders resolved to allocate
                                                                   600,000 options to the Company's Chief Executive Officer, Mr.
                                                                   Dror Ben-Asher and 400,000 options to Mr. Ori Shilo, Deputy
                                                                   Chief Executive Officer Finance and Operations, both of whom
                                                                   also serve as directors in the Company. This resolution was
                                                                   made after the approval of the said allocation by the Audit
                                                                   Committee and Board of Directors of the Company on December
                                                                   28, 2011 and January 5, 2012, respectively. These options are
                                                                   exercisable at a ratio of 1 option into 1 ordinary share for
                                                                   an exercise price of $0.72 per share. The options will vest
                                                                   as follows: 1/6 of the options at the end of each calendar
                                                                   half year over the next three years.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -31.2pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The fair value of all options
on the date of grant is $271 thousand. The fair value of the options was computed using the binomial model and the underlying
data used are mainly as follows: price of the Company's ordinary share: $0.52, expected volatility: 68.49%, risk-free interest
rate: 1.34% and expected useful life to exercise of 7 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The options will be exercisable,
either in full or partially, including exercise in batches, from vesting date until the end of 7 years since the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 21pt"><B>b.</B></TD><TD STYLE="text-align: justify">On January 5, 2012, the Board
                                                                   of Directors of the Company granted 825,000 options to employees
                                                                   and consultants of the Company under the option plan of the
                                                                   Company. These options are exercisable based on a ratio of
                                                                   1 option to 1 ordinary share for $0.72 per share.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The options will vest as follows:
for employees and consultants of the Company who provided, as of the date of grant, service for over one year to the Company,
1/6 of the total number of options at the end of each calendar half year over the next three years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"> For employees and consultants
of the Company who do not provide services to the Company over more than a year, as of the date of grant, the options will vest
as follows: 1/3 of the options after one year since the date of grant, and thereafter, 1/6 of the options at the end of each calendar
half year over the next two years. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"> &nbsp; </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The fair value of all options
on the date of grant is $289 thousand. The fair value of the options was computed using the binomial model and the underlying
data used are mainly as follows: price of the Company's ordinary share: $0.64, expected volatility: 68.42%, risk-free interest
rate: 1.43% and expected useful life to exercise of 7 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The options will be exercisable,
either in full or partially, including exercise in batches, from vesting date until the end of 7 years since the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 21pt"><B>c.</B></TD><TD STYLE="text-align: justify">On June 17, 2012, the Board
                                                                   of Directors of the Company granted 200,000 options to a new
                                                                   employee of the Company, the employment of whom shall commence
                                                                   on July 16, 2012; the options were granted under the option
                                                                   plan of the Company. These options are exercisable based on
                                                                   a ratio of 1 option to 1 ordinary share for an exercise price
                                                                   of $0.7 per share. The options will vest as follows: 1/3 of
                                                                   the options after one year since the date of commencement of
                                                                   employment, and thereafter, 1/6 of the options at the end of
                                                                   each 6 month period over the next two years subsequent to the
                                                                   first year of vesting.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">NOTES TO THE CONDENSED INTERIM FINANCIAL
INFORMATION (continued)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOTE 5 - SHARE-BASED PAYMENTS</B> (continued)<B>:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 71.85pt 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The fair value of all options
on the date of grant is $75 thousand. The fair value of the options was computed using the binomial model and the underlying data
used are mainly as follows: price of the ordinary Company share: $0.675, expected volatility: 67.53%, risk-free interest rate:
1.06% and expected useful life to exercise of 7 years.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">The options will be exercisable,
either in full or partially, including exercise in batches, from vesting date until the end of 7 years since the date of grant.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B> NOTE 6 - EVENTS SUBSEQUENT TO SEPTEMBER
30, 2012: </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.8pt"></TD><TD STYLE="width: 18.05pt"><B>a.</B></TD><TD STYLE="text-align: justify">In October 2012 a term
                                                                        sheet was entered into between the Company and a US pharmaceutical
                                                                        company for the acquisition by the Company of exclusive
                                                                        rights to two proprietary extended release therapeutic
                                                                        candidates. The signing of a detailed agreement is subject
                                                                        to due diligence to be conducted by the Company. For the
                                                                        first extended release therapeutic candidates, the US
                                                                        company would be entitled to a royalty of between 20%-50%
                                                                        depending on distribution channel and territory and for
                                                                        the second the US company would be entitled to royalty
                                                                        of 8%-15% depending on distribution channel.</TD></TR></TABLE>

<P STYLE="text-align: justify; margin: 0pt 0 0pt 71.85pt; font-size: 10pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.8pt"></TD><TD STYLE="width: 18.05pt"><FONT STYLE="font-size: 10pt"><B> b. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"> In
                                                                                                             October and November
                                                                                                             2012, the Board of
                                                                                                             Directors of the
                                                                                                             Company approved
                                                                                                             a proposed acquisition
                                                                                                             and termination of
                                                                                                             the royalty rights
                                                                                                             granted to investors
                                                                                                             pursuant to the August
                                                                                                             2010 mandatory convertible
                                                                                                             loan agreement in
                                                                                                             consideration for
                                                                                                             the allocation by
                                                                                                             the Company of 2,
                                                                                                             317,186 Company ordinary
                                                                                                             shares, NIS 0.01
                                                                                                             par value, pursuant
                                                                                                             to which each investor
                                                                                                             will receive a number
                                                                                                             of shares on a pro-rata
                                                                                                             basis in accordance
                                                                                                             with their respective
                                                                                                             royalty rights. Such
                                                                                                             <FONT STYLE="font-family: Times New Roman, Times, Serif">proposed
                                                                                                             acquisition is subject
                                                                                                             to the approval of
                                                                                                             the General Shareholders
                                                                                                             Meeting, the approval
                                                                                                             of the investors
                                                                                                             and the approval
                                                                                                             of the Tel Aviv Stock
                                                                                                             Exchange.</FONT> </FONT></TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.8pt"></TD><TD STYLE="width: 18.05pt"><B> c. </B></TD><TD STYLE="text-align: justify"> In November 2012, the
                                                                        Board of Directors of the Company approved the issuance
                                                                        to a group of investors (the &quot;approved investors&quot;)
                                                                        of up to an aggregate of 7,063,000 ordinary shares and
                                                                        warrants to acquire up to an aggregate of 3,531,500 ordinary
                                                                        shares in consideration of an aggregate investment amount
                                                                        of approximately $7 million. As of December 2, 2012, the
                                                                        Company had entered into investment agreements with approved
                                                                        investors for an aggregate investment amount of approximately
                                                                        $6.5 million. The transaction is subject to the approval
                                                                        of the Tel Aviv Stock Exchange. The warrants will have
                                                                        a term of 24 months, and each warrant will be exercisable
                                                                        into one ordinary share for exercise prices ranging from
                                                                        $1.18 to $1.54, depending on the date of exercise. </TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">_________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">_________________________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">_________________</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><IMG SRC="tlogo.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REPORT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">To the shareholders of</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We have audited the accompanying statements
of financial position of RedHill Biopharma Ltd. (the &quot;Company&quot;) as of December 31, 2011 and 2010 and the related statements
of comprehensive loss, changes in equity and cash flows for each of the two years ended on those dates and for the period from
August 3, 2009 (date of incorporation) through December 31, 2009. These financial statements are the responsibility of the Company's
Board of Directors and management. Our responsibility is to express an opinion on these financial statements based on our audits.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We conducted our audits in accordance
with standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform
the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by the Company's Board of Directors and management, as
well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In our opinion, the accompanying financial
statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31,
2011 and 2010 and the results of its operations, changes in equity and cash flows for each of the two years ended on those dates
and for the period from August&nbsp;3, 2009 (date of incorporation) through December 31, 2009, in accordance with International
Financial Reporting Standards (&quot;IFRS&quot;) as issued by the International Accounting Standards Board (&quot;IASB&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 33%; text-align: justify"> Tel-Aviv, Israel </TD>
    <TD STYLE="width: 67%; text-align: justify"> /s/ Kesselman &amp; Kesselman </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"> December 2, 2012 </TD>
    <TD STYLE="text-align: justify"> Certified Public Accountants (Isr.) </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; font-weight: bold"> &nbsp; </TD>
    <TD STYLE="text-align: justify"> A member firm of PricewaterhouseCoopers International Limited </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.1pt; text-align: center"><B>REDHILL BIOPHARMA LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">STATEMENTS OF COMPREHENSIVE LOSS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Year&nbsp;ended&nbsp;<BR>
    December&nbsp;31</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt">Period&nbsp;from <BR>August&nbsp;3*,
    <BR>2009&nbsp;to <BR>December&nbsp;31,</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Note</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2009</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">U.S. dollars in thousands</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="padding-left: 9pt; text-indent: -9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 44%; font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">REVENUE</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">&nbsp;</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">23</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">-</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">RESEARCH AND DEVELOPMENT EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">17</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(5,414</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(736</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(86</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">GENERAL AND ADMINISTRATIVE EXPENSES</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">18</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(2,482</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(518</TD><TD STYLE="text-align: left">)</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">(43</TD><TD STYLE="text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 9pt; text-indent: -9pt">OTHER INCOME (EXPENSES)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">19</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">-</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(479</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">28</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 9pt; text-indent: -9pt">OPERATING LOSS</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(7,873</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,733</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(101</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">FINANCIAL INCOME</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">570</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">65</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 9pt; text-indent: -9pt">FINANCIAL EXPENSES</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(8,200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(876</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(6</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; padding-left: 9pt; text-indent: -9pt">FINANCIAL EXPENSES NET</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">20</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(7,630</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(811</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(4</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt; text-indent: -9pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; padding-left: 9pt; text-indent: -9pt">LOSS AND COMPREHENSIVE LOSS</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(15,503</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(2,544</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">(105</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">)</TD></TR>
</TABLE>

<P STYLE="margin: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: right; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>U.S.
                                                                                                 dollars</B></P>

</TD><TD STYLE="text-align: left; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; width: 44%; padding-left: 9pt; text-indent: -9pt"><B>LOSS PER ORDINARY SHARE </B>- basic<B> </B>and diluted</TD><TD STYLE="padding-bottom: 2.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right; width: 8%">21</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; width: 12%">(0.32</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; width: 1%">)</TD><TD STYLE="padding-bottom: 2.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; width: 12%">(0.27</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; width: 1%">)</TD><TD STYLE="padding-bottom: 2.5pt; width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; width: 1%">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; width: 12%">(0.01</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; width: 1%">)</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">* Date of incorporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 7.1pt; text-align: center"><B>The accompanying notes are
an integral part of these financial statements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">STATEMENTS OF FINANCIAL POSITION</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">December&nbsp;31</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Note</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2011</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">2010</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center">&nbsp;</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid">U.S.&nbsp;dollars&nbsp;in
    <BR>thousands</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 59%; text-align: left; padding-left: 9pt">Cash and cash equivalents</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 8%; text-align: right">5</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">14,070</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 12%; text-align: right">9,050</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Bank deposits</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">5</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3,013</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Financial assets at fair value through profit or loss</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">6</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">1,564</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">87</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Prepaid expenses and receivable<B>s</B></TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">7</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">89</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">150</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18,736</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">9,302</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 7.9pt">NON-CURRENT ASSETS:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Restricted bank deposit</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">73</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Fixed assets</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">132</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">8</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Intangible assets</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">9</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,245</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,200</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 16.15pt">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,450</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,208</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Total assets</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">20,186</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">10,510</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 16.15pt">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">CURRENT LIABILITIES -</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">accounts payable and accruals</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">11</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">513</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">141</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">NON-CURRENT LIABILITIES:</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Mandatory convertible loans</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">12</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">11,245</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Royalty obligations to investors</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">12</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">886</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">718</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 14.65pt">&nbsp;</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">886</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">11,963</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total liabilities</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">1,399</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">12,104</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="color: red; font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="color: red">&nbsp;</TD>
    <TD STYLE="color: red; text-align: left">&nbsp;</TD><TD STYLE="color: red; text-align: right">&nbsp;</TD><TD STYLE="color: red; text-align: left">&nbsp;</TD><TD STYLE="color: red">&nbsp;</TD>
    <TD STYLE="color: red; text-align: left">&nbsp;</TD><TD STYLE="color: red; text-align: right">&nbsp;</TD><TD STYLE="color: red; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">COMMITMENTS</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">13</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left">EQUITY:</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">15</TD><TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Ordinary shares</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">142</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">3</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Convertible preferred shares</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">-</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt">Additional paid-in capital</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">31,168</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">925</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt">Warrants</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">2,686</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">45</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt">Accumulated deficit</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(15,209</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(2,569</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in">Total equity</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">18,787</TD><TD STYLE="padding-bottom: 1pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right">(1,594</TD><TD STYLE="padding-bottom: 1pt; text-align: left">)</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 0.25in">&nbsp;</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in">Total liabilities and equity</TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: right">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">20,186</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right">10,510</TD><TD STYLE="padding-bottom: 2.5pt; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 33pt; text-align: justify; text-indent: 73.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The accompanying notes are an integral
part of these financial statements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">STATEMENTS OF CHANGES IN EQUITY</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Convertible </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Additional </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Ordinary </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> preferred </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> paid-in </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Accumulated </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt"><FONT STYLE="font-size: 8pt"> shares </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt"><FONT STYLE="font-size: 8pt"> shares </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt"><FONT STYLE="font-size: 8pt"> capital </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Warrants </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt"><FONT STYLE="font-size: 8pt"> deficit </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Total&nbsp;equity </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD COLSPAN="22" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid; font-size: 8pt"><FONT STYLE="font-size: 8pt"> US&nbsp;dollars&nbsp;in&nbsp;thousands </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"><B> CHANGES IN THE PERIOD FROM AUGUST&nbsp;3,
    2009 </B> * </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> THROUGH
    DECEMBER 31, 2009: </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="width: 40%; text-align: left; padding-left: 9pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Comprehensive
    loss </FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 7%; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 7%; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 7%; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 7%; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 7%; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (105 </FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="width: 1%; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="width: 7%; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (105 </FONT></TD><TD STYLE="width: 1%; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Issuance
    of ordinary shares, convertible preferred shares and warrants </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 3 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 2 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 925 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 45 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 975 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> BALANCE AT DECEMBER 31, 2009 </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 3 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 2 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 925 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 45 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (105 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 870 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> CHANGES DURING THE YEAR ENDED </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> DECEMBER
    31,2010: </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="text-align: left; padding-left: 9pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Comprehensive loss </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (2,544 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (2,544 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Share-based
    compensation to employees and service providers </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 80 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 80 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> BALANCE AT DECEMBER 31, 2010 </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 3 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 2 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 925 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 45 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (2,569 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (1,594 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> CHANGES DURING THE YEAR ENDED </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> DECEMBER
    31, 2011: </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Comprehensive
    loss </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (15,503 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (15,503 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Exercise
    of warrants into convertible preferred shares </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ** </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 629 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (45 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 584 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Conversion
    of convertible preferred shares into ordinary shares </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 2 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (2 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Distribution
    of bonus shares </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 42 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (42 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Conversion
    of mandatory convertible loans to equity </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 53 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 17,381 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 1,749 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 19,183 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Issuance
    of ordinary shares and warrants under public offering </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 39 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 11,352 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 1,271 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 12,662 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Exercise
    of warrants into ordinary shares </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 3 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 923 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (334 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 592 </FONT></TD><TD STYLE="text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204); font-size: 8pt">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> Share-based
    compensation to employees and service providers </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 2,863 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 2,863 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White; font-size: 8pt">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> BALANCE
    AT DECEMBER 31, 2011 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 142 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="font-size: 8pt; padding-bottom: 2.5pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-size: 8pt; text-align: right"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 8pt; text-align: left"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 31,168 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 2,686 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> (15,209 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> ) </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right; font-size: 8pt"><FONT STYLE="font-size: 8pt"> 18,787 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left; font-size: 8pt"><FONT STYLE="font-size: 8pt"> &nbsp; </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.35in; text-align: left">*</TD><TD STYLE="text-align: justify">Date of incorporation.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.35in; text-align: left">**</TD><TD STYLE="text-align: justify">Represents amount
                                                                               less than $1 thousand.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The accompanying notes are an integral
part of these financial statements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">STATEMENTS OF CASH FLOWS</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> Year&nbsp;ended&nbsp;<BR>
    December&nbsp;31 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"> Period&nbsp;from <BR>August&nbsp;3,&nbsp;2009*
    <BR>through&nbsp; <BR>December&nbsp;31, </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2011 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2010 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> 2009 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"> &nbsp; </TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"> &nbsp; </TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"> US dollars in thousands </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD NOWRAP> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD><TD> &nbsp; </TD>
    <TD COLSPAN="2"> &nbsp; </TD><TD> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> CASH FLOWS FROM OPERATING ACTIVITIES: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 61%; text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Loss </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (15,503 </TD><TD NOWRAP STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (2,544 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD><TD STYLE="width: 1%"> &nbsp; </TD>
    <TD STYLE="width: 1%; text-align: left"> &nbsp; </TD><TD STYLE="width: 10%; text-align: right"> (105 </TD><TD STYLE="width: 1%; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Adjustments in respect of income and expenses not
    involving cash flows: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Share-based compensation to employees and service
    providers </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2,863 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 80 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-decoration: none; text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Fair value losses on mandatory
    convertible loans<U> </U> </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 7,938 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 545 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Depreciation </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 15 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Fair value losses (gains) on financial assets at
    fair value through profit or loss </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 29 </TD><TD NOWRAP STYLE="text-align: left"> (7) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (2 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Revaluation of bank deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 9 </TD><TD NOWRAP STYLE="text-align: left"> (2) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Accretion of royalty obligations to investors </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 168 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 327 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Exchange differences in respect of cash and cash
    equivalents </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (640 </TD><TD NOWRAP STYLE="text-align: left"> )(10) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 2 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Changes in asset and liability items: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.35in"> Decrease (increase) in prepaid expenses and receivables </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 61 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (141 </TD><TD STYLE="text-align: left"> )(9) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.35in"> Increase in accounts payable
    and accruals </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 369 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 120 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 21 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Net cash used in operating
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (4,691 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,632 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (93 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> CASH FLOWS FROM INVESTING ACTIVITIES: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Purchase of fixed assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (136 </TD><TD NOWRAP STYLE="text-align: left"> )(8) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Purchase of intangibles assets </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (45 </TD><TD NOWRAP STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (1,100 </TD><TD STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (100 </TD><TD STYLE="text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Investment in bank deposits </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> (3,080 </TD><TD NOWRAP STYLE="text-align: left"> ) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> (13) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Acquisition of financial assets
    at fair value through profit or loss </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,506 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; text-align: right"> (189 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Proceeds from sale of financial
    assets at fair value through profit or loss </TD><TD STYLE="font-size: 1pt; padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="padding-bottom: 1pt; font-size: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt; font-size: 1pt; text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-size: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 92 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 19 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Net cash used in investing
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (4,767 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (1,016 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> (283 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> ) </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> CASH FLOWS FROM FINANCING ACTIVITIES: </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Proceeds from issuance of shares and warrants </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 975 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Proceeds from issuance of shares and warrants under
    February 2, &nbsp;2011 prospectus, net of issuance expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 12,662 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"> Exercise of warrants into shares, net of expenses </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 1,176 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> - </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Proceeds from mandatory convertible
    loans and royalty obligations to investors </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 11,091 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"> Net cash provided by financing
    activities </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 13,838 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 11,091 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 975 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> INCREASE IN CASH AND CASH EQUIVALENTS </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 4,380 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 8,443 </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 599 </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> EXCHANGE DIFFERENCES ON CASH
    AND CASH EQUIVALENTS </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 640 </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> 10 </TD><TD STYLE="text-align: left"> (2) </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.1in"> BALANCE
    OF CASH AND CASH EQUIVALENTS AT &nbsp;BEGINNING OF PERIOD </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 9,050 </TD><TD NOWRAP STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> 597 </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 1pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"> - </TD><TD STYLE="padding-bottom: 1pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"> BALANCE
    OF CASH AND CASH EQUIVALENTS AT END OF PERIOD </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 14,070 </TD><TD NOWRAP STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 9,050 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 597 </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 0.1in"> Supplementary
    information on interest received in cash </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 14 </TD><TD NOWRAP STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -0.1in; padding-left: 0.1in"> Supplementary Information on
    financing activities not involving cash flows&nbsp; - </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD NOWRAP STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD><TD> &nbsp; </TD>
    <TD STYLE="text-align: left"> &nbsp; </TD><TD STYLE="text-align: right"> &nbsp; </TD><TD STYLE="text-align: left"> &nbsp; </TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt"> conversion of mandatory
    convertible loans </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> 19,183 </TD><TD NOWRAP STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD><TD STYLE="padding-bottom: 2.5pt"> &nbsp; </TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"> &nbsp; </TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"> - </TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"> &nbsp; </TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">* Date of incorporation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The <FONT STYLE="font-size: 10pt">accompanying
</FONT>notes are an integral part of these financial statements.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>
<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
1 - GENERAL</B> <B>INFORMATION:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>General</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">RedHill
Biopharma Ltd (the &quot;Company&quot;) was incorporated in Israel on August 3, 2009 and is active in the pharmaceutical industry.
The Company is focused on acquiring intellectual property rights in therapeutic candidates (the &quot;drugs&quot;) in advanced
clinical development stages, and in the development of these drugs in order to obtain regulatory marketing approvals and for future
commercialization.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Upon
completion of an initial public offering on February 3, 2011 on the Tel Aviv Stock Exchange (TASE), the Company became a public
company governed by the Israel Securities Law, 1968 and its regulations. See note 15b.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company's registered address is at 21 Ha'arba'a St, Tel Aviv, Israel.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company is still in research and development of its therapeutic candidates. Accordingly the Company is unable to estimate if and
when its business will generate positive cash flow. Through December 31, 2011, the Company has accumulated an operating loss and
its activities have been funded through public and private offerings of the Company's securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company plans to fund its future operations through commercialization of its therapeutic candidates, out-licensing certain programs
and raising additional capital. The Company's current cash resources are not sufficient to complete the research and development
of all of the Company's therapeutic candidates. Management expects that the Company will incur more losses, as it continues to
focus its resources on advancing its therapeutic candidates based on a prioritized plan that will result in negative cash flows
from operating activities. The Company believes its existing capital resources should be sufficient to fund its current and planned
operations for at least the next 12 months.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
the Company is unable to commercialize or out-license its therapeutic candidates or obtaining future financing, the Company may
be forced to delay, reduce the scope of, or eliminate one or more of its research and development programs related to the therapeutic
candidates, which may have material adverse effect on the Company's business, financial condition and results of operations.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Approval
                                                                         of financial statements</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> These
financial statements were approved by the Board of Directors on December 2, 2012. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 52.5pt"></TD><TD STYLE="width: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> a. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Basis
                                                                              for presentation of the financial statements </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
financial statements of the Company as of December 31, 2011 and 2010 and for each of the two years ended on those dates and for
the period from August 3, 2009 to December 31, 2009 have been prepared in accordance with International Financial Reporting Standards,
(&quot;IFRS&quot;), as issued by the International Accounting Standards Board (&quot;IASB&quot;).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
significant accounting policies described below have been applied consistently in relation to all the periods presented, unless
otherwise stated.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
financial statements have been prepared under the historical cost convention, subject to adjustments in respect of revaluation
of financial assets and financial liabilities at fair value through profit or loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 82.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
preparation of financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also
requires management to exercise its judgment in the process of applying the Company&rsquo;s accounting policies. The areas involving
a higher degree of judgment or complexity, or areas where assumptions and estimates are significant to the financial statements
are disclosed in note&nbsp;3. Actual results could differ significantly from those estimates and assumptions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 78pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> b. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Translation
                                                                                of foreign currency balances and transactions: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99pt; text-align: justify; text-indent: -22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77pt"></TD><TD STYLE="width: 22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Functional
                                                                   and presentation currency </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Items
included in the financial statements are measured using the currency of the primary economic environment in which the Company
operates (the &ldquo;Functional Currency&rdquo;). The financial statements are presented in U.S. dollars, which is the Company&rsquo;s
functional and presentation currency.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: justify; text-indent: -16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77pt"></TD><TD STYLE="width: 22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Transactions
                                                            and balances</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99pt; text-align: justify; text-indent: -22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Foreign
currency transactions in currencies different from the functional currency (hereafter foreign currency, mostly New Israeli Shekels
(&quot;NIS&quot;)) are translated into the functional currency using the exchange rates prevailing at the dates of the transactions.
Foreign exchange differences resulting from the settlement of such transactions and from the translation at period-end exchange
rates of monetary assets and liabilities denominated in foreign currencies are carried to the statement of comprehensive loss
among financing income or expenses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> c. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Cash
                                                                                and cash equivalents </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash
and cash equivalents include cash in hand and unrestricted short-term bank deposits with maturities of three months or less.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>d.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Fixed
                                                                         assets </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fixed
assets are recognized as assets only if (a) it is probable that future economic benefits associated with the item will flow to
the group and (b) the cost of the item can be measured reliably.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fixed
assets items are initially recognized at acquisition cost. Fixed assets items are stated at cost less accumulated depreciation
and impairment losses.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.5pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.5pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depreciation
is computed by the straight- line method, to reduce the cost of fixed assets to their residual value over their estimated useful
lives as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 40%; font: 10pt Times New Roman, Times, Serif; margin-left: 85pt">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">%</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 77%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Computers</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 20%; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">33</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Office furniture and equipment</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">8-15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Leasehold
improvements are depreciated by the straight-line method over the shorter of the term of the lease or the estimated useful life
of the improvements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
assets&rsquo; residual values, useful lives and depreciation method are reviewed, and adjusted if appropriate at least once a
year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>e.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Research
                                                                         and development:</B></FONT></TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify; text-indent: -17.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 15.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Research
                                                                and development assets acquired by the Company, the development
                                                                of which has not been completed yet, are stated at cost and are
                                                                not amortized; these assets are tested for impairment once a year.
                                                                At the time these assets will be available for use, they will
                                                                be amortized by the straight line method over their useful lives.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify; text-indent: -17.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 14.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Research
                                                                 expenses are charged to profit or loss as incurred. An intangible
                                                                 asset arising from development of the Company's drugs is recognized
                                                                 if all of the following conditions are met:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 105pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">It
                                                                                                            is technically feasible
                                                                                                            to complete the intangible
                                                                                                            assets so that it
                                                                                                            will be available
                                                                                                            for use;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 105pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Management
                                                                                                            intends to complete
                                                                                                            the intangible asset
                                                                                                            and use it or sell
                                                                                                            it;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 105pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">There
                                                                                                            is an ability to use
                                                                                                            or sell the intangible
                                                                                                            asset;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 105pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">It
                                                                                                            can be demonstrated
                                                                                                            how the intangible
                                                                                                            asset will generate
                                                                                                            probable future economic
                                                                                                            benefits;</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 105pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Adequate
                                                                                                            technical, financial
                                                                                                            and other resources
                                                                                                            to complete the development
                                                                                                            and to use or sell
                                                                                                            the intangible asset
                                                                                                            are available; and
                                                                                                            costs associated to
                                                                                                            the intangible asset
                                                                                                            during development
                                                                                                            can be measured reliably.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other
development costs that do not meet the above criteria are recognized as expenses as incurred. Development costs previously recognized
as an expense are not recognized as an asset in a subsequent period.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
of December 31, 2011 and 2010, the Company has not yet capitalized development costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 14.15pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Amounts
                                                                                                      paid in respect of agreement
                                                                                                      to purchase Intellectual
                                                                                                      property of drugs are capitalized
                                                                                                      and carried as intangible
                                                                                                      assets. Amounts due for
                                                                                                      future payment, based on
                                                                                                      the agreement, will be accrued
                                                                                                      upon reaching the relevant
                                                                                                      milestones</FONT>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Research
                                                                               and development costs for the performance of clinical
                                                                               trials<FONT STYLE="font-size: 10pt"> and manufacturing
                                                                               by subcontractors, are recognized upon completion
                                                                               of the development milestones as defined in the
                                                                               agreements.</FONT></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify; text-indent: -17.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> f. </B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Impairment
                                                                                of non-financial assets </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left; text-indent: 59.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.4pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depreciable
assets are tested for impairment if any events have occurred or changes in circumstances have taken place, which might indicate
that their carrying amounts may not be recoverable. An impairment loss is recognized for the amount by which the asset&rsquo;s
carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset&rsquo;s fair value less costs
to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are
separately identifiable cash flows (cash-generating units). Nonfinancial assets that were subject to impairment are reviewed for
possible reversal of the impairment recognized in respect thereof at each date of statement of financial position.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.4pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.4pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Research
and development assets, the development of which has not been completed yet, are not amortized and are tested for impairment on
an annual basis.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> g. </B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Financial
                                                                                assets: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 71.5pt"></TD><TD STYLE="width: 16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Classification</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
financial assets of the Company are classified into the following categories: financial assets at fair value through profit or
loss and loans and receivables. The classification depends on the purpose for which the financial assets were acquired. Company's
management determines the classification of its financial assets at initial recognition.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 88pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">a)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
                                                            assets at fair value through profit or loss</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">This
category includes financial assets that are managed and their performance is evaluated on a fair value basis. Thus upon their
initial recognition, these assets are designated by management at fair value through profit or loss. Assets in this category are
classified as current assets if expected to be settled within 12 months; otherwise, they are classified as noncurrent.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 88pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">b)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loans
                                                            and receivables</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loans
and receivables are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market.
They are included in current assets, except for maturities greater than 12 months after the statement of financial position date,
for which they are classified as noncurrent assets. The loans and receivables of the Company comprise &quot;receivables&quot;,
&quot;cash and cash equivalents&quot; and &quot;bank deposits&quot; in the statement of financial position.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 71.5pt"></TD><TD STYLE="width: 16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2) </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Recognition
                                                                       and measurement </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Regular
purchases and sales of financial assets are recognized on the trade date, which is the date on which the asset is delivered to
the Company or delivered by the Company. Investments are initially recognized at fair value plus transaction costs for all financial
assets not carried at fair value through profit or loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
assets measured at fair value through profit or loss are initially recognized at fair value, and transaction costs are expensed
in profit or loss. Financial assets are derecognized when the rights to receive cash flows from the investments have expired or
have been transferred and the Company has transferred substantially all risks and rewards of ownership. Financial assets at fair
value through profit or loss are subsequently carried at fair value. Loans and receivables are measured in subsequent periods
at amortized cost using the effective interest method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gains
or losses arising from changes in the fair value of financial assets at fair value through profit or loss are presented in the
statement of comprehensive loss under &quot;financial income or expenses&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 88pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> h. </B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Financial
                                                                                                                                         liabilities: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: left; text-indent: -21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 71.5pt"></TD><TD STYLE="width: 16.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Classification:</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 88pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">a)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
                                                                              liabilities at fair value through profit or loss</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">This
category includes financial liabilities designated by management as at fair value through profit or loss. Financial liabilities
at fair value through profit or loss of the Company are mandatory convertible loans exercisable into a variable number of shares
and warrants.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 90.3pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Gains
or losses arising from changes in the fair value of financial liabilities at fair value through profit or loss are presented in
the statement of comprehensive loss under &quot;financial income or expenses&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 88pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">b)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other
                                                                              Financial Liabilities</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.4pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other
financial liabilities are initially measured at fair value, net of transaction costs. In subsequent periods, the other financial
liabilities are presented at amortized cost. Any difference between the consideration (net of transaction costs) and the redemption
value is carried to profit or loss over the term of the liability, using the effective interest method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
liabilities are classified as current liabilities, unless the Company has an unconditional right to defer settlement of the liability
for at least 12 months after the end of the reporting period, for which they are classified as noncurrent liabilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Derecognition
                                                                        of financial liabilities </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">A
financial liability is derecognized when the obligation under the liability is settled, cancelled or expired. The financial liability
is settled when the Company:</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 92pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Repays
                                                           the liability by cash payment, other financial assets, goods or services,
                                                           or</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 92pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Is
                                                           legally released from the liability.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Where
an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of
an existing liability are substantially modified, such an exchange or modification is treated as a derecognition of the original
liability and the recognition of a new liability with the difference in the respective carrying amount is recognized in profit
or loss. Where the replacement or change is immaterial, they are accounted for as change in the terms of the original financial
liability.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> i. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Trade
                                                                          payables </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Trade
payables are obligations to pay for goods or services that have been acquired from suppliers in the ordinary course of business.
Accounts payable are classified as current liabilities if payment is due within one year or less, otherwise they are presented
as noncurrent liabilities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Trade
payables are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 20pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> j. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Share
                                                                          capital </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company's ordinary shares and convertible preferred shares are classified as the Company's share capital. Incremental costs directly
attributed to issuance of new shares or warrants are presented under equity as a deduction from the proceeds of issuance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> k. </B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Employee
                                                                                benefits: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: left; text-indent: -22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 71.5pt"></TD><TD STYLE="width: 22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Pension
                                                                     and retirement benefit obligations </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
any matter related to payment of pension and severance pay to employees to be dismissed or to retire from the Company, the Company
operates in accordance with labor laws.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Labor
laws and agreements in Israel and the Company's practice require the Company to pay severance pay and/ or pensions to employees
dismissed or retiring from their employ in certain other circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company has a severance pay plan in accordance with Section 14 of the Severance Pay Law with the plan handled as a defined contribution
plan. According to the plan, the Company regularly makes payments to severance pay or pension funds without having a legal or
constructive obligation to pay further contributions if the fund does not hold sufficient assets to pay all employees the benefits
relating to employee service in the current and prior periods. Contributions in respect of severance pay or pension are recognized
as employee benefit expenses when they are due commensurate with receipt of work services from the employee and no further provision
is required in the financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: left; text-indent: -22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 71.5pt"></TD><TD STYLE="width: 22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2) </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Vacation
                                                                     and recreation pay </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: left; text-indent: -22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Under
the law, each employee is entitled for vacation days and recreation pay, both computed on an annual basis. The entitlement is
based on the period of employment. The Company records a liability and an expense in respect of vacation and recreation fees,
based on the benefit accumulated for each employee.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> l. </B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Share-based
                                                                                payments </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: left; text-indent: -21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company operates a number of equity-settled, share-based compensation plans to employees (as defined in IFRS 2 &quot;Share-Based
Payments&quot;) and service providers. As part of the plans, the Company grants employees and service providers, from time to
time and at its discretion, options to purchase Company shares. The fair value of the employee and service provider services received
in exchange for the grant of the options is recognized as an expense in profit or loss and at the same time is carried to accumulated
deficit under equity. The total amount recognized as an expense over the vesting period of the options (the period during which
all vesting conditions are expected to be met) was determined as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share
based payments to employee by reference to the fair value of the options granted at date of grant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share
based payments to service providers by reference to the fair value of the service provided.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Nonmarket
vesting conditions are included in assumptions about the number of options that are expected to vest. The total expense is recognized
over the vesting period, which is the period over which all of the specified vesting conditions are to be satisfied.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">At
the end of each reporting period, the Company revises its estimates of the number of options that are expected to vest based on
the nonmarket vesting conditions. The Company recognizes the impact of the revision to original estimates, if any, in profit or
loss, with a corresponding adjustment to accumulated deficit.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">When
exercising options, the Company issues new shares, with proceeds, less directly-attributable transaction costs, recognized as
share capital (par value) and share premium.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>m.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Provisions</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Provisions
are recognized when the Company has a present legal or constructive obligation as a result of past events and it is probable that
an outflow of resources will be required to settle the obligation. Provisions are measured by discounting the future cash outflow
at a pretax interest rate that reflects current market assessments of the time value of money and the risks specific to the obligation.
The carrying amount of the provision is adjusted in each reporting period in order to reflect the passage of time and the changes
in the carrying amounts are carried to the profit and loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> n. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Revenue
                                                                                            recognition </B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Revenue
is measured at the fair value of the consideration received or receivable for providing rights to use the Company's intangible
assets. Revenue is presented net of VAT, returns, credits and discounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Revenue
is recognized when the amount of revenue can be reliably measured; it is probable that future economic benefits will flow to the
Company and the stage of completion of a transaction as of the reporting period end can be measured reliably. The amount of revenue
is not considered to be reliably measurable until all conditions associated with the transaction are settled.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>o.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Leases</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Leases
in which a significant portion of the risks and rewards of ownership are retained by the lessor are classified as operating leases.
Payments made under operating leases are charged to the statement of comprehensive loss on a straight-line basis over the period
of the lease.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 50pt"></TD><TD STYLE="width: 20pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> p. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Loss
                                                                                            per ordinary share </B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
computation of basic loss per share is based, as a general rule, on the Company's loss divided by the weighted average number
of ordinary shares in issue during the period, after taking into account, with retroactive effect to distribution of bonus shares.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
calculating the diluted loss per share, the Company adds to the average number of shares outstanding that was used to calculate
the basic loss per share also the weighted average of the number of shares to be issued assuming the all shares that have a potentially
dilutive effect would be converted into shares. The potential shares, as above are only taken into account in cases where their
effect is dilutive (increasing the loss per share). Since the addition of potential shares reduces loss per share, these potential
shares are not taken into account, and basic and diluted loss per share is identical.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.6pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> q. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Deferred
                                                                               taxes </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Deferred
income tax is recognized, using the liability method, for temporary differences arising between the tax bases of assets and liabilities
and their carrying amounts in the financial statements. However, deferred tax liabilities are not recognized if they arise from
the initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction
affects neither accounting nor taxable profit or loss.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Deferred
income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the statement of financial
position date and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability
is settled. Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be
available against which the temporary differences can be utilized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Since
the Company is unable to assess whether it will have taxable income in the foreseeable future, no deferred taxes were recorded
in these financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.6pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> r. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Standards
                                                                                     and interpretations to existing standards
                                                                                     that are not yet effective and have not been
                                                                                     early adopted by the Company </B></FONT></TD></TR>                                                                                                                               <TR STYLE="vertical-align: top">
<TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></TD><TD STYLE="width: 14.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">International
                                                                            Financial Reporting Standard No. 9 &quot;Financial
                                                                            Instruments&quot; (hereafter - IFRS 9)</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
first part of IFRS 9, dealing with the classification and measurement of financial assets, was issued in November 2009 (hereinafter
first part of IFRS&nbsp;9) and the second part of IFRS 9, which includes guidance on financial liabilities and derecognition of
financial instruments was issued in 2010. IFRS 9 replaces certain parts of IAS 39 &quot;Financial Instruments: Recognition and
Measurement&quot; (hereinafter IAS 39) relating to the classification and measurement of financial instruments. IFRS 9 requires
that financial assets will be classified into one of the following two categories: financial assets measured after initial recognition
at fair value and financial assets measured after initial recognition at amortized cost. The decision on classification is made
on the date of initial recognition, based on the entity's business model and the characteristics and the projected contractual
cash flows from the asset. As to financial liabilities, IFRS 9 retains most guidance of IAS 39, with the main change being that
entities with financial liabilities designated at fair value through profit or loss (FVTPL) recognize changes in the fair value
due to changes in the liability&rsquo;s credit risk (own credit risk) directly in other comprehensive income (OCI), unless this
creates an accounting mismatch.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
to amounts recognized as above in other comprehensive income, the income or loss will not be recycled. However, it is possible
to transfer accumulated income or loss between equity items.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
December 2011, an amendment to IFRS 9 and IFRS 7 &quot;Financial Instruments: Disclosures&quot; (hereinafter the amendment). The
amendment deferred the mandatory effective date of the IFRS 9 and the transition provision for implementation, and added certain
disclosure requirements for the transition (hereinafter the additional disclosures).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">According
to IFRS 9 after the amendment, both parts of IFRS 9 will apply to annual periods commencing on January 1, 2015 and thereafter.
Entities can elect to early adopt IFRS 9, but it is not permitted to adopt early the second part of IFRS 9 without implementing
the first part of IFRS 9 on the same date. On the other hand, it is possible to early adopt the first part of IFRS 9 without being
required to implement the second part of IFRS 9 on the same date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Entities
adopting IFRS 9 for reporting periods:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.2pt"></TD><TD STYLE="width: 14.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Prior
                                                                to January 1, 2012 are neither required to restate comparatives
                                                                on first-time implementation and provide the additional disclosures.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.2pt"></TD><TD STYLE="width: 14.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Beginning
                                                                January 1, 2013 and prior to January 1, 2013 will be required
                                                                to restate comparatives and provide the additional disclosures.</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 85.2pt"></TD><TD STYLE="width: 14.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Beginning
                                                                on January 1, 2013 or thereafter will not be required to restate
                                                                comparatives but will be required to provide additional disclosures.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 14.3pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company is assessing the expected effect of IFRS 9 on the financial statements and the timing of adoption.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 80pt"></TD><TD STYLE="width: 25pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">IFRS
                                                                              13 &quot;Fair Value Measurement&quot; (hereinafter
                                                                              IFRS 13)</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">IFRS
13 aims to improve consistency and reduce complexity by providing a precise definition of 'fair value' and a single source of
fair value measurement and disclosure requirements for use across IFRSs. The requirements do not extend the use of fair value
accounting, but provide guidance on how it should be applied where its use is already required or permitted by other standards
within IFRSs. IFRS 13 should be applied for annual periods commencing on January 1, 2013 or thereafter. Early adoption is permitted
with a related disclosure. IFRS&nbsp;13 is applied prospectively as of the beginning of the annual period in which it is initially
applied. The disclosure requirements of the new guidance do not need to be applied in comparative information for periods before
initial application of IFRS 13.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company is assessing the expected effect of IFRS 13 on the financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Estimates
and judgments are continually evaluated and are based on historical experience and other factors, including expectations of future
events that are believed to be reasonable under the circumstances.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company makes judgments and estimates and assumptions concerning the future. The resulting accounting estimates will, by definition,
seldom equal the related actual results. The material judgments, estimates and assumptions that have a significant risk of causing
a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
3 - CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS</B> (continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 20.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Fair
                                                                         value of mandatory convertible loans</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of the above mandatory convertible loans that are not traded in an active market is determined by using valuation techniques.
The Company uses its judgment to select a variety of methods and make assumptions that are mainly based on market conditions existing
at the end of each reporting period. The Company's management used an assistance of external appraiser in determining the value
of the mandatory convertible loans. The estimated fair value of these loans might have changed had Company's management used different
estimates and assumptions.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 20.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Impairment
                                                                         of intangible assets</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">The
Company reviews once a year or when indications of impairment are present, whether research and development assets are impaired,
see also note 2f. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">The
Company makes judgments to determine whether indications are present that require reviewing impairment of these intangible assets.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">An
impairment loss is recognized for the amount by which the asset&rsquo;s carrying amount exceeds its recoverable amount. The recoverable
amounts of cash generating units are based on Company's estimates as to the development of the drugs, changes in market scope,
market competition and timetables for regulatory approvals.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.65pt"></TD><TD STYLE="width: 19.65pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>c.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Royalty
                                                                         obligations to investors</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">Royalty
obligations to investors are presented in the statement of financial position at amortized cost according to Company estimations
to pay future royalties to investors. The amounts paid will be 5% of future revenue that the Company will derive from two therapeutic
candidates of the Company, see also note 12a(4).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT</B>:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99pt; text-align: justify; text-indent: -11pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 55pt"></TD><TD STYLE="width: 16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Financial
                                                                     risk management:</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify; text-indent: -16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 14.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
                                                                 risk factors</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company&rsquo;s activities expose it to a variety of financial risks: market risk (including foreign exchange risk and price risk),
credit and interest risks and liquidity risk. The Company&rsquo;s overall risk management program focuses on the unpredictability
of financial markets and seeks to minimize potential adverse effects on the Company&rsquo;s financial performance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Risk
management is performed by Deputy Chief Executive Officer Finance and Operations of the Company, who identifies and evaluates
financial risks in close cooperation with the Company's Chief Executive Officer.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.75pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company&rsquo;s finance department is responsible for carrying out risk management activities in accordance with policies
approved by its Board of Directors. The Board of Directors provides guidelines for overall risk management, as well as
policies dealing with specific areas, such as exchange rate risk, interest rate risk, credit risk, use of financial
instruments, and investment of excess cash. In order to minimize the risk exposure to market risk and credit risk the Company
invested the majority of its cash balances in highly-rated bank deposits with maturity of less than a year, and the remaining
balance is invested in high rated marketable securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.75pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (a) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Market
                                                                         risks </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Foreign
exchange risk - the Company might be exposed to foreign exchange risk as a result of making payments to employees or service providers
and investment of some liquidity in currencies other than the US dollar (i.e. the functional, reporting and presentation currency
of the Company). The Company manages the foreign exchange risk by aligning the currencies for holding liquidity with the currencies
of expected expenses, based on the expected cash flows of the Company. Had the functional currency of the Company been stronger
by 5% against the NIS, assuming all other variable remained constant, the Company would have recognized an additional expense
of $393 thousand and $138 thousand in profit or loss for the years ended, December 31, 2011 and 2010, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Price
risk - the Company is sometimes exposed to equity securities price risk because of investments held by the Company and classified
on the statement of financial position as financial assets at fair value through profit or loss. To manage its price risk arising
from investments in equity securities, the Company invests in marketable securities with high rating and diversifies its investment
portfolio.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Portfolio
diversification is done based on risk level limits set by the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.75pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (b) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Credit
                                                                         and interest risks </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Credit
and interest risk arises from cash and cash equivalents, deposits with banks as well as accounts receivable. A substantial portion
of liquid instruments of the Company is invested in short-term deposits in highly-rated banks. The Company estimates that since
the liquid instruments are mainly invested for the short-term and with highly-rated institutions, the credit and interest risk
associated with these balances is immaterial.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>



<P STYLE="margin: 0"></P>
<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> &nbsp; </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> NOTE
4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.75pt"></TD><TD STYLE="width: 21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (c) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Liquidity
                                                                         risk </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -21.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">Prudent
liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount of committed
credit facilities. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">Management
monitors rolling forecasts of the Company&rsquo;s liquidity reserve (comprising cash and cash equivalents and deposits). This
is generally carried out based on the expected cash flows in accordance with practice and limits set by the management of the
C</FONT>ompany.</P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company is in an R&amp;D stage and has not yet generated significant revenue from sale of drugs or royalties; it is therefore
exposed to liquidity risk, taking into consideration the forecasts of cash flows required to finance its investments and other
activities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
table presented below classifies the Company's financial liabilities into relevant maturity groupings based on the remaining period
to the contractual maturity date. The amounts presented in the table represent the contractual undiscounted cash flows.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> &nbsp; </B></FONT></P><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></P></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Less
    than <BR> 1 year </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Between
    1 <BR>
    and 5 <BR>
    years </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> More
    than <BR> 5 years </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> US
    dollars in thousands </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> As of December
    31, 2011: </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Accounts
    payable and accruals </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 513 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Royalty
    obligations to investors </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,929 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,143 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 513 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,929 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,143 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> As of December
    31, 2010: </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Accounts payable
    and accruals </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 141 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Royalty
    obligations to investors </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 23 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,127 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,260 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 164 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,127 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,260 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Capital
                                                                                     risk management </FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company&rsquo;s objectives when managing capital are to safeguard the Company&rsquo;s ability to continue as a going concern in
order to provide returns for shareholders and to maintain an optimal capital structure to reduce the cost of capital. It should
be indicated that the Company is in the development stage and has not yet generated significant revenue from the sale of drugs
or from royalties.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.25in; text-align: justify; text-indent: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> NOTE
4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 3) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Fair
                                                                                     value estimation </FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
table below analyses financial instruments carried at fair value through profit of loss, by valuation methods. The different levels
have been defined as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Quoted
                                                                                                              prices (unadjusted)
                                                                                                              in active markets
                                                                                                              for identical assets
                                                                                                              or liabilities (level
                                                                                                              1).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Inputs
                                                                                                              other than quoted
                                                                                                              prices included
                                                                                                              within level 1 that
                                                                                                              are observable for
                                                                                                              the asset or liability,
                                                                                                              either directly
                                                                                                              (that is, as prices)
                                                                                                              or indirectly (that
                                                                                                              is, derived from
                                                                                                              prices) (level 2).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Inputs
                                                                                                              for the asset or
                                                                                                              liability that are
                                                                                                              not based on observable
                                                                                                              market data (that
                                                                                                              is, unobservable
                                                                                                              inputs) (level 3).</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                                                              fair value of financial
                                                                                                              instruments traded
                                                                                                              in active markets
                                                                                                              is based on quoted
                                                                                                              market prices at
                                                                                                              dates of statements
                                                                                                              of financial position.</FONT></TD></TR></TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">A
market is regarded as active if quoted prices are readily and regularly available from an exchange, dealer, broker, industry group,
pricing service, or regulatory agency, and those prices represent actual and regularly occurring market transactions on an arm&rsquo;s
length basis. These instruments are included in level 1.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These
valuation techniques maximize the use of observable market data where it is available and rely as little as possible on entity
specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included
in level 2.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
one or more of the significant inputs is not based on observable market data, the instrument is included in level 3.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
to specific valuation techniques used to value financial instruments included in level&nbsp;3, see note 12.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
following table presents Company assets and liabilities measured at fair value:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Level
    1 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Level
    3 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> US
    dollars in thousands </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> December 31, 2011- </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Assets
    - </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 34.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Financial
    assets at fair value through profit or loss </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,564 </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%; font-weight: bold; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> December 31, 2010: </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Assets
    - </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 34.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> financial
    assets at fair value through profit or loss </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 87 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Liabilities
    - </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> mandatory
    convertible loans </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 11,245 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -1.7pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> NOTE
4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -1.7pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
following table presents the change in instruments measured at level 3 for the years ended December 31, 2011 and 2010:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Financial
    liabilities at fair value <BR>
    through profit or loss </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> US
    dollars <BR> in thousands </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Balance at January
    1, 2010: </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 70%; text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Proceeds
    received during the reported period </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 27%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 10,700 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Amounts
    recognized in profit or loss </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 545 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Balance at December
    31, 2010: </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 11,245 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Amounts
    recognized in profit or loss </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 7,938 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Conversion
    of the mandatory convertible loans </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (19,183 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> ) </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -13.75pt; padding-left: 13.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Balance
    at December 31, 2011 </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 49.7pt"></TD><TD STYLE="width: 21.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> b. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Classification
                                                                              of financial instruments by Groups: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify; text-indent: -16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Assets
    at fair <BR>
    value <BR>
    through <BR>
    profit or loss</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loans
    and<BR>
    receivables</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As of December
    31 ,2011:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; padding-left: 0.12in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash
    and cash equivalents</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14,070</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14,070</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bank deposits</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,086</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,086</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.24in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
    assets at fair value through &nbsp;profit or loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,564</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,564</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 0.12in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Receivables
    (except prepaid expenses)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">19</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">19</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 16.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,564</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">17,175</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">18,739</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As of December
    31 ,2010:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.12in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash and cash
    equivalents</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,050</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,050</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 0.12in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bank deposits</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 0.24in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
    assets at fair value through profit or loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">87</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">87</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 0.24in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Receivable
    (excluding prepaid &nbsp;expenses)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">87</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,127</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,214</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> &nbsp; </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> NOTE
4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify; text-indent: -16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Liabilities
    at <BR>
    fair value <BR>
    through <BR>
    profit or loss</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
    <BR>
    liabilities at <BR>
    amortized<BR>
    cost</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As of December
    31, 2011:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt; width: 64%"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts
    payable and accruals</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">513</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">513</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Royalty
    obligations to investors</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">886</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">886</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 7.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,399</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,399</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As of December
    31, 2010:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts payable
    and accruals</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">141</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">141</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mandatory convertible
    loans</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,245</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,245</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Royalty
    obligations to investors</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">718</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">718</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 22.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,245</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">859</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,104</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> c.&nbsp;&nbsp;&nbsp;&nbsp;Composition
of financial instruments by currency: </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify; text-indent: -16.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>As
of December 31, 2011:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -0.6pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: justify; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Dollar </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Foreign
    currency <BR>
    (mainly NIS) </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Total </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> US
    dollars in thousands </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Assets: </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 55%; text-align: justify; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Cash
    and cash equivalents </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 9,857 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4,213 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 14,070 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Bank deposits </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 3,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 86 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 3,086 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Financial
    assets at fair value &nbsp;through profit or loss </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,564 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,564 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Receivable
    (except prepaid expenses) </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 19 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 19 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 7.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 12,857 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 5,882 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 18,739 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Liabilities: </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Accounts
    payable and accruals </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 338 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 175 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 513 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Royalty
    obligations to investors </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 886 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 886 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 22.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,224 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 175 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,399 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 22.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 11,633 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 5,707 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 17,340 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;&nbsp;&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> NOTE
4 - FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>As
of December 31, 2010:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Dollar</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Foreign
    currency <BR>
    (mainly NIS)</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Total</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Assets:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 55%; text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash
    and cash equivalents</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,611</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,439</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 12%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,050</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Bank deposits</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
    assets at fair value through profit or loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">87</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">87</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Receivables
    (excluding prepaid expenses)</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 7.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,611</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,603</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,214</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Liabilities:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accounts
    payable and accruals</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">129</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">141</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Mandatory convertible
    loans</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,245</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,245</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Royalty
    obligations to investors</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">718</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">718</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 22.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,092</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12,104</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 22.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(6,481</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,591</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(2,890</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
5 - CASH AND CASH EQUIVALENTS AND BANK DEPOSITS:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.5pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.&#9;Cash
and Cash Equivalents:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cash in bank</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,030</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,738</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Short-term bank
    deposits</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">11,040</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,312</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 14.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14,070</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,050</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
carrying amounts of the cash and cash equivalents approximate their fair values.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.&#9;Bank
Deposits </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
bank deposits are for terms of three months to one year and bear interest at annual rates of between 2.2% - 2.46%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
6 - FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">These
financial assets represent a portfolio of Israeli, NIS denominated marketable securities as of December 31, 2011 and 2010, which
is managed and valued by the company based on the fair value of all portfolio securities.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Taking
into consideration the manner of management of the portfolio and the evaluation of its performances, the Company classified the
entire investment in the marketable securities portfolio as financial assets at fair value through profit or loss. The fair value
of the securities is based on its exchange market price at the end of the reporting date trading day.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
7 - PREPAID EXPENSES AND RECEIVABLES:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 70%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: left; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Prepaid
    expenses</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">70</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">88</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Government institutions</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">62</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">89</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">150</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of receivables, which constitute financial assets, approximates their carrying amount.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
maximal exposure to credit risks as of statement of financial position date in respect of the receivable balances is the fair
value of the entire receivables in respect of those balances net of nonmonetary balances (arising from prepaid expense). The Company
does not hold collaterals in connection with these receivables.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
                            8 -</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>FIXED
                                                                                                                                            ASSETS</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-right: 0; margin-bottom: 0pt; text-align: justify; text-indent: 0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
composition of assets and accumulated depreciation, grouped by major classifications:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45.6pt; text-align: justify; text-indent: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cost</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accumulated
    <BR>
    depreciation</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Depreciated
    <BR>
    balance</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="22" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Office furniture and equipment</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">65</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">56</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">(including computers)</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Leasehold improvements</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">82</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">76</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">147</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">132</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;<FONT STYLE="text-underline-style: none"><B>&nbsp;</B></FONT></FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B> REDHILL
                                                                                                                      BIOPHARMA
                                                                                                                      LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
                            9 -</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>INTANGIBLE
                                                                                                                                            ASSETS</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
intangible assets represent R&amp;D assets in respect to intellectual property rights in drugs purchased by the Company under
licensing agreements or under assets' acquisition agreements. The changes in those assets are as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Period
    from <BR>
    August 3, 2009 <BR>
    through <BR>
    December 31,</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2009</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cost:</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance
    at beginning of period</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,200</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Additions
    during the period</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">45</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,100</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Balance
    at end of period</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,245</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,200</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 27pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">For further details,
    see note 13.</FONT></TD><TD STYLE="font-size: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 0.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 0.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-size: 0.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-size: 0.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: left; text-indent: -0.75in"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
10 - LIABILITY FOR EMPLOYEE RIGHTS UPON RETIREMENT:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 52.5pt"></TD><TD STYLE="width: 17.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Labor
                                                                       laws and agreements in Israel require the Company to pay
                                                                       severance pay and/or pensions to employer dismissed or
                                                                       retiring from their employ in certain other circumstances.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 77pt; text-align: justify; text-indent: -22pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 51.8pt"></TD><TD STYLE="width: 18.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                       Company's pension liability and the Company's liability
                                                                       for payment of severance pay in respect of employees in
                                                                       Israel for whom the liability is within the scope of Section
                                                                       14 for the Severance Pay Law is covered by ongoing deposits
                                                                       with defined contribution plans. The amounts deposited
                                                                       are not included in the statements of financial position.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 77.1pt; text-align: justify; text-indent: -22.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
amounts charged as an expense in respect of defined contribution plans in 2011 was $51 thousand. Of that amount, $25 thousand
and $26 thousand were charged to general and administrative expenses and to research and development expenses, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
amount recognized as an expense on defined contribution plan in 2010 was $8 thousand. Of that amount, $5 thousand and $3 thousand
were charged to general and administrative expenses and research and development expenses, respectively.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
                                                                                                                      BIOPHARMA
                                                                                                                      LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;<B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
11 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES: </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 76%; text-align: justify; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Trade
    payables</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">337</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Expenses payable</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">52</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">78</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Employees and
    employees institutions</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">85</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">36</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Government
    institutions</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">39</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">24</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; padding-left: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">513</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">141</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of the accounts payable and accrued expense balances approximates their carrying amounts.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
12 - MANDATORY CONVERTIBLE LOANS AND ROYALTY OBLIGATIONS TO INVESTORS:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 52.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;First
convertible loans:</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77.95pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
                                                                  August 2010, the Company, raised $3.5 million from investors
                                                                  (part of which were shareholders) in the form of convertible
                                                                  loans (&quot;the first convertible loans&quot;). The loans were
                                                                  denominated in dollars, bore interest at an annual rate of 8%
                                                                  and in any case were not repayable in cash. In addition to bearing
                                                                  interest, the loan terms also included a conversion feature
                                                                  into convertible loans. Those convertible loans are to be converted
                                                                  into the Company's shares and warrants that were exercisable
                                                                  into the Company's shares. Further, there was an additional
                                                                  liability for future royalties, as more fully described in (4)
                                                                  below.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77.95pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Based
                                                                  on the terms of the loans agreement, in the absence of any material
                                                                  capital raising event in the period through August 31, 2010,
                                                                  as of that date, these loans were converted into new convertible
                                                                  loans with updated terms (&quot;the new terms&quot;).</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77.95pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                  new terms of the loans included conversion feature terms as
                                                                  above, and the liability for future royalties remained the same.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> &nbsp; </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> NOTE
12 &ndash; MANDATORY CONVERTIBLE LOANS AND ROYALTY OBLIGATION TO INVESTORS </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77.95pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Under
                                                                                                       the first convertible loans
                                                                                                       agreement, the investors
                                                                                                       are entitled to 5% royalties
                                                                                                       of future revenue that
                                                                                                       will arise from two therapeutic
                                                                                                       candidates purchased by
                                                                                                       the Company, in connection
                                                                                                       with both Net Sales and
                                                                                                       advances or milestones
                                                                                                       as part of licensing transaction
                                                                                                       as follows:</FONT></TD></TR></TABLE>



<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">a)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Royalty
                                                                 income on net sales and/or royalty income on sales by licensed
                                                                 reseller and/or distributors will be paid over 5 years since
                                                                 beginning commercial sales of one of the therapeutic candidates.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="margin-top: 0pt; margin-bottom: 0pt; font-size: 10pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">b)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Royalty
                                                                 income from down payments and milestones over a period of 5 years
                                                                 commencing from August 11, 2010 (the closing date of the first
                                                                 convertible loan).</FONT></TD></TR></TABLE>

<P STYLE="margin: 0pt 0 0pt 0.5in; font-size: 10pt"></P>

<P STYLE="text-indent: 63.25pt; margin: 0pt 0 0pt 0.5in; font-size: 10pt"></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 63.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
right to royalties will also exist following any conversion of the convertible loans.</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 77.95pt"></TD><TD STYLE="width: 21.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                  consideration received for the first convertible loans was divided
                                                                  into two components for measurement purposes mandatory convertible
                                                                  loans and royalties' obligation). Because these loans hosed
                                                                  an embedded derivative, the Company decided to designate it
                                                                  as a liability at fair value through profit or loss. The total
                                                                  consideration was attributed to the mandatory convertible loans,
                                                                  based on their fair value upon issuance and the balance was
                                                                  assigned to royalties' obligation which is carried at amortized
                                                                  cost (using the embedded effective interest on the date of issuance).</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of the mandatory convertible loans upon issuance was $3,079 thousand. The balance attributed to the royalties' obligation
was $391 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of the mandatory convertible loans is computed using a common valuation model, which takes into account the different
scenarios for converting the loans into equity and is based on the price of an ordinary share (hereinafter - the underlying asset)
and based, as of December 31, 2010, on the following key parameters: risk-free interest rate of 0.19% - 1.02% and an average standard
deviation of 39.3% - 77.8%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
effective interest rate on royalties' obligation is 27.98%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.2pt; text-align: justify; text-indent: 0.05pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Second
                                                                                         convertible loans</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 20.7pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 75pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
November 2010, the Company completed an additional capital round raising $7.6 million in mandatory convertible loans to Israeli
and foreign investors (hereinafter - the second convertible loans). The terms of the loans are equal to the terms of the first
convertible loans, except for the entitlement for royalties.&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> &nbsp; </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: left; text-indent: -56.8pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B> NOTE
12 &ndash; MANDATORY CONVERTIBLE LOANS AND ROYALTY OBLIGATION TO INVESTORS </B> (continued): </FONT>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>c.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Conversion
                                                                       of the mandatory convertible loans</B></FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 75pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Based
on the convertible loans terms, just prior to the Company's Initial Public Offering, all of the mandatory convertible loans were
automatically converted into 19,818,314 Company's ordinary shares and to warrants. The conversion ratio was $0.5721 of convertible
loan (and all accrued interest) into 1 ordinary share, as stipulated by the loans agreements. As to the terms of the warrants,
see note 15c(1). The liability for future royalties still exists.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.05pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
13 - COMMITMENTS:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> a. </B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Agreements
                                                                              to purchase intellectual property of drugs: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 87.95pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                             November 18, 2009, the Company engaged with a Danish company in an
                                                             agreement that provides the Company an exclusive right to use the
                                                             rights in a drug for treating congestive heart failure, left atrium
                                                             dysfunction and high blood pressure. According to the agreement,
                                                             the Company will pay the Danish company an initial amount of $100
                                                             thousand, and later will transfer to the Danish company additional
                                                             amounts of up to $700 thousand based on achieving regulatory milestones
                                                             as agreed between the parties. Under the agreement, the Company undertook
                                                             to pay the Danish company royalties at 30% of the Company revenues
                                                             generated by the drug, less specified amounts incurred in the 12
                                                             years from the date marketing begins, or until the patent expires,
                                                             whichever is the earliest in each country where the drug will be
                                                             marketed. According to the understanding, the Company will obtain
                                                             exclusive global rights for completing development and for production,
                                                             commercialization, marketing and selling the drug. Through December
                                                             31, 2011, the Company paid the Danish company $100 thousand.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                             May 2, 2010, the Company engaged with a US publically traded company
                                                             in an agreement granting the Company an exclusive license to use
                                                             rights in a drug for treating chemotherapy radiation and surgery
                                                             induced nausea and vomiting. Under the agreement, the Company will
                                                             pay the US company an initial amount of $100 thousand, and will later
                                                             pay the US company an amount of up to $500 thousand, based on regulatory
                                                             milestones set between the parties. Under the agreement, the Company
                                                             undertook to pay the US company royalties at 8% of Company revenues
                                                             from selling the drug, less certain amounts as detailed in the agreement,
                                                             during a period which is the shorter of: (1) expiry of the last patent
                                                             granted under the license; (2) ten years from the beginning of marketing
                                                             by the Company or any third party; and (3) the date in which the
                                                             amount of all payments to the US company reach $30 million. Through
                                                             December 31, 2011, the Company paid $100 thousand to the US company.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.05pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> &nbsp; </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.05pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
13 - COMMITMENTS </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -28.35pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                             August 26, 2010, the Company engaged with a Canadian based company
                                                             which is traded in the US and Canada in an agreement for a co-development
                                                             of a drug for the treatment of migraine. Under the agreement, the
                                                             Company paid the Canadian company an initial amount of $500 thousand
                                                             on the date of signing the agreement, and later will transfer additional
                                                             amounts of up to $800 thousand based on achieving milestones as agreed
                                                             between the parties. In addition, the Company will participate in
                                                             additional drug research and development costs of up to $934 thousand.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Under
the agreement, the Company will pay a 60% royalty to the Canadian company for the first $2 million in revenue. For revenues beyond
the $2 million, the Company will pay royalties at 20% - 40% of the Company's income from the drug. The agreement is for an indefinite
period. Through December 31, 2011, the Company paid the Canadian Company for the license of the drug under the agreement a total
of approximately $500 thousand.</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                             August 11, 2010, the Company engaged with Australian company listed
                                                             on the Australian stock exchange in an asset purchase agreement to
                                                             acquire intellectual property of the Australian company relating
                                                             to three therapeutic candidates for the treatment of intestinal and
                                                             digestion conditions. Under the purchase agreement, the Company will
                                                             pay the Australian company an initial amount of $500 thousand and
                                                             later, another payment in the range of 7% - 20% of Company revenues
                                                             from the sale of the drugs. Through December 31, 2011, the Company
                                                             paid the Australian company a total of $500 thousand.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 71.4pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                             September 18, 2011, the Company engaged with a US academic institution
                                                             (hereinafter &ndash; &quot;the Academic Institution&quot;) in an
                                                             agreement to acquire exclusive rights to a diagnostic test (hereinafter
                                                             &ndash; the &quot;test&quot;) for a certain bacteria that is relatively
                                                             prevalent among patients of a certain condition of the intestines
                                                             and digestive tract.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Under
the agreement, in addition to an initial payment of $45 thousand, the Company will pay the Academic Institution royalties in the
range of 7% - 20% of the amount received by the Company from revenues resulting from rights to the test and other potential payments
in immaterial amounts. Through December 31, 2011, the Company paid the Academic Institution a total amount of $45 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
acquisition of rights was intended to allow the Company to screen patients for clinical trials and in the future, may be used
commercially, if and when approved for marketing, in combination with treatment with one of the drugs that was purchased from
the Australian company above.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.8pt; text-align: justify; text-indent: -0.15pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.8pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
13 - COMMITMENTS </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 15.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Operating
                                                                        lease agreement</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company entered into operating lease agreement in respect of offices it uses. The agreement will expire on February 28, 2016 (hereafter
&ndash; date of end of rental period) with an option to extend the rental period by additional 3 years. The projected rental payments
until the end of the rent period, at rates in effect at December 31, 2011, are $ 150 thousand per year.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 72.8pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
of December 31, 2011 an amount of $ 73 thousand was deposited with a bank to secure the lease payments.</FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
14 - INCOME TAX:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 82.2pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Measurement
                                                                       of results for tax purposes</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 82.2pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
results of the Company are measured for tax purposes in NIS and in accordance with Accounting Principles Generally Accepted in
Israel (Israeli GAAP). These financial statements are prepared in dollars and in accordance with IFRS. The difference between
the NIS and the exchange rate of the dollar and differences between IFRS and Israeli GAAP, both on an annual and a cumulative
basis causes a difference between taxable results and the results reflected in these financial statements.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 82.2pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Tax
                                                                       Rates</B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
income of the Company is liable to the normal corporate tax rate. The Amendment to the Israel Income Tax Ordinance, which was
passed into law in August 2005, set a gradual decrease in corporate tax rate. Corporate tax rates in 2009 and thereafter is: 2009
26%, 2010 and thereafter - 25%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
July 14, 2009, the Knesset (the Israeli parliament) passed into law the Economic Efficiency Law (Legislation Amendments for Applying
the Economic Program for 2009 and 2010), 2009 (hereinafter the 2009 amendment), which stipulated among other things an additional
gradual reduction in corporate tax rates in 2011 and thereafter as follows: 2011 -24%, 2012 - 23%, 2013 - 22%, 2014 - 21%, 2015
20%, 2016 and thereafter - 18%.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
December 6, 2011, the Law for Changing the Tax Burden (Legislative Amendments), 2011 (the 2011 amendment), was published in Reshumot
(the official gazette of the Israeli government), halting the phased reduction in corporate tax rates that was enacted in 2009,
and setting corporate tax rate at 25% in 2012 and thereafter.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
14 - INCOME TAX </B> (continued) <B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> c. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Carry
                                                                                                                                                         forward
                                                                                                                                                         losses </B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
balance of carry forward losses as of December 31, 2011 is $4 million. These tax loss carry forwards have no expiration
date.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Deferred
tax assets on losses for tax purposes carried forward to subsequent years are recognized if utilization of the related tax benefit
against a future taxable income is expected. The Company has not created deferred taxes on its carry forward losses since their
utilization is not expected in the foreseeable future.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>d.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Deductible
                                                                                         temporary differences</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
amount of cumulative deductible temporary differences, other than loss carry forwards (as mentioned in c. above), for which deferred
tax assets have not been recognized in the statement of financial position as of December 31, 2011 and 2010, were $2.5 million
and $0.5 million, respectively. These temporary differences have no expiration dates.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>e.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Tax
                                                                                         assessments</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
Company has not been assessed for tax purposes since its incorporation.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
15 - EQUITY:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Share
                                                                                         capital:</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Composition</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Company
share capital is composed of ordinary shares and convertible preferred shares of NIS&nbsp;0.01 par value, as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="RIGHT" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Number
    of shares</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Value</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">December
    31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">**2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
    thousands</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">U.S.
    dollars<BR>
    in thousands</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -15.9pt; padding-left: 15.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Authorized
    share capital:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 52%; text-align: left; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ordinary
    shares*</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">40,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">262</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Convertible
    preferred shares</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,000</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">50,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">262</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">15</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -12.25pt; padding-left: 12.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Issued
    and paid-up share capital:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ordinary shares</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">52,320</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">9,600</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">142</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Convertible
    preferred shares</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6,497</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">52,320</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">16,097</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">142</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE><BR STYLE="clear: both"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 78pt"></TD><TD STYLE="width: 14.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">*</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Starting
                                                              in February 2011, the Company shares are traded on the Tel Aviv
                                                              Stock Exchange (TASE). The closing price on December 31, 2011 is
                                                              $0.65 per ordinary share of NIS&nbsp;0.01.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.1pt; text-align: justify; text-indent: -15.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">**After
giving retroactive effect for 1:10 distribution of bonus shares (see (3)(c) below).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.1pt; text-align: justify; text-indent: -20.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.1pt; text-align: justify; text-indent: -20.3pt"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.1pt; text-align: justify; text-indent: -20.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;<B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.1pt; text-align: justify; text-indent: -20.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
15 - EQUITY </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.1pt; text-align: justify; text-indent: -20.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Rights
                                                                                                                             attached
                                                                                                                             to
                                                                                                                             Company
                                                                                                                             shares: </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.6pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (a) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Ordinary
                                                                                                                                 shares
                                                                                                                                 provide
                                                                                                                                 holders
                                                                                                                                 the
                                                                                                                                 rights
                                                                                                                                 to
                                                                                                                                 participate
                                                                                                                                 and
                                                                                                                                 vote
                                                                                                                                 in
                                                                                                                                 shareholders
                                                                                                                                 meetings,
                                                                                                                                 a
                                                                                                                                 right
                                                                                                                                 to
                                                                                                                                 appoint
                                                                                                                                 directors,
                                                                                                                                 a
                                                                                                                                 right
                                                                                                                                 to
                                                                                                                                 receive
                                                                                                                                 a
                                                                                                                                 share
                                                                                                                                 of
                                                                                                                                 earnings
                                                                                                                                 and
                                                                                                                                 a
                                                                                                                                 right
                                                                                                                                 to
                                                                                                                                 participate
                                                                                                                                 in
                                                                                                                                 remaining
                                                                                                                                 assets
                                                                                                                                 upon
                                                                                                                                 liquidation
                                                                                                                                 after
                                                                                                                                 convertible
                                                                                                                                 preferred
                                                                                                                                 shares. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (b) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Convertible
                                                                                                                                 preferred
                                                                                                                                 shares
                                                                                                                                 convertible
                                                                                                                                 into
                                                                                                                                 ordinary
                                                                                                                                 shares
                                                                                                                                 at
                                                                                                                                 a
                                                                                                                                 1:1
                                                                                                                                 ratio,
                                                                                                                                 provide
                                                                                                                                 holders,
                                                                                                                                 among
                                                                                                                                 other
                                                                                                                                 things,
                                                                                                                                 voting
                                                                                                                                 rights,
                                                                                                                                 rights
                                                                                                                                 to
                                                                                                                                 appoint
                                                                                                                                 directors,
                                                                                                                                 priority
                                                                                                                                 in
                                                                                                                                 distribution
                                                                                                                                 of
                                                                                                                                 Company
                                                                                                                                 assets
                                                                                                                                 upon
                                                                                                                                 liquidation
                                                                                                                                 up
                                                                                                                                 to
                                                                                                                                 the
                                                                                                                                 original
                                                                                                                                 amount
                                                                                                                                 paid
                                                                                                                                 and
                                                                                                                                 receiving
                                                                                                                                 dividends.
                                                                                                                                 In
                                                                                                                                 addition,
                                                                                                                                 in
                                                                                                                                 case
                                                                                                                                 additional
                                                                                                                                 capital
                                                                                                                                 is
                                                                                                                                 raised
                                                                                                                                 at
                                                                                                                                 a
                                                                                                                                 lower
                                                                                                                                 share
                                                                                                                                 price
                                                                                                                                 than
                                                                                                                                 paid
                                                                                                                                 for
                                                                                                                                 convertible
                                                                                                                                 preferred
                                                                                                                                 shares,
                                                                                                                                 then
                                                                                                                                 the
                                                                                                                                 conversion
                                                                                                                                 ratio
                                                                                                                                 of
                                                                                                                                 such
                                                                                                                                 shares
                                                                                                                                 will
                                                                                                                                 be
                                                                                                                                 adjusted. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Changes
                                                             in share capital:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (a) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> On
                                                                                                                                 January
                                                                                                                                 27,
                                                                                                                                 2011,
                                                                                                                                 the
                                                                                                                                 general
                                                                                                                                 meeting
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 ratified
                                                                                                                                 replacing
                                                                                                                                 the
                                                                                                                                 existing
                                                                                                                                 articles
                                                                                                                                 of
                                                                                                                                 incorporation
                                                                                                                                 with
                                                                                                                                 a
                                                                                                                                 new
                                                                                                                                 one
                                                                                                                                 that
                                                                                                                                 better
                                                                                                                                 fits
                                                                                                                                 a
                                                                                                                                 public
                                                                                                                                 company.
                                                                                                                                 Under
                                                                                                                                 the
                                                                                                                                 new
                                                                                                                                 articles,
                                                                                                                                 the
                                                                                                                                 outstanding
                                                                                                                                 preferred
                                                                                                                                 shares
                                                                                                                                 were
                                                                                                                                 converted
                                                                                                                                 into
                                                                                                                                 ordinary
                                                                                                                                 shares
                                                                                                                                 and
                                                                                                                                 the
                                                                                                                                 authorized
                                                                                                                                 share
                                                                                                                                 capital
                                                                                                                                 was
                                                                                                                                 consolidated
                                                                                                                                 into
                                                                                                                                 a
                                                                                                                                 single
                                                                                                                                 type
                                                                                                                                 of
                                                                                                                                 ordinary
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 NIS&nbsp;0.01
                                                                                                                                 par
                                                                                                                                 value
                                                                                                                                 each. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 78pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (b) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> On
                                                                                                                                 January
                                                                                                                                 16,
                                                                                                                                 2011,
                                                                                                                                 the
                                                                                                                                 Company's
                                                                                                                                 Board
                                                                                                                                 of
                                                                                                                                 Directors
                                                                                                                                 resolved
                                                                                                                                 to
                                                                                                                                 increase
                                                                                                                                 the
                                                                                                                                 issued
                                                                                                                                 and
                                                                                                                                 outstanding
                                                                                                                                 share
                                                                                                                                 capital
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 to
                                                                                                                                 NIS&nbsp;1
                                                                                                                                 million,
                                                                                                                                 divided
                                                                                                                                 into
                                                                                                                                 100,000,000
                                                                                                                                 ordinary
                                                                                                                                 shares
                                                                                                                                 of
                                                                                                                                 NIS&nbsp;0.01
                                                                                                                                 par
                                                                                                                                 value
                                                                                                                                 each. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (c) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> On
                                                                                                                                 January
                                                                                                                                 16,
                                                                                                                                 2011,
                                                                                                                                 the
                                                                                                                                 Board
                                                                                                                                 of
                                                                                                                                 Directors
                                                                                                                                 of
                                                                                                                                 the
                                                                                                                                 Company
                                                                                                                                 resolved
                                                                                                                                 to
                                                                                                                                 distribute
                                                                                                                                 bonus
                                                                                                                                 shares
                                                                                                                                 based
                                                                                                                                 on
                                                                                                                                 a
                                                                                                                                 1:10
                                                                                                                                 ratio,
                                                                                                                                 such
                                                                                                                                 that
                                                                                                                                 each
                                                                                                                                 shareholder
                                                                                                                                 received
                                                                                                                                 9
                                                                                                                                 bonus
                                                                                                                                 shares
                                                                                                                                 for
                                                                                                                                 each
                                                                                                                                 share
                                                                                                                                 held
                                                                                                                                 by
                                                                                                                                 that
                                                                                                                                 shareholder.
                                                                                                                                 The
                                                                                                                                 distribution
                                                                                                                                 of
                                                                                                                                 bonus
                                                                                                                                 shares
                                                                                                                                 was
                                                                                                                                 performed
                                                                                                                                 on
                                                                                                                                 February
                                                                                                                                 3,
                                                                                                                                 2011. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">4)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
                                                             September 2009 and November 2009, the Company entered into investment
                                                             agreements with a number of investors. Under these agreements, the
                                                             Company issued to the investors 649,673 convertible preferred shares
                                                             and 129,935 warrants exercisable into convertible preferred shares.
                                                             Issuance proceeds amounted to $975 thousand and were divided between
                                                             convertible preferred shares and warrants.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
January 2011, all warrants that were issued to investors during 2009 were exercised into preferred shares. Accordingly, the Company
issued 1,299,347 convertible preferred shares for $584 thousand.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;<B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 93.1pt; text-align: justify; text-indent: -20.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
15 - EQUITY </B> (continued): </FONT></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">5)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
                                                             to the conversion of all mandatory convertible loans into 19,818,314
                                                             ordinary shares to warrants - see note&nbsp;12c.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -28.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
June to August 2011, the Company received notifications on the exercise of part of the above warrants. Accordingly, the Company
issued 803,667 ordinary shares for $592 thousand, net of issuance costs.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -28.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">6)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
                                                             to the issuance of 14,302,300 ordinary shares and 7,151,150 warrants
                                                             in a public offering - see b. below.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 113.6pt; text-align: justify; text-indent: -28.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Public
                                                                                         offering</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.4pt; text-align: justify; text-indent: -28.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
February 3, 2011, the Company completed a public offering of securities on the TASE under a prospectus dated February 2, 2011.
As part of the offering, the Company issued 14,302,300 Ordinary shares and 7,151,150 warrants (Series&nbsp;1). The price of a
package of 100 shares and 50 warrants was NIS&nbsp;361 ($98.1 at the exchange rate on the date of issuance).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 42.55pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Issuance
proceeds (gross) amounted to $14 million, less direct issuance costs of $1.3 million, thereby amounting to $12.7 million. Issuance
proceeds (net) was allocated to the issued shares and warrants based on the fair value of each of these equity instruments and
was recognized in equity.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> c. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Warrants: </B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 71pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1) </FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> The
                                                                     warrants that were issued to investors as part of the conversion
                                                                     of the mandatory convertible loans are exercisable on any
                                                                     trading day until expiration. Expiration date of the warrants
                                                                     will be the earlier of: (1) three years after the date of
                                                                     issuance or (2) a transaction for transferring control over
                                                                     the company, as this term is defined in the convertible loan
                                                                     agreements. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
of December 31, 2011, warrants outstanding are exercisable into ordinary shares for a total exercise price of $2.7 million. In
accordance with the term of the warrants, the number of shares resulting from the exercise of the warrants is based upon the date
of exercise.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
number of the shares is decreasing based on the time elapsing from the date of issuing the warrants to the exercise thereof.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Warrants
outstanding as of December 31, 2011, if exercised prior to February 3, 2012, will result in 3,408,066 ordinary shares. If the
exercise occurs in the period from February 4, 2012 to expiry date, it will result in 3,180,861 ordinary shares.&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> &nbsp; </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
15 - EQUITY </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 71pt"></TD><TD STYLE="width: 14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                              warrants (Series 1) are exercisable since their listing and through
                                                              February 2, 2014, such that each warrant (Series 1) is exercisable
                                                              into one ordinary share for $1.03 since the date of listing and
                                                              through February 2, 2012, and for $1.25 from February 3, 2012 to
                                                              February 2, 2014. The warrants (Series 1) not exercised by February
                                                              2, 2014 will expire.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
of December 31, 2011, the number of ordinary shares issued as a result of exercising these warrants will be 7,151,150 for a total
$7.4 million.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
16 - SHARE-BASED PAYMENTS </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> On
May 30, 2010 the general meeting of shareholders approved the option plan of the Company for 2010 (the &quot;Option Plan&quot;),
after being approved by the Board of Directors on February 2, 2010. The terms and conditions of the grants were determined by
the Board of Directors and according to the plan. The Company is allowed to allocate 308,000 options to employees and directors. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> On
August 6, 2010, the Company's Board of Directors approved a grant of 50,000 options to Company service providers beyond the scope
of the Company's Option Plan. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Following
the distribution of bonus shares as discussed in note 15a(3), the number of shares resulting from the conversion of the options
was adjusted such that 358,000 options granted through December 31, 2010 will be exercisable into 3,580,000 ordinary shares of
the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.05pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
January 5, 2012, for administrative purposes, the Company's Board of Directors approved granting 9 bonus shares for each option-holder
such that the conversion rate of an option into ordinary share will be 1:1 (instead of 10 shares for each option as was the case
before the distribution of the bonus shares).</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
16 - SHARE-BASED PAYMENTS </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
November 1, 2010, the Board of Directors resolved to enlarge the plan of the Company by 700,000 additional options, exercisable
into 700,000 shares. In addition, on January 19, 2011, the Board of Directors resolved to increase the Option Plan of the Company
such that the Company is permitted to grant an additional 12,000,000 options of the Company.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> a.&#9;Following
is information on options granted in 2010: </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Number
    of options granted </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: justify; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> According
    to option <BR>
    plan of the Company </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> To
    service <BR>
    providers<BR>
    not under<BR>
    option </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> The
    fair<BR>
    value of<BR>
    options<BR>
    on date of </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Date
    of grant </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Other
    <BR>
    than <BR>
    directors<BR>
    (1) </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> To
    <BR>
    directors<BR>
    (1) </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> plan
    of<BR>
    the <BR>
    Company <BR>
    (2) </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Total </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Exercise
    <BR>
    price to 1<BR>
    Ordinary <BR>
    Share ($) </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> grant
    in<BR>
    US$<BR>
    thousands<BR>
    (3) </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> May 2010 </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> *1,810,000 </FONT></TD><TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 180,000 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,990,000 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.17 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 89 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> August 2010 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 580,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 580,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.17 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 26 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> August 2010 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 100,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 100,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.17 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> August 2010 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 400,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 400,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.55 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> September 2010 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 180,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 180,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.17 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 8 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> October 2010 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 240,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 240,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.17 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 74 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> November
    2010 </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 90,000 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 90,000 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.50 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 21 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2,810,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 270,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 500,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 3,580,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 221 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">*
1,500,000 options were allocated to officers who also serve as Company directors.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70.9pt"></TD><TD STYLE="width: 16.6pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Each
                                                                of these options is exercisable based on a conversion ratio of
                                                                1 option into one ordinary share for an exercise price of $0.165
                                                                per share as from the beginning of vesting. The options will vest
                                                                as follows: 1/3 of the options after one year from the date of
                                                                grant, and subsequently, 1/12 of the shares at the end of each
                                                                calendar quarter in the following two years. Unexercised options
                                                                will expire in the occurrence of the earlier of: a sale of all
                                                                or most Company assets or shares, the Company being merged or
                                                                consolidated into another Company, or after 7 years since their
                                                                date of grant. In addition, in certain circumstances, the Company's
                                                                Board of Directors has the authority to decide on an early vesting
                                                                of some of the options granted to the option holder or compensating
                                                                the option holder, including extending the life of the options.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.8pt; text-align: justify; text-indent: -14.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 70pt"></TD><TD STYLE="width: 15.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                              options to the service providers will vest as follows:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.05pt; text-align: justify; text-indent: -14.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 86.1pt"></TD><TD STYLE="width: 11.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">a)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">100,000
                                                                options will vest in two tranches: half after two months since
                                                                grant date and the reminder half after 4 months since grant date.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.05pt; text-align: justify; text-indent: -14.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>



<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 86.1pt"></TD><TD STYLE="width: 11.9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">b)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">400,000
                                                                options will vest in two tranches: half after 6 months since grant
                                                                date and the reminder half after one year since grant date.</FONT></TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: right; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: right; text-indent: 0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: right; text-indent: 0.5in"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: right; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
                            16 - </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> SHARE-BASED
                                                 PAYMENTS </B> (continued): </FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71.05pt; text-align: justify; text-indent: -14.25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
of December 31, 2011 all of these options are fully vested and exercisable. Unexercised options will expire in the occurrence
of the earlier of: a sale of all or most Company assets or shares, the Company being merged or consolidated into another Company,
an initial public offering by September 1, 2012. On January 16, 2011, the Board of Directors approved an amendment whereby these
options will not expire automatically upon an initial public offering.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 55.5pt"></TD><TD STYLE="width: 15.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                fair value of all options granted in 2010 on the date of grant
                                                                was computed using the binomial model.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 55.5pt"></TD><TD STYLE="width: 15.4pt"></TD><TD STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                              the date of grant, the data used in computing the fair value of
                                                              the option is mainly as follows: ordinary share price as of the
                                                              date of computation: $0.09-$0.42, the expected volatility: 73.7%-75.3%
                                                              (the volatility is based on the figure for similar peer companies
                                                              in the industry), risk-free interest: 1.75%-2.75% (risk-free interest
                                                              rate is based on the redemption returns of unlinked US treasury
                                                              bonds with an average life that approximates the average life of
                                                              the options), an expected dividend at $0 and expected life to exercise
                                                              of 7 years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 55.5pt"></TD><TD STYLE="width: 15.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> b. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Options
                                                                                                                                       granted
                                                                                                                                       in
                                                                                                                                       2011: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="18" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Number
    of options granted </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> According
    to option <BR>
    plan of the Company </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> To
    service <BR>
    providers, <BR>
    not under <BR>
    option </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> The
    fair <BR>
    value of <BR>
    options <BR>
    on date of </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Date
    of grant </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Other
    <BR>
    than <BR>
    directors <BR>
    (1) </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> To
    <BR>
    directors <BR>
    (1) </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> plan
    of <BR>
    the <BR>
    Company <BR>
    (2) </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Total </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Exercise
    <BR>
    price to 1 <BR>
    ordinary <BR>
    share ($) </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> grant
    in <BR>
    US$ <BR>
    thousands <BR>
    (3) </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 28%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> January 2011 </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> *4,900,000 </FONT></TD><TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,310,000 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 6,210,000 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.50 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 3,992 </FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> January 2011 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 100,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 100,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.55 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 43 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> March 2011 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 120,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 120,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1.05 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 66 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> May 2011 </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 300,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 300,000 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1.05 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 164 </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> August 2011 </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 350,000 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 350,000 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.69 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 96 </FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 5,370,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1,610,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 100,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 7,080,000 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4,361 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">*&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,760,000
                                                                                      options were allocated to officers who also
                                                                                      serve as directors.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.85pt"></TD><TD STYLE="width: 17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                  options will vest as follows: 1/3 of the options after one year
                                                                  from the date of grant, and subsequently, 1/12 of the shares
                                                                  at the end of each calendar quarter over the following two years.
                                                                  Unexercised options will expire in the occurrence of the earlier
                                                                  of: a sale of all or most Company assets or shares; the Company
                                                                  being merged or consolidated into another Company; or after
                                                                  7 years since their date of grant. In addition, in certain circumstances,
                                                                  the Company's Board of Directors has the authority to decide
                                                                  on an early vesting of some of the options granted to the option
                                                                  holder or compensating the option holder, including by extending
                                                                  the life of the options. Each of the options is exercisable
                                                                  at a ratio of 1 option to 1 ordinary share.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
16 &ndash; SHARE-BASED PAYMENTS </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 71pt; text-align: justify; text-indent: -0.1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.85pt"></TD><TD STYLE="width: 17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">2)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                  options granted under the Company's Option Plan will vest as
                                                                  follows: half after 6 months since the date of grant and the
                                                                  remainder after one year since the date of grant. Unexercised
                                                                  option will expire when earliest of the following events occur:
                                                                  a sale of all or most Company assets or shares; the Company
                                                                  being merged or consolidated into another Company; initial public
                                                                  offering of Company shares through September 1, 2012. On January&nbsp;16,
                                                                  2011, the Board of Directors approved an amendment indicating
                                                                  that the options will not expire automatically upon a public
                                                                  offering of Company shares.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -0.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Each
of these options is exercisable at a ratio of 1 option to 1 ordinary share.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.85pt"></TD><TD STYLE="width: 17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">3)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
                                                                  fair value of the options on the date of grant was computed
                                                                  using the binomial model. The underlying data use for computing
                                                                  the fair value of the options are mainly as follows: ordinary
                                                                  share price, based on share price in the public offering: $0.53-$0.97,
                                                                  expected volatility: 68.4%-72.8% (volatility is based on the
                                                                  figure for similar peer companies in the industry), risk-free
                                                                  interest rate: 1.65%-2.89% (the risk-free interest rate is determined
                                                                  based on rates of return on maturity of unlinked US treasury
                                                                  bonds with time to maturity that equals the average life of
                                                                  the options); expected dividend at $0 and expected life to exercise
                                                                  of 7 years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> c. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Changes
                                                                              in the number of shares and weighted averages of
                                                                              exercise prices are as follows: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 59.65pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="14" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Number
    of <BR>
    options</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted
    <BR>
    average of <BR>
    exercise <BR>
    price</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Number
    of<BR>
    options</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Weighted
    <BR>
    average <BR>
    of <BR>
    exercise <BR>
    price</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 52%; color: black; text-align: justify; text-indent: -1.3pt; padding-left: 1.3pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Outstanding
    at beginning of year</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,580,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.22</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="color: black; text-align: justify; padding-bottom: 1pt; text-indent: -8.4pt; padding-left: 8.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Granted</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,080,000</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.54</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,580,000</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.22</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="color: black; text-align: justify; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Outstanding
    at end of year</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">10,660,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.43</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">3,580,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.22</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="color: black; text-align: justify; padding-bottom: 2.5pt; text-indent: 1.75pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Exercisable
    at end of year</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,443,750</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.24</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">100,000</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">0.17</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> d. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> The
                                                                              following is information about exercise price and
                                                                              remaining useful life of outstanding options at
                                                                              year-end: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 59.65pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 59.65pt; text-align: justify; text-indent: -17.05pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>December
    31, 2011</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>December
    31, 2010</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Number
    of</B></FONT><B><BR>
    <FONT STYLE="font-size: 8pt">options </FONT><BR>
    <FONT STYLE="font-size: 8pt">outstanding </FONT><BR>
    <FONT STYLE="font-size: 8pt">at end of </FONT><BR>
    <FONT STYLE="font-size: 8pt">year</FONT></B></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Exercise
    </B></FONT><B><BR>
    <FONT STYLE="font-size: 8pt">price </FONT><BR>
    <FONT STYLE="font-size: 8pt">range</FONT></B></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Weighted
    </B></FONT><B><BR>
    <FONT STYLE="font-size: 8pt">average of </FONT><BR>
    <FONT STYLE="font-size: 8pt">remaining </FONT><BR>
    <FONT STYLE="font-size: 8pt">useful life</FONT></B></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Number
    of </B></FONT><B><BR>
    <FONT STYLE="font-size: 8pt">options </FONT><BR>
    <FONT STYLE="font-size: 8pt">outstanding </FONT><BR>
    <FONT STYLE="font-size: 8pt">at end of year</FONT></B></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Exercise
    </B></FONT><B><BR>
    <FONT STYLE="font-size: 8pt">price </FONT><BR>
    <FONT STYLE="font-size: 8pt">range</FONT></B></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>Weighted
    </B></FONT><B><BR>
    <FONT STYLE="font-size: 8pt">average of </FONT><BR>
    <FONT STYLE="font-size: 8pt">remaining </FONT><BR>
    <FONT STYLE="font-size: 8pt">useful life</FONT></B></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font: 8pt Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 14%; text-align: right"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">10,660,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 14%; text-align: right"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">0.17-1.05</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 14%; text-align: right"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">5.64</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 14%; text-align: right"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">3,580,000</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 14%; text-align: right"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">0.17-0.55</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 13%; text-align: right"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">5.83</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font: 8pt Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 59.65pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
16 - SHARE-BASED PAYMENTS </B>(continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.2pt; text-align: justify; text-indent: -21.7pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> e. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> Expenses
                                                                              recognized in profit or loss for the options are
                                                                              as follows: </B></FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 59.65pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 50%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended<BR> December 31</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Period
    from <BR> August 3,<BR>
    2009 through<BR>
    December&nbsp;31,</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2009</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD COLSPAN="10" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 31%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,863</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 31%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">80</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 30%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
options granted to Company employees in Israel are governed by relevant rules in Section 102 to the Israel Income Tax Ordinance
(hereinafter - the Ordinance). According to the treatment elected by the Company and these rules, the Company is not entitled
to claim as tax deductions the amounts charged to employees as a benefit, including amounts recognized as payroll benefits in
Company accounts for the options the employees received within the plan.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Options
granted to option holder who are related parties of the Company are governed by Section&nbsp;3(i) to the Ordinance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
17 - RESEARCH AND DEVELOPMENT EXPENSES:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; border-collapse: collapse; width: 90%; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Period
    from<BR> August 3, <BR>
    2009 through <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2009</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Payroll
    and related expenses</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">468</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">45</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Professional
    services</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">698</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">351</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">41</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share-based
    payments</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,384</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">20</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Clinical
    trials</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,463</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">135</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Patents
    expenses</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">193</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">120</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">43</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">208</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">65</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5,414</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">736</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">86</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
18 - GENERAL AND ADMINISTRATIVE EXPENSES:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="RIGHT" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Period
    from<BR> August 3, <BR>
    2009 through <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2009</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Payroll
    and related expenses</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">467</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">*266</FONT></TD><TD STYLE="width: 1%; text-align: left"></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">*30</FONT></TD><TD STYLE="width: 1%; text-align: left"></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share-based
    payments</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,479</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">60</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Professional
    services</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">301</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">112</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">12</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Office
    related expenses</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">103</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">132</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">66</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2,482</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">518</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">43</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE><BR STYLE="clear: both">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 66.5pt"></TD><TD STYLE="width: 17.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">*</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none">Including
                                                                                                               a management fee
                                                                                                               of $180 thousand
                                                                                                               and $30 thousand
                                                                                                               in 2010 and in
                                                                                                               the period from
                                                                                                               August 3, 2009
                                                                                                               through December
                                                                                                               31, 2009, respectively.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
19 - OTHER EXPENSE (INCOME):</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="RIGHT" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Period
    from<BR> August 3, 2009<BR>
    through <BR>December 31,</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2009</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 64%; text-align: justify; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fees
    for recruiting investors</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">479</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: justify; padding-bottom: 1pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(28</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: justify; padding-bottom: 2.5pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">479</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">(28</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">)</FONT></TD></TR>
</TABLE><BR STYLE="clear: both">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
                            20 -</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>FINANCIAL
                                                                                                                                             EXPENSES,
                                                                                                                                             </B>net:</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="RIGHT" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Period
    from<BR> August 3, 2009 <BR>
    through <BR>December 31,</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">2009</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="10" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
    income:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fair
    value gain on financial assets at fair value through profit or loss</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2</FONT></TD><TD STYLE="width: 1%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Income from changes
    in exchange rates</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">556</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">56</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">14</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">570</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">65</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">2</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: left; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
    expenses:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fair
    value losses on mandatory convertible loans</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,938</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">545</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accretion of Royalty
    obligations to investors</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">168</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">327</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -0.12in; padding-left: 0.24in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Fair
    value losses on financial assets at fair</FONT><U> </U><FONT STYLE="font-size: 10pt">value through profit or loss</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">29</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Loss from changes
    in exchange rates</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">-</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">5</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 1pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">65</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 1pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8,200</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">876</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 1pt solid; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">6</FONT></TD><TD STYLE="padding-bottom: 1pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Financial
    expenses - net</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">7,630</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">811</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE><BR STYLE="clear: both">

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>NOTE
                            21 -</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-underline-style: none"><B>LOSS
                                                                                                                                             PER
                                                                                                                                             ORDINERY
                                                                                                                                             SHARE</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 74.7pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> The
basic loss per share is computed by dividing the Company's loss by the weighted average number of ordinary shares outstanding
during the period, after taking into account, with retroactive effect, bonus shares distributed or bonus shares, the distribution
of which has been approved. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
diluted loss per share is identical to the basic loss per share since the effect of potential dilutive shares in anti dilutive.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Set
forth below are data taken into account in the computation of loss per share:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Year
    ended <BR> December 31 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Period
    from <BR> August 3, <BR>
    2009 through <BR>
    December 31 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2011 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2010 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2009 </FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Loss
    as reported in the financial statements </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 64%; text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (in
    thousands of dollars) </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 15,503 </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2,544 </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 105 </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Weighted
    average of ordinary shares </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> outstanding
    during the period (in thousands) </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 48,087 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 9,600 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 8,900 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: left; padding-bottom: 2.5pt; text-indent: -18.2pt; padding-left: 19.95pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Basic
    and diluted loss per share (dollars) </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.32 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.27 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 0.01 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.75in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
                            22 - </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> RELATED
                                                                                                    PARTIES </B> : </FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Key
                                                                       management includes members of the Board of Directors,
                                                                       the Chief Executive Officer and Deputy Chief Executive
                                                                       Officer Finance and Operations.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">Year
    ended <BR>December 31</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2011</FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD NOWRAP COLSPAN="2" STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">2010</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD NOWRAP STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="6" NOWRAP STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif">US
    dollars in <BR>
    thousands</FONT></TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Key management compensation:</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left; padding-bottom: 2.5pt; padding-left: 0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Salaries
    and other short-term employee benefits</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">467</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">86</FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Post-employment
    benefits</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">48</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">8</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Share-based
    payments</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,814</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">50</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Other
    long-term benefits</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">25</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">4</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; text-indent: -14.2pt; padding-left: 14.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Transactions with Key management</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Accretion
    of royalty obligations to investors</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">73</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">146</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; text-indent: -0.1in; padding-left: 16.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Fair
    value losses on mandatory&nbsp; convertible loans</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">1,697</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">139</FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -17.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Balances
                                                                                         with related parties:</B></FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 56.7pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 80%; font: 10pt Times New Roman, Times, Serif; margin-left: 0.75in">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> December
    31 </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2011 </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2010 </FONT></TD><TD STYLE="padding-bottom: 1pt; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="font-weight: bold; padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD COLSPAN="6" STYLE="font-weight: bold; text-align: center; border-bottom: Black 1pt solid"><FONT STYLE="font-family: Times New Roman, Times, Serif"> US
    dollars <BR> in thousand </FONT></TD><TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Current liabilities - </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="width: 76%; text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> credit
    balance in "accounts payable" </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 79 </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="width: 1%; border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="width: 9%; border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 14 </FONT></TD><TD STYLE="width: 1%; padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Noncurrent liabilities: </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Balance
    of mandatory convertible loans * </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> - </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2,880 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="text-align: left; padding-bottom: 2.5pt; padding-left: 9pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Balance
    of Royalty obligations to investors * </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 383 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="padding-bottom: 2.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="border-bottom: Black 2.5pt double; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD><TD STYLE="border-bottom: Black 2.5pt double; text-align: right"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 321 </FONT></TD><TD STYLE="padding-bottom: 2.5pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">*&#9;See
also note 12.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -85.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
23 - EVENTS SUBSEQUENT TO DECEMBER 31, 2011:</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -31.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 53.85pt"></TD><TD STYLE="width: 31.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>a.</B></FONT></TD><TD STYLE="text-align: justify; text-indent: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                                        February 15, 2012, an extraordinary general meeting of
                                                                        Company shareholders resolved to allocate 600,000 options
                                                                        to the Company Chief Executive Officer , Mr. Dror Ben-Asher
                                                                        and 400,000 options to Mr. Ori Shilo, Deputy Chief Executive
                                                                        Officer Finance and Operations, who both also serve as
                                                                        directors of the Company. These options are exercisable
                                                                        at a ratio of 1 option into 1 ordinary share for an exercise
                                                                        price of $0.72 per share. The options will vest as follows:
                                                                        1/6 of the options at the end of each calendar half year
                                                                        over the next three years.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -31.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of all options on the date of grant is $271 thousand. The fair value of the options was computed using the binomial
model and the underlying data used are mainly as follows: price of the Company's ordinary share: $0.52, expected volatility: 68.49%,
risk-free interest rate: 1.34% and expected useful life to exercise of 7 years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
options will be exercisable, either in full or partially, including exercise in tranches, from vesting date until the end of 7
years since the date of grant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.8pt"></TD><TD STYLE="width: 28.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>b.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                                       January 5, 2012, the Board of Directors of the Company
                                                                       granted 825,000 options to employees and consultants of
                                                                       the Company under the Option Plan of the Company. These
                                                                       options are exercisable based on a ratio of 1 option to
                                                                       1 ordinary share for $0.72 per share.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -28.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
options will vest as follows: for employees and consultants of the Company who provided, as of the date of grant, service of over
one year to the Company, 1/6 of the total number of options at the end of each calendar half year over the next three years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
employees and consultants of the Company who did not provide services to the Company over more than a year, as of the date of
grant, the options will vest as follows: 1/3 of the options after one year since the date of grant, and thereafter, 1/6 of the
options at the end of each calendar half year over the next two years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.2pt; text-align: justify; text-indent: -31.2pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of all options on the date of grant is $289 thousand. The fair value of the options was computed using the binomial
model and the underlying data used are mainly as follows: price of the Company's ordinary share: $0.64, expected volatility: 68.42%,
risk-free interest rate: 1.43% and expected useful life to exercise of 7 years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
options will be exercisable, either in full or partially, including exercise in batches, from vesting date until the end of 7
years since the date of grant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>c.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
                                                                        April 2012, the Company was given notice of exercise of
                                                                        non-tradable options, which were granted in August 2010
                                                                        to a service provider. Accordingly, the Company allocated
                                                                        100,000 ordinary shares in consideration for $17 thousands.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>REDHILL
BIOPHARMA LTD.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">NOTES
TO THE FINANCIAL STATEMENTS (continued)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -85.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>NOTE
23 - EVENTS SUBSEQUENT TO DECEMBER 31, 2011</B> (continued):</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>d.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                                        June 17, 2012, the Board of Directors of the Company granted
                                                                        200,000 options to a new employee of the Company, which
                                                                        will commence his employment on July 16, 2012, under the
                                                                        Option Plan of the Company. These options are exercisable
                                                                        based on a ratio of 1 option to 1 ordinary share for $0.70
                                                                        per share.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -28.4pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
options will vest as follows: 1/3 of the options after one year since the employment commencement, and thereafter, 1/6 of the
options at the end of 6 month period over the next two years subsequent to the first year of vesting.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
fair value of all options on the date of grant is $75 thousand. The fair value of the options was computed using the binomial
model and the underlying data used are mainly as follows: price of the Company's ordinary share: $0.675, expected volatility:
67.53%, risk-free interest rate: 1.06% and expected useful life to exercise of 7 years.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.2pt; text-align: justify; text-indent: -0.15pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
options will be exercisable, either in full or partially, including exercise in batches, from vesting date until the end of 7
years since the date of grant.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>e.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">On
                                                                        27, June 2012, the Company was given notice of exercise
                                                                        of 70,000 options, which were granted under the Option
                                                                        Plan of the Company in September 2010. Accordingly, the
                                                                        Company allocated 70,000 ordinary shares in consideration
                                                                        for $11 thousands.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 85.05pt 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>f.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
                                                                        August 2012, the Company was given notice of exercise
                                                                        of non-tradable options, which were granted in August
                                                                        2010 and in January 2011 to a service provider. Accordingly,
                                                                        the Company allocated 500,000 ordinary shares in consideration
                                                                        for $275 thousands.</FONT></TD></TR></TABLE>



<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>g.</B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
                                                                                          October 2012 a term sheet was entered
                                                                                          into between the Company and a US pharmaceutical
                                                                                          company for the acquisition by the Company
                                                                                          of exclusive rights to two proprietary
                                                                                          extended release therapeutic candidates.
                                                                                          The signing of a detailed agreement
                                                                                          is subject to due diligence to be conducted
                                                                                          by the Company. For the first extended
                                                                                          release therapeutic candidates, the
                                                                                          US company would be entitled to a royalty
                                                                                          of between 20%-50% depending on distribution
                                                                                          channel and territory and for the second
                                                                                          the US company would be entitled to
                                                                                          royalty of 8%-15% depending on distribution
                                                                                          channel.</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> h. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> In
                                                                                                 October and November 2012 the
                                                                                                 Board of Directors of the Company
                                                                                                 approved a proposed acquisition
                                                                                                 and termination of the royalty
                                                                                                 rights granted to investors pursuant
                                                                                                 to the August 2010 mandatory
                                                                                                 convertible loan agreement in
                                                                                                 consideration for the allocation
                                                                                                 by the Company of 2, 317,186
                                                                                                 Company ordinary shares, NIS
                                                                                                 0.01 par value, pursuant to which
                                                                                                 each investor will receive a
                                                                                                 number of shares on a pro-rata
                                                                                                 basis in accordance with their
                                                                                                 respective royalty rights. Such
                                                                                                 proposed acquisition is subject
                                                                                                 to the approval of the General
                                                                                                 Shareholders Meeting, the approval
                                                                                                 of the investors and the approval
                                                                                                 of the Tel Aviv Stock Exchange. </FONT></TD>
</TR></TABLE>



<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="margin: 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> REDHILL
BIOPHARMA LTD. </B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"> NOTES
TO THE FINANCIAL STATEMENTS (continued) </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.85pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -85.05pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> NOTE
23 - EVENTS SUBSEQUENT TO DECEMBER 31, 2011 </B> (continued): </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B> a. </B></FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> In
                                                                               November 2012, the Board of Directors of the Company
                                                                               approved the issuance to a group of investors (the
                                                                               &quot;approved investors&quot;) of up to an aggregate
                                                                               of 7,063,000 ordinary shares and warrants to acquire
                                                                               up to an aggregate of 3,531,500 ordinary shares
                                                                               in consideration of an aggregate investment amount
                                                                               of approximately $7 million. As of December 2,
                                                                               2012, the Company had entered into investment agreements
                                                                               with approved investors for an aggregate investment
                                                                               amount of approximately $6.5 million. The transaction
                                                                               is subject to the approval of the Tel Aviv Stock
                                                                               Exchange. The warrants will have a term of 24 months,
                                                                               and each warrant will be exercisable into one ordinary
                                                                               share for exercise prices ranging from $1.18 to
                                                                               $1.54, depending on the date of exercise. </FONT></TD></TR></TABLE>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">_________________</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">_________________</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 1in; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">ITEM
                            19.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; text-transform: none">EXHIBITS</FONT></TD>
</TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 57.55pt 0pt 0; text-transform: uppercase; text-indent: 0in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
exhibits filed with or incorporated into this Registration Statement are listed in the index of exhibits below</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 0; padding-left: 0; text-align: justify; font-weight: bold; text-decoration: underline"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Exhibit<BR>
Number </FONT></TD>
    <TD STYLE="width: 85%; padding-right: 0; padding-left: 0; text-align: left; font-weight: bold; text-decoration: underline; vertical-align: bottom"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Exhibit
    Description </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify; font-weight: bold"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 1.1
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Articles
    of Association of the Registrant (unofficial English translation).&nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2.1
    (2) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Form
    of Deposit Agreement, dated as of ____, 2012, among the Registrant, the Bank of New York Mellon, as Depositary, and all<U>
    </U>Owners and Holders from time to time of American Depositary Shares issued hereunder.<U> </U> </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 2.2
    (2) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Form
    of American Depositary Receipt. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.1&nbsp;
    &dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Exclusive
    License Agreement, dated November 18, 2009, by and between the Registrant and Egalet a/s (RHB-101). </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.2
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Exclusive
    License Agreement, dated May 2, 2010, by and between the Registrant and SCOLR Pharma Inc. (RHB-102). </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.3
    &nbsp;&dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Co-
    Development and Commercialization Agreement, dated August 26, 2010, by and between the Registrant and IntelGenx Corp. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.4&nbsp;
    &dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Asset
    Purchase Agreement, dated August 11, 2010, by and between the Registrant and Giaconda Limited (RHB-104, 105, 106). </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.5&nbsp;
    (1)&dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> License
    Agreement, dated September 15, 2011, by and between the Registrant and University of Central Florida Research Foundation. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.6&nbsp;
    (1)&dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Fee
    Agreement, dated June 3, 2010, by and between the Registrant and ProSeed Capital Holdings CVA. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.7&nbsp;
    (1)&dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Termination
    of Fee Agreement, dated August 6, 2010, by and between the Registrant and ProSeed Capital Holdings CVA. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.8
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Independent
    Consulting Agreement, dated as of August 23, 2010, by and between the Registrant and R.E. Investments. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.9
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Form
    Loan Agreement, dated between June to August 2010, by and between the Registrant and each of the lenders. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.10
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Form
    of Term of Convertible Loan, dated August 31, 2010, by and between the Registrant and each of the lenders of the Loan Agreement
    Letter. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.11
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Form
    of Convertible Loan Agreement, November 7, 2010 by and between the Registrant and each of the lenders. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.12&nbsp;(1)&dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Master
    Service Agreement, dated April 28, 2011, by and between the Registrant. and 7810962 Canada Inc. and amendments. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.13 &dagger; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Manufacturing Agreement,
    dated April 28, 2011, by and between 7810962 Canada Inc. and the Registrant (regarding RHB-104) and amendments. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.14&nbsp;(1)&dagger; </FONT></P></TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Manufacturing
        Agreement, dated October 21, 2012, by and between 7810962 Canada Inc. and the Registrant (regarding RHB-104). </FONT></P></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

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<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 15%; padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.15&nbsp;
    &dagger; </FONT></TD>
    <TD STYLE="width: 85%; padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Clinical
    Services Agreement, dated June 15, 2011, by and between RedHill and 7810962 Canada Inc. and amendment (regarding RHB-104)&nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.16
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Underwriting
    Agreement made and entered on January 30, 2011, by and between the Registrant and to Poalim I.B.I Underwriting &amp; Issuing
    Ltd.&nbsp; (Free English translation accompanied by the Hebrew original). </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.17
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Form
    of Letter of Exemption and Indemnity adopted on January 2010, as amended in February 2012 (Free English translation accompanied
    by the Hebrew original). </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 4.18
    (1) </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Option
    Plan (2010), as amended </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 15.1 </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Consent
    of Kesselman &amp; Kesselman, Certified Public Accountant (Isr.), a member of PricewaterhouseCoopers International Limited,
    independent registered public accounting firm for the Registrant </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="padding-right: 0; padding-left: 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> 99.1
        (1)&nbsp; </FONT></P></TD>
    <TD STYLE="padding-right: 0; padding-left: 0"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Original
                                                  Draft Registration Statement, dated September 12, 2012. </FONT></P></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 7%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">&dagger;</FONT></TD>
    <TD STYLE="width: 93%; text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif">Portions of this exhibit
    have been omitted and filed separately with the Securities and Exchange Commission pursuant to a confidential treatment request.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (1) </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Previously filed. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> (2) </FONT></TD>
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> To be filed by amendment. </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: left"><FONT STYLE="font-family: Times New Roman, Times, Serif"> &nbsp; </FONT></TD>
    <TD STYLE="text-align: left"></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><U>SIGNATURE</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized
the undersigned to sign this Registration Statement on its behalf.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">&nbsp;</FONT></P>

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<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 50%; text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">REDHILL
    BIOPHARMA LTD</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify; font-size: 10pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
</TABLE><BR STYLE="clear: both">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">By:</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s/
    Dror Ben-Asher</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="width: 5%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Name:</FONT></TD>
    <TD STYLE="width: 40%; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;Dror Ben-Asher</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Title:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;Chief Executive Officer and
    Chairman of the Board of Directors</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD COLSPAN="2" STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">By:</FONT></TD>
    <TD COLSPAN="2" STYLE="border-bottom: windowtext 1pt solid; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">/s<B>/
    </B>Ori Shilo<B> </B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Name:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Ori Shilo</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Title:</FONT></TD>
    <TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Deputy Chief Executive Officer Finance
    and Operations</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"> Date:
December 2, 2012 </FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: Black">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

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<TYPE>EX-4.1
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<FILENAME>filename2.htm
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<HEAD>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 4.1</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>EXCLUSIVE LICENSE AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THIS EXCLUSIVE LICENSE AGREEMENT</B>
(this &ldquo;Agreement&rdquo;) is made and entered into effective as of November 18, 2009 (the &ldquo;<B>Effective Date</B>&rdquo;),
by and between Egalet a/s, a Danish corporation also registered under the name BM Research a/s (&ldquo;<B>Egalet</B>&rdquo;),
and RedHill Biopharma Ltd., an Israeli company (&ldquo;<B>RedHill</B>&rdquo;). Egalet and RedHill each may be referred to herein
individually as a &ldquo;Party,&rdquo; or collectively as the &ldquo;Parties&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B><FONT STYLE="font-size: 10pt">,
</FONT>Egalet is the sole and exclusive owner of certain patents and other intellectual property rights relating to a certain
Product (as such term is defined herein);<B>&#9;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>, Egalet
wishes to license to RedHill all Egalet's rights in and to the Product, including all patent rights and other intellectual property
rights relating thereto, and RedHill wishes to receive such license from Egalet, so that RedHill may develop and commercialize
Products for all indications and for all uses, all on the terms set forth below; and,<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 35.45pt"><B>WHEREAS</B>,
the license to be granted shall be granted on an exclusive and global basis in so far as the rights and positions licensed relate
solely to the Product, whereas rights and positions, which may also be commercialized or exploited for purposes unrelated to the
Product, shall be granted on a non-exclusive basis, all as more fully set out below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOW THEREFORE, THE PARTIES HERETO AGREE
AS FOLLOWS:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left"><B>1.</B></TD><TD STYLE="text-align: justify"><B><U>DEFINITIONS</U></B></TD>
</TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B>&ldquo;Affiliate&rdquo;
</B>of a Party means any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled
by, or is under common control with such first Party. For purposes of this definition only, &ldquo;control&rdquo; and, with correlative
meanings, the terms &ldquo;controlled by&rdquo; and &ldquo;under common control with&rdquo; will mean the possession, directly
or indirectly, of the power to direct the management or policies of an entity, whether through the ownership of fifty percent
or more of the voting securities of the other organization or entity or by contract relating to voting rights or corporate governance.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">&ldquo;</FONT><B>Combination
Product</B><FONT STYLE="font-size: 10pt">&rdquo; shall mean a </FONT>product which comprises (a) a Product and (b) at least one
other active ingredient or medical device, which, if administered or used independently of the Product, would have a clinical,
diagnostic or therapeutic effect and be capable of being priced and marketed separately.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt">&ldquo;</FONT><B>Competing
Product</B><FONT STYLE="font-size: 10pt">&rdquo; </FONT>shall mean (i) a product for the treatment/prevention of heart failure
and/or hypertension, including, without limitation, any product belonging to ATC Class C07AG and (ii) a product for the treatment/prevention
of any other cardiovascular indication for which RedHill intends in good faith to market the Product provided that Egalet's obligations
regarding such additional indications shall only be with respect to the grant of rights made following RedHill's notice of its
intention to commercialize the Product for such additional indication.<B><U> </U></B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&quot;<B>Field
of Use</B>&quot; means all indications, and includes therapeutic, diagnostic and other human and/or animal uses.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&ldquo;First
Commercial Sale&rdquo;</B> shall mean the first commercial sale of a Product, in exchange for cash or some equivalent to which
value can be assigned, after regulatory approval has been granted by a Regulatory Authority, other than the use of the Product
for testing purposes and/or a sale for experimental, promotional, compassionate named patient or test market purposes. For the
avoidance of any doubt, First Commercial Sale can only occur once worldwide, regardless of the jurisdiction in which it took place.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<B>&ldquo;Licensed Know-How&rdquo;</B> means all information (other than that contained in the Patents) whether patentable or
not and physical objects related to the Product, including but not limited to Product data, Product related results and information,
including, but not limited to, clinical data, analytical test results, non-clinical pharmacology and safety data, other R&amp;D
data, Regulatory Documentation, manufacturing and formulation information of a like nature, known to, generated by, vested in
(or licensed to) and/or controlled by Egalet. Egalet represents and warrants that the entire Licensed Know How is listed in Annex
B of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&ldquo;Net
Sales&rdquo;</B> means the gross invoice price charged by RedHill or its Affiliates in respect of the sale of a Product by RedHill
or its Affiliates, less the following items (collectively, the &quot;<B>Recognized Deductions</B>&quot;):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">allowances or credits granted to
                                                               and taken by customers (including wholesalers) for rejections,
                                                               returns (including as a result of recalls), retroactive price reductions
                                                               and prompt payment, and trade, cash and volume discounts;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">amounts incurred resulting from
                                                                government mandated rebate programs (or any agency thereof);</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">freight, transport, packing and
                                                                 insurance charges;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iv)</TD><TD STYLE="text-align: justify">taxes, including value added tax,
                                                                tariffs or import/export or customs, duties;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(v)</TD><TD STYLE="text-align: justify">rebates, charge backs and discounts
                                                               paid or credited,</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(vi)</TD><TD STYLE="text-align: justify">bad debts;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(vii)</TD><TD STYLE="text-align: justify">reasonable quantities of samples;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(viii)</TD><TD STYLE="text-align: justify">liability insurance; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ix)</TD><TD STYLE="text-align: justify">royalties paid to third parties
                                                                in respect of the use of such third party&rsquo;s intellectual
                                                                property rights for the purpose of generating the Net Sales without
                                                                infringing such third party intellectual property right positions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding the
foregoing, for the purposes of this definition, the transfer of a Product by RedHill or one of its Affiliates to another Affiliate
of RedHill or to a sublicensee is not a sale and in such cases, Net Sales will be determined based on the amount received by RedHill
or such Affiliate in respect of the Product as sold by the Affiliate or sublicensee to independent third-parties, less the Recognized
Deductions. For Net Sales of a Product sold or supplied as a &ldquo;Combination Product&rdquo;, the Net Sales of such a Combination
Product in a country will be determined by multiplying the Net Sales of such Combination Product by the fraction of A/A+B, where
A is the average unit selling price during the period in respect of which Net Sales are being calculated of the Product sold separately
in that country and B is the total average unit selling price during the period in respect of which Net Sales are being calculated
of the other product or device included in the Combination Product, when sold separately in that country. If neither the Product
nor the other product or device included in the Combination Product are sold separately during the period in respect of which
Net Sales are being calculated, then the Parties shall, considering the costs incurred by RedHill bringing about the Combination
Product, in good faith negotiate the value of the other product or device included in the Combination Product that are to be deducted
from the Net Sales of the Combination Product in determining the Net Sales of the Product contained in the Combination Product,
it being agreed that absent such mutual agreement as to the proportion of such Combination Product to be attributed to the Product,
the Parties shall mutually appoint an independent expert to determine such proportion.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">1.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B>&ldquo;Patents&rdquo;
</B>shall mean the patents listed in Annex A to this Agreement, as well as such other Product-related (a) U.S. patents and patent
applications, (b) any substitutions, divisions, continuations, continuations-in-part (but only to the extent that they cover the
same invention claimed in the foregoing), reissues, renewals, registrations, confirmations, re-examinations, extensions, supplementary
protection certificates and the like, and any provisional applications, of any such patents or patent applications, and (c) any
foreign or international equivalent of any of the foregoing, of which Egalet during the term of this Agreement becomes owner or
controller.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt">1.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
</FONT>&ldquo;<B>Product</B>&rdquo; shall mean Egalet Carvedilol - a controlled release pharmaceutical formulation based on a
polymeric matrix composition formulated under one or more of the Patents and comprising Carvedilol as an active substance.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&ldquo;Regulatory
Approval</B>&rdquo; means approval by the US FDA of an NDA (New Drug Application), or the equivalent application for marketing
approval, and satisfaction of any related applicable FDA registration and notification requirements (if any).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&ldquo;Regulatory
Authority&rdquo;</B> means any applicable government entity regulating or otherwise exercising authority with respect to the development
and commercialization of a Product.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&ldquo;Regulatory
Documentation</B>&rdquo; means all applications, registrations, licenses, authorizations and approvals (including all Regulatory
Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports
relating to any communications with any Regulatory Authority), all supporting documents and all clinical studies and tests, including
the manufacturing batch records for Products to be assigned, relating to a Product, and all data contained in any of the foregoing,
including all regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&ldquo;<B>Royalty
Term</B>&rdquo; shall mean the period commencing on the date of this Agreement and ending on the earlier of (i) expiration of
the Patents for which exclusivity is granted, i.e. the Patents covering the core technology of the Product, and (ii) twelve (12)
years after the First Commercial Sale.<B> </B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&ldquo;Sublicense&rdquo;
</B>means a sublicense from RedHill to a third party under the License granted pursuant to this Agreement and the term &ldquo;<B>Sublicensee</B>&rdquo;
shall be construed accordingly. Any Sublicense may include the right to grant further Sublicenses.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">1.15&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>&ldquo;Sublicensee
Sales Royalties&rdquo; </B>means payments, whether comprising royalties and/or other payments, actually received by RedHill from
third party distributors and/or Sublicensees in respect of sales of the Product effected by such distributors and/or Sublicensees
(and/or any further Sublicensees thereof), less deduction of (i) debt financing; (ii) equity (and conditional equity, such as
warrants, convertible debt and the like) investments in RedHill or any Affiliate thereof at market value; (iii) payments received
in reimbursement of patent prosecution costs incurred or which shall be incurred by RedHill; (iv) payments received in reimbursement
of the cost of research and/or development activities or services performed or to be performed by RedHill or expended or to be
expended by RedHill, and (v) payments received in reimbursement for marketing expenses which have been or shall be expended by
RedHill with respect to the Product).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left"><B>2.</B></TD><TD STYLE="text-align: justify"><B><U>LICENSE
                                                                                   GRANT</U></B></TD>
</TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">2.1</TD><TD STYLE="text-align: justify"><B><U>Scope of License</U></B>.
                                                                 Egalet hereby grants to RedHill a worldwide, perpetual license,
                                                                 under its rights in and to the Patents and the Licensed Know-How
                                                                 to develop, manufacture, commercialize, make, use, sell, offer
                                                                 for sale and import Products, in the Field of Use (the &ldquo;<B>License</B>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">2.2</TD><TD STYLE="text-align: justify"><B><U>Scope of Exclusivity</U></B><U>.
                                                                 </U>The License shall, with respect to the Patents listed in
                                                                 Schedules IP-P06 and IP-P08 in Annex A, be exclusive (even as
                                                                 to Egalet), whereas the License, with respect to the Patents
                                                                 listed in Schedules IP-P03, IP-P05 and IP-P09 in Annex A, shall
                                                                 be non-exclusive. The License shall be non-exclusive with respect
                                                                 to any intellectual property included in the Licensed Know-How
                                                                 listed on Annex B that may be used by Egalet in respect of products
                                                                 other than the Product; provided, however, that Egalet shall
                                                                 not be permitted to make any use or grant any rights to such
                                                                 Licensed Know-How and/or the Patents listed in Schedules IP-P03,
                                                                 IP-P05 and IP-P09 in Annex A (i) in respect of the Product whatsoever,
                                                                 or (ii) in respect of any Competing Product or potentially Competing
                                                                 Product.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">2.3</TD><TD STYLE="text-align: justify"><B><U>Sublicenses</U></B>. The
                                                                 License granted to RedHill is Sublicensable (and further Sublicensable)
                                                                 in whole or in part, to third parties (including RedHill&rsquo;s
                                                                 Affiliates).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify">For the avoidance of doubt,
RedHill shall be entitled to conduct or to perform any activity in respect of the Products by means of any third party sub-contractor,
and such conduct shall not be considered to be a grant of a Sublicense hereunder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">2.4</TD><TD STYLE="text-align: justify"><B><U>Registration</U></B>. Egalet
                                                                 agrees that<B> </B>RedHill shall have the right, at its own account,
                                                                 to register as the licensee of the rights in and to the Patents
                                                                 and the Licensed Know-How as per Sections 2.1 and 2.2 above,
                                                                 and Egalet shall, within the scope of the License, execute all
                                                                 documentation reasonably requested by RedHill and otherwise cooperate
                                                                 with RedHill in order to ensure such registration where required
                                                                 or reasonably deemed relevant by RedHill to commercialize the
                                                                 Product.</TD></TR></TABLE>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">2.5</TD><TD STYLE="text-align: justify"><B><U>Limitations on Other Licenses</U></B>.
                                                                 Without derogating from any other obligation of Egalet under
                                                                 this Agreement, during the term of this Agreement, Egalet shall
                                                                 not, without RedHill&rsquo;s prior written consent, grant any
                                                                 rights or licenses to Patents or Licensed Know-How, or transfer
                                                                 any data or know-how to any third party, or otherwise assist
                                                                 any third party in any manner that would conflict with Egalet&rsquo;s
                                                                 obligations under this Agreement.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>3.</B></TD><TD STYLE="text-align: justify"><B><U>DATA AND PRODUCT TRANSFER</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.65pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.65pt; text-align: justify; text-indent: 0in">Within
thirty (30) days following the Effective Date, Egalet will (i) transfer to RedHill all relevant know how and copies of external
service and other contracts relating to the manufacturing of Product vesting in Egalet, all to the extent relevant for RedHill
to exploit the License as envisaged by this Agreement, and (ii) make available to RedHill Ex Works (Incoterms 2000) V&aelig;rl&oslash;se,
Denmark, any unexpired quantities of Product and unexpired quantities of raw materials for the Product it has on hand, all at
no charge whatsoever to RedHill. Egalet will transfer to RedHill all additional Licensed Know How and copies of external service
and other contracts relating to the manufacturing of Product vesting in Egalet, promptly following RedHill's request. The information
and data detailed in this Section 3 shall be provided in hard and soft copies whichever is available, all of which shall be well
organized in accordance with industry standards. In the event Egalet has a specific difficulty in providing both hard and soft
copies, it shall discuss with RedHill possible resolutions of such difficulty. From time to time during the period of twelve (12)
months following the Effective Date, Egalet will provide RedHill with any additional data, results and information in the possession
or under the control of Egalet related to the Product requested by RedHill; provided, however, that in no event shall Egalet be
obliged to generate additional materials apart from what it has on file. </P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>4.</B></TD><TD STYLE="text-align: justify"><B><U>DILIGENCE</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">4.1</TD><TD STYLE="text-align: justify"><B><U>General</U></B>. RedHill
                                                                 will undertake its best efforts to diligently proceed with the
                                                                 development, manufacture and sale of Products.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">4.2</TD><TD STYLE="text-align: justify"><B><U>Specific</U></B>. Specifically,
                                                                 RedHill will use its best efforts to secure the appropriate financial
                                                                 resources to prepare, initiate and complete the clinical trials
                                                                 necessary to file an NDA with the United States FDA. RedHill
                                                                 undertakes to use its best efforts to initiate the clinical trials
                                                                 to be planned for the Product no later than 24 months following
                                                                 the Effective Date (the &quot;<B>Diligence Obligation</B>&quot;).
                                                                 In the event that RedHill shall fail to satisfy the Diligence
                                                                 Obligation, Egalet&rsquo;s sole and exclusive remedy shall be
                                                                 the return by RedHill of the License rights to Egalet provided
                                                                 that in the event that any such failure is due to (i) any decision
                                                                 of, or delay caused or dictated by, any Regulatory Authority,
                                                                 (ii) any technical problems (including, but not limited to, crystallinity,
                                                                 dissolution and manufacturing problems) and development failure
                                                                 related to the Products, or (iii) any other reasons that are
                                                                 beyond RedHill&rsquo;s reasonable control or influence (including
                                                                 any actions or defaults by Egalet), same shall not be deemed
                                                                 to constitute a breach of the Diligence Obligation. For purposes
                                                                 of this Agreement, &lsquo;best efforts&rsquo; will not be deemed
                                                                 to require a party to undertake extraordinary or unreasonable
                                                                 measures, including the payment of amounts in excess of normal
                                                                 and usual fees and investments made by pharmaceutical companies
                                                                 reasonably comparable to RedHill in terms of size and capital
                                                                 strength for their prioritized products considered having a strategic
                                                                 potential and as being vital to the company.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">4.3</TD><TD STYLE="text-align: justify"><B><U>No Warranty</U></B>. For
                                                                 the avoidance of doubt, nothing contained in this Agreement shall
                                                                 be construed as a warranty by RedHill that any development or
                                                                 any commercialization to be carried out by it in connection with
                                                                 this Agreement will actually achieve its aims or any other results
                                                                 and RedHill makes no warranties whatsoever as to any results
                                                                 to be achieved in consequence of the carrying out of any such
                                                                 development. Furthermore, RedHill makes no representation to
                                                                 the effect that the commercialization of the Products, or any
                                                                 part thereof, will succeed, or that it shall be able to sell
                                                                 the Products in any quantity.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>5.</B></TD><TD STYLE="text-align: justify"><B><U>REPORTS</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">5.1</TD><TD STYLE="text-align: justify">Until the end of the Royalty
                                                                 Term, RedHill agrees as follows:</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">5.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Development
Reports</U></B>. To keep Egalet informed with respect to activities and progress regarding the development and commercialization
of Product(s), and to submit semi-annual written progress reports to Egalet describing in reasonable detail RedHill's activities
related to the development, testing and commercialization of the Product(s).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">5.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>First
Commercial Sale Report</U></B>. To report to Egalet the date of the First Commercial Sale, together with the name of the country
in which such First Commercial Sale occurred.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">5.1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Together
with each Royalty payment detailed in Section 6.3 below, to deliver to Egalet reports (&quot;<B>Periodic Reports</B>&quot;) including
the following with respect to the period covered by the Royalty payment:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">5.1.3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
amount of Net Sales received from Products sold by RedHill, including the Recognized Deductions applicable in computing Net Sales,
and the total Royalties due based on Net Sales.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">5.1.3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Name
and address of all Sublicensees.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">5.1.3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total
payments due by RedHill to Egalet based on Sublicense Sales Royalties.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">5.2</TD><TD STYLE="text-align: justify">Without prejudice to Egalet's
                                                                 compliance with financial reporting requirements applicable under
                                                                 law for Egalet, any and all information, data or reports supplied
                                                                 by RedHill pursuant to the provisions of this Section 5 shall
                                                                 be treated as RedHill's Confidential Information.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">5.3</TD><TD STYLE="text-align: justify">Upon the termination of this
                                                                 Agreement in accordance with Section 14 below, RedHill shall
                                                                 have no further obligations under this Section 5.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 35.45pt"><B>6.</B></TD><TD STYLE="text-align: justify"><B><U>FINANCIAL PROVISIONS
                                                                   </U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt; text-align: left">6.1</TD><TD STYLE="text-align: justify"><B><U>Up-Front
                                                                                   Payment</U></B>. Within fifteen (15) days after
                                                                                   the Effective Date and against receipt of a
                                                                                   lawful invoice from Egalet, RedHill will pay
                                                                                   Egalet an up-front license fee of US$100,000.
                                                                                   In the event such payment may require approval
                                                                                   of any governmental authority, RedHill undertakes
                                                                                   to file for approval promptly following closing
                                                                                   of this Agreement and undertakes to effectuate
                                                                                   prompt payment of the up-front payment following
                                                                                   receipt of the necessary approval. To the best
                                                                                   of RedHill&rsquo;s knowledge and belief, no
                                                                                   significant delay in expected in receiving
                                                                                   government approval for the transfer of the
                                                                                   license fee from Israel to Denmark.</TD>
</TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">6.2</TD><TD STYLE="text-align: justify"><B><U>Milestone Payments</U></B>.
                                                                 RedHill will pay to Egalet the following one-time milestone payments
                                                                 (such payments are due only once for the Product and are not
                                                                 payable per indication) not more than 90 days after first achievement
                                                                 of each of the applicable milestones for the first Product to
                                                                 achieve such milestone (and not, for the avoidance of doubt,
                                                                 in respect of each Product or indication of a Product to do so),
                                                                 as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 90%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: normal; text-align: justify; border-bottom: Black 1pt solid; font-style: normal">Milestone</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: normal; text-align: center; border-bottom: Black 1pt solid; font-style: normal; text-decoration: none">Payment</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 80%; font-weight: normal; text-align: justify; text-indent: 0in; font-style: normal">First filing for Regulatory
    Approval with the US FDA and Acceptance for review of such Filing by the US FDA</TD><TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 1%; font-weight: normal; text-align: left; font-style: normal">$</TD><TD STYLE="width: 17%; font-weight: normal; text-align: right; font-style: normal">200,000</TD><TD STYLE="width: 1%; font-weight: bold; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: normal; text-align: justify; text-indent: 0in; font-style: normal">Receipt of Regulatory Approval
    from the US FDA</TD><TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: normal; text-align: left; font-style: normal">$</TD><TD STYLE="font-weight: normal; text-align: right; font-style: normal">500,000</TD><TD STYLE="font-weight: bold; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.1pt; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">6.3</TD><TD STYLE="text-align: justify"><B><U>Royalty Payments.</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"><B><U>Royalty Payments
on Sales of Products that are Effected by RedHill or its Affiliates</U></B>. Until the expiry of the Royalty Term RedHill will
pay Egalet a royalty of 30% of Net Sales actually received by RedHill (the &ldquo;<B>Royalties</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in"><B><U>Royalty Payments
in respect of Sublicensee Sales Royalties</U></B>.<B> </B>Until the expiry of the Royalty Term, RedHill will pay Egalet 30% of
all Sublicensee Sales Royalties (&ldquo;<B>Sublicense Royalty Fees</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">6.4</TD><TD STYLE="text-align: justify"><B><U>Due Dates for Payment</U></B>.
                                                                 All payments due pursuant to the provisions of Section 6.3 above
                                                                 shall be due and payable to Egalet on a calendar quarterly basis
                                                                 within 90 days of the end of the applicable quarter, all against
                                                                 the receipt of a lawful invoice from Egalet for same.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">6.5</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black"><B><U>Payment
                                                                 Method</U></B>. </FONT> Any amounts due to Egalet under this
                                                                 Agreement will be paid in U.S. dollars, by wire transfer in immediately
                                                                 available funds to an account designated in writing at least
                                                                 fifteen (15) days in advance by Egalet.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">6.6</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black"><B><U>Currency;
                                                                 Foreign Payments</U></B>. </FONT> If any currency conversion
                                                                 will be required in connection with the calculation of any payment
                                                                 hereunder, such conversion will be made by using the exchange
                                                                 rate for the purchase of U.S. dollars as published in <I>The
                                                                 Wall Street Journal</I>, Eastern Edition, on the last business
                                                                 day of the calendar quarter to which such payments relate. If
                                                                 at any time legal restrictions prevent the prompt remittance
                                                                 of any payments in any jurisdiction, RedHill may notify Egalet
                                                                 and make such payments by depositing the amount thereof in local
                                                                 currency in a bank account or other depository in such country
                                                                 in the name of Egalet or its designee, and RedHill will have
                                                                 no further obligations under this Agreement with respect thereto.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">6.7</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black"><B><U>Taxes</U></B>.
                                                                 </FONT> RedHill may deduct from any amounts it is required to
                                                                 pay to Egalet pursuant to this Agreement <FONT STYLE="color: black">an
                                                                 </FONT>amount equal to that withheld for or due on account of
                                                                 any taxes (including VAT to the extent applicable, but other
                                                                 than taxes imposed on or measured by net income of RedHill) or
                                                                 similar governmental charge imposed by any jurisdiction based
                                                                 on such payments to Egalet (&ldquo;<B>Withholding Taxes</B>&rdquo;).
                                                                 RedHill will provide Egalet a certificate evidencing payment
                                                                 of any Withholding Taxes hereunder within 30 days of such payment
                                                                 and will reasonably assist Egalet, at Egalet&rsquo;s expense,
                                                                 to obtain the benefit of any applicable tax treaty.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">6.8</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black"><B><U>Continuing
                                                                 Right</U></B>. </FONT>Following the expiration of the Royalty
                                                                 Term in any country, RedHill shall be entitled to continue to
                                                                 exploit the License in such country with respect to the Product(s)
                                                                 without having to pay Royalties, Sublicense Royalty Fees or make
                                                                 any other payment to Egalet in respect of such activities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 35.45pt">7.</TD><TD STYLE="text-align: justify"><B><U>RECORDS RETENTION AND AUDIT</U></B>.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">7.1</TD><TD STYLE="text-align: justify"><B><U>Record Retention</U></B>.
                                                                 Until the expiry of the Royalty Term,<B> </B>RedHill will maintain
                                                                 (and will ensure that its Affiliates maintain) complete and accurate
                                                                 books, records and accounts that fairly reflect Net Sales and
                                                                 Sublicensee Sales Royalties, in sufficient detail to confirm
                                                                 the accuracy of any payments required hereunder, which books,
                                                                 records and accounts will be retained for five (5) years after
                                                                 the end of the period to which such books, records and accounts
                                                                 pertain.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">7.2</TD><TD STYLE="text-align: justify"><B><U>Audit</U></B>. Egalet will
                                                                 have the right, at its own cost, to have an independent certified
                                                                 public accounting firm of nationally recognized standing, reasonably
                                                                 acceptable to RedHill and who agrees to be bound by a customary
                                                                 undertaking of confidentiality, have access during normal business
                                                                 hours, and upon reasonable prior written notice, to RedHill&rsquo;s
                                                                 records (and those of its Affiliates) as may be reasonably necessary
                                                                 to verify the accuracy of Net Sales and Sublicensee Sales Royalties,
                                                                 as applicable, for any period ending not more than 24 months
                                                                 prior to the date of such request; <I>provided, however</I>,
                                                                 that Egalet will not, unless material discrepancies are identified,
                                                                 have the right to conduct more than one such audit in any calendar
                                                                 year or more than one such audit covering any given time period.
                                                                 The auditing firm will disclose to Egalet only the results of
                                                                 its audit and not any other information. Any such audit shall
                                                                 be made during RedHill&rsquo;s normal business hours and shall
                                                                 not unreasonably interfere with the business of RedHill and shall
                                                                 be completed within a reasonable time. Egalet will bear all the
                                                                 costs of such audit. Without derogating from the forgoing, Egalet's
                                                                 audit rights shall be conducted no later than one year following
                                                                 the final payment under this Agreement.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt; text-align: left">7.3</TD><TD STYLE="text-align: justify"><B><U>Payment
                                                                                   of Additional Amounts</U></B>. If, based on
                                                                                   the results of such audit, additional payments
                                                                                   are owed by RedHill under this Agreement, RedHill
                                                                                   shall, at its own cost, have an additional
                                                                                   60 days to conduct an additional (second) audit
                                                                                   to verify Egalet&rsquo;s audit results, and,
                                                                                   assuming the two audits reconcile, RedHill
                                                                                   shall make such additional payments within
                                                                                   60 days after the date on which such second
                                                                                   accounting firm&rsquo;s written report is delivered
                                                                                   to RedHill. If the results of the two audits
                                                                                   do not reconcile, the parties shall, unless
                                                                                   otherwise agreed, appoint a third independent
                                                                                   auditor, who &ndash; on basis of the audit
                                                                                   results achieved by the first two auditors
                                                                                   and such additional investigations and reviews,
                                                                                   which the third auditor may find to be required
                                                                                   &ndash; shall conduct a third and final audit
                                                                                   the result of which shall be applied by the
                                                                                   Parties. The Parties shall equally share the
                                                                                   costs of for the third audit to be conducted.</TD>
</TR></TABLE>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">7.4</TD><TD STYLE="text-align: justify"><B><U>Confidentiality</U></B>.
                                                                 Egalet will treat all information subject to review under this
                                                                 Section 7 in accordance with the confidentiality provisions of
                                                                 Section 11 below.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>8.</B></TD><TD STYLE="text-align: justify"><B><U>REPRESENTATIONS AND WARRANTIES</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">8.1</TD><TD STYLE="text-align: justify"><B><U>By Both Parties</U></B>.
                                                                 Each Party hereby represents, warrants and covenants to the other
                                                                 Party as of the Effective Date as follows:</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">8.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Corporate
Authority</U></B>. Such Party (a) has the power and authority and the legal right to enter into this Agreement and perform its
obligations hereunder, and (b) has taken all necessary action on its part required to authorize the execution and delivery of
this Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf
of such Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance
with its terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement
of creditor rights and judicial principles affecting the availability of specific performance and general principles of equity,
whether enforceability is considered a proceeding at law or equity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">8.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Consents,
Approvals, etc</U></B>. All necessary consents, approvals and authorizations of all governmental authorities and other parties
required to be obtained by such Party in connection with the execution and delivery of this Agreement and the performance of its
obligations hereunder have been obtained.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">8.1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Conflicts</U></B>.
The execution and delivery of this Agreement and the performance of such Party&rsquo;s obligations hereunder (a) do not conflict
with or violate any requirement of applicable law or any provision of the articles of incorporation, bylaws or any similar instrument
of such Party, as applicable, in any material way, and (b) do not conflict with, violate, or breach or constitute a default or
require any consent not already obtained under, any contractual obligation or court or administrative order by which such Party
is bound.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">8.2</TD><TD STYLE="text-align: justify"><B><U>By Egalet</U></B>.<B> </B>Egalet
                                                                 hereby further represents, warrants, and covenants to RedHill
                                                                 as of the Effective Date as follows:</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">8.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>IP
Ownership</U></B>. Egalet<B> </B>has, the sufficient legal and/or beneficial title and ownership of the Patents and, to the best
of its knowledge and belief, to the Licensed Know-How as is necessary to fulfill its obligations under this Agreement and to grant
the License to RedHill pursuant to this Agreement, and the Patents and the Licensed Know-How are free and clear of any liens,
encumbrances or third party rights (including without limitation, the right to receive royalties or other compensation). Furthermore,
Egalet<B> </B>undertakes that to the extent that RedHill, its Affiliates, or any Sublicensee requires a license under any additional
patents or related rights controlled by Egalet<B> </B>in order to develop, use, sell, offer for sale or import Products, Egalet
shall grant such a license to RedHill, its Affiliates, and any Sublicensee on a non-exclusive royalty-free basis.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">8.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>No
Conflicting Grants</U></B>.<B> </B>Egalet<B> </B>has not and shall not grant any rights to the Patents, or the Licensed Know-How
that may derogate from the rights granted to RedHill hereunder, and no third party has any rights whatsoever (including the right
to receive royalties or any other compensation) to the Patents or the Licensed Know-How.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">8.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Third
Party Actions</U></B>.<B> </B>Outside the scope of the IP positions listed in Annex [C], the exercise of the License by RedHill
will not - to the best of Egalet&rsquo;s knowledge and belief - infringe upon the patent or other intellectual property rights
of any third party, and further that no actions, suits, claims, disputes, or proceedings concerning the Patents, the Licensed
Know-How or the Product are currently pending or have been threatened in writing, that if determined adversely to Egalet<B> </B>would
have an adverse effect on the Product or would impair Egalet&rsquo;s ability to perform its obligations under this Agreement.
Furthermore, there are no legal suits or proceedings by a third party (including without limitation employees or former employees
of Egalet) contesting the ownership or validity of the Patents, the Licensed Know-How or the Product or any part thereof, and
that if Egalet shall become aware of any such third party, Egalet shall immediately notify RedHill of such, and undertakes to
effect any payments required (including the payment of royalties or other compensation) to be made to such third party, and to
hold RedHill harmless from, and indemnify RedHill against, any such claims or payments.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">8.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Additional
Licenses</B>. To Egalet&rsquo;s knowledge, no additional licenses to any patents (including patents owned or controlled by third
parties) or know how are required to develop, manufacture, use or sell the Product.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>9.</B></TD><TD STYLE="text-align: justify"><B><U>LIMITATION OF LIABILITY</U></B>.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">Except
in the case of a willful or fraudulent misrepresentation under Section 8, and except in the case of indemnification for payments
to third parties under Section 13, in no event shall either Party be liable to the other or any of its Affiliates for any consequential,
incidental, indirect, special, punitive or exemplary damages (including, without limitation, lost profits, business or goodwill)
suffered or incurred by such other Party or its Affiliates, whether based upon a claim or action of contract, warranty, negligence
or tort, or otherwise, arising out of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>10.</B></TD><TD STYLE="text-align: justify"><B><U>PATENTS</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">10.1</TD><TD STYLE="text-align: justify"><B><U>PATENT PROSECUTION AND
                                                                  MAINTENANCE</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Prosecution
by RedHill</U></B>.<B> </B>RedHill undertakes and shall have the sole, exclusive and first right to prosecute and maintain the
patents comprising the Patents that are licensed on an exclusive basis using counsel of its choice, in the jurisdictions and to
the extent that RedHill shall deem appropriate at its sole discretion. RedHill will provide Egalet with copies of all relevant
documentation so that Egalet will be informed of the continuing prosecution and may comment upon such documentation sufficiently
in advance of any initial deadline for filing a response, provided, however, that if Egalet has not commented upon such documentation
in a reasonable time for RedHill to sufficiently consider Egalet&rsquo;s comments prior to a deadline with the relevant government
patent office, or RedHill must act to preserve the Patents, RedHill will be free to act without consideration of Egalet&rsquo;s
comments, if any.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Egalet
undertakes to prosecute and maintain the patents comprising the Patents that are licensed on a non-exclusive basis using counsel
of its choice in the jurisdictions and to the extent that Egalet shall deem appropriate at its sole discretion. Egalet will provide
RedHill with copies of all relevant documentation so that RedHill will be informed of the continuing prosecution and may comment
upon such documentation sufficiently in advance of any initial deadline for filing a response, provided, however, that if RedHill
has not commented upon such documentation in a reasonable time for Egalet to sufficiently consider RedHill&rsquo;s comments prior
to a deadline with the relevant government patent office, or Egalet must act to preserve the Patents, Egalet will be free to act
without consideration of RedHill&rsquo;s comments, if any.<B> </B>Egalet undertakes to inform RedHill promptly if Egalet decides
not to prosecute and maintain a Patent in order for RedHill to take such action as per RedHill&rsquo;s discretion. RedHill shall
have the right but no obligation to prosecute and maintain the patents comprising the Patents that are licensed on a non-exclusive
basis.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>RedHill&rsquo;s
Requests</U></B>.<B> </B>Egalet shall use reasonable efforts to amend any Patent application to include claims or any other changes
reasonably requested by RedHill to protect the Products contemplated to be sold under this Agreement.<B> </B>Moreover, Egalet
<FONT STYLE="font-family: Times New Roman, Times, Serif">will cooperate in the preparation, filing, prosecution, and maintenance
of the </FONT>Patents, <FONT STYLE="font-family: Times New Roman, Times, Serif">including (a) promptly executing all papers and
instruments and requiring employees to execute such papers and instruments as reasonable and appropriate so as to enable </FONT>RedHill
<FONT STYLE="font-family: Times New Roman, Times, Serif">to file, prosecute, and maintain the Patents in any country; and (b)
promptly informing </FONT>RedHill <FONT STYLE="font-family: Times New Roman, Times, Serif">of matters that may affect the preparation,
filing, prosecution, or maintenance of any Patents.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Patent
Prosecution Costs</U></B>. RedHill will bear the costs of preparing, filing, prosecuting and maintaining all patent applications
contemplated by Section 10.1.1 and Egalet will bear the costs of preparing, filing, prosecuting and maintaining all patent applications
contemplated by Section 10.1.2.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Co-operation</U></B>.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
and maintaining Party to prosecute and maintain the relevant Patent.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.65pt; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt"><FONT STYLE="font-size: 10pt">10.2</FONT></TD><TD STYLE="text-align: justify"><B><U>PATENT
                                                                                                       ENFORCEMENT</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Infringement
Notice</U></B>.<B> </B>If Egalet or RedHill determines that any Patent licensed hereunder is being infringed by a third party&rsquo;s
activities and that such infringement could affect the exercise of the License under this Agreement, it will promptly notify the
other Party in writing. In addition, If Egalet or RedHill determines that any Licensed Know How is being misappropriated by a
third party&rsquo;s activities and that such misappropriation could affect the exercise of the License under this Agreement, it
will promptly notify the other Party in writing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Action
by RedHill</U></B>. RedHill will have the sole, exclusive and first right but not the obligation to remove such infringement and/or
misappropriation and to control all litigation to remove such infringement and/or misappropriation, all to the extent the rights
infringed are exclusively licensed to RedHill and in such case as RedHill shall deem appropriate in its sole discretion. However,
RedHill undertakes to inform Egalet promptly if RedHill decides not to take infringement or misappropriation action in order for
Egalet to assume responsibility of infringement or misappropriation action to be taken as per Egalet&rsquo;s discretion. Egalet
shall have the right, but no obligation to take any infringement or misappropriation action to the extent the rights infringed
are not exclusively licensed to RedHill.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event at Eagalet does, at its discretion, undertake any infringement or misappropriation action, Egalet will provide RedHill
with copies of all relevant documentation so that RedHill will be informed of the continuing action and may comment upon such
documentation sufficiently in advance of any initial deadline for filing a response, provided, however, that if RedHill has not
commented upon such documentation in a reasonable time for Egalet to sufficiently consider RedHill&rsquo;s comments prior to a
deadline, or Egalet must act to preserve the action, Egalet will be free to act without consideration of RedHill&rsquo;s comments,
if any.<B> </B>Egalet undertakes to inform RedHill promptly if Egalet decides not to take any infringement or misappropriation
action in order for RedHill to take such action as per RedHill&rsquo;s discretion. RedHill shall have the right but no obligation
to take any action to remove any infringement and/or misappropriation, to the extent the rights infringed are not exclusively
licensed to RedHill.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Co-operation</U></B>.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
Party to maintain the action.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.2.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Recovery</U></B>.
Any amounts recovered in connection with or as a result of any action contemplated by Sections 10.2.2 and 10.2.3, whether by settlement
or judgment, will be used to reimburse the Parties for their reasonable costs and expenses in making such recovery (which amounts
will be allocated pro rata if insufficient to cover the totality of such expenses), and any remainder received by RedHill in excess
of the reasonable costs and expenses in making such recovery will be treated as Net Sales or Sublicensee Sales Royalties and payments
will be due in respect of same pursuant to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">10.3</TD><TD STYLE="text-align: justify"><B><U>PATENT INFRINGEMENT</U></B></TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>License</U></B>.
In the event that the manufacturing, use or commercialization of the Products or any other action authorized under the License
or any part thereof, is such that RedHill determines, after prior consultation with Egalet, that it is commercially reasonable
to seek a license to the intellectual property rights of any third party (as reasonably determined by RedHill), RedHill shall
be entitled to enter into negotiations with such third party in order to reach an agreement according to which RedHill shall obtain
a license or other applicable right or a waiver from such party with respect to such intellectual property rights. In such event
RedHill shall be entitled to deduct such payments made from Net Sales and/or Sublicensee Sales Royalties.</P>

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    <!-- Field: /Page -->

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Claim
Rights and Procedures</U></B>. In the event that either Egalet or RedHill, or both of them, are sued by a third party alleging
that the commercialization of a Product infringes upon any intellectual property rights of such third party, the Party being so
sued shall immediately give the other Party notice of same. In so far the infringement alleged relates to rights licensed to RedHill
hereunder on an exclusive basis, RedHill shall have the sole, exclusive and first right, but not the obligation, to defend against
such action and to control the defense of such action, on behalf of both Parties, within 60 business days from the date the relevant
suit becomes known to RedHill. In so far as the infringement alleged relates to rights licensed to RedHill hereunder on a non-exclusive
basis, Egalet shall have the sole, exclusive and first right, but not the obligation, to defend against such action and to control
the defense of such action, on behalf of both Parties, within 60 business days from the date the relevant suit becomes known to
Egalet. Any expenses or costs incurred by RedHill in connection with such action(s) RedHill shall be entitled to deduct such payments
made from Net Sales and/or Sublicensee Sales Royalties, and any costs or amounts awarded to the counterparties in such action(s)
shall be fully borne by RedHill and shall be offset from Royalties and Sublicense Royalty Fees or any other amounts of whatsoever
nature due to Egalet. Any recovery in such action shall be retained by RedHill in full after reimbursing Egalet for any of its
reasonable costs and expenses related to such suit (provided that such claim is not the result of a breach of warranty or representation
by Egalet).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that RedHill does not exercise its right to so defend, then Egalet shall be entitled to defend against such claim at
its own cost and expense, including any costs or amounts awarded to the counterparties in such action(s), and any recovery in
such action shall be retained by Egalet in full. In the event that Egalet does not exercise its right to defend in so far as the
infringement alleged relates to rights licensed to RedHill hereunder on a non-exclusive basis, then RedHill shall be entitled
to defend against such claim at its own cost and expense, including any costs or amounts awarded to the counterparties in such
action(s), and any recovery in such action shall be retained by RedHill in full.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">10.3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
Party shall, without the consent of the other Party, enter into any settlement or compromise or consent to any judgment in respect
of any claim related to rights licensed on an exclusive basis to RedHill under this Agreement, unless such settlement, compromise
or consent includes an unconditional release of the other Party from all liability arising out of the claim and does not otherwise
limit the other Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt; text-align: left">11.</TD><TD STYLE="text-align: justify"><B><U>CONFIDENTIALITY</U></B></TD>
</TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">11.1</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black"><B><U>Disclosure
                                                                  and Use Restriction</U></B>. </FONT> The Parties agree that,
                                                                  during the Term of this Agreement and thereafter, each Party
                                                                  will keep <FONT STYLE="color: black">completely</FONT> confidential
                                                                  and will not publish, submit for publication or otherwise disclose,
                                                                  and will not use for any purpose except for the purposes contemplated
                                                                  by this Agreement, any Confidential Information (as such term
                                                                  is defined below) received from the other Party.</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.65pt"></TD><TD STYLE="width: 33.8pt">11.2</TD><TD STYLE="text-align: justify"><B><U>Confidential Information</U></B>.
                                                                  &ldquo;<B>Confidential Information</B>&rdquo; shall mean all
                                                                  information and know-how and any tangible embodiments thereof
                                                                  provided by or on behalf of one Party to the other Party either
                                                                  in connection with the discussions and negotiations pertaining
                                                                  to this Agreement or in the course of performing this Agreement,
                                                                  which may include data; knowledge; practices; processes; ideas;
                                                                  research plans; engineering designs and drawings; research data;
                                                                  manufacturing processes and techniques; scientific, manufacturing,
                                                                  marketing and business plans; and financial and personnel matters
                                                                  relating to the disclosing Party or to its present or future
                                                                  products, sales, suppliers, customers, employees, investors
                                                                  or business. Notwithstanding the foregoing, information or know-how
                                                                  of a Party shall not be deemed Confidential Information of such
                                                                  Party for purposes of this Agreement if such information or
                                                                  know-how:</TD></TR></TABLE>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"></P>


<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>(</B>a<B>)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>was
already known to the receiving Party, other than under an obligation of confidentiality or non-use, at the time of disclosure
to such receiving Party;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>(</B>b<B>)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>was
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was
otherwise part of the public domain, at the time of its disclosure to such receiving Party;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>(</B>c<B>)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>became
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise
became part of the public domain, after its disclosure to such receiving Party through no fault of the receiving Party;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was
disclosed to such receiving Party, other than under an obligation of confidentiality or non-use, by a third party who had no obligation
to the disclosing Party not to disclose such information or know-how to others; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.65pt; text-align: justify; text-indent: -36.75pt"><B>(</B>e<B>)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B>was
independently discovered or developed by such receiving Party, as evidenced by their written records, without the use of Confidential
Information belonging to the disclosing Party and prior to any subsequent disclosure by the receiving Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">All Licensed Know-How shall
be deemed to be Confidential Information of Egalet; provided that RedHill shall be entitled to disclose such information under
the same confidentiality undertakings as listed in section 11.2 to third parties that are relevant for the commercialization of
the Product and to use any Licensed Know-How in the exercise of its rights under this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">11.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><B><U>Authorized
Disclosure</U></B>.</FONT> Notwithstanding the provisions of Section 11.1 above, a Party shall be entitled to disclose the Confidential
Information of the other Party hereto to the extent that such disclosure is:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">(i)&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made in response to a valid order of a court of competent jurisdiction; <I>provided,
however</I>, that such Party will first (to the extent practicably possible) have given notice to such other Party and given
such other Party a reasonable opportunity to quash such order and to obtain a protective order requiring that the
Confidential Information and documents that are the subject of such order be held in confidence by such court or agency or,
if disclosed, be used only for the purposes for which the order was issued; and <I>provided further</I> that if a disclosure
order is not quashed or a protective order is not obtained, the Confidential Information disclosed in response to such court
or governmental order will be limited to that information which is legally required to be disclosed in response to such court
or governmental order;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;otherwise
required by law; <I>provided, however</I>, that the disclosing Party will provide such other Party with notice of such disclosure
in advance thereof to the extent practicably possible;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">(iii)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made by such Party to the Regulatory Authorities as necessary for the
development or commercialization of a medicinal product, including the Product, in a country, as required in connection with
any filing, application or request for Regulatory Approval or as required by applicable securities laws and regulations;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">(iv)
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made by such Party, in connection with the performance of this Agreement, to
Sublicensees, directors, officers, employees, consultants, representatives or agents, each of whom prior to disclosure must
be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in this Agreement;
or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt; text-align: justify; text-indent: -0.5in">(v)&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made by such Party in the course of submitting financial accounts to relevant
authorities as per local statutory requirements or to existing or potential acquirers; existing or potential collaborators;
investment bankers; existing or potential investors, merger candidates, partners, venture capital firms or other financial
institutions or investors for purposes of obtaining financing; or, bona fide strategic potential partners; each of whom prior
to disclosure must be bound by obligations of confidentiality and non-use at least equivalent in scope to those set forth in
this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<FONT STYLE="font-size: 10pt"><U>PRESS</U></FONT><U> RELEASES </U></B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in"><FONT STYLE="color: black"><B><U>Press
</U></B></FONT><B><U>Releases</U></B>. Press releases or other similar public communication by either Party relating to the terms
of this Agreement (but not, for the avoidance of doubt, unless reference is made to the other Party or the terms of this Agreement,
with respect to activities in exercise of its rights under this Agreement) will be approved in advance by the other Party, which
approval will not be unreasonably withheld or delayed, except for those communications required by applicable law, regulation
or securities exchange rule (including, but not limited to, a public offering prospectus), disclosures of information for which
consent has previously been obtained, and information of a similar nature to that which has been previously disclosed publicly
with respect to this Agreement, each of which will not require advance approval, but will be provided to the other Party as soon
as practicable after the release or communication thereof. For the avoidance of doubt, the Parties may issue press releases regarding
the fact that this Agreement has been signed so long as they do not describe the specific provisions hereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>INDEMNIFICATION AND INSURANCE</U></B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">13.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Indemnification
of Egalet</U></B>.<B> </B>RedHill will indemnify Egalet and its directors, officers, employees and agents (&ldquo;<B>Egalet Parties</B>&rdquo;)
and defend and hold each of them harmless, from and against any and all losses, damages, liabilities, costs and expenses (including
reasonable attorneys&rsquo; fees and expenses) to the extent arising from or occurring as a result of any and all liability suits,
investigations, claims or demands by a third party (collectively, &ldquo;<B>Losses</B>&rdquo;) arising from or occurring as a
result of or in connection with (a) the negligence or willful misconduct on the part of RedHill in performing any activity contemplated
by this Agreement, (b) breach by RedHill of any representations, warranties, or covenants set forth in this Agreement and/or (c)
losses stemming from Product liability related losses or claims; except to the extent a Loss arises from the (i) negligence or
willful misconduct on the part of an Egalet Party; or (ii) breach by Egalet of any representations, warranties or covenants set
forth in this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">13.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Indemnification
of RedHill</U></B>.<B> </B>Egalet will indemnify RedHill, its Affiliates, and their respective directors, officers, employees
and agents (&ldquo;<B>RedHill</B> <B>Parties</B>&rdquo;), and defend and hold each of them harmless, from and against any and
all Losses to the extent arising from or occurring as a result of or in connection with (a) negligence or willful misconduct on
the part of Egalet; or (b) breach by Egalet of any representations, warranties, or covenants set forth in this Agreement, except
to the extent a Loss arises from or occurs as a result of or in connection with (i) negligence or willful misconduct on the part
of a RedHill Party; or (ii) breach by RedHill of any representations, warranties, or covenants set forth in this Agreement. Egalet
shall further be responsible for and shall indemnify and hold RedHill harmless in respect of:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">13.2.1&nbsp;&nbsp;All
royalties and other payments existing under an agreement signed by Egalet or any obligation undertaken by Egalet, required to
be paid to third parties in respect of the commercialization of the Products.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 0in">13.2.2
All royalty and other payments required to be paid to other third parties in respect of the Product as a result of a claim by
any of Egalet&rsquo;s existing or former employees, consultants or shareholders, or any person named in Egalet&rsquo;s patents
or patent applications, or any person claiming it should have been named as an inventor in such patent applications.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">13.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event that additional license(s) to intellectual property (irrespective of whether such is the intellectual property covered
herein or any other intellectual property) are necessary to enable RedHill, its Affiliates or Sublicensees to exercise the License,
and the receipt of or license to use such additional intellectual property requires payment of royalties, settlement payments,
awards or any other payments made to and taken by any third party on account of the use of such third party&rsquo;s intellectual
property, then RedHill shall effect a reduction in the Royalties and Sublicense Sales Royalties payable to Egalet&nbsp;hereunder
by the amount of such third party payments (without derogating from any other deductions permitted herein, including without limitation,
on account of a Combination Product reduction).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">13.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Conditions
<FONT STYLE="font-family: Times New Roman, Times, Serif">to Indemnity</FONT></U></B><FONT STYLE="font-family: Times New Roman, Times, Serif">.
Each Party&rsquo;s agreement to indemnify and hold the other harmless is conditioned upon the indemnified Party (i) providing
written notice to the indemnifying Party of any claim, demand or action arising out of the indemnified activities within thirty
(30) days after the indemnified Party has knowledge of such claim, demand or action, (ii) permitting the indemnifying Party to
assume full responsibility to investigate, prepare for and defend against any such claim or demand, (iii) assisting the indemnifying
Party, at the indemnifying Party&rsquo;s reasonable expense, in the investigation of, preparation of and defense of any such claim
or demand; and (iv) the indemnifying Party not compromising or settling such claim or demand without the indemnified Party&rsquo;s
prior written consent, unless such settlement includes as an unconditional term thereof the giving by the claimant or plaintiff
to such indemnified Party a complete release from all liability in respect of such claim or litigation;</FONT> <I>provided that,
</I>if the Party entitled to indemnification fails to promptly notify the indemnifying Party pursuant to the foregoing clause
(i), the indemnifying Party shall only be relieved of its indemnification obligation to the extent prejudiced by such failure
and that <I>provided that</I> the indemnified Party is not obligated to notifying the indemnifying Party of <FONT STYLE="font-family: Times New Roman, Times, Serif">claims,
demands and/or actions made directly against the indemnifying Party.</FONT> Notwithstanding the foregoing, if in the reasonable
judgment of the indemnified party, such suit or claim involves an issue or matter which could have a materially adverse affect
on the business, operations or assets of the indemnified party, the indemnified party may waive its rights to indemnity under
this Agreement and control the defense or settlement thereof, but in no event shall any such waiver be construed as a waiver of
any indemnification rights such indemnified party may have at law or in equity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">13.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Insurance</U></B>.
RedHill will have and maintain such types and amounts of liability insurance, including clinical trial and product liability insurance,
as is normal and customary in the industry generally for parties similarly situated. RedHill undertakes to send a copy of such
insurance at the request of Egalet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>TERM AND TERMINATION</U></B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">14.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Term</U></B>.
Unless earlier terminated in accordance with the provisions of this Article 14, the term of this Agreement (the &ldquo;<B>Term</B>&rdquo;)
commences upon the Effective Date and will continue until terminated in accordance with the terms hereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">14.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Termination</U></B>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Termination
for Breach</U></B>. Failure by a Party to comply with any of its material obligations contained herein will entitle the Party
not in default to give to the defaulting Party notice specifying the nature of the material breach, requiring the defaulting Party
to make good or otherwise cure such material breach, providing specific actions that the defaulting Party could take to cure such
material breach, and stating its intention to invoke the provisions of Section 14.3 if such material breach is not cured. If such
material breach is not cured within 90 days after the receipt of such notice (or, if such material breach cannot be cured within
such 90-day period, if the defaulting Party does not commence actions to cure such material breach within such period and thereafter
diligently continue such actions), the Party not in default will be entitled, without limiting any of its other rights conferred
on it by this Agreement (except as expressly set forth herein), to terminate this Agreement by providing written notice to the
breaching Party.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify">Notwithstanding anything to
the contrary herein, in the event of Egalet&rsquo;s material breach of this Agreement, and without derogating from any of RedHill&rsquo;s
other rights at law, RedHill shall have the right to continue all activities under the License granted herein and to continue
utilizing the Patents for the exploitation of the License, with the right to set-off, from any sums due to the Egalet hereunder,
amounts equivalent to any damage caused to RedHill as a result of Egalet&rsquo;s breach hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify">Notwithstanding, it is clarified
that Egalet shall not be entitled to terminate this Agreement for any reason whatsoever once the Royalty Term has expired, provided
that this shall not derogate from any right of termination available to Egalet if RedHill has not complied with any and all of
its obligations hereunder as per elapse of the Royalty Term.</P>


<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Voluntary
Termination</U></B>.<B> </B>RedHill shall be entitled, in its sole discretion, to terminate this Agreement at any time on thirty
(30) days written notice to Egalet, without the need to pay Egalet any compensation in respect of such termination, in which case
RedHill will immediately cease any and all development and other activities regarding the Product. Outside the scope of Sections
14.2.1 and 15.11 Egalet shall have no right to terminate this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">14.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Consequences
of Termination</U></B>.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>License</U></B>.
Upon early termination of this Agreement in its entirety pursuant to Section 14.2, the License granted by Egalet<FONT STYLE="color: black">
</FONT>to RedHill hereunder will terminate; provided that RedHill shall have a period of 180 days after the date of termination
to dispose, for consideration or otherwise as RedHill deems fit, of all previously made or partially made Product, subject to
Royalties and Sublicense Royalty Fees on such sales being duly paid to Egalet.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Continuation
following Egalet&rsquo;s Bankruptcy</U></B><FONT STYLE="color: black">. The Parties agree that in the event that Egalet becomes
insolvent or makes a filing under bankruptcy or similar laws in any jurisdiction, RedHill shall have the protection afforded to
the licensee under the United States Bankruptcy Code, including but not limited to, the protections set forth in 11 U.S.C &sect;365(n)
or its equivalent in any other jurisdiction </FONT>which allows the licensee, upon rejection of the license agreement by the debtor-licensor
or its representative, the option to either retain the licensee&rsquo;s rights in the intellectual property under the existing
contract while continuing to pay royalties, or to treat the executory contract as terminated<FONT STYLE="color: black">. Egalet
does not warrant that the rights granted to RedHill under this Section 14.3.2 will be enforceable under the laws of the jurisdiction
under which Egalet operates.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Return
of Information and Materials</U></B>. Upon early termination of this Agreement in its entirety pursuant to Section 14.2, each
Party will return to the other all Confidential Information of the other Party (except one copy of which may be retained for archival
and compliance purposes), RedHill will return to Egalet or its designee all Licensed Know How and any other tangible materials
received by RedHill under this Agreement and RedHill will further waive and actively deregister or assign as requested by Egalet,
all Patent right registrations made under Section 2.4 above.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Accrued
Rights</U></B>. Termination or expiration of this Agreement for any reason will be without prejudice to any rights or financial
compensation that will have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration
will not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Survival</U></B>.
Sections [6.8, 7, 9, 11, 12, 13.1-13.4, 14.3 and 15.3] of this Agreement will survive expiration or termination of this Agreement
for any reason.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">14.3.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>License
Survival</U></B>. Once the Royalty Term shall expire, RedHill shall, provided that the Agreement has not been terminated by Egalet
under Section 14.2.1 or by RedHill under Section 14.2.2, be entitled to continue to manufacture and/or sell the Product throughout
the world without having to pay Royalties or Sublicense Royalty Fees or any other amounts of whatsoever nature to Egalet in respect
of such activities subsequent to such date. This Section 14.3.6 shall survive termination or expiration of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
<U>MISCELLANEOUS</U></B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Assignment</U>.
</B>Without the prior written consent of the other Party hereto, neither Party will sell, transfer, assign, delegate, pledge or
otherwise dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights
or duties hereunder; provided, however, that (i) either Party hereto may assign or transfer this Agreement or any of its rights
or obligations hereunder without the consent of the other Party to any Affiliate, or to any third party successor in interest
with which it has merged or consolidated, or to which it has transferred all or substantial part of its assets or stock to which
this Agreement relates. Any purported assignment or transfer in violation of this Section 15.1 will be void <I>ab initio </I>and
of no force or effect. This provision shall not prevent Egalet from assigning or prohibit the transfer of the rights to future
Royalties and Sublicense Royalty Fees to a third party, provided however that such third party in no event shall enjoy any better
rights vis-&agrave;-vis RedHill than Egalet.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Severability</U>.
</B>Should any term or provision of this Agreement be or become invalid or unenforceable or should this Agreement contain an omission,
the validity or enforceability of the remaining terms or provisions shall not be affected. In such case, subject to the next following
sentence, the parties shall immediately commence to negotiate in good faith in order to replace the invalid or unenforceable term
or provision by such other valid or enforceable term or provision which comes as close as possible to the original intent and
effect of the invalid or unenforceable term or provision, or respectively, to fill the omission by inserting such term or provision
which the parties would have reasonably agreed to, if they had considered the omission at the date hereof. In the event that any
term or provision as aforesaid is invalid, void or unenforceable by reason of its scope, duration or area of applicability or
some similar limitation as aforesaid, then the court making such determination shall have the power to reduce the scope, duration,
area or applicability of the term or provision so that they shall be enforceable to the maximum scope, duration, area or applicability
permitted by applicable law which shall not exceed those specified in this Agreement or to replace such term or provision with
a term or provision that comes closest to expressing the intention of the invalid or unenforceable term or provision.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70.9pt; text-align: justify; text-indent: -33.8pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Governing
Law</U>.</B>&nbsp;This Agreement will be governed by and construed in accordance with the laws of England, without reference to
any rules of conflicts of laws.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.4&nbsp;&nbsp;
&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Notices</U>. </B>All notices or other communications that are required or permitted hereunder
will be in writing and delivered personally with acknowledgement of receipt, sent by electronic mail (provided receipt is
acknowledged), facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier as
provided herein), sent by nationally-recognized overnight courier or sent by registered or certified mail, postage prepaid,
return receipt requested, addressed as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34.9pt; text-indent: 1.1pt">If to Egalet, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34.9pt; text-indent: 1.1pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">Egalet a/s</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">Lejrvej 37-41</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">DK-3500V&aelig;rl&oslash;se,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">Denmark</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">Phone: +45 4447 8080</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 70.9pt">Telefax: +45 4447
8081</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">If to RedHill, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">RedHill Biopharma Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">42 Givati St.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">Ramat Gan 52232</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">Fax: +972 (3) 725 5723</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">or
to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance
herewith. Any such communication will be deemed to have been given (i) when delivered, if personally delivered, (ii) on the business
day (on the receiving end) after dispatch, if sent by nationally-recognized overnight courier (third business day if sent internationally),
(iii) on the third business day following the date of mailing, if sent by mail (fifth business day if sent internationally) and
(iv) on the first business day (on the receiving end) after being sent by facsimile or by if sent by electronic mail followed
by facsimile. It is understood and agreed that this Section 15.4 is not intended to govern the day-to-day business communications
necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Entire
Agreement; Modifications</U>.</B> This Agreement sets forth and constitutes the entire agreement and understanding between the
Parties with respect to the subject matter hereof and all prior agreements, understanding, promises and representations, whether
written or oral, with respect thereto are superseded hereby. Each Party confirms that it is not relying on any representations
or warranties of the other Party except as specifically set forth herein. No amendment, modification, release or discharge will
be binding upon the Parties unless in writing and duly executed by authorized representatives of both Parties.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Relationship
of the Parties</U>.</B>&nbsp;It is expressly agreed that the Parties will be independent contractors of one another and that the
relationship between the Parties will not constitute a partnership, joint venture or agency.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Waiver</U>.</B>&nbsp;Any
term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no such
waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term
or condition. Any such waiver will not be deemed a waiver of any other right or breach hereunder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Counterparts</U>.
</B>This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>No
Third Party Beneficiaries</U>.</B> The representations, warranties, covenants and agreements set forth in this Agreement are for
the sole benefit of the Parties hereto and their successors and permitted assigns, and they will not be construed as conferring
any rights on any other parties.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -33.8pt">15.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Further
Assurances</U>. </B>Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further
instruments and do and cause to be done such further acts and things, including the filing of such assignments, agreements,
documents and instruments, as may be necessary to carry out the provisions and purposes of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">15.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Force
Majeure</U></B><FONT STYLE="font-size: 10pt">. </FONT>Neither party shall be responsible to the other for failure or delay in
performing any of its obligations under this Agreement or for other non-performance hereof but only to the extent that such delay
or non-performance is occasioned by a cause beyond the reasonable control and without fault or negligence of such party, including,
but not limited to earthquake, fire, flood, explosion, discontinuity in the supply of power, court order or governmental interference,
act of God, strike or other labor trouble, act of war or terrorism and provided that such party will inform the other party as
soon as is reasonably practicable and that it will entirely perform its obligations immediately after the relevant cause has ceased
its effect. If any such force majeure event continues for a continuous period of 12 months, the Party whose performance is not
prevented by such event may terminate this Agreement with immediate effect by providing the other Party with written notice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>IN WITNESS WHEREOF,</B> the Parties
hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Egalet a/s</TD>
    <TD STYLE="font-variant: small-caps; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-variant: small-caps; font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-left: 63pt; font-weight: bold"><B>RedHill Biopharma Ltd.</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%">Signature:</TD>
    <TD STYLE="width: 30%; border-bottom: windowtext 1pt solid">/s/ M. Fiorini</TD>
    <TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 10%">Signature:</TD>
    <TD STYLE="width: 30%; border-bottom: windowtext 1pt solid">/s/ Dror Ben-Asher</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">M. Fiorini</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">Dror Ben-Asher</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Title:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">Chairman</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">CEO</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold"><B>Egalet a/s</B></TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding-left: 63pt; font-weight: bold"><B>RedHill Biopharma Ltd.</B></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%">Signature:</TD>
    <TD STYLE="width: 30%; border-bottom: windowtext 1pt solid">/s/ P. Nordwood</TD>
    <TD STYLE="width: 20%">&nbsp;</TD>
    <TD STYLE="width: 10%">Signature:</TD>
    <TD STYLE="width: 30%; border-bottom: windowtext 1pt solid">/s/ Ori Shilo</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;P. Nordwood</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">Ori Shilo</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Title:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;CEO</TD>
    <TD>&nbsp;</TD>
    <TD>Title:</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">CFO</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>ANNEX A</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>PATENT TABLES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.1pt; text-align: justify; text-indent: 0in">Patent
license granted on an exclusive basis: Tables IP-P06 and IP-P08.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 37.1pt; text-align: justify; text-indent: 0in">Patent
license granted on a non-exclusive basis: Tables IP-P03, IP-P05 and IP-P09.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>IP-P03 - Coat (coating with cellulose)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 18%; border-bottom: windowtext 1pt solid; text-align: left; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Application </I>/</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Patent</I> <I>type</I></P></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 34%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><B>Title</B></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom"><B>Patent No.</B></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; text-align: left; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Application No. /</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Publication No.</B></P></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; font-weight: bold; text-align: left; vertical-align: bottom">Filing date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>PCT application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release composition</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>PCT/DK95/00080 /</TD>
    <TD>&nbsp;</TD>
    <TD>23-02-95</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>WO/1995/022962</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Japan application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release composition</TD>
    <TD>&nbsp;</TD>
    <TD>JP 4194114</TD>
    <TD>&nbsp;</TD>
    <TD>HEI7(1995)-522075 /</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>JP9509184</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Japan application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release composition</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>2005-282068 / 2006-</TD>
    <TD>&nbsp;</TD>
    <TD>Withdrawn</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>052228</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US patent*</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release composition</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>US 6,787,156</TD>
    <TD>&nbsp;</TD>
    <TD>08/693,254</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release composition</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>10/827,521 /</TD>
    <TD>&nbsp;</TD>
    <TD>Abandon</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>US2005019405</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release composition</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>12/213,087 /</TD>
    <TD>&nbsp;</TD>
    <TD>Withdrawn</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>US2008254124</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">-</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>EP Patent**</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release composition</TD>
    <TD>&nbsp;</TD>
    <TD>EP 0746310</TD>
    <TD>&nbsp;</TD>
    <TD>95909667.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Switzerland</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 0746310</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>France</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 0746310</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Great Britain</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 0746310</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Italy</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 0746310</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Germany</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Zusammensetzung mit gesteuerter</TD>
    <TD>&nbsp;</TD>
    <TD>DE69506086</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">freizetzung</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Denmark</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Pr&aelig;parat med styret afgivelse</TD>
    <TD>&nbsp;</TD>
    <TD>DK 0746310</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proprietor: BM Research</B></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Status:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>- EP patent issued in Switzerland, France, Great Britain,
Italy, Germany &amp; Denmark and expires 23 February 2015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>- US patent issued and expires 7 September 2021</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>- JP patent issued and expires 23 February 2015</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>IP-P05 - Polymer release system</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 18%; border-bottom: windowtext 1pt solid; text-align: left; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Application </I>/</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><I>Patent</I> <I>type</I></P></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 34%; border-bottom: windowtext 1pt solid; text-align: left; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Title</B></P></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; text-align: left; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Patent No.</B></P></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; text-align: left; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Application No. /</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Publication No.</B></P></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; text-align: left; vertical-align: bottom">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Filing</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>date</B></P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>PCT application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Polymer release system</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>PCT/DK02/00620 /</TD>
    <TD>&nbsp;</TD>
    <TD>23-09-02</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>WO 2003/024429</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Polymer release system</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>10/490,308 /</TD>
    <TD>&nbsp;</TD>
    <TD>Abandon</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>US2004/0234602</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US continuation</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>12/073,692 /</TD>
    <TD>&nbsp;</TD>
    <TD>07-03-08</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>US2008254122</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>EP application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Polymer release system</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429739/</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-style: italic">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">02779224.1</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proprietor: Egalet a/s</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>IP-P06 - Controlled release solid dispersions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B>&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="width: 18%; border-bottom: windowtext 1pt solid; font-style: italic"><I>Application&nbsp;</I>/<BR>
    <I>Patent</I>&nbsp;<I>type</I></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 34%; border-bottom: windowtext 1pt solid; font-weight: bold"><B>Title</B></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 13%; border-bottom: windowtext 1pt solid; font-weight: bold"><B>Patent&nbsp;No.</B></TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 20%; border-bottom: windowtext 1pt solid; font-weight: bold">Application&nbsp;No.&nbsp;/<BR> Publication&nbsp;No.</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 11%; border-bottom: windowtext 1pt solid; font-weight: bold">Filing&nbsp;date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>PCT application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>PCT/DK02/00621</TD>
    <TD>&nbsp;</TD>
    <TD>23-09-02</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>WO 2003/024426</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>10/490,170 /</TD>
    <TD>&nbsp;</TD>
    <TD>Abandon</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>US2005/0019399</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US continuation</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>12/073,691 /</TD>
    <TD>&nbsp;</TD>
    <TD>07-03-08</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>US2008/0234352</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>EP application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>02776907.4</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>AT</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>AT E 381 924</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>BE</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>CH</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>DE</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>DE 602 24 293</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>DK</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>ES</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>FR</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>GB</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>IE</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>IT</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1429734</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>EP Divisional</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1929998/</TD>
    <TD>&nbsp;</TD>
    <TD>20-12-07</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>07024778.8</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proprietor: Egalet a/s</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Status:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>- EP patent granted 26 December 2007 and expires 23. September
2022</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>IP-P08 - Controlled release Carvedilol compositions</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 18%; font-weight: normal; text-decoration: none; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom"><FONT STYLE="text-underline-style: none"><I>Application
    </I>/<BR>
    <I>Patent type</I></FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 34%; font-weight: bold; text-align: left; vertical-align: bottom; border-bottom: Black 1pt solid">Title</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 13%; font-weight: bold; text-align: left; vertical-align: bottom; border-bottom: Black 1pt solid">Patent
    No.</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 20%; font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom">Application No. /<BR> Publication No.</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: left; vertical-align: bottom">&nbsp;</TD>
    <TD STYLE="width: 11%; font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom">Filing&nbsp;date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>PCT application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release carvedilol </TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>PCT/DK03/00765/</TD>
    <TD>&nbsp;</TD>
    <TD>07-11-03</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">compositions</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>WO 2004/041252</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>10/703,084 / </TD>
    <TD>&nbsp;</TD>
    <TD>Abandon</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>US2004/0151772</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US continuation</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>12/076,105 /</TD>
    <TD>&nbsp;</TD>
    <TD>13-03-08</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD> US2008268057</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>EP application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Controlled release solid dispersion</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1562552/</TD>
    <TD>&nbsp;</TD>
    <TD>Withdrawn</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD> 03810382.6</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proprietor: Egalet a/s</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>IP-P09 - Polymer blend</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 18%; font-weight: normal; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom; font-style: normal"><FONT STYLE="font-weight: normal"><I><U STYLE="text-decoration: none">Application
    </U></I><U STYLE="text-decoration: none">/<BR>
    <I>Patent</I> <I>type</I></U></FONT></TD>
    <TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 34%; font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom">Title</TD>
    <TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 13%; font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom">Patent
    No.</TD>
    <TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 20%; font-weight: bold; border-bottom: Black 1pt solid">Application No. /<BR> Publication No.</TD>
    <TD STYLE="width: 1%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 11%; font-weight: bold; border-bottom: Black 1pt solid; text-align: left; vertical-align: bottom">Filing&nbsp;date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>PCT application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Matrix composition for controlled release</TD>
    <TD>&nbsp;</TD>
    <TD>-</TD>
    <TD>&nbsp;</TD>
    <TD>PCT/DK04/000217</TD>
    <TD>&nbsp;</TD>
    <TD>26-03-04</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>WO 2004/084869</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>US application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Matrix composition for controlled release</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>10/550,685 /</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD> US2007/0042044</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Canada application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Matrix composition for controlled release</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>2,520,312</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Japan application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Matrix composition for controlled release</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>2006-504340 /</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD> 2006521301</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>India application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Matrix composition for controlled release</TD>
    <TD>&nbsp;</TD>
    <TD>IN 233507</TD>
    <TD>&nbsp;</TD>
    <TD>4439/DELNP/2005</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>EP application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Matrix composition for controlled release</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>04723523.9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>AT</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic"></TD>
    <TD>&nbsp;</TD>
    <TD>AT E 399 538</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>BE</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>CH</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>DE</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>DK</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>ES</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>FR</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>GB</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>IE</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>IT</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>NL</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>EP 1610768</TD>
    <TD>&nbsp;</TD>
    <TD>From EP</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>EP Divisional</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">Matrix composition for controlled release</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP>EP 1974726/ 08158752,9</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>1120403</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>HK application</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD STYLE="font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proprietor: Egalet a/s</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<HR ALIGN="LEFT" NOSHADE STYLE="color: Black; width: 25%; height: 1pt; margin-top: 0; margin-bottom: 0">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>- EP patent granted and expires 26. Marts 2024</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>- IN Patent granted and expires 26. Marts 2024</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>ANNEX B</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[****] [3 pages redacted]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ANNEX C</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Third Party Patents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">EP 1272179 (WO 01/74357)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">US&nbsp; 5,902,821</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 4.3</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">August 26, 2010</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>CO-DEVELOPMENT AND COMMERCIALIZATION
AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>THIS CO-DEVELOPMENT
AND COMMERCIALIZATION AGREEMENT</B> (this &ldquo;<B>Agreement</B>&rdquo;) is made and entered into as of August 26, 2010 (the &ldquo;<B>Effective
Date</B>&rdquo;), by and between IntelGenx Corp., a Canadian corporation (&ldquo;<B>IntelGenx</B>&rdquo;), and RedHill Biopharma
Ltd., an Israeli company (&ldquo;<B>RedHill</B>&rdquo;). IntelGenx and RedHill each may be referred to herein individually as a
&ldquo;Party,&rdquo; or collectively as the &ldquo;Parties&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B><FONT STYLE="font-size: 10pt">,
</FONT>IntelGenx<FONT STYLE="font-size: 10pt"> is </FONT>the sole and exclusive owner of certain patents and other intellectual
property relating to a certain Product (as such term is defined herein);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B><FONT STYLE="font-size: 10pt">,</FONT><B>
</B>the Parties wish to jointly undertake the further development of the Product, all as more fully set forth herein;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>,
subject to the terms and conditions set forth in this Agreement, IntelGenx wishes to license to RedHill and RedHill wishes to license
from IntelGenx IntelGenx&rsquo; proprietary technology for use in connection with the sale and use of the Product;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>WHEREAS,</B>
IntelGenx and RedHill wish to set forth in the Agreement the terms upon which IntelGenx may, enter into an agreement with [****]
and/or any of its affiliates or sublicensees, for the purpose of permitting [****] to develop, commercialize, distribute or otherwise
exploit the Product, Patents and/or Licensed Know How; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in"><B>WHEREAS</B>,
the license to be granted shall be granted on a worldwide basis all as more fully set out below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>NOW THEREFORE, THE
PARTIES HERETO AGREE AS FOLLOWS:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DEFINITIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Affiliate</B>&rdquo;
of a Party means any other entity that, directly or indirectly, through one or more intermediaries, controls, is controlled by,
or is under common control with such Party. For purposes of this definition only, &ldquo;control&rdquo; and, with correlative meanings,
the terms &ldquo;controlled by&rdquo; and &ldquo;under common control with&rdquo; will mean the possession, directly or indirectly,
of the power to direct the management or policies of an entity, whether through the ownership of fifty percent or more of the voting
securities of the other organization or entity or by contract relating to voting rights or corporate governance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
&ldquo;<B>Commercialization</B>&rdquo; shall mean the commercial distribution and/or commercial promotion of the Product for sale.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Field
of Use</B>&rdquo; means all indications, including, but not limited to, acute treatment of migraine attacks with or without aura,
and all other therapeutic, diagnostic and other human and/or animal uses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Licensed
Know-How</B>&rdquo; means all information (other than that contained in the Patents) whether patentable or not and physical objects
related to the Product, including but not limited to Product data, Product-related results and information, including, but not
limited to, clinical data, analytical test results, non-clinical pharmacology and safety data, other R&amp;D data, Regulatory Documentation,
manufacturing and formulation information of a like nature, all provided that the Licensed Know-How is known to, generated by,
vested in (or licensed to) and/or controlled by IntelGenx, including, without limitation, the Licensed Know-How listed in <B>Annex
B</B> of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Marketing
Approval</B>&rdquo; shall mean the obtaining of all necessary regulatory approvals (excluding the obtainment of pricing reimbursement
approval) required from the applicable regulatory authority in the territory in order to commercially sell or market the Product
for human consumption in such territory, and satisfaction of any related regulatory registration and notification requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>[****]
Agreement</B>&rdquo; shall mean a binding definitive agreementthat becomes effective following the Effective Date between IntelGenx,
RedHill and [****] and/or any of its Affiliates, for the purpose of permitting [****] and/or any of its Affiliates or sublicensees
to exploit the Patents and the Licensed Know-How to develop, distribute or otherwise Commercialize the Product in the Field of
Use. Notwithstanding the foregoing, in the event a binding term sheet or binding letter-of-intent in respect of a [****] Agreement
(&ldquo;Interim [****] Agreement&rdquo;) is executed, the revenue sharing percentages under Section 8.4.3 shall be determined based
on the date said Interim [****] Agreement becomes effective and the period during which a &ldquo;[****] Agreement&rdquo; may come
into effect shall be extended to twelve (12) months following the Effective Date; provided that such agreement is consummated within
such twelve (12) month period. For the avoidance of doubt, IntelGenx shall, at its sole discretion, have the right to assume a
leadership role in any negotiations relating to any Interim [****] Agreement and shall have a casting vote in all decisions with
respect thereto. RedHill shall, in all reasonable respects relating to any Interim [****] Agreement, cooperate with IntelGenx to
the extent reasonably requested by IntelGenx and shall expeditiously execute any documents reasonably necessary to permit the Parties
to enter into any agreement with [****] including but not limited to any Interim [****] Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>[****]
Proceeds</B>&rdquo; shall mean all (i) amounts actually received by RedHill, IntelGenx and/or their respective Affiliates in respect
of the sale of a Product by RedHill, IntelGenx and/or their respective Affiliates to [****] and/or any of its Affiliates or sublicensees,
less, and following recovery of, Recognized Deductions and (ii) sales royalties, <FONT STYLE="color: black">milestones, income
and all cash or equivalents to which value can be assigned directly and/or indirectly</FONT> actually received by RedHill, IntelGenx
and/or their respective Affiliates from [****] and/or any of its Affiliates or sublicensees in respect of the Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Notwithstanding the foregoing, for the
purposes of this definition, the transfer of a Product by RedHill or IntelGenx or one of their respective Affiliates to another
Affiliate of RedHill or IntelGenx, as applicable, or to a sublicensee for resale is not a sale and in such cases, [****] Proceeds
will be determined based on the amount received by RedHill or IntelGenx, as applicable, or such Affiliate in respect of the Product
as sold by the Affiliate or sublicensee to independent third-parties, less Recognized Deductions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
&ldquo;<B>Net Sales</B>&rdquo; means amounts actually received by RedHill or its Affiliates in respect of the sale of a Product
by RedHill or its Affiliates, less, and following recovery of, the following items (collectively, the &quot;<B>Recognized Deductions</B>&quot;)
as considered under International Accounting Standards (IFRS):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">allowances or credits granted to and taken by customers (including wholesalers) for rejections,
returns (including as a result of recalls), and prompt payment and trade, cash and volume discounts or resulting from inventory
management</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">amounts incurred resulting from government mandated rebate programs (or any agency thereof);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">freight, transport, packing and insurance charges;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(iv)</TD><TD STYLE="text-align: justify">taxes, including value added tax, tariffs or import/export or customs, duties;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(v)</TD><TD STYLE="text-align: justify">rebates, charge backs and discounts paid or credited;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding the
foregoing, for the purposes of this definition, the transfer of a Product by RedHill or one of its Affiliates to another Affiliate
of RedHill or to a sublicensee for resale is not a sale and in such cases, Net Sales will be determined based on the amount received
by RedHill or such Affiliate in respect of the Product as sold by the Affiliate or sublicensee to independent third-parties, less
the Recognized Deductions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>
&ldquo;<B>Patents</B>&rdquo; shall mean the patents listed in <B>Annex A</B> to this Agreement, as well as Product-related (a)
U.S. patents and patent applications, (b) any substitutions, divisions, continuations, continuations-in-part (but only to the extent
that they cover the same invention claimed in the foregoing), reissues, renewals, registrations, confirmations, re-examinations,
extensions, supplementary protection certificates and the like, and any provisional applications, of any such patents or patent
applications, and (c) any foreign or international equivalent of any of the foregoing, of which IntelGenx is the owner, controller
or licensee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Product</B>&rdquo;
shall mean<FONT STYLE="font-size: 10pt"> </FONT>Rizatriptan - selective 5-hydroxytriptamine<SUB>1B/1D</SUB> (5-HT<SUB>1B/1D</SUB>)
receptor agonist formulation that is based on IntelGenx&rsquo; proprietary and patented VersaFilm oral drug delivery technology,
in all doses and formulations whatsoever<FONT STYLE="font-size: 10pt">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Regulatory
Authority</B>&rdquo; means any applicable government entity regulating or otherwise exercising authority with respect to the development
and Commercialization of a Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.12&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Regulatory
Documentation</B>&rdquo; means all applications, registrations, licenses, authorizations and approvals (including all Marketing
Approvals), all correspondence submitted to or received from Regulatory Authorities (including minutes and official contact reports
relating to any communications with any Regulatory Authority), all supporting documents and all clinical studies and tests, including
the manufacturing batch records for Product to be assigned, relating to a Product, and all data contained in any of the foregoing,
including all regulatory drug lists, advertising and promotion documents, adverse event files and complaint files.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.13&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B>&ldquo;Sublicense&rdquo;
</B>means a sublicense from RedHill to a third party under the License granted pursuant to this Agreement and the term &ldquo;<B>Sublicensee</B>&rdquo;
shall be construed accordingly. Any Sublicense may include the right to grant further Sublicenses. However, in the event that IntelGenx
and RedHill enter into a [****] Agreement, RedHill will not have rights to grant sublicenses and all sublicenses granted by RedHill
shall terminate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">1.14&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>&ldquo;<B>Sublicense
Sales Royalties</B>&rdquo;<B> </B>means sales royalties, <FONT STYLE="color: black">milestones, income and all cash or equivalents
to which value can be assigned directly and/or indirectly</FONT> actually received by RedHill from third party marketing Sublicensees
(and/or any further Sublicensees thereof) in respect of the Product.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>LICENSE
GRANT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Scope
of License</U></B>. Subject to all the terms and conditions of this Agreement, IntelGenx hereby grants to RedHill, an exclusive
(including as to IntelGenx except as set forth in this Agreement), worldwide, perpetual (subject to termination in accordance with
the terms hereof) license under the Patents and the Licensed Know-How, with such exclusivity being limited to the right to and
for the sole purpose of co-developing, selling, offering for sale and importing Product, in the Field of Use (the &ldquo;<B>License</B>&rdquo;).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Sublicenses</U></B>.
The License granted to RedHill under this Agreement is Sublicensable (and further Sublicensable) in whole or in part, to third
parties in arms length transactions. For the avoidance of doubt, RedHill shall, subject to the license grant provided herein, be
entitled to conduct or to perform any activity in respect of the Product by means of any third party sub-contractor, and such conduct
shall not be considered to be a grant of a Sublicense hereunder. RedHill shall give IntelGenx written notice of any intended Sublicense,
including the name of the Sublicensee and the material terms thereof. IntelGenx shall have 30 days (or such shorter period as is
reasonably specified by RedHill to address the exigencies of an agreement or negotiation with a Sublicensee) to deliver a notice
that it does not approve the proposed Sublicense. In the event IntelGenx notifies RedHill that it does not approve the proposed
Licensee the matter shall be presented to the Steering Committee for resolution and the provisions of Section 5.7 shall be applicable.
If IntelGenx does not deliver a notice of disapproval within such 30 day period, then RedHill shall have the right to execute the
Sublicense with the Sublicensee. IntelGenx agrees that it cannot unreasonably withhold, delay or condition approval to any proposed
Sublicense hereunder. Any sublicense by the Parties of the rights granted to such Party under this Agreement shall be consistent
with the terms of this Agreement, shall contain provisions necessary to effectuate the terms of this Agreement and shall include
an obligation for the Sublicensee to comply with obligations similar to those of this Agreement. However, in the event that IntelGenx
and RedHill enter into a [****] Agreement, RedHill will not have the right to grant sublicenses and all sublicenses granted by
RedHill shall terminate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Registration</U></B>.
IntelGenx agrees that<B> </B>RedHill shall, subject to the express provisions of this Agreement pertaining to an agreement with
[****], for the sole purpose of the fulfillment of the activities contemplated under the terms of this Agreement, have the right,
on its own account, to register as the licensee of exclusive rights in, to and under the Patents and the Licensed Know-How and
IntelGenx shall execute all pertinent documentation reasonably requested by RedHill and otherwise cooperate with RedHill in order
to ensure such registration</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Limitations
on Other Licenses</U></B>. During the term of this Agreement, IntelGenx shall not grant any rights or licenses to any Patents or
Licensed Know-How, or transfer any data or know-how to any third party that conflict with IntelGenx&rsquo; obligations under this
Agreement and the rights granted to RedHill under this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">2.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Manufacturing</U></B>.
For the avoidance of doubt, IntelGenx reserves the right to grant manufacturing privileges for the Product, subject to approval
by the Steering Committee as described in Section 5.6 below.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DATA
TRANSFER</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Data
Transfer</U></B>. Upon and following the successful and valid execution of this Agreement and upon written request from RedHill,
IntelGenx shall reasonably provide to RedHill, at no cost to RedHill, all the pertinent information it has about the Product including,
but not limited to, all Patents, know-how, R&amp;D data, past trials data, communications with Regulatory Authorities in the U.S.,
Europe and elsewhere, manufacturing, supply, external service and other contracts and any and all other information whatsoever
that is relevant for the development, marketing approval, marketing and other Commercialization of the Product.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Assistance</U></B>.
For the commercial manufacturing post-approval by the appropriate Regulatory Authorities, IntelGenx undertakes to reasonably assist
in a technical transfer of Licensed Know-How to a contract manufacturing organization chosen by the Steering Committee.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DEVELOPMENT
RESPONSIBILITIES AND DECISION-MAKING</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Co-Development</U></B>.
The Parties shall, following the Effective Date, undertake the co-development of the Product as more fully set forth hereinbelow.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>IntelGenx
Development Costs and Responsibilities</U></B>. IntelGenx shall perform the development of the Product in accordance with the provisions
of the development program, budget and time schedule attached hereto as <B><U>Annex 4.2</U></B> (the &ldquo;<B>R&amp;D Program</B>&rdquo;).
The budget set forth in the R&amp;D Program shall be referred to herein as the &ldquo;<B>R&amp;D Budget</B>&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IntelGenx will
be responsible for all the internal costs portion of the R&amp;D Budget, as well as all those internal costs that exceed those
set forth in the R&amp;D Budget by up to 10%.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The R&amp;D
Program, including the R&amp;D Budget shall be reviewed and approved in writing by the Steering Committee (as defined below) within
sixty (60) days following the Effective Date. Thereafter, at least thirty days prior to the end of each calendar quarter during
the term of the performance of the R&amp;D Program, IntelGenx shall be required to provide the Steering Committee with (i) reasonably
detailed quarterly reports regarding the progress of the R&amp;D Program during the then-ending quarter vis-&agrave;-vis the R&amp;D
Program, including, without limitation, the R&amp;D Budget applicable to such quarter, in a form and containing the substance to
be agreed in advance by the Steering Committee and (ii) the reasonably detailed R&amp;D Program and the R&amp;D Budget for the
immediately following quarter, all for review and prior written approval by the Steering Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the avoidance
of doubt, it is clarified that any deviation by IntelGenx from the R&amp;D Program, including, without limitation, the R&amp;D
Budget shall require the prior written approval of the Steering Committee. It is clarified that other than as set forth in Section
4.3 below, RedHill shall not be required to make any additional payments to IntelGenx on account of development of the Product.
It is further clarified that RedHill may cease the performance of any part or all of the R&amp;D Program upon ten (10) days prior
written notice to IntelGenx, without any penalty being imposed on RedHill whatsoever in respect of such cessation, and in such
event, the remaining provisions of this Agreement shall remain in full force and effect, subject to the provisions hereof. In the
event that following notice of RedHill's intent to cease performance of the entire R&amp;D Program as aforesaid RedHill does not
notify IntelGenx of its decision to revoke such notice and to continue with the R&amp;D Program and in fact ceases the performance
of the R&amp;D Program for more than sixty (60) days, then all licenses granted to RedHill and Sublicenses granted by RedHill,
shall subject to 16.3.1 terminate without penalty to IntelGenx and, for the avoidance of doubt, any ownership rights that RedHill
may have to the project or Product including all Patents and Licensed Know-How, shall immediately be assigned to IntelGenx. Payment
obligations by RedHill under this Agreement incurred and/or accrued prior to such termination would remain in effect until completed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IntelGenx shall
keep separate records of the expenses actually incurred by it in the conduct of the R&amp;D Program and shall provide the Steering
Committee with detailed quarterly reports of its expenses and any other information reasonably required by a member of the Steering
Committee in connection therewith.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">For the avoidance
of doubt, it is clarified that (i) any in-licensing of third party technology by IntelGenx for the purposes of the performance
of the R&amp;D Program and/or (ii) any use of third party technology by IntelGenx for the purposes of the performance of the R&amp;D
Program, shall require the prior written agreement of RedHill, and shall not be in-licensed or used, as applicable, in the event
that such prior written agreement of RedHill is not provided.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">RedHill&rsquo;s
representative(s) on the Steering Committee may, from time to time, request updates regarding the progress of the R&amp;D Program,
in addition to the periodic progress reports, and IntelGenx shall provide any additional update that RedHill&rsquo;s representative(s)
on the Steering Committee may reasonably request.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">IntelGenx shall
perform its obligations under the R&amp;D Program in accordance with all applicable laws and regulations, and shall procure the
receipt of all approvals and consents necessary for the performance of its obligations under the R&amp;D Program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">IntelGenx shall
only be entitled to subcontract its obligations to perform any item or task under the R&amp;D Program to any third party after
receipt of RedHill's project leader&rsquo;s written approval not to be unreasonably withheld. The performance of any part of the
R&amp;D Program by any subcontractor shall not detract from IntelGenx&rsquo; responsibilities hereunder. Furthermore, in the event
that IntelGenx shall subcontract any items under the R&amp;D Program with an assigned value that exceeds [****], IntelGenx shall,
prior to approving any such subcontract, provide RedHill with the proposal received in respect of such item(s) and RedHill shall
have the right to comment on same at RedHill's discretion and shall be required to approve same in writing. <B>.</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>RedHill&rsquo;s
Costs and Responsibilities</U></B>. RedHill shall be required to fund the external costs portion of the R&amp;D Budget (as same
are set forth in <B><U>Annex 4.2</U></B>) for the development of the Product in accordance with the provisions of the R&amp;D Program,
up to a maximum of US $[****] (USD[****]), in accordance with the actual progress in the various stages of the development of the
Product. In addition, RedHill will be responsible for bearing and paying all those external costs that exceed those set forth in
the R&amp;D Budget of US $[****], as aforesaid, by up to 10%. Any such payments shall be subject to RedHill's approval and shall
be made only after IntelGenx has provided RedHill with a copy of the relevant receipt from the subcontractor. Notwithstanding the
foregoing, all fees and/or payment obligations due to any Regulatory Authority shall be the burden of the party to whom responsibility
for Commercialization of the Product will be given pursuant to this Agreement. However, if a commercialization partner is not secured
by RedHill before December 31, 2011 (&ldquo;<B>PDUFA Deadline</B>&rdquo;), such partner subject to IntelGenx&rsquo; approval, such
approval not to be unreasonably withheld or delayed, RedHill shall become financially responsible for the fees associated with
a US FDA regulatory filing if and when such PDUFA Fee becomes due (&ldquo;<B>PDUFA Fee</B>&rdquo;), and the Revenue Share under
Section 8.3 shall be 20% until such time as RedHill has recovered such PDUFA Fee plus interest at the rate of ten (10) percent
per annum from the date the PDUFA Fee is paid by RedHill, and thereafter the Revenue Share under Section 8.3 shall be 40%. For
the avoidance of doubt, RedHill shall not be responsible financially or otherwise for any fees and/or payment obligations due to
any Regulatory Authority, except under the scenario just described and in the event the Product is marketed by RedHill or one of
its Affiliates unless otherwise mutually agreed and IntelGenx shall not be responsible financially or otherwise for any fees and/or
payment obligations due to any Regulatory Authority unless otherwise mutually agreed by the parties. Notwithstanding the foregoing,
in the event that RedHill itself becomes financially responsible for the PDUFA Fee as specified above, and informs IntelGenx, with
such notice to be written and provided to IntelGenx by the latter of the PDUFA Deadline or immediately, following a successful
completion of the NDA-enabling pivotal study (including full post-study analysis clearly confirming that the study&rsquo;s endpoints
have been met), that it does not intend to pay the PDUFA Fee, IntelGenx may elect, for a period of 60 days starting on the date
of such notice, to bear the burden of the PDUFA Fee by itself, in which case the Revenue Shares under Section 8.3 shall be [****]
IntelGenx and [****] RedHill.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Expenses
Exceeding R&amp;D Budget</U></B>. Any expenses exceeding the agreed R&amp;D Budget by less than 10% must be authorized in advance
and in writing by the Steering Committee. In the event of a deadlock at the Steering Committee on such matter, same shall be addressed
as set forth in Section 5.6 below. In the event that the Parties foresee expenses exceeding the agreed R&amp;D Budget by more than
10% (separately in respect of the internal and external costs), the Parties will discuss in good faith the necessary next steps
that will be required and which each agrees to take in order to advance the development of the Product under these new circumstances.
In the event that the Parties fail to reach an agreement in respect of such next steps within 21 days of first discussing same,
the matter shall be resolved in accordance with the arbitration mechanism set forth in Section 17.3 below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt; color: black">4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Deductions</U></B>.
Any and all third party (government and/or other) financing, credits, rebates, reimbursements and the like received in respect
of the development of the Product as of the Effective Date shall be proportionally deducted, on a pro-rata basis, from the Parties&rsquo;
respective undertakings toward the internal (IntelGenx) and external (RedHill) costs of the R&amp;D Program<FONT STYLE="color: black">
as set forth in the R&amp;D Budget. For the avoidance of doubt, any and all discounts or other price reductions for the development
of the Product, shall be fully reflected as such by reducing RedHill&rsquo;s commitment to pay such external development costs.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">4.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Third
Party Obligations</U>. </B>All royalty and other payment obligations existing under any agreement entered into by either Party
with the approval of the Steering Committee or any other obligation undertaken by either Party with the approval of the Steering
Committee, required to be paid to third parties in respect of the Commercialization of the Product shall be shared equally by the
Parties. In addition, if additional license(s) to intellectual property (irrespective of whether such is the intellectual property
covered herein or any other intellectual property) are necessary to enable the Parties to exercise the License, and the receipt
of or license to use such additional intellectual property requires payment of royalties, settlement payments, awards or any other
payments made to and taken by any third party on account of the use of such third party&rsquo;s intellectual property shall be
shared equally by the Parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">4.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Manufacturing
Royalties</U>. </B>Any manufacturing royalties negotiated with and paid to either of the Parties by the contract manufacturer shall
be shared equally by the Parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">4.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Ownership
of Regulatory Application</U></B>. If either IntelGenx or RedHill pay the PDUFA Fee as outlined in Section 4.3, the party paying
the fees will file the application and act as the applicant during the regulatory review process. However, the NDA will be jointly
owned by both IntelGenx and RedHill. For the avoidance of doubt, all aspects relating to any regulatory filing shall be controlled
by the Steering Committee.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DECISION
MAKING AND STEERING COMMITTEE</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Within
thirty (30)&nbsp;days following the Effective Date, the Parties shall establish a joint (50/50) steering committee (&ldquo;<B>Steering
Committee</B>&rdquo;) comprising not less than four (4) members and no more than 6 members (excluding observers who are non-members),
with at least two (2) being appointed and replaced by IntelGenx, of which one shall be the IntelGenx Project Leader, and at least
two (2)&nbsp;being appointed and replaced by RedHill, of which one shall be the RedHill Project Leader. All such representatives
shall be individuals of suitable authority and seniority with significant and relevant experience and expertise. Any appointment
or replacement shall be notified to the other Party in writing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The
Steering Committee shall oversee the overall execution of the objectives of the development of the Product. In particular, the
Steering Committee shall (i) monitor the progress of the R&amp;D Program against the timeframe and budgets and any amendments agreed
between the Parties, (ii) report on delays in the conduct of the R&amp;D Program which would materially affect IntelGenx&rsquo;
ability to successfully complete the R&amp;D Program within the timeframe or budgets and (iii) determine whether corrective action
is required. All aspects of the Steering Committee including but not limited to Steering Committee decisions shall be consistent
with terms provided in any [****] Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The
Project Leaders shall facilitate the flow of information and otherwise promote communications and collaboration within and among
the Parties, the Steering Committee, and any other sub-committees or teams that the Steering Committee may appoint or constitute.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The
Steering Committee shall meet at least monthly on the phone or in person at the offices of IntelGenx. Meetings shall be chaired
alternatively by the IntelGenx Project Leader and the RedHill Project Leader. Each Party shall only be responsible for its own
costs related to the Steering Committee and meetings. The Project Leader conducting the meeting also will be responsible for taking
and distributing the minutes. At and between meetings of the Steering Committee, each Party shall keep the other fully and regularly
informed as to its progress with its respective tasks and obligations under the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>At
each Steering Committee meeting, at least one (1) member appointed by each Party present in person or by telephone shall constitute
a quorum. Each Party shall have equal voting power, whether represented by one or two committee members, on all matters before
the Steering Committee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Decision
Making</U></B>. The Parties hereto shall jointly take all key decisions regarding the development and Commercialization of the
Product, subject to the following:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.05in">5.6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IntelGenx
shall bear primary responsibility for the development of the Product and shall have a deciding vote on the Steering Committee (detailed
below) in respect of development, regulatory and manufacturing decisions regarding the Product development, provided the decision
does not deviate from the R&amp;D Budget and is reasonable in accordance with industry standards.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.05in">5.6.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RedHill
shall bear primary responsibility for the licensing, Commercialization and partnering of the Product and shall have a deciding
vote on the Steering Committee in respect of partnering/licensing/Commercialization decisions relating to the Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1.05in">5.6.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Notwithstanding
the foregoing, or any text or content to the contrary provided for herein, during the period of nine (9) months following the Effective
Date, IntelGenx shall have a deciding vote on the Steering Committee in respect of partnering/licensing/Commercialization decisions
relating to a [****] Agreement and in the event a [****] Agreement is entered into during such nine (9) month period, IntelGenx
shall bear primary responsibility for the licensing, Commercialization and partnering of the Product and shall have a deciding
vote on the Steering Committee in respect of partnering/licensing/Commercialization decisions relating to the Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The
Parties shall undertake their respective obligations under the R&amp;D Program on a collaborative basis.&nbsp; In case the Steering
Committee cannot reach an agreement on a professional matter related to the development of the Product, the matter may be submitted
by either Party to a third party expert for an additional expert opinion. In any event, IntelGenx shall have the deciding vote
on matters pertaining to development, regulatory and manufacturing decisions and RedHill shall have the deciding vote on matters
pertaining to partnering/licensing/Commercialization decisions, all as described in Section 5.6 above.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>The
Steering Committee shall, among its other authorities, have the authority to establish and appoint sub-committees as the Steering
Committee deems necessary. All decisions of a subcommittee are subject to approval by the Steering Committee. The Steering Committee
may prescribe rules of procedure for the foregoing subcommittees. In the event that any such other subcommittees fail to reach
agreement on an issue within its respective area of oversight, the matter shall be referred to the Steering Committee.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">5.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Unless
otherwise expressly stated, nothing contained in this Agreement may be deemed to make any member of the Steering Committee a partner,
agent or legal representative of the other, or to create any fiduciary relationship for any purpose whatsoever. No member of the
Steering Committee shall have any authority to act for, or to assume any obligation or responsibility on behalf of, any other member
of the Steering Committee, or the other Party.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>DILIGENCE</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">6.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>IntelGenx
will make a good faith, continuous and diligent effort to allocate all appropriate resources to prepare, initiate and complete
the clinical development of the Product and file an application for regulatory marketing approval in the United States in accordance
with industry standards, and within the R&amp;D Budget and the timeframe agreed for the R&amp;D Program.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>REPORTS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">7.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>IntelGenx
shall keep RedHill informed with respect to activities and progress regarding the development, Marketing Approval and other approvals
of Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">7.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>RedHill
agrees as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">7.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Commercialization
Reports</U></B>. Within 30 days following the close of each calendar quarter following the Effective Date, RedHill will provide
IntelGenx with a quarterly report with respect to activities and progress regarding the Commercialization, sublicensing, and government
approvals of Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">7.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>First
Commercial Sale Report</U></B>. To report to IntelGenx the date of the first commercial sale of the Product, together with the
name of the country in which such first commercial sale occurred</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">7.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Revenue
Reports</U></B>. To deliver to IntelGenx a revenue report with respect to each calendar quarter within thirty (30) days of the
expiration of such calendar quarter, detailing in a manner to be mutually agreed the following: the amount of Net Sales and Sublicense
Sales Royalties received from Product, including the Recognized Deductions applicable in computing Net Sales and the deductions
applicable in computing Sublicense Sales Royalties, and the total Royalties due based on Net Sales and Sublicense Sales Royalties.
Within seven (7) days following receipt of such revenue report, IntelGenx shall issue an appropriate invoice to RedHill for payment
of the amount due pursuant to such revenue report. RedHill shall remit payment within ten (10) business days following receipt
of such invoice.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">7.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Any
and all information, data or reports supplied by RedHill pursuant to the provisions of this Section 7 shall be treated as RedHill's
Confidential Information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">7.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>If
this Agreement is terminated for any reason, RedHill shall deliver a final report and associated revenue sharing payment to IntelGenx
within sixty (60) days after such termination. Following termination, RedHill shall have no further reporting obligations.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>8.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>FINANCIAL
PROVISIONS </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Up-Front
Payment</U></B>. RedHill will pay IntelGenx a non-refundable one time up-front license fee in the amount of $[****] within seven
(7) days following the Effective Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Milestone
Payments</U></B>. RedHill will pay to IntelGenx the following non-refundable one-time milestone payments (such payments are due
only once for the Product and are not payable per indication or per jurisdiction). Within thirty (30) days after first achievement
of each of the applicable milestones for the Product (and not, for the avoidance of doubt, in respect of each indication of the
Product to do so), as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" ALIGN="CENTER" STYLE="border-collapse: collapse; width: 75%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: Black 1pt solid">Milestone</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; border-bottom: Black 1pt solid; text-align: center">Payment</TD><TD STYLE="font-weight: bold; padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD><TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 80%; font-weight: bold; text-align: justify">[****]</TD><TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="width: 1%; text-align: left">&nbsp;</TD><TD STYLE="width: 17%; text-align: right">[****]</TD><TD STYLE="width: 1%; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify">Filing and acceptance of an New Drug Application (NDA) by the US FDA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">200,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; text-align: justify">&nbsp;</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">&nbsp;</TD><TD STYLE="text-align: right">&nbsp;</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; text-align: justify">Marketing Approval of the Product by the US FDA</TD><TD>&nbsp;</TD>
    <TD STYLE="text-align: left">$</TD><TD STYLE="text-align: right">500,000</TD><TD STYLE="text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="color: black">Any
R&amp;D tax credits and all other tax or other credits that relate directly to development or R &amp; D activities of the Product
in Canada or anywhere else in the world (but not, for the avoidance of doubt, corporate tax credits) that are actually received
by </FONT>IntelGenx<FONT STYLE="color: black"> as a direct or indirect result of the funds provided or invested by RedHill, shall
be deducted from the Milestone payments required to be paid by RedHill to </FONT>IntelGenx<FONT STYLE="color: black">, or if no
Milestone payment is due and payable at such time, shall be transferred to RedHill within thirty (30) days following </FONT>IntelGenx&rsquo;<FONT STYLE="color: black">
actual receipt of such tax credit. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Revenue
Sharing</U></B>. RedHill will pay IntelGenx an amount equal to (i) 20% of Net Sales if Product is marketed by RedHill or one of
its Affiliates or (ii) 40% of Sublicense Sales Royalties actually received by RedHill if Product is marketed by Sublicensees; provided
that the Revenue Share as aforesaid shall be 20% if RedHill does not become directly responsible for the Commercialization of the
Product and pays the PDUFA Fee until such time as RedHill has recovered such costs, pursuant to Section 4.3 above (&ldquo;<B>Revenue
Share</B>&rdquo;), in each case, after recovery by RedHill of all its commercially reasonable costs and expenses, not to exceed
[****], incurred in connection with <FONT STYLE="color: black">the partnering of the Product</FONT> that are in excess of such
costs and expenses of IntelGenx (as shown by appropriate evidence of payment).</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT>Notwithstanding,
the foregoing, up until the receipt by RedHill of the first US $2,000,000 of Sublicense Sales Royalties, the Revenue Share percentage
of Sublicense Sales Royalties to which IntelGenx shall be entitled and which RedHill shall pay IntelGenx, shall be 60% of Sublicense
Sales Royalties actually received by RedHill (the<B> </B>&ldquo;<B>Initial Proceeds Split</B>&rdquo;) (after recovery of costs
and expenses as aforesaid). For the avoidance of any doubt, the Initial Proceeds Split will only apply once for the Product, and
not per indication, per territory or per Sublicensee. Notwithstanding the foregoing, and any text or content to the contrary herein,
in the event that IntelGenx, pursuant to Section 4.3, becomes financially responsible for the PDUFA Fee, RedHill will pay IntelGenx
pursuant to Section 4.3 above, an amount equal to 70% of Sublicense Sales Royalties. <B><U>[****] Agreement</U></B>. Notwithstanding
anything to the contrary contained in this Agreement, in the event that IntelGenx and RedHill enter into a [****] Agreement the
following shall apply:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">8.4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;All
financial commitments of RedHill including, but not limited to, external development costs under Section 4.3 above and the final
milestone payment pursuant to Section 8.2 above, in which RedHill is obligated to pay $0.5 million upon marketing approval will
be cancelled and RedHill shall have no financial commitment whatsoever with respect to the project and/or the Product. All other
milestone payments payable by RedHill shall remain in effect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">8.4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RedHill
shall receive [****] of all [****] Proceeds until recovery by RedHill of all external costs and expenses of the R&amp;D Program
actually paid and/or incurred by RedHill following which revenues generated by the Product shall be payable to RedHill and IntelGenx
as otherwise set forth in this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">8.4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Except
as set forth in Section 8.4.2 above, revenue sharing in respect of all [****] Proceeds shall be as follows:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>


<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the [****] Agreement is signed and becomes effective within three (3) months following the Effective Date, revenue sharing
as aforesaid shall be [****] in favor of IntelGenx.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the [****] Agreement is signed and becomes effective between three (3) and six (6) months following the Effective Date,
revenue sharing as aforesaid shall be [****] in favor of IntelGenx.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event the [****] Agreement is signed and becomes effective after six (6) months following the Effective Date, revenue sharing
as aforesaid shall be [****] in favor of IntelGenx.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the greater certainty, and solely for the purposes of determining the revenue sharing percentages under this section, the date
an Interim [****] Agreement becomes effective&nbsp; shall be the date of the [****] Agreement</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">8.4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
provisions of Sections 7.2, 7.3, 7.4, 8.5, 8.6, 8.7 and 9 shall apply, <I>mutatis mutandis</I>, to IntelGenx and it shall provide
reports and make payments in respect of [****] Proceeds in accordance therewith. IntelGenx undertakes to use its best efforts to
protect the vital interests of RedHill in decisions relating to a [****] Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">8.4.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[****]
Proceeds shall be paid to IntelGenx. Disbursements to RedHill shall be due and payable to RedHill on a quarterly basis within fifteen
(15) days following the end of the calendar quarter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Due
Dates for Payment</U></B>. All payments due pursuant to the provisions of Section 8.3 above shall be due and payable to IntelGenx
on a calendar quarterly basis within fifteen (15) days following the submission of the relevant quarterly revenue report but no
earlier than ten (10) business days following receipt of the relevant invoice from IntelGenx</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="color: black"><B><U>Payment
Method</U></B>. </FONT> Any amounts due to IntelGenx under this Agreement will be paid in U.S. dollars, by wire transfer in immediately
available funds to an account designated in writing at least fifteen (15) days in advance by IntelGenx.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="color: black"><B><U>Currency;
Foreign Payments</U></B>. </FONT>If any currency conversion will be required in connection with the calculation of any payment
hereunder, such conversion will be made by using the exchange rate for the purchase of U.S. dollars as published in <I>The Wall
Street Journal</I>, Eastern Edition, on the date of the payment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Invoice;
Approvals</U></B>. All payments to be made by RedHill to IntelGenx hereunder shall be made against receipt of an appropriate invoice
in respect of the amount of such payment. In the event any payment may require approval of any governmental authority, RedHill
undertakes to promptly file for approval and in the event that such approval is not received by the due date of payment, RedHill
undertakes to effectuate payment promptly following receipt of the necessary approval.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="color: black"><B><U>Taxes</U></B>.<B>
</B></FONT> RedHill may deduct from amounts it is required to pay IntelGenx pursuant to this Agreement an amount equal to that
withheld for or due on account of any taxes (including VAT to the extent applicable, but other than taxes imposed on or measured
by net income of RedHill) or similar governmental charge imposed by any jurisdiction based on such payments to IntelGenx (&ldquo;<B>Withholding
Taxes</B>&rdquo;). RedHill will provide IntelGenx a certificate evidencing payment of any Withholding Taxes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">8.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>No
Warranty</U></B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">8.10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the avoidance of doubt, nothing contained in this Agreement shall be construed as a warranty by RedHill that any Commercialization
to be carried out by it in connection with this Agreement will actually achieve its aims or any other results and RedHill makes
no warranties whatsoever as to any results to be achieved in consequence of the carrying out of any such Commercialization. Furthermore,
RedHill makes no representation to the effect that the Commercialization of the Product, or any part thereof, will succeed, or
that it shall be able to sell the Product in any quantity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">8.10.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;For
the avoidance of doubt, nothing contained in this Agreement shall be construed as a warranty by IntelGenx that any clinical trials
and/or any other activities required for an approval from any Regulatory Authority to market and/or sell the Product to be carried
out in connection with this Agreement will actually achieve its aims or any other results and IntelGenx makes no warranties whatsoever
as to any results to be achieved in consequence of the carrying out of any such activities. Furthermore, IntelGenx makes no representation
to the effect that any clinical trials and/or any other activities required for an approval from any Regulatory Authority to market
and/or sell the Product, or any part thereof, will succeed, or that RedHill shall be able to sell the Product in any quantity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">9.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>RECORD
RETENTION AND AUDIT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">9.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Record
Retention</U></B>.<B> </B>RedHill will maintain (and will ensure that its Affiliates maintain) complete and accurate books, records
and accounts that fairly reflect Net Sales and Sublicense Sales Royalties, in sufficient detail to confirm the accuracy of any
payments required hereunder, which books, records and accounts will be retained for two (2) years after the end of the period to
which such books, records and accounts pertain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">9.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Audit</U>.
</B>IntelGenx will have the right, at its own cost, to have an independent certified public accounting firm of nationally recognized
standing, reasonably acceptable to RedHill and who agrees to be bound by a customary undertaking of confidentiality (including
an undertaking not to disclose to IntelGenx any information other than the results of its audit), have access during normal business
hours, and upon reasonable prior written notice, to RedHill&rsquo;s records together with any disclosure necessary to explain the
same as may be reasonably necessary to verify the accuracy of Net Sales, Royalties and Sublicense Sales Royalties, as applicable,
for any fiscal year ending not more than 24 months prior to the date of such request; <I>provided, however</I>, that IntelGenx
will not have the right to conduct more than one such audit in any calendar year or more than one such audit covering any given
time period. Any such audit shall not unreasonably interfere with the business of RedHill and shall be completed within a reasonable
time. Any amounts determined pursuant to any such audit to have been overpaid or underpaid shall promptly be refunded or paid as
applicable. In the event that any such audit reveals an underpayment to IntelGenx of more than five percent (5%), RedHill shall
reimburse IntelGenx for the expense of such audit. Notwithstanding the foregoing, in the event that RedHill disagrees with the
conclusions of any such audit, the Parties shall submit such dispute to arbitration in accordance with Section 17.3 and no payment
shall be made pursuant to this Section 9.2 pending the outcome of such arbitration. As a condition to such audit, the independent
public accountant selected shall execute a written agreement, reasonably satisfactory in form and substance to both Parties, to
maintain in confidence all information obtained during the course of any such audit except for disclosure as necessary for the
above purpose and all reasonable documents will be delivered to the auditor under these confidential terms. Additionally no auditor
may be employed on a contingency basis..</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">9.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Confidentiality</U></B>.
IntelGenx will treat all information subject to review under this Section 9 in accordance with the confidentiality provisions of
Section 13 below.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><FONT STYLE="font-size: 10pt"><B>10.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</B></FONT><B><U>REPRESENTATIONS
AND WARRANTIES</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">10.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>By
Both Parties</U></B>. Each Party hereby represents, warrants and covenants to the other Party as of the Effective Date as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.1.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Corporate
Authority</U></B>. Such Party (a) has the power and authority and the legal right to enter into this Agreement and perform its
obligations hereunder, and (b) has taken all necessary action on its part required to authorize the execution and delivery of this
Agreement and the performance of its obligations hereunder. This Agreement has been duly executed and delivered on behalf of such
Party and constitutes a legal, valid and binding obligation of such Party and is enforceable against it in accordance with its
terms subject to the effects of bankruptcy, insolvency or other laws of general application affecting the enforcement of creditor
rights and judicial principles affecting the availability of specific performance and general principles of equity, whether enforceability
is considered a proceeding at law or equity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.1.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Consents
and Approvals</U></B>. Excluding any required regulatory approvals from Regulatory Authorities, and subject to the approvals referenced
in Sections 8.8 and 8.9 above, such Party has obtained all necessary consents, approvals and authorizations from any federal, state
provincial, local or foreign government or subdivision thereof, or any entity, body or authority exercising executive, legislative,
judicial, regulatory or administrative functions of, or pertaining to any federal, state, provincial, local or foreign government
with jurisdiction over the subject matter of the transactions and/or activities contemplated by this Agreement (&ldquo;<B>Governmental
Authority</B>&rdquo;) and other parties required to be obtained by such Party in connection with the execution and delivery of
this Agreement and the performance of its obligations hereunder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.1.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Conflicts</U></B>.
The execution and delivery of this Agreement and the performance of such Party&rsquo;s obligations hereunder, other than as described
in the [****] Agreement, (a) do not conflict with or violate any requirement of applicable law or any provision of the articles
of incorporation, bylaws or any similar instrument of such Party, as applicable, in any material way, and (b) do not conflict with,
violate, or breach or constitute a default or require any consent not already obtained under, any contractual obligation or court
or administrative order by which such Party is bound.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">10.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>By
IntelGenx</U></B>.<B> </B>IntelGenx<B> </B>hereby further represents, warrants, and covenants to RedHill as of the Effective Date
as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>IP
Ownership</U></B>. IntelGenx<B> </B>has the sole legal and/or beneficial title to and ownership of the Patents and to the Licensed
Know-How as is necessary to grant the License to RedHill pursuant to this Agreement, and the Patents and the Licensed Know-How
are free and clear of any liens, encumbrances or third party rights (including without limitation, the right to receive royalties
or other compensation). Furthermore, IntelGenx<B> </B>undertakes that to the extent that RedHill, its Affiliates, or any Sublicensee
requires a license under any additional patents or related rights controlled by IntelGenx<B> </B>other than the rights granted
to IntelGenx as outlined<B> </B>in the agreement between [****] and IntelGenx dated December 18, 2009 (&ldquo;<B>[****]</B>&rdquo;)
in order to use, sell, offer for sale or import Product, IntelGenx<B> </B>shall grant such a license to RedHill, its Affiliates,
and any Sublicensee on a non-exclusive royalty-free basis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>No
Conflicting Grants</U></B>.<B> </B>IntelGenx<B> </B>has not and during the term of this Agreement shall not, grant any rights to
the Patents or the Licensed Know-How that conflict with the rights granted to RedHill hereunder, and no third party has any rights
whatsoever (including the right to receive royalties or any other compensation) under the Patents or the Licensed Know-How for
the Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Third
Party Actions</U></B>.<B> </B>The exercise of the License by RedHill will not, to the best of IntelGenx&rsquo; knowledge, infringe
upon the patent or other intellectual property rights of any third party, and no actions, suits, claims, disputes, or proceedings
concerning the Patents, the Licensed Know-How or the Product are currently pending or have been threatened, that could have an
adverse effect on the Product or could impair IntelGenx&rsquo; ability to perform its obligations under this Agreement. Furthermore,
there are no legal suits or proceedings by a third party (including without limitation employees or former employees of IntelGenx)
contesting the ownership or validity of the Patents, the Licensed Know-How or the Product or any part thereof, and if IntelGenx
shall become aware of any such third party, IntelGenx shall immediately notify RedHill of such, and IntelGenx undertakes to effect
any payments required (including the payment of royalties or other compensation) to be made to such third party, and to hold RedHill
harmless from, and indemnify RedHill against, any such claims or payments. <B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">10.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B>Additional
Licenses</B>. To the best of IntelGenx&rsquo; knowledge and other than as described in the [****], no additional licenses to any
patents (including patents owned or controlled by third parties) or know how are required to develop, manufacture, use or sell
the Product.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>11.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>LIMITATION
OF LIABILITY</U></B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Except in the
case of willful or fraudulent misrepresentation under Section 10 and indemnification for payments to third parties under Section
15, in no event shall either Party be liable to the other or any of its Affiliates for any consequential, incidental, indirect,
special, punitive or exemplary damages (including, without limitation, lost profits, business or goodwill) suffered or incurred
by such other Party or its Affiliates, whether based upon a claim or action of contract, warranty, negligence or tort, or otherwise,
arising out of this Agreement.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>12.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>PATENTS</U></B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">12.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>IP
Ownership</U></B>.<FONT STYLE="color: black"> All Product-related IP solely developed by </FONT>IntelGenx<FONT STYLE="color: black">
either prior to the Effective Date, or at any time after the Effective Date, shall be owned by </FONT>IntelGenx<FONT STYLE="color: black">,
and licensed to RedHill pursuant to the License exclusivity granted herein. Any Product-related IP that is jointly developed (including
the use of any financing provided by RedHill) by the Parties will be jointly owned by the Parties (the &ldquo;<B>Joint IP</B>&rdquo;)
and IntelGenx&rsquo; portion of same shall be included in the License granted hereunder. Notwithstanding the foregoing, each Party
shall have the right to use such Joint IP in respect of Product other than the Product, provided that such other Product do not
compete with the Product or with any other Product of the other Party; and provided further that neither party shall grant any
exclusive rights to, or otherwise dispose of its portion of the Joint IP, without the prior written consent of the other party;
other than (i) an assignment or transfer in connection with a merger of such Party or a sale of all or substantially all of its
assets or shares</FONT> and (ii) RedHill&rsquo;s right to sublicense <FONT STYLE="color: black">its portion of the Joint IP</FONT>
in the context of a sublicensing transaction under the License.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">12.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Patent
Prosecution And Maintenance</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Prosecution</U></B>.<B>
</B>IntelGenx undertakes to prosecute and maintain the Patents using counsel of its choice in the jurisdictions to the extent such
jurisdictions are decided after conferring with RedHill. IntelGenx will provide RedHill with copies of all relevant documentation
so that RedHill will be informed of the continuing prosecution and may comment upon such documentation sufficiently in advance
of any initial deadline for filing a response, provided, however, that if RedHill has not commented upon such documentation in
a reasonable time for IntelGenx to sufficiently consider RedHill&rsquo;s comments prior to a deadline with the relevant government
patent office, or IntelGenx must act to preserve the Patents, IntelGenx will be free to act without consideration of RedHill&rsquo;s
comments, if any.<B> </B>RedHill shall have the right but not the obligation to prosecute and maintain at RedHill&rsquo;s discretion
and expense the Patents in any jurisdiction as aforesaid as to which IntelGenx decides not to prosecute and maintain a Patent and
IntelGenx undertakes to inform RedHill promptly, at least 30 days prior to expiry, if IntelGenx decides not to prosecute and maintain
a Patent in any jurisdiction in order for RedHill to take such action.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>RedHill&rsquo;s
Requests</U></B>.<B> </B>IntelGenx shall use reasonable efforts to amend any Patent application to include claims or any other
changes reasonably requested by RedHill to protect the Product contemplated to be sold under this Agreement. Moreover, IntelGenx
will cooperate in the preparation, filing, prosecution, and maintenance of the Patents, including (a) promptly executing all papers
and instruments and requiring employees to execute such papers and instruments as reasonable and appropriate so as to enable RedHill
to file, prosecute, and maintain the Patents in any country; and (b) promptly informing RedHill of matters that may affect the
preparation, filing, prosecution, or maintenance of any Patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Patent
Prosecution Costs</U></B>. IntelGenx shall bear the costs of preparing, filing, prosecuting and maintaining all patent applications
contemplated by Section 12.2.1, provided, however that RedHill shall pay all costs and expenses incurred in making amendments or
changes required by RedHill, provided such amendments or changes have been expressly and specifically requested from IntelGenx
in advance and in writing by RedHill and provided all such costs and expenses have been pre-approved in writing by RedHill. Costs
associated with Joint IP patent applications shall be shared equally.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Co-operation</U></B>.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
and maintaining Party to prosecute and maintain the relevant Patent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">12.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Patent<FONT STYLE="font-size: 10pt">
</FONT>Enforcement</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Infringement
Notice</U></B>.<B> </B>If IntelGenx or RedHill determines that any Patent is being infringed by a third party&rsquo;s activities
and that such infringement could affect the exercise of the License under this Agreement, it will promptly notify the other Party
in writing. In addition, if IntelGenx or RedHill determines that any Licensed Know-How is being misappropriated by a third party&rsquo;s
activities and that such misappropriation could affect the exercise of the License under this Agreement, it will promptly notify
the other Party in writing.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
RedHill will have the sole, exclusive and first right but not the obligation to remove such infringement and/or misappropriation
and to control all litigation to remove such infringement and/or misappropriation relating to the Product in the Field of Use,
all as RedHill shall deem appropriate in its sole discretion. IntelGenx shall provide notice to RedHill of its decision to co-defend
(i.e., equally share the costs resulting from the action) within sixty (60) calendar days from the date the relevant Proceeding
(as hereinafter defined) becomes known to IntelGenx. In the event RedHill does, at its discretion, undertake any infringement or
misappropriation action and IntelGenx does not co-defend, RedHill will provide IntelGenx with copies of all relevant documentation
so that IntelGenx will be informed of the continuing action and may comment upon such documentation sufficiently in advance of
any initial deadline for filing a response, provided, however, that if IntelGenx has not commented upon such documentation in a
reasonable time for RedHill to sufficiently consider IntelGenx&rsquo; comments prior to a deadline, or RedHill must act to preserve
the action, RedHill will be free to act without consideration of IntelGenx&rsquo; comments, if any.<B> </B> Notwithstanding the
foregoing, and/or any language to the contrary, RedHill shall not be permitted to settle any threatened, pending or completed action,
suit, arbitration, or other alternate dispute resolution mechanism, or investigation, inquiry, administrative hearing or any other
actual, threatened or completed proceeding, whether civil, administrative, investigative or criminal including, without limitation,
any appeal therefrom (collectively, &ldquo;<B>Proceeding</B>&rdquo;), or any claim, issue or matter therein, on behalf of IntelGenx,
without the prior written consent of IntelGenx, such consent not to be unreasonably withheld, delayed or conditioned</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RedHill
agrees to inform IntelGenx promptly if RedHill decides not to take infringement or misappropriation action or not to continue such
action due to IntelGenx&rsquo; refusal to consent to a proposed settlement in order for IntelGenx to assume responsibility of infringement
or misappropriation action to be taken as per IntelGenx&rsquo; discretion.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">In the event IntelGenx
does, at its discretion, undertake any infringement or misappropriation action, IntelGenx will provide RedHill with copies of all
relevant documentation so that RedHill will be informed of the continuing action and may comment upon such documentation sufficiently
in advance of any initial deadline for filing a response, provided, however, that if RedHill has not commented upon such documentation
in a reasonable time for IntelGenx to sufficiently consider RedHill&rsquo;s comments prior to a deadline, or IntelGenx must act
to preserve the action, IntelGenx will be free to act without consideration of RedHill&rsquo;s comments, if any.<B> </B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Co-operation</U></B>.
The Parties will provide reasonable assistance to each other, including providing access to relevant documents and other evidence,
making its employees available at reasonable business hours, and joining the action to the extent necessary to allow the prosecuting
Party to maintain the action.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Recovery</U></B>.
Any amounts recovered in connection with or as a result of any action contemplated by Sections 12.3.2 and 12.3.3, whether by settlement
or judgment, will be used to reimburse the Parties for their reasonable costs and expenses in making such recovery (which amounts
will be allocated pro rata if insufficient to cover the totality of such expenses), and any remainder received by RedHill will
be treated as Sublicense Sales Royalties and payments will be due in respect of same pursuant to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">12.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Patent
Infringement</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>License</U></B>.
In the event that RedHill determines that the manufacturing, use or Commercialization of the Product or any other action authorized
under the License or any part thereof, is such that it is commercially reasonable to seek a license to the intellectual property
rights of any third party, RedHill shall, upon approval of the Steering Committee, be entitled to enter into negotiations with
such third party in order to reach an agreement according to which RedHill shall obtain a license or other applicable right or
a waiver from such party with respect to such intellectual property rights. In such event RedHill shall be entitled to deduct all
the payments made to such third party from Net Sales and/or Sublicense Sale Royalties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Claim
Rights and Procedures</U></B>. In the event that either IntelGenx or RedHill, become aware of any allegation or are sued by a
third party that the development or Commercialization of the Product infringes upon any intellectual property rights of such third
party (an &ldquo;<B>Infringement Allegation</B>&rdquo;), notice of an Infringement Allegation shall promptly be given to the other
Party. In the event that IntelGenx is sued independently of RedHill, RedHill shall provide notice to IntelGenx of its decision
to co-defend (i.e., equally share the costs resulting from the action) within sixty (60) calendar days from the date the relevant
suit becomes known to RedHill. Provided that an Infringement Allegation is not the result of a breach of warranty or representation
by IntelGenx, which shall be addressed as provided in Section 15.2 [Indemnification], any damages, losses and royalties or other
amounts awarded to the counterparty or paid in settlement and/or incurred in connection with an Infringement Allegation shall be
shared equally by the Parties.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.4.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;In
the event of an Infringement Allegation wherein IntelGenx is sued independently of RedHill, IntelGenx shall, at its sole discretion,
have the first right to defend any such Infringement Allegation(s) using counsel of its choice. RedHill shall have the right but
not the obligation to join IntelGenx in the suit as may be necessary or advisable, and RedHill will make available its employees
and relevant records to assist in and to provide evidence for such suit. Should RedHill decide to join IntelGenx, all expenses,
fees (including reasonable legal fees and expenses), damages, losses and royalties or other amounts paid in settlement and/or incurred
in connection with the defense of any Infringement Allegation shall be shared equally by the Parties. In the event that IntelGenx
is solely financially responsible for any Proceeding other than the defense of any Infringement Allegation, all royalties and/or
other amounts paid in settlement, and/or recovered in connection with such shall be the sole benefit and/or responsibility of IntelGenx.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">12.4.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Neither
Party shall, without the consent of the other Party, enter into any settlement or compromise or consent to any judgment in respect
of any claim and/or Proceeding related to rights licensed to RedHill under this Agreement, unless such settlement, compromise or
consent includes an unconditional release of the other Party from all liability arising out of the claim, if any, and does not
otherwise limit or impair the other Party&rsquo;s rights.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">13.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>CONFIDENTIALITY</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">13.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="color: black"><B><U>Disclosure
and Use Restriction</U></B>. </FONT> The Parties agree that during the Term of this Agreement and thereafter, each Party will keep
<FONT STYLE="color: black">completely</FONT> confidential and will not publish, submit for publication or otherwise disclose, and
will not use for any purpose except for the purposes contemplated by this Agreement, any Confidential Information (as such term
is defined below) received from the other Party.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">13.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Confidential
Information</U></B>. &ldquo;<B>Confidential Information</B>&rdquo; shall mean all information and know-how and any tangible embodiments
thereof provided by or on behalf of one Party to the other Party either in connection with the discussions and negotiations pertaining
to this Agreement or in the course of performing this Agreement, which may include data; knowledge; practices; processes; ideas;
research plans; engineering designs and drawings; research data; manufacturing processes and techniques; scientific, manufacturing,
marketing and business plans; and financial and personnel matters relating to the disclosing Party or to its present or future
Product, sales, suppliers, customers, employees, investors or business. Notwithstanding the foregoing, information or know-how
of a Party shall not be deemed Confidential Information of such Party for purposes of this Agreement if such information or know-how:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was
already known to the receiving Party, other than under an obligation of confidentiality or non-use, at the time of disclosure to
such receiving Party;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or was
otherwise part of the public domain, at the time of its disclosure to such receiving Party;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;became
generally available or known to parties reasonably skilled in the field to which such information or know-how pertains, or otherwise
became part of the public domain, after its disclosure to such receiving Party through no fault of the receiving Party;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was
disclosed to such receiving Party, other than under an obligation of confidentiality or non-use, by a third party who had no obligation
to the disclosing Party not to disclose such information or know-how to others; or</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;was
independently discovered or developed by such receiving Party, as evidenced by their written records, without the use of Confidential
Information belonging to the disclosing Party and prior to any subsequent disclosure by the receiving Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All Licensed Know-How shall be deemed to
be Confidential Information of IntelGenx; provided that RedHill shall be entitled to disclose and use any Licensed Know-How in
the exercise of its rights under this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">13.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><FONT STYLE="color: black"><B><U>Authorized
Disclosure</U></B>.</FONT> Notwithstanding the provisions of Section 13.1 above, a Party shall be entitled to disclose the Confidential
Information of the other Party hereto to the extent that such disclosure is:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made
in response to a valid order of a court of competent jurisdiction; <I>provided, </I>however, that such Party will first (to the
extent practicably possible) have given notice to such other Party and given such other Party a reasonable opportunity to quash
such order and to obtain a protective order requiring that the Confidential Information and documents that are the subject of such
order be held in confidence by such court or agency or, if disclosed, be used only for the purposes for which the order was issued;
and <I>provided further</I> that if a disclosure order is not quashed or a protective order is not obtained, the Confidential Information
disclosed in response to such court or governmental order will be limited to that information which is legally required to be disclosed
in response to such court or governmental order;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;otherwise
required by law; <I>provided, however</I>, that the disclosing Party will provide such other Party with notice of such disclosure
in advance thereof to the extent practicably possible and to the extent permitted, will redact from such disclosure the other party&rsquo;s
Confidential Information or designate the same as trade secret;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(iii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made
by such Party to any Regulatory Authority or Governmental Authority as necessary for the development or Commercialization of a
Product, including the Product, in a country, as required in connection with any filing, application or request for Regulatory
Approval or as required by applicable securities laws and regulations, subject to the limitations in Section 13.3(ii);</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(iv)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made
by such Party in connection with the performance of this Agreement, to Sublicensees, Affiliates, directors, officers, employees,
consultants, representatives or agents, each of whom prior to disclosure must be bound by obligations of confidentiality and non-use
at least equivalent in scope to those set forth in this Agreement;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;made
by such Party in the course of submitting financial accounts to relevant authorities as per local statutory requirements or to
existing or potential acquirers; existing or potential collaborators; investment bankers; existing or potential investors, merger
candidates, partners, venture capital firms or other financial institutions or investors for purposes of obtaining financing; or,
bona fide strategic potential partners; each of whom prior to disclosure must be bound by obligations of confidentiality and non-use
at least equivalent in scope to those set forth in this Agreement; or</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 1in">(vi)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;a
general description of the Product made by a Party to its shareholders and to potential investors with the aim of securing the
financing needed to continue the development of the Product.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>14.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="font-size: 10pt"><U>PRESS</U></FONT><U>
RELEASES </U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Press releases
or other similar public communication by either Party relating to the terms of this Agreement (but not, for the avoidance of doubt,
unless reference is made to the other Party or the terms of this Agreement, with respect to activities in exercise of its rights
under this Agreement) will be approved in advance by the other Party, which approval will not be unreasonably withheld or delayed.
Notwithstanding the foregoing, those communications required by applicable law, regulation or securities exchange rule (including,
but not limited to, a public offering prospectus), disclosures of information for which consent has previously been obtained, and
information of a similar nature to that which has been previously disclosed publicly with respect to this Agreement, will not require
advance approval, but will be provided to the other Party as soon as practicable after the release or communication thereof. For
the avoidance of doubt, the Parties may issue press releases regarding the fact that this Agreement has been signed and the nature
of the agreement so long as they do not describe the specific provisions hereof without approval from the other party.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>15.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>INDEMNIFICATION</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">15.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Indemnification
of IntelGenx</U></B>.<B> </B>RedHill will defend and hold IntelGenx and its directors, officers, employees and agents (&ldquo;<B>IntelGenx
Parties</B>&rdquo;) harmless, from and against any and all liability, suits, investigations, claims or demands by a third party
to the extent arising from or occurring as a result of or in connection with (a) the negligence or willful misconduct on the part
of RedHill in performing any activity contemplated by this Agreement or (b) a breach by RedHill of any representations, warranties,
or covenants set forth in this Agreement; except to the extent arising from the (i) negligence or willful misconduct on the part
of an IntelGenx Party; or (ii) breach by IntelGenx of any representations, warranties or covenants set forth in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">15.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Indemnification
of RedHill</U></B>.<B> </B>IntelGenx will defend and hold RedHill, its Affiliates, and their respective directors, officers, employees
and agents (&ldquo;<B>RedHill</B> <B>Parties</B>&rdquo;), harmless, from and against any and all liability, suits, investigations,
claims or demands by a third party to the extent arising from or occurring as a result of or in connection with (a) negligence
or willful misconduct on the part of IntelGenx or (b) breach by IntelGenx of any representations, warranties, or covenants set
forth in this Agreement, except to the extent the liability or loss arises from or occurs as a result of or in connection with
(i) negligence or willful misconduct on the part of a RedHill Party; or (ii) breach by RedHill of any representations, warranties,
or covenants set forth in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">IntelGenx shall
further be responsible for and shall indemnify and hold RedHill harmless in respect of:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">15.2.1&nbsp;&nbsp;All
royalty and other payments required to be paid to other third parties in respect of the Product as a result of a claim by any of
IntelGenx&rsquo; existing or former employees, consultants or shareholders, or any person named in IntelGenx&rsquo; patents or
patent applications, or any person claiming it should have been named as an inventor in such patent applications.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">15.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Conditions<FONT STYLE="font-family: Times New Roman, Times, Serif">
to Indemnity</FONT></U></B><FONT STYLE="font-family: Times New Roman, Times, Serif">. Each Party&rsquo;s agreement to indemnify
and hold the other harmless is conditioned upon the indemnified Party (i) providing written notice to the indemnifying Party of
any claim, demand or action arising out of the indemnified activities within thirty (30) days after the indemnified Party has knowledge
of such claim, demand or action, (ii) permitting the indemnifying Party to assume full responsibility to investigate, prepare for
and defend against any such claim or demand, (iii) assisting the indemnifying Party, at the indemnifying Party&rsquo;s expense,
in the investigation of, preparation of and defense of any such claim or demand; and (iv) the indemnifying Party not compromising
or settling such claim or demand without the indemnified Party&rsquo;s prior written consent, unless such settlement includes as
an unconditional term thereof the giving by the claimant or plaintiff to such indemnified Party a complete release from all liability
in respect of such claim or litigation;</FONT> <I>provided that,</I> if the Party entitled to indemnification fails to promptly
notify the indemnifying Party pursuant to the foregoing clause (i), the indemnifying Party shall only be relieved of its indemnification
obligation to the extent it is prejudiced by such failure and <I>provided further that</I> the indemnified Party is not obligated
to notify the indemnifying Party of <FONT STYLE="font-family: Times New Roman, Times, Serif">claims, demands and/or actions made
directly against the indemnifying Party only.</FONT> Notwithstanding the foregoing, if in the reasonable judgment of the indemnified
Party, such suit or claim involves an issue or matter which could have a materially adverse affect on the business, operations
or assets of the indemnified Party, the indemnified Party may waive its rights to indemnity under this Agreement and control the
defense or settlement thereof, but in no event shall any such waiver be construed as a waiver of any indemnification rights such
indemnified Party may have at law or in equity.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>16.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>TERM
AND TERMINATION</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">16.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Term</U></B>.
Unless earlier terminated in accordance with the provisions of this Article 16, the term of this Agreement (the &ldquo;<B>Term</B>&rdquo;)
commences upon the Effective Date and will continue until terminated in accordance with the terms hereof.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">16.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Termination</U></B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Termination
for Breach</U></B>. Failure by a Party to comply with any of its material obligations contained herein will entitle the Party not
in default to give to the defaulting Party notice specifying the nature of the material breach, requiring the defaulting Party
to make good or otherwise cure such material breach, providing specific actions that the defaulting Party could take to cure such
material breach, and stating its intention to invoke the provisions of Section 16.2 if such material breach is not cured. If such
material breach is not cured within 90 days after the receipt of such notice (or, if such material breach cannot be cured within
such 90-day period, if the defaulting Party does not commence actions to cure such material breach within such period and thereafter
diligently continue such actions), the Party not in default will be entitled, without limiting any of its other rights conferred
on it by this Agreement (except as expressly set forth herein), to terminate this Agreement by providing written notice to the
breaching Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding anything
to the contrary herein, in the event of IntelGenx&rsquo; material breach of this Agreement, and without derogating from any of
RedHill&rsquo;s other rights at law, RedHill shall have the right to continue all activities under the License granted herein and
to continue utilizing the Patents and the Licensed Know-How for the exploitation of the License, with the right to set-off, from
any sums due to IntelGenx hereunder, amounts equivalent to any damage caused to RedHill as a result of IntelGenx&rsquo; breach
hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Notwithstanding anything
to the contrary herein, in the event of termination of the Agreement by IntelGenx as a result of RedHill&rsquo;s material breach
of this Agreement, and without derogating from any of IntelGenx&rsquo; other rights at law, IntelGenx shall have the right to continue
any and/or all activities contemplated in under and/or by this Agreement, terminate all rights granted to RedHill, continue utilizing
the Patents and the Know-How for the exploitation of the Products, with the right to set-off, from any sums due to RedHill hereunder,
amounts equivalent to any damage caused to IntelGenx as a result of RedHill breach hereunder. <I> </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><I>&nbsp;</I></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">16.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Voluntary
Termination</U></B>.<B> </B>RedHill may forthwith terminate this Agreement upon the occurrence of any of the following events:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: normal 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">IntelGenx fails to perform any of its obligations hereunder or makes any material misrepresentation
in this Agreement, which, if capable of being cured, has not been cured within 90 days after written notice by RedHill (in which
RedHill specifies the nature of such failure or misrepresentation);</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IntelGenx
enters into any compromise with creditors or a general agreement for referral of payment with its creditor;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IntelGenx
makes or suffers to be made any transfer to any person, trustee, receiver, liquidator, or referee for the benefit of creditors;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IntelGenx
files a voluntary petition in bankruptcy; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
involuntary petition in bankruptcy is filed against IntelGenx and not dismissed within 60 days of filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">16.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Termination
for Convenience</U></B>. RedHill shall be entitled, in its sole discretion, to terminate this Agreement at any time on thirty (30)
days written notice to IntelGenx, without the need to pay IntelGenx any compensation in respect of such termination, in which case
the License granted under this Agreement shall immediately terminate and, except as permitted in Section 16.3.1, RedHill will immediately
cease any and all development and other activities regarding the Product. IntelGenx shall have no right to terminate this Agreement
other than for cause in accordance with the provisions of Section 16.2.1 above or in accordance with Section 16.2.4 below. Payment
obligations by RedHill under this Agreement incurred or accrued prior to the termination would remain in effect until completed.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">16.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;IntelGenx
shall in furtherance of and in addition to the provisions of Section 16.2.1 above, be entitled, in its sole discretion, to terminate
this Agreement upon the occurrence of any of the following events:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RedHill
fails to perform any of its obligations hereunder or makes any material misrepresentation in this Agreement, which has not been
cured within 90 days after written notice by IntelGenx (in which IntelGenx specifies the nature of such failure or misrepresentation);</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RedHill
enters into any compromise with creditors or a general agreement for referral of payment with its creditor;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RedHill
makes or suffers to be made any transfer to any person, trustee, receiver, liquidator, or referee for the benefit of creditors;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;RedHill
files a voluntary petition in bankruptcy; and</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;An
involuntary petition in bankruptcy is filed against RedHill and not dismissed within 60 days of filing.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">16.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Consequences
of Termination</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.3.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>License</U></B>.
Upon early termination of this Agreement, all rights granted to RedHill under Section 2.1 will, subject to the second paragraph
of Section 16.2.1, terminate; provided that RedHill shall have a period of 180 days after the date of termination to sell-off all
previously made Product, subject to Royalties and Sublicense Sale Royalties on such sales being duly paid to IntelGenx. Upon termination
of this Agreement all sublicenses granted by RedHill shall, at IntelGenx&rsquo; sole discretion, either terminate or, unless termination
is due to breach by IntelGenx or pursuant to Section 16.2.2, be automatically transferred to IntelGenx upon written request from
IntelGenx if permitted under the terms of the sublicense. For the greater certainty, any agreement with a Sublincensee shall be
consistent with this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.3.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Continuation
following IntelGenx&rsquo; Bankruptcy</U></B><FONT STYLE="color: black">. The Parties agree that in the event that IntelGenx makes
a filing under bankruptcy or similar laws in any jurisdiction, RedHill shall have the protection afforded to the licensee under
the United States Bankruptcy Code, including but not limited to, the protections set forth in 11 U.S.C &sect;365(n) or its equivalent
in any other jurisdiction </FONT>which allows the licensee, upon rejection of the license agreement by the debtor-licensor or its
representative, the option to either retain the licensee&rsquo;s rights in the intellectual property under the existing contract
while continuing to pay royalties, or to treat the executory contract as terminated<FONT STYLE="color: black">.</FONT></P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.3.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Return
of Information and Materials</U></B>. Upon early termination of this Agreement, each Party will return to the other all Confidential
Information of the other Party (except one copy of which may be retained for archival and compliance purposes), RedHill will return
to IntelGenx or its designee all Licensed Know-How and any other tangible materials received by RedHill under this Agreement and
RedHill will further waive and actively deregister or assign as requested by IntelGenx, all Patent right registrations made hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.3.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Accrued
Rights</U></B>. Termination or expiration of this Agreement for any reason will be without prejudice to any rights or financial
compensation that will have accrued to the benefit of a Party prior to such termination or expiration. Such termination or expiration
will not relieve a Party from obligations that are expressly indicated to survive the termination or expiration of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">16.3.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<B><U>Survival</U></B>.
Sections 9, 11, 13, 15, 16.3 and 17.3 of this Agreement will survive expiration or termination of this Agreement for any reason.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>17.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>MISCELLANEOUS
</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Assignment</U></B>.
Without the prior written consent of the other Party hereto, neither Party will sell, transfer, assign, delegate, pledge or otherwise
dispose of, whether voluntarily, involuntarily, by operation of law or otherwise, this Agreement or any of its rights or duties
hereunder; provided, however, that (i) either Party hereto may assign or transfer this Agreement or any of its rights or obligations
hereunder without the consent of the other Party to any Affiliate, or to any third party successor in interest with which it has
merged or consolidated, or to which it has transferred all or substantial part of its assets or stock to which this Agreement relates.
Any purported assignment or transfer in violation of this Section 17.1 will be void <I>ab initio </I>and of no force or effect.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Severability</U>.
</B>Should any term or<B> </B>provision of this Agreement be or become invalid or unenforceable or should this Agreement contain
an omission, the validity or enforceability of the remaining terms or provisions shall not be affected. In such case, subject to
the next following sentence, the Parties shall immediately commence to negotiate in good faith in order to replace the invalid
or unenforceable term or provision by such other valid or enforceable term or provision which comes as close as possible to the
original intent and effect of the invalid or unenforceable term or provision, or respectively, to fill the omission by inserting
such term or provision which the Parties would have reasonably agreed to, if they had considered the omission at the date hereof.
In the event that any term or provision as aforesaid is invalid, void or unenforceable by reason of its scope, duration or area
of applicability or some similar limitation as aforesaid, then the court making such determination shall have the power to reduce
the scope, duration, area or applicability of the term or provision so that they shall be enforceable to the maximum scope, duration,
area or applicability permitted by applicable law which shall not exceed those specified in this Agreement or to replace such term
or provision with a term or provision that comes closest to expressing the intention of the invalid or unenforceable term or provision</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Governing
Law</U>.</B> This Agreement shall be governed by and construed in accordance with English law, without reference to any rules of
conflicts of laws. Except as expressly otherwise provided in this Agreement, the courts of London, England shall have exclusive
jurisdiction of any dispute arising out of or relating to the interpretation of any provisions of this Agreement, or the failure
of any Party to perform or comply with any obligations or conditions applicable to such Party pursuant to this Agreement; provided
that disputes as expressly set forth in Sections 4.4 and 5.7 above shall be settled by arbitration in accordance with the terms
set forth hereunder.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">The place of arbitration
of any dispute shall be London, England. The arbitrator shall be a person mutually agreed upon by both Parties and with relevant
experience in the pharmaceutical industry. In the absence of agreement as to the identity of the arbitrator within 7 days, each
Party shall propose the other a candidate to serve as an arbitrator and the other Party shall have to agree or reject and if rejected,
provide detailed explanation for such rejection. This mechanism shall be repeated 3 times but not longer than 45 days. If upon
the expiry of 45 days, the Parties have still not agreed on a certain arbitrator, then the arbitrator shall be appointed by the
Chairman of the English Bar Association, provided that, with respect to scientific or regulatory disputes based on &ldquo;deadlock&rdquo;
within the Steering Committee, the appointed arbitrator must have relevant experience in the pharmaceutical industry. Any award
rendered by the arbitrator shall be final and binding upon the Parties. Notwithstanding, if a Party shall be in the opinion that
certain resolution of the arbitrator might have adverse effects on patients then such party shall be entitled to apply to the authorities
to receive their opinion on such matter. The arbitrator shall be bound by the substantive law of England and be liable to give
written grounds for its decision. Judgment upon any award rendered may be entered in any court having jurisdiction, or application
may be made to such court for a judicial acceptance of the award and an order of enforcement, as the case may be. Each Party shall
pay its own expenses of arbitration, and the expenses of the arbitrator shall be equally shared between the Parties, unless the
arbitrator assesses as part of their award all or any part of the arbitration expenses of a Party (including reasonable attorneys&rsquo;
fees) against the other Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">This Section 17.3
shall not prohibit a Party from seeking injunctive relief from a court of competent jurisdiction in the event of a breach or prospective
breach of this Agreement by the other Party, which would cause irreparable harm to the first Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 1in">The execution
of this Agreement shall constitute the execution of an arbitration deed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Notices</U></B>.
All notices or other communications that are required or permitted hereunder will be in writing and delivered personally with acknowledgement
of receipt, sent by electronic mail (provided receipt is acknowledged), facsimile (and promptly confirmed by personal delivery,
registered or certified mail or overnight courier as provided herein), sent by nationally-recognized overnight courier or sent
by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 1.45pt">If to IntelGenx, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 1.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">IntelGenx
Corp.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 142.9pt">6425 Abrams<BR>
Ville St-Laurent (Quebec) H4S 1X9</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">Canada</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">Fax: +1 <FONT STYLE="color: black">514-331-0436</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: 1.45pt">If to RedHill, to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">RedHill Biopharma
Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">42 Givati
St.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">Ramat Gan
52232</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: 70.9pt">Fax: +972
(3) 725 5723</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-indent: 49.7pt">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">or to such other
address as the Party to who notice is to be given may have furnished to the other Party in writing in accordance herewith. Any
such communication will be deemed to have been given (i) when delivered, if personally delivered, (ii) on the business day (on
the receiving end) after dispatch, if sent by nationally-recognized overnight courier (third business day if sent internationally),
(iii) on the third business day following the date of mailing, if sent by mail (fifth business day if sent internationally) and
(iv) on the first business day (on the receiving end) after being sent by facsimile or by if sent by electronic mail followed by
facsimile. It is understood and agreed that this Section 17.4 is not intended to govern the day-to-day business communications
necessary between the Parties in performing their duties, in due course, under the terms of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.5&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Entire
Agreement; Modifications</U>.</B> This Agreement sets forth and constitutes the entire agreement and understanding between the
Parties with respect to the subject matter hereof and all prior agreements, understanding, promises and representations, whether
written or oral, with respect thereto, including the term sheet executed between the Parties dated April 19, 2010, are superseded
hereby,. Each Party confirms that it is not relying on any representations or warranties of the other Party except as specifically
set forth herein. No amendment, modification, release or discharge will be binding upon the Parties unless in writing and duly
executed by authorized representatives of both Parties.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.6&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Relationship
of the Parties</U></B>. It is expressly agreed that the Parties will be independent contractors of one another and that the relationship
between the Parties will not constitute a partnership, joint venture or agency.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.7&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Waiver</U>.</B>
Any term or condition of this Agreement may be waived at any time by the Party that is entitled to the benefit thereof, but no
such waiver will be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such
term or condition. Any such waiver will not be deemed a waiver of any other right or breach hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.8&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Counterparts</U>.</B>
This Agreement may be executed in two (2) or more counterparts, each of which will be deemed an original, but all of which together
will constitute one and the same instrument.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.9&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>No
Third Party Beneficiaries</U>.</B> The representations, warranties, covenants and agreements set forth in this Agreement are for
the sole benefit of the Parties hereto and their successors and permitted assigns, and they will not be construed as conferring
any rights on any other parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.10&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Further
Assurances</U>.</B> Each Party will duly execute and deliver, or cause to be duly executed and delivered, such further instruments
and do and cause to be done such further acts and things, including the filing of such assignments, agreements, documents and instruments,
as may be necessary to carry out the provisions and purposes of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-size: 10pt">17.11&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</FONT><B><U>Force
Majeure</U></B><FONT STYLE="font-size: 10pt">. </FONT>Neither party shall be responsible to the other for failure or delay in performing
any of its obligations under this Agreement or for other non-performance hereof but only to the extent that such delay or non-performance
is occasioned by a cause beyond the reasonable control and without fault or negligence of such party, including, but not limited
to earthquake, fire, flood, explosion, discontinuity in the supply of power, court order or governmental interference, act of God,
strike or other labor trouble, act of war or terrorism and provided that such party will inform the other party as soon as is reasonably
practicable and that it will entirely perform its obligations immediately after the relevant cause has ceased its effect. If any
such force majeure event continues for a continuous period of 12 months, the Party whose performance is not prevented by such event
may terminate this Agreement with immediate effect by providing the other Party with written notice.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"><B>IN WITNESS WHEREOF,</B>
the Parties hereto have caused this Agreement to be executed by their duly authorized representatives as of the Effective Date.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%; font-size: 10pt"><B>IntelGenx Corp</B>.</TD>
    <TD STYLE="width: 5%; font-size: 10pt; font-variant: small-caps; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 50%; font-size: 10pt; font-weight: bold"><B>RedHill Biopharma Ltd.</B></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="width: 8%; font-size: 10pt">Signature:&nbsp;</TD>
    <TD STYLE="width: 25%; border-bottom: windowtext 1pt solid; font-size: 10pt">/s/ Horst G. Zerbe</TD>
    <TD STYLE="width: 17%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 10%; font-size: 10pt">Signature:</TD>
    <TD STYLE="width: 43%; border-bottom: windowtext 1pt solid; font-size: 10pt">/s/ Dror Ben-Asher, /s/ Ori Shilo</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 8%; font-size: 10pt">Name:</TD>
    <TD STYLE="width: 25%; border-bottom: windowtext 1pt solid; font-size: 10pt">Horst G. Zerbe</TD>
    <TD STYLE="width: 17%; font-size: 10pt">&nbsp;</TD>
    <TD STYLE="width: 10%; font-size: 10pt">Name:</TD>
    <TD STYLE="width: 43%; border-bottom: windowtext 1pt solid; font-size: 10pt">Dror Ben-Asher; Ori Shilo</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 8%">Title:</TD>
    <TD STYLE="width: 25%; border-bottom: windowtext 1pt solid">President &amp; CEO</TD>
    <TD STYLE="width: 17%">&nbsp;</TD>
    <TD STYLE="width: 10%">Title:</TD>
    <TD STYLE="width: 43%; border-bottom: windowtext 1pt solid">CEO ; VP Finance &amp; Operation</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">IntelGenx Technologies Corp (&ldquo;<B>Parent
Guarantor</B>&rdquo;), hereby guarantees, absolutely and unconditionally, the timely and complete performance by IntelGenx Corp.
of the obligations of IntelGenx Corp., and the payment by IntelGenx Corp. of the amounts required to be paid by IntelGenx Corp.,
in each case as provided for in this Agreement and hereby agrees to pay any and all reasonable expenses (including reasonable attorneys'
fees and disbursements) which may be paid or incurred by RedHill Biopharma Ltd. in enforcing any rights with respect to, or collecting
against, Parent Guarantor or IntelGenx Corp. Parent Guarantor agrees that this constitutes a guarantee of payment and not of collection,
and RedHill Biopharma Ltd. shall not be obligated to initiate, pursue or exhaust any form of recourse or obtain any judgment against
IntelGenx Corp or others or to realize upon or exhaust any collateral security held by or available to RedHill Biopharma Ltd. before
being entitled to payment from Parent Guarantor. The liability of Parent Guarantor shall not be limited, diminished or affected
by (i)&nbsp;any failure by RedHill Biopharma Ltd. to file or enforce any claim against IntelGenx Corp or others (in administration,
bankruptcy or otherwise), or (ii)&nbsp;any other circumstance which might otherwise constitute a legal or equitable discharge of
a guarantor. Parent Guarantor waives diligence, presentment, protest, notice of dishonor or protest or default, demand for payment
upon IntelGenx Corp or the undersigned, notice of acceptance, and all other notices and demands whatsoever. The guarantee set forth
herein is a continuing guarantee, and it will not be discharged until, and will remain in full force and effect until, performance
or payment in full of all actions and other obligations of IntelGenx Corp provided in this Agreement or, if earlier, termination
of this Agreement in accordance with its terms. Notwithstanding the foregoing, IntelGenx Technologies Corp. shall only act as guarantor
for IntelGenx Corp. in the event that RedHill completes and prevails in the arbitration procedure set forth in Section 17.3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>IntelGenx Technologies Corp</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-variant: small-caps"><B></B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 10%">Signature:</TD>
    <TD STYLE="width: 25%; border-bottom: windowtext 1pt solid; text-align: justify">/s/ Horst G. Zerbe</TD>
    <TD STYLE="width: 65%; text-align: justify">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Name: Horst G. Zerbe</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Title: President &amp; CEO</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase">Annex A: INTELGENX Patents</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">US Patent 6231957</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">US Patent 6660292</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">US Patent 7132113</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">US Provisional Application US61/267626</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">ANNEX B INTELGENX LICENSED KNOWHOW</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Includes, but is not limited to, the following documents:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>[****] Immediate Release Film</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>Disintegration and Dissolution Time</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>Film Scale-up Info Package</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">4.</TD><TD>Film General Characteristics</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">5.</TD><TD>Method of Analysis</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">6.</TD><TD>Manufacturing Information</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">7.</TD><TD>Testing Information</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">8.</TD><TD>Dissolution Studies</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">9.</TD><TD>Physical Characteristics</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">10.</TD><TD>Clinical Study Report</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">11.</TD><TD>Pilot Bio Summary</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">12.</TD><TD>Description and Composition Summary</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">13.</TD><TD>Protocol for Pilot BA Study</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">14.</TD><TD>Packaging Information</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">15.</TD><TD>CRBIO Data Report</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">16.</TD><TD>CRBIO Report Riza</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">17.</TD><TD>Clinical Formation and Optimazation Process</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">18.</TD><TD>Stability Data-Binary Mixtures</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">19.</TD><TD>Dissolution Studies (pH=1.2)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">20.</TD><TD>pH data and saliva formulation</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">ANNEX 4.2</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****] [2 pages redacted]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



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<P STYLE="margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 4.4</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>ASSET PURCHASE AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This Asset Purchase Agreement is made and
entered into as of August 11, 2010 (the &quot;<B>Effective Date</B>&quot;),<B> </B>by and among Giaconda Limited ABN 68 108 088
517, an Australian public limited company having its registered office at Ground Floor, 44 East Street, Five Dock, NSW 2046 Australia
(the &quot;<B>Seller</B>&quot;) and RedHill Biopharma Ltd., an Israeli company, having its business address at 42 Givati Street,
Ramat-Gan 52232, Israel (the&nbsp;&quot;<B>Buyer</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>WHEREAS, </B>Seller owns and has been
engaged in the business of development, performing clinical trials, procuring regulatory approval and commercialization of those
products known as Myoconda, Heliconda and Picoconda; and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>WHEREAS,</B> Buyer wishes to acquire
from Seller, and Seller wishes to sell to Buyer the Acquired Assets (as such term is defined below);<B> </B>and</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>WHEREAS,</B> the parties have entered
into a binding Term Sheet dated June 10, 2010 regarding the sale of the Acquired Assets which contemplated that the parties would
enter into a definitive comprehensive agreement (the &quot;<B>Term Sheet</B>&quot;);</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>NOW, THEREFORE, </B>for good and valuable
consideration, the sufficiency of which is hereby acknowledged, Seller and Buyer hereby agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.45in">1</TD><TD><B><U>Definitions</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">In this Agreement, the following
terms have the meanings specified or referred to in this Section 1 and shall be equally applicable to both singular and plural
forms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&ldquo;<B>Action</B>&rdquo;
means any civil, criminal or administrative action, suit, demand, claim, charge, citation, complaint, reexamination, opposition,
interference, decree, injunction, arbitration, mediation, hearing, notice of violation, investigation, proceeding or demand letter.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Acquired Assets</B>&quot;
has the meaning specified in Section 2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&ldquo;<B>Advance</B>&rdquo;
has the meaning specified in Section 6.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Affiliate</B>&quot;
when used with reference to any Person, means another Person that directly or indirectly, through one or more intermediaries, controls,
is controlled by, or is under common control with such first Person.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Agreement</B>&quot;
means any agreement, contract, lease, license, commitment, permit, sales order, purchase order, invoice, warranty and/or other
agreement or understanding.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>AMTI</B>&quot; means
Australian Medical Therapy Investments Pty Limited (ABN 40 125 467 325) of Suite 1203, 370 Pitt Street, Sydney, New South Wales,
Australia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>AMTI Asset Purchase
Agreements</B>&quot; means the agreement entitled &quot;Asset Purchase Agreement&quot; between Giaconda Limited and Australian
Medical Therapy Investments Pty Limited, dated 1 December 2009, as varied on 18 February 2010, 1 March 2010, 19 March 2010, and
15 April 2010.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Ancillary Agreements</B>&quot;
means the Assignment of Patents in substantially the form set forth on <B><U>Exhibit 1A</U></B> hereto and the Assignment of Agreements
in substantially the form set forth on <B><U>Exhibit 1B</U></B> hereto and any other assignment document required to consummate
the transfer and assignment to Buyer of the Acquired Assets in accordance with the terms of this Agreement, all in form and substance
reasonably acceptable to Buyer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Applicable Law</B>&quot;
means, with respect to any Person, any domestic or foreign, federal, state or local law, case law or ruling, statute, ordinance,
rule, regulation, directive, judgment, decree or other requirement of any Governmental Authority applicable to such Person or any
of its Affiliates or any of their respective properties, assets, officers, directors, employees, consultants or agents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Approvals</B>&quot;
means any and all licenses, permits, approvals, consents, certificates, clearances, authorizations, licenses, license applications,
registrations and other rights, including regulatory documentation from any Governmental Authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&ldquo;<B>ASIC</B>&rdquo; means
the Australian Securities &amp; Investments Commission.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Assigned Agreements</B>&quot;
has the meaning specified in Section 2.3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Assumed Liabilities</B>&quot;
has the meaning specified in Section 3.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>ASX Listing Rules</B>&quot;
means the rules of the Australian Securities Exchange.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Borody</B>&quot; means
Professor Thomas J. Borody of Ground Floor, 44 East Street, Five Dock, New South Wales, Australia 2046.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Borody Agreement</B>&quot;
means the agreement between Borody and Buyer dated on or about the date of this agreement in form agreed between Borody and Buyer.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Budget</B>&quot; has
the meaning specified in Section 11.19.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Buy Back Option</B>&quot;
has the meaning specified in Section 5.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Buy Back Price&quot;</B>
has the meaning specified in Section 5.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Buyer</B>&quot; has
the meaning specified in the introduction to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Buyer Protected Parties&quot;</B>
has the meaning specified in Section 16.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Closing</B>&quot;<B>
</B>has the meaning specified in Section 8.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Closing Date</B>&quot;
has the meaning specified in Section 8.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Closing Payment</B>&quot;
has the meaning specified in Section 6.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&ldquo;<B>Combination Product</B>&rdquo;
shall mean a product which comprises (a) a Product and (b) at least one other active ingredient or medical device, which, if administered
or used independently of the Product, would have a clinical, diagnostic or therapeutic effect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Compounding Agreement</B>&quot;
means the agreement called &quot;Patent Licence Agreement&quot; between Seller and Compounding Chemist dated on or about November
2009.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Compounding Chemist</B>&quot;
means [****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Confidential Information</B>&quot;
has the meaning specified in Section 14.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Corporate Documents</B>&quot;
means the Certificate of Incorporation, Memorandum of Association, Articles of Association, Bylaws and any other corporate document
of an entity, including any shareholders, voting and/or any other agreement or document relating to the incorporation, ownership
or management of an entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Corporations Act</B>&quot;
means the <I>Corporations Act 2001</I> (Cth).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Damages</B>&quot;<B>
</B>means all demands, claims, actions or causes of action, losses, damages, costs, expenses, liabilities, judgments, awards, fines,
sanctions, penalties, charges and amounts paid in settlement, including, but not limited to, reasonable costs, fees and expenses
of attorneys, accountants, and other agents of the Person incurring such expenses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Development Costs</B>&quot;
means the total amount expended by Buyer in connection with the relevant Product, Intellectual Property, or Technology Intellectual
Property including the research and development costs, patent maintenance, salaries, and administrative costs, all on a fully-loaded
basis, with general overhead costs and expenses that cannot be attributed to specific Products, being allocated among them in accordance
with Exhibit 5.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Diligence Obligations</B>&quot;
has the meaning specified in Section 5.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 32.3pt; text-align: justify">&quot;<B>Disclosure Schedule</B>&quot;
means a letter given by Seller to Buyer in the form attached to Exhibit 11.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Effective Date</B>&quot;
has the meaning specified in the introduction to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Environmental Laws</B>&quot;
has the meaning specified in Section 11.8.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Event</B>&quot; means
an event, a change, an occurrence or matter arising other than something which:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">is contemplated by this Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">is agreed by Buyer and Seller in writing not to be an Event; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: justify">is set out in the Disclosure Schedule.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Exercise Notice</B>&quot;
has the meaning specified in Section 5.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Governmental Authority</B>&quot;
means any local, regional, state, foreign or other governmental or regulatory agency, instrumentality, commission, authority, board
or body, and shall also include, for the purposes of this Agreement, without limitation Ethics Committees and Institutional Review
Boards.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>IND</B>&quot; (or &quot;<B>IMPD</B>&quot;)
means an Investigational New Drug application or Investigational Medicinal Product Dossier as submitted to the United States Food
and Drug Administration (&quot;<B>FDA</B>&quot;) or the European Medicines Agency (&quot;<B>EMEA</B>&quot;), as applicable, or
an equivalent submission to another regulatory authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Indemnified Party&quot;</B>
has the meaning specified in Section 16.3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Indemnifying Party</B>&quot;
has the meaning specified in Section 16.3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Insolvency Event</B>&quot;
means with respect to Seller any of the following events (i) a receiver, receiver and manager, administrator, trustee or similar
official is appointed over any of the assets or undertaking of Seller; (ii) Seller suspends payment of its debts generally; (iii)
Seller is or becomes unable to pay its debts when they are due or is unable to pay its debts within the meaning of the Corporations
Act; (iv)&#9;Seller enters into or resolves to enter into any arrangement, competition or compromise with, or assignment for the
benefit of, its creditors or any class of them; (v) an application or order is made for the winding up or dissolution of, or the
appointment of a provisional liquidator, to Seller or a resolution is passed or steps are taken to pass a resolution for the winding
up or dissolution of Seller; or (vi) an administrator is appointed under the Corporations Act.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 32.3pt; text-align: justify">&quot;<B>Intellectual Property</B>&quot;
means and includes all of the following: (i) United States, Australian, Israeli and foreign patents, patent applications, provisional
patent applications, patent disclosures and all related continuation, continuation-in-part, divisional, reissue, re-examination,
utility, model, certificate of invention and design patents, design patent applications, registrations and applications for registrations
(&quot;<B>Patents</B>&quot;); (ii) copyrights in both published or unpublished works and subject matter other than works and registrations
and applications for registration thereof and moral rights (&quot;<B>Copyrights</B>&quot;); (iii) computer software, programs,
data and documentation; (iv) technology, trade secrets and confidential business information, whether patentable or non-patentable
and whether or not reduced to practice, know-how, designs, specifications, processes, mask works, prototypes, enhancements, improvements,
works-in-progress, drawings, models, research and development information, technical data, engineering files, flow charts, inventions
(whether or not patentable), discoveries, improvements, works of authorship and ideas; (v) trade names, together with the goodwill
attached thereto, trade marks, logos, service marks, merchandise marks and brands, domain names, whether registered or not, together
with all translations, adaptations, derivations and combinations thereof and all applications, registrations and renewals in connection
therewith (&quot;<B>Trademarks</B>&quot;); (vi) all rights to continuations, enhancements, renewals and modifications thereof and
of the foregoing, common law rights; (vii) other proprietary rights relating to any of the foregoing (including without limitation
relief and remedies for infringements thereof and rights of protection of an interest therein under the laws of all jurisdictions,
whether arising prior to or following the Closing); and (viii) the rights and remedies of Seller under the non-competition, confidentiality,
assignment of inventions and non-solicitation provisions of all of Seller's employees, affiliates, and consultants, including Borody,
with respect to the Technology.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>IP Australia</B>&quot;
means IP Australia, a Government Authority of the Commonwealth of Australia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>IP Deeds</B>&quot;
mean:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.55in">(a)</TD><TD STYLE="text-align: justify">the deed called the &quot;Borody Intellectual Property Deed&quot; between Seller and Professor
Thomas Borody dated 29 April 2005; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.55in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.55in">(b)</TD><TD STYLE="text-align: justify">the deed called the &quot;CDD Intellectual Property Deed&quot; between Seller and Centre for Digestive
Diseases Pty Limited dated 5 May 2005.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Knowledge Transfer
Period</B>&quot; has the meaning specified in Section 13.6.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Liability</B>&quot;
means any liabilities, obligations or claims of any kind whatsoever whether absolute, accrued or un-accrued, fixed or contingent,
matured or un-matured, asserted or unasserted, known or unknown, direct or indirect, and whether due or to become due.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Lien</B>&quot; means
any mortgage, pledge, security interest, encumbrance, lien, claim, conditional sale or other title retention arrangement or charge
of any kind, or any other third party right (including the right to receive royalties or other payments) or equitable right.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Material Adverse Effect</B>&quot;
means any Event between the Effective Date and Closing which (whether or not it becomes public and whether or not it relates to
matters occurring before the date of this deed) has had or may reasonably be expected to have a material adverse effect on the
Technology, the Acquired Assets, the Assumed Liabilities or the condition, operations, or properties of the Acquired Assets or
the ability of Seller to perform its obligations under this Agreement, the Mortgage or the Featherweight Charge.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&ldquo;<B>Net Sales</B>&rdquo;
shall mean with respect to a Product, the total amounts actually received by Buyer and/or its Affiliates in respect of all sales
(including, without limitation, hospital sales, mail orders, retail sales, and sales to federal or state governments, wholesalers,
or medical institutions) of such Product(s) or Combination Product (subject to the adjustments set forth below) in arm&rsquo;s
length sales by Buyer and/or its Affiliates, less the following items determined in accordance with Buyer&rsquo;s standard accounting
methods and IFRS standards as consistently applied by Buyer or its Affiliates (the &ldquo;<B>Recognized Deductions</B>&rdquo;)
which have not been previously claimed by Buyer: (i) quantity and/or cash discounts allowed or taken (including by or to wholesalers);
(ii) customs, duties, sales, withholding, import/export, excise and similar taxes imposed on the Product but not income tax; (iii)
amounts allowed or credited by reason of rejections, return of goods (including as a result of recalls), any retroactive price
reductions or allowances (including those resulting from inventory management or similar agreements with wholesalers), and prompt
payment and trade, cash and volume discounts; (iv) amounts incurred resulting from government mandated rebate programs (or any
agency thereof); (v) third party (a) rebates, (b) freight, packaging, postage, shipping and applicable insurance charges and (c)
chargebacks or similar price concessions related to the sale of the Product; (vi) bad debts; (vii) royalties paid to third parties
by Buyer, its Affiliates or Sublicensees in respect of the use of such third party&rsquo;s intellectual property rights but only
if that intellectual property is required to exploit or used in combination with or to enhance the Product or Combination Product;
and (viii) reasonable quantities of samples.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">For the purposes of this definition,
the transfer of a Product by Buyer or one of its Affiliates to another Affiliate of Buyer or to a sublicensee for resale is not
a sale and in such cases, Net Sales will be determined based on the amount received by Buyer or such Affiliate or Sublicensee in
respect of the Product or &ldquo;Combination Product&rdquo; (subject to the adjustments set forth below) as sold by the Affiliate
or Sublicensee to independent third-parties, less the Recognized Deductions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">In the case of any sale of Product
or part thereof for value other than in an arm&rsquo;s length transaction exclusively for cash, such as barter or counter trade,
Net Sales will be calculated based on the fair market value of the consideration received less the Recognized Deductions fairly
attributable to that transaction.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">For Net Sales of a Product sold
or supplied as a &ldquo;Combination Product&rdquo;, the Net Sales of such a Combination Product will be determined by multiplying
the Net Sales of such Combination Product by the fraction of A/(A+B), where A is the average unit selling price during the period
in respect of which Net Sales are being calculated of the Product sold separately and B is the total average unit selling price
during the period in respect of which Net Sales are being calculated of the other product or device included in the Combination
Product, when sold separately.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Notice of Buy Back
Price</B>&quot; has the meaning specified in Section 5.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Notice of Intention</B>&quot;
has the meaning specified in Section 5.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Patents</B>&quot; means
the patents and applications for patent referred to in Exhibit&nbsp;11.13.4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Person</B>&quot; means
an individual, corporation, partnership, association, trust or other entity or organization, including any Governmental Authority.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Pharmatel</B>&quot;
means Pharmatel Research &amp; Development Pty Limited</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Proceedings</B>&quot;
has the meaning specified in Section 11.10</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Products</B>&quot;
means Myoconda, Heliconda and Picoconda as described in <B><U>Exhibit 2.1</U></B>, in all formulations and dosage forms and in
all delivery methods, including all combination products, as well as all &lsquo;next generations&rsquo; of same.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Protected Party</B>&quot;
means a Buyer Protected Party or a Seller Protected Party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Regulatory Approvals</B>&quot;
has the meaning specified in Section 11.7.1.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Relevant Therapy</B>&quot;
has the meaning specified in Section 5.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Retained Intellectual
Property</B>&quot;<B> </B>has the meaning specified in Section 4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Retained Liabilities</B>&quot;<B>
</B>has the meaning specified in Section 3.2</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Required Approvals</B>&quot;
has the meaning specified in Section 11.4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Revenue Sharing Payments</B>&quot;
has the meaning specified in Section 6.2.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Seller Protected Party</B>&quot;
has the meaning specified in Section 16.2</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 32.3pt; text-align: justify">&ldquo;<B>Sublicense</B>&rdquo;
shall mean any right granted, license given, or agreement entered into, by Buyer and/or its Affiliates and/or Sublicensees to or
with any other person or entity permitting any use of the Technology (or any part thereof) or any right to research, develop, make,
have made, register, import, manufacture, use, sell, offer for sale, produce, sublicense, commercialize and/or distribute the Products
for any indication; and the term &ldquo;<B>Sublicensee</B>&rdquo; shall be construed accordingly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&ldquo;<B>Sublicense Receipts</B>&rdquo;
means royalties actually received by Buyer and/or its Affiliates from third party partner Sublicensees (and/or any further Sublicensees
thereof) in respect of the Products, excluding, for example but without limitation, payments received on account of (i) debt financing;
(ii) equity (and conditional equity, such as warrants, convertible debt and the like) investments in Buyer or any Affiliate thereof
at market value, and less the Recognized Deductions which have not already been claimed or deducted by Buyer. For Sublicense Receipts
received in respect of a Product sold or supplied as a &ldquo;Combination Product&rdquo;, the Sublicense Receipts of such Combination
Product will be determined in the same manner as the Net Sales of such Combination Product, <I>mutatis mutandis</I>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Tax</B>&quot; or &quot;<B>Taxes</B>&quot;
means all taxes imposed of any nature including federal, state, local or foreign income tax, franchise tax, employment related
tax, real or personal property tax, sales or use tax, excise tax, stamp tax or duty, capital gains tax, any withholding or back
up withholding tax, and value added tax, together with any interest or any penalty.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34pt"><FONT STYLE="font-size: 10pt">&quot;<B>Technology</B>&quot;
means</FONT>:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 33.85pt"></TD><TD STYLE="width: 33.85pt">(a)</TD><TD>all inventions subsisting in the Products (including the inventions described in Exhibit 11.13.4); and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: -34.05pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 34pt"></TD><TD STYLE="width: 34.05pt">(b)</TD><TD><FONT STYLE="font-size: 10pt">all technical and other information subsisting in or relating to the Products. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&quot;<B>Technology Intellectual
Property</B>&quot; shall refer collectively to all Intellectual Property that is owned by, controlled by, used by or licensed to
Seller and is associated with the Technology and all documentation evidencing the same, including without limitation those patents
listed in Exhibit 11.13.4.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 32.3pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 32.3pt; text-align: justify">&quot;<B>Third Person Claim</B>&quot;
has the meaning specified in Section 16.3.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&ldquo;<B>USD</B>&rdquo; means
United States Dollars.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.45in">2.</TD><TD STYLE="text-align: justify"><B><U>Purchase and Sale of Assets</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">Subject to the terms and conditions
of this Agreement, at the Closing, Seller shall, or procure Borody at no additional consideration to, sell, transfer, convey, assign
and deliver to Buyer and Buyer shall purchase from Seller, free and clear of any Liens other than the Assumed Liabilities and the
Charges, the Products, the Technology and the Technology Intellectual Property, including all of Seller's rights, title and interest
in and to all assets and properties of Seller of whatever kind wherever located, real personal or mixed, tangible or intangible
associated with the Products and/or the Technology and/or the Technology Intellectual Property, whether or not appearing on the
books and records of Seller, as the same shall exist on the date hereof and/or at Closing (the &quot;<B>Acquired Assets</B>&quot;)
including all right, title and interest of Seller in, to and under:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.1.</TD><TD STYLE="text-align: justify"><U>Assets.</U> (i) the Products and all right to develop, make, have made, use, market, manufacture,
sell, license, service and otherwise commercialize the Products and (ii) all assets (including patents, patent applications and
other patent rights, data know-how and other Intellectual Property and rights associated therewith) whatsoever that are used by
Seller or needed in any way for the development, manufacture, use and/or commercialization of the Products, including the tangible
assets listed on <B><U>Exhibit 2.1A</U></B>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.2.</TD><TD STYLE="text-align: justify"><U>Materials.</U> All materials, including raw materials, work-in process, samples, finished goods
and all quantities of the Products or samples collected in all clinical trials and made available to Seller, whether in the possession
of Seller or located at the clinical centers where the clinical trials are taking or have taken place.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.3.</TD><TD STYLE="text-align: justify"><U>Assigned Agreements.</U> The Agreements listed on <B><U>Exhibit 2.3</U></B> hereto (including
without limitation the rights, relief and remedies for infringements thereunder and rights of protection of interests thereunder,
whether arising prior to or following the Closing), including the IP Deeds, and any other Agreement entered into after the Effective
Date which had it existed on the Effective Date would have been required to be listed in <B><U>Exhibit 11.11</U></B> and which
Buyer notifies Seller it wishes to acquire (collectively, the &quot;<B>Assigned Agreements</B>&quot;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.4.</TD><TD STYLE="text-align: justify"><U>Documentation.</U> All books and records and other documentation relating to the Acquired Assets
in the possession or under the control of Seller, or held on behalf of Seller, whether in hard copy or machine-readable format,
including without limitation: (i) all documentation relating to the research and development of the Technology and the Products;
(ii) all documentation relating to the manufacturing, marketing, distribution and sale of the Products; (iii) all documentation
relating to testing and clinical trials of the Technology and the Products, including all records, databases, accounts, notes,
reports and data, all agreements relating to the conduct of such trials and testing and all reports and results of such testing
and trials; and (iv) any regulatory, patent office, governmental or other filing, approval or certification covering the Products
or any of them as well as all trials and studies performed in connection therewith.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.5.</TD><TD STYLE="text-align: justify"><U>Production Files.</U> All production files and development files (including all specifications,
drug manufacturing files, source codes, formulae and other documentation) required for the production, modification and further
development of the Products.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.6.</TD><TD STYLE="text-align: justify"><U>Approvals.</U> All Approvals with respect to the Acquired Assets and/or the Technology (including
without limitation all Regulatory Approvals), all applications for such Approvals and all other correspondence with any Governmental
Authority with respect to such Approvals and the application process therefor.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.7.</TD><TD STYLE="text-align: justify"><U>Goodwill.</U> All of the goodwill associated with the Technology, including the right to represent
oneself as the successor to the Technology.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.8.</TD><TD STYLE="text-align: justify"><U>Intellectual Property</U>. All of the Technology Intellectual Property.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.2in">2.9.</TD><TD STYLE="text-align: justify"><U>Claims</U>. Seller's rights, claims and actions against third parties relating to the Acquired
Assets arising out of transactions occurring prior to the Closing Date other than in relation to the AMTI Asset Purchase Agreement,
including all rights, claims and credits of Seller under or pursuant to all warranties, representations and guarantees made by
suppliers, manufacturers and contractors in connection with products sold or services provided to Seller for or in connection with
any of the Acquired Assets or any Assumed Liabilities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in; text-align: justify; text-indent: -0.45in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.45in; text-align: left">3.</TD><TD STYLE="text-align: justify"><B><U>Assumption</U></B><U> <B>and Retention of Liabilities</B></U></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt; text-align: left">3.1.</TD><TD STYLE="text-align: justify"><U>Assumed Liabilities.</U> Subject to the provisions
of this Section, at Closing, Buyer shall assume and agree to perform, and to pay or otherwise discharge, in accordance with the
stated written terms of the Assigned Agreements, the obligations and Liabilities of Seller following the Closing under the Assigned
Agreements, but only to the extent such obligations and Liabilities arise after Closing, and specifically excluding any obligations,
third party claims or Liabilities arising from or in connection with any causes of action, breach, violation, default or the failure
of performance of Seller, occurring or arising prior to the Closing. The obligations described in this Section 3.1 which are to
be assumed by Buyer are collectively referred to as the<B> </B>&quot;<B>Assumed Liabilities</B>&quot;.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">3.2.</TD><TD STYLE="text-align: justify"><U>Retained Liabilities.</U> Except for the Assumed Liabilities, Buyer shall not assume or be required
to pay or otherwise discharge and hereby expressly disclaims any assumption of any other obligations, third party claims or Liabilities
of Seller, whether or not, in any particular instance, any such Liability has a value for accounting purposes or is carried or
reflected on or specifically referred to in Seller&rsquo;s financial statements, including any obligations, third party claims
or Liabilities arising from or in connection with any causes of action, breach, violation, default or failure of performance of
Seller or any third party occurring or arising prior to Closing, whether or not related to the Products, Technology, or Technology
Intellectual Property (the &quot;<B>Retained Liabilities</B>&quot;). Seller shall pay, perform or discharge when due or required
to be performed or discharged, or contest in good faith, the Retained Liabilities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 28.35pt; text-align: left">4.</TD><TD STYLE="text-align: justify"><B><U>Right of Use</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 17.85pt">4.1</TD><TD STYLE="text-align: justify"><U>Licence in Respect of Retained Intellectual Property.</U> As of Closing and for no additional
consideration, Seller grants Buyer a worldwide, assignable, perpetual, exclusive right to use any Intellectual Property owned,
controlled or otherwise held or used by Seller that it retains and does not transfer to Buyer as part of the Acquired Assets (&quot;<B>Retained
Intellectual Property</B>&quot;), for the research, development, manufacture, registration, import/export, use, commercialization,
distribution, sale and/or offer for sale of the Products, with a right to freely grant secondary rights (including sub-licences)
under such rights.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 17.85pt">4.2</TD><TD STYLE="text-align: justify"><U>Hepaconda and Ibaconda Licence Carveout.</U> For the avoidance of doubt, the obligation imposed
on Seller by Section 4.1 to grant Seller a licence (including sub-licenses) and the restriction imposed by Section 4.5 on Seller
does not extend to the Intellectual Property identified as Hepaconda or Ibaconda (as same are defined in <B><U>Exhibit 4.2</U></B>
hereto); provided that Seller hereby warrants and represents that such Intellectual Property identified as Hepaconda or Ibaconda
is not and will not be required in any manner for the development or commercialization of any of the Products. In the event that
despite the foregoing representation, the Intellectual Property identified as Hepaconda or Ibaconda shall be required for the research,
development, manufacture, registration, import/export, use, commercialization, distribution, sale and/or offer for sale of any
of the Products, Seller grants Buyer a worldwide, assignable, perpetual, non-royalty bearing exclusive right to use same as set
forth in Section 4.1 above.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 17.85pt">4.3</TD><TD STYLE="text-align: justify"><U>Non Disposal of Retained Intellectual Property.</U> For the avoidance of doubt, Seller shall
not dispose of any of the Retained Intellectual Property unless Buyer's rights under the above right to use are preserved. In addition,
prior to the lapse of any rights in or registrations relating to the Retained Intellectual Property, Seller shall use its reasonable
endeavours to offer such Retained Intellectual Property to Buyer for no additional consideration.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 17.85pt">4.4</TD><TD STYLE="text-align: justify"><U>Related Information.</U> Seller must also share with Buyer, free of charge, all other information
which is not part of the Technology Intellectual Property and that is required for the development of the Products.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 46.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 17.85pt">4.5</TD><TD STYLE="text-align: justify"><U>Licensing Restrictions.</U> From the Effective Date, Seller shall not grant a license to any
of the Intellectual Property licensed to Buyer pursuant to this Section 4 for use in the research, development, manufacture, registration,
import/export, use, commercialization, distribution, sale and/or offer for sale of the Products or products that compete with the
Products in any way whatsoever or otherwise grant or enter into any agreement, arrangement or commitment according to which a third
party is granted any rights that would derogate from or conflict with the rights granted to Buyer pursuant to this Section 4.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 28.35pt; text-align: left">5.</TD><TD STYLE="text-align: justify"><B><U>Diligence Obligation and Buy Back Option</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.25pt">5.1</TD><TD STYLE="text-align: justify"><U>Diligence Obligations</U>. The control of the Acquired Assets and the business related thereto
on and after Closing will rest exclusively with Buyer and Seller shall not have any right to object to the manner in which same
are handled or conducted after the Closing, including any rights to prevent the merger or consolidation of Buyer, any sale or transfer
of any shares of Buyer or any assets of Buyer to any third Person or the acquisition of any interests in or assets of any third
Person. Notwithstanding the foregoing, Buyer will, if the Closing does occur, make a good faith, continuous and commercially reasonable
effort to allocate appropriate financial resources (by itself and/or thorough cooperation with third party partners) to prepare,
initiate and complete the clinical development of the Products (with the exception of Picoconda) and file an application for regulatory
marketing approval in accordance with industry standards (the &ldquo;<B>Diligence Obligation</B>&rdquo;). For the avoidance of
any doubt, development failures, negative regulatory decisions, and/or other reasons that are beyond Buyer's control, shall not
constitute a breach of the Diligence Obligation.</TD></TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-size: 10pt">Buyer
agrees to keep Seller informed with respect to activities and progress toward further research, development and commercialization
of the Products. Towards this end, as of six months following the Closing, and bi-annually thereafter, Buyer shall promptly provide
Seller with written reports summarizing such activities as well as the prosecution and maintenance activities planned or due in
respect of the Patents deemed by Buyer to be necessary for the development of the respective Products. Buyer agrees to give Seller
written notice as soon as practicable, but no later than 30 days after Buyer becomes aware of the occurrence thereof, of any event
of which Buyer becomes aware that is materially related to the safety of a Product (such as serious adverse events) or that concerns
any material developments, material failures (including, without limitation, the grant of any regulatory approval), or material
events.</FONT></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">5.2</TD><TD STYLE="text-align: justify"><U>Buy Back Option.</U> Seller's sole and exclusive remedy for a material breach by Buyer of the
Diligence Obligation in respect of any of the Products that is not remedied within ninety (90) days of notice by Seller of such
breach, shall be the option to acquire the relevant Product, as well as the Intellectual Property, Technology Intellectual Property
and Assigned Agreements associated with the relevant Product (the &quot;<B>Relevant Therapy</B>&quot;) at the Buy-Back Price (the
&ldquo;<B>Buy Back Option</B>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: 0in">If
Seller wishes to exercise its Buy Back Option then it must give a written notice to Buyer of such intention (the &quot;<B>Notice
of Intention</B>&quot;). The Notice of Intention must specify: (i) the circumstances upon which Seller is relying in order to effect
the Buy Back Option; and (ii) its proposed date for acquiring legal and beneficial ownership in the relevant Product that is the
subject of the Buy-Back. The Notice of Intention does not constitute a notice exercising the Buy Back Option.</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: 0in">Promptly,
but no later than 21 days after receiving the Notice of Intention, Buyer must calculate the Buy Back Price and give written notice
to Seller of same (the &quot;<B>Notice of</B> <B>Buy Back Price</B>&quot;). Buyer must also provide Seller at the time its gives
the aforementioned notice with reasonable evidence substantiating its calculations and with a reasonable opportunity to undertake
due diligence on the Relevant Therapy.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">The &ldquo;<B>Buy Back Price</B>&rdquo;
with respect to the Product the subject of the Notice of Intention shall be equal to Buyer&rsquo;s purchase price of the relevant
Products as set out in <B><U>Exhibit 5.2</U></B> as well as the Development Costs incurred by Buyer in connection with the Relevant
Therapy up to the date of such sale back to Seller.<B> </B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">If Buyer does not dispute Seller&rsquo;s
provision of the Notice of Intention and does not remedy the material breach, Seller will have 30 days after its receipt of the
Notice of Buy Back Price from Buyer to exercise the Buy Back Option. The Buy Back Option may be exercised by Seller giving a written
exercise notice to Buyer together with payment of the Buy Back Price without any set-off, counterclaim or any other condition (the&nbsp;&quot;<B>Exercise&nbsp;Notice</B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">Promptly, but no later than
30 days after the receipt by Buyer of the Exercise Notice, Buyer must transfer to Seller (or its nominee which must be an Affiliate)
all rights of Buyer in the Relevant Therapy &quot;as-is&quot; with no representations or warranties whatsoever free and clear of
all Liens on title created by Buyer. Buyer must also transfer to Seller (or its nominee which must be an Affiliate) all its rights
in and under Assigned Agreements which relate to the Relevant Therapy at the same time as the transfer of legal and beneficial
ownership of the Relevant Therapy by entering into assignment agreements equivalent in form and substance to those provided by
Seller at the Closing hereunder, <I>mutatis mutandis</I>,<I> </I>or that are otherwise to the reasonable satisfaction of Buyer.
The provisions of Section 14.1 will apply to sale of the Relevant Therapy except that all references to &quot;Buyer&quot; shall
be construed as &quot;Seller (or its nominee)&quot;, and vice versa. Any costs associated with the transfer of the Relevant Therapy
and associated Assigned Agreements to the Seller pursuant to exercise of the Buy Back Option shall be borne by Seller.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">Notwithstanding anything to
the contrary in this Agreement, the Option granted by Buyer to Seller in accordance with this Section may be separately exercised
by Seller (or its nominee who must be an Affiliate) in respect of any Product which Buyer has committed a material breach of the
Diligence Obligations. The occurrence of a dispute between the parties will not prejudice Seller's right to acquire the Relevant
Therapy following the resolution of that dispute.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">As of the date of the relevant
Exercise Notice, all Buyer&rsquo;s obligations related to the Product and Relevant Therapy covered by the Exercise Notice shall
terminate.</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.25pt">5.3</TD><TD STYLE="text-align: justify"><U>No Assurance.</U> For the avoidance of doubt, nothing contained in this Agreement shall be construed
as a warranty by Buyer that any commercialization to be carried out by it in connection with this Agreement will actually achieve
its aims or any other results and Buyer makes no warranties whatsoever as to any results to be achieved in consequence of the carrying
out of any such commercialization. Furthermore, Buyer makes no representation to the effect that the commercialization of any of
the Products, or any part thereof, will succeed, or that it shall be able to sell any of the Products in any quantity. The foregoing
provision does not qualify the obligation of Buyer to use its good faith, continuous and commercially reasonable effort to fulfill
the Diligence Obligation in accordance with Section 5.1.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 28.35pt; text-align: left">6.</TD><TD STYLE="text-align: justify"><B><U>Payments</U></B></TD>
</TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">6.1</TD><TD STYLE="text-align: justify"><U>Up-Front Payment</U>. Buyer shall pay, or cause to be paid, USD $500,000 (USD five hundred thousand)
to Seller to the account listed in <B><U>Exhibit 6.1</U></B> (the &ldquo;<B>Closing Payment</B>&rdquo;). [****]. All payments will
be made to the account listed in Exhibit 6.1 unless otherwise instructed by Seller a reasonable time prior to the date of payment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt; text-align: left">6.1A</TD><TD STYLE="text-align: justify"> <U>Use of Advance and Grant of Charge.</U> Seller shall
use the Advance solely for the payment of the costs and expenses listed in <B><U>Exhibit 6.1A</U></B>. In the event that the Closing
shall not take place within 45 days of the Effective Date, for any reason whatsoever, the full amount of the Advance shall be
repaid to the Buyer immediately upon the expiration of such 45 day period; provided that in the event that prior to such time
the Seller&rsquo;s Board of Directors rescinds its approval of the transactions contemplated hereby or the Seller's shareholders
consider and do not approve the transactions contemplated hereby, the full amount of the Advance shall be repaid to the Buyer
immediately following that occurrence.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">The Advance shall be secured
by a registered first ranking equitable mortgage in form and substance satisfactory to the Buyer for the benefit of the Buyer on
the entirety of the Technology Intellectual Property (the &ldquo;<B>Collateral</B>&rdquo; and the &ldquo;<B>Mortgage</B>&rdquo;),
as well as a featherweight floating charge in a form and substance satisfactory to the Buyer over all the assets of the Seller
(&ldquo;<B>Featherweight Charge</B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify"><FONT STYLE="font-size: 10pt">Seller
will immediately file the Mortgage and Featherweight Charge (each, a &ldquo;<B>Charge</B>&rdquo;) and any reports or documents
required to record them with ASIC and the Australian Patent Office and with all foreign equivalents thereof in jurisdictions where
Technology Intellectual Property is registered and with any other local or foreign authority as required to give force, effect
and priority to each Charge. Seller shall be liable for any amounts required to be paid in order to accomplish such registrations</FONT>.
<FONT STYLE="font-size: 10pt">The Seller hereby represents that the Collateral and all other assets that are subject to the Charge
as at the time of the creation of the Charge are free and clear of all mortgages, Liens, loans and encumbrances, claims or any
other rights that might impair the rights or the priority of the Buyer pursuant to the Mortgage or the Featherweight Charge. The
Seller shall not directly or indirectly create, incur, assume or suffer to exist any liens on the Collateral or any other assets
that are subject to the Charge at any time, without the prior written consent of the Buyer.</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">The Seller shall promptly notify
the Buyer in writing of any Insolvency Event that it suffers or is threatened against Seller or any of its assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">Without limiting in any way
the responsibility and obligations of the Seller and not as substitute to such obligations, the Seller hereby irrevocably appoints
the Buyer as its true and lawful attorney, with full power of substitution, to act in the name of and at the expense of the Seller
in order to do any such act, including without limitation to sign in the name of the Seller any and all documents as may in the
opinion of the Buyer be necessary in order to exercise the rights of the Buyer under the Mortgage and/or the Featherweight Charge
and realize same. The foregoing right is only exercisable if: (a) Seller suffers an Insolvency Event; or (b) Seller has failed
to repay the Advance when required in accordance with the terms of this Agreement or (c) Seller fails to comply with its Closing
obligations set out in Section 8.1 (the &ldquo;<B>Event of Default</B>&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">Without derogating from the
terms of the Charges, upon the occurrence of any Insolvency Event or any Event of Default, the Buyer shall be entitled to take
all such steps allowed by Applicable Law as it sees fit to collect and realize the Collateral including, without limitation, the
appointment of a receiver or manager (the &ldquo;<B>Receiver</B>&rdquo;). Seller hereby, to the fullest extent possible under applicable
law, irrevocably agrees to the appointment of such Receiver and waives any claim or right to object to such appointment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">Unless otherwise provided in
the Charges, Seller alone shall be responsible for the remuneration of the Receiver. The Receiver shall be empowered to do the
following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">(a)</TD><TD STYLE="text-align: justify">to take possession of the assets the subject of the Charges and for that purpose to take any proceedings
in the Seller&rsquo;s name or otherwise as the Receiver shall see fit;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">(b)</TD><TD STYLE="text-align: justify">to sell or agree to the sale of the assets the subject of the Charges, in whole or in part, or
to transfer the same, including without limitation to the Buyer, in any manner and upon such conditions as the Receiver may see
fit;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 85.05pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">(c)</TD><TD STYLE="text-align: justify">to make any other arrangement with respect to the assets the subject of the Charges or any part
thereof as the Receiver may see fit;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 56.7pt"></TD><TD STYLE="width: 28.35pt">(d)</TD><TD STYLE="text-align: justify">to do all other acts and things which the Receiver may consider to be incidental or conducive to
any of the above powers.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">Unless otherwise provided in
the Charges, all reasonable costs, charges and expenses incurred by the Buyer in connection with all proceedings for enforcement
of the Charges shall be recoverable from the Seller.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">6.2</TD><TD STYLE="text-align: justify"><U>Revenue Sharing Payments</U>. [****]. Buyer will pay Seller an amount equal to 7% of Net Sales,
and 20% of Sublicense Receipts, actually received by Buyer and/or its Affiliates in respect of the relevant Product, all after
recovery by Buyer of all costs and expenses that exceed the Budget (collectively, &ldquo;<B>Revenue Sharing Payments</B>&rdquo;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">For the avoidance of doubt,
the foregoing obligation applies to Buyer in respect of products which incorporate some or all of the Patents of the applicable
Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify">Seller shall be fully and solely
responsible for all payments to Borody and the Australian Centre for Digestive Diseases and for any additional payments required
to be paid to any third party with respect to the exploitation of the Technology to the extent such payment arises from circumstances
that constitute a breach of Seller&rsquo;s representations hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">6.3</TD><TD STYLE="text-align: justify"><U>Due Dates for Payment of Revenue Sharing Payments</U>. All payments due pursuant to the provisions
of Section 6.2 above shall be due and payable to Seller on a calendar quarterly basis within sixty (60) days following the end
of the applicable calendar quarter during which the relevant Net Sales or Sublicense Receipts were actually received by Buyer or
its Affiliates. The Buyer must procure its Affiliates who sell the Products to comply with the foregoing obligation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">6.4</TD><TD STYLE="text-align: justify"><U>Payment Method</U>. Any amounts due to Seller under this Agreement will be paid in U.S. dollars,
by wire transfer in immediately available funds, to the account specified in Exhibit 6.1.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">6.5</TD><TD STYLE="text-align: justify"><U>Currency; Foreign Payments</U>. If any currency conversion will be required in connection with
the calculation of any payment hereunder, such conversion will be made by using the exchange rate for the purchase of U.S. dollars
as published in Europe Edition of the Wall Street Journal (online edition), on the date of the payment. If at any time legal restrictions
prevent the prompt remittance of any payments in any jurisdiction, Buyer may notify Seller and make such payments by depositing
the amount thereof in local currency in a bank account or other depository in such country in the name of Seller or its designee,
and Buyer will have no further obligations under this Agreement with respect thereto.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify; text-indent: -21.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.25pt">6.6</TD><TD STYLE="text-align: justify"><U>Invoice; Approvals</U>. Buyer will inform Seller of the amount payable pursuant to any payment
to be made hereunder all payments to be made by Buyer to Seller under this Agreement shall be made against receipt of an appropriate
invoice in respect of the amount of such payment. Buyer will make payment of all Revenue Sharing Payments into the account of Seller
specified in Exhibit 6.1 unless otherwise directed by Seller in writing beforehand and promptly provide the invoice. In the event
any payment may require approval of any Governmental Authority, Buyer undertakes to promptly file for approval after engaging in
reasonable prior consultation with Seller and in the event that such approval is not received by the due date of payment, Buyer
undertakes to effectuate payment as soon as possible following the receipt of the necessary approval. The cost of obtaining any
government approvals will be solely borne by Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.6pt; text-align: justify; text-indent: -21.25pt">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">6.7</TD><TD STYLE="text-align: justify"><U>Gross Payments; Taxes</U>. All amounts to be paid to Seller hereunder are gross amounts and
are final and inclusive of any applicable Taxes. Any applicable Taxes shall be borne and paid for exclusively by Seller. Buyer
may deduct from amounts paid to Seller pursuant to this Agreement any amounts required under Applicable Law to be withheld at source
(including VAT) including under any applicable treaty or law. Buyer will provide Seller a certificate evidencing payment of any
Withholding Taxes and such other available documentation as is necessary to enable Seller to promptly claim any input tax credits
or tax rebates.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 28.35pt; text-align: left">7</TD><TD STYLE="text-align: justify"><B><U>Record Retention and Audit</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">7.1</TD><TD STYLE="text-align: justify"><U>Record Retention and Access</U>. Buyer will maintain, and procure its Affiliates who sell Products
to maintain, complete, accurate, up-to-date and auditable books, records and accounts in relation to the Net Sales, Sublicense
Receipts, and Development Costs, in sufficient detail to confirm the accuracy of Revenue Sharing Payments and the Buy Back Price
payable in accordance with this Agreement. The aforementioned books, records and accounts must be retained for seven (7) after
the end of the period to which such books, records and accounts pertain or as required by regulatory authorities in any territory
with respect to the books and records applicable to such territory. Buyer will, and will procure its Affiliates, to provide an
independent certified public accounting firm of nationally recognized standing, reasonably acceptable to Buyer and who agrees to
be bound by a customary undertaking of confidentiality with reasonable access to the aforementioned books, records and accounts
upon receiving a reasonable request to do so for the sole purpose of complying with an order, request or demand made by a Government
Authority until the expiration of seven (7) years following termination of this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">7.2</TD><TD STYLE="text-align: justify"><U>Audit</U>. Seller will have the right, at its own cost, to have an independent certified public
accounting firm of nationally recognized standing, reasonably acceptable to Buyer and who agrees to be bound by a customary undertaking
of confidentiality, have access during normal business hours, and upon reasonable prior written notice, to Buyer&rsquo;s books,
records and accounts (including, without limitation, electronic records and accounts) as may be reasonably necessary to verify
the accuracy of Net Sales, Sublicense Receipts and Royalties, as applicable, for any period ending not more than twenty-four (24)
months prior to the date of such request; provided, however, that Seller will not have the right to conduct more than one such
audit in any calendar year or more than one such audit covering any given time period. The auditing firm will disclose to Seller
only the results of its audit and not any other information. Any such audit shall be made during Buyer&rsquo;s normal business
hours and shall not unreasonably interfere with the business of Buyer and shall be completed within a reasonable timeframe. Seller
will bear all the costs of such audit, unless a discrepancy of more than 5% exists in favor of the Seller in which case the Buyer
will bear the costs of said audit. If, based on the results of such audit, additional payments are owed by Buyer under this Agreement,
Buyer shall, at its own cost, have an additional thirty (30) days to conduct an additional (second) audit to verify Seller&rsquo;s
audit results and the discrepancies found during the first audit, and, assuming the two audits reconcile, Buyer shall make such
additional payments within thirty (30) days after the date on which such second accounting firm&rsquo;s written report is delivered
to Buyer. Buyer will promptly, but no later than 7 days after the receipt of the second accounting firm's written report, give
a copy of that report to Seller. If the results of the two audits do not reconcile, then the parties must engage in good faith
negotiations for a period of thirty (30) days with the view of resolving the audit discrepancies as soon as possible. If the parties
are unable to reach an agreement as to how the audit discrepancies should be resolved, then a party may engage a third independent
auditor (who will be selected by the head of the Institute of Certified Public Accountants in Israel if the parties are unable
to agree an auditor) to review the discrepancies between the two audits and conduct (if necessary) a third and final audit to resolve
those discrepancies. The third auditor will provide its draft report to Seller and Buyer for their reasonable comment and review
before finalizing same. The determination of the third auditor will be final and binding on the parties in the absence of manifest
error. The parties shall equally share the costs incurred by the third auditor to be conducted, unless the third audit substantially
confirms the results of the either parties&rsquo; individual audit in which case the cost of such audit shall be paid by the other
party hereto.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">7.3</TD><TD STYLE="text-align: justify"><U>Confidentiality</U>. Seller will treat all information subject to review under this Section
7 in accordance with the confidentiality provisions of Section 14 below.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 49.65pt; text-align: justify; text-indent: -21.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 21.3pt">7.4</TD><TD STYLE="text-align: justify"><U>Audit of Buyer&rsquo;s Affiliate.</U> Buyer must procure those Affiliates who sell Products
to comply with a written request made by Seller to audit the books, records and accounts of the aforementioned Buyer&rsquo;s Affiliates.
The audit will be conducted in accordance with Section 7.2 and all references to Buyer will be construed as a reference to &ldquo;Buyer&rsquo;s
Affiliate who sells Products&rdquo;.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 28.35pt; text-align: left">8.</TD><TD STYLE="text-align: justify"><B><U>Closing</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify"><FONT STYLE="font-size: 10pt">The
consummation of the sale and purchase of the Acquired Assets (the &quot;<B>Closing</B>&quot;)<B> </B>shall take place at the Sydney
offices of Minter Ellison at 15:00 (Sydney time) in no event later than the second business day after all of the conditions set
forth in Section 9 have been satisfied or waived,</FONT> <FONT STYLE="font-size: 10pt">or at such<FONT STYLE="font-family: Times New Roman, Times, Serif">
</FONT>other date, time or place as Buyer and Seller may agree. Such time and date of Closing are herein referred to as the &quot;<B>Closing</B>
<B>Date</B>&quot;.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in; text-indent: -0.45in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.45in">8.1.</TD><TD><U>Seller&rsquo;s Closing Obligations.</U> On or prior to Closing, and subject to the performance by Buyer of the obligations
on its part to be performed in accordance with Section 8.2, Seller shall deliver to Buyer the following:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.1.</TD><TD STYLE="text-align: justify">an extract, certified by its Chairman, of the minutes of its Board of Directors meeting approving
the entry into and execution by Seller of this Agreement and the Ancillary Agreements, the performance by Seller of this Agreement
and the Ancillary Agreements and the consummation by Seller of all transactions contemplated hereunder and thereunder, in form
and substance reasonably satisfactory to Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.2</TD><TD STYLE="text-align: justify">an extract, certified by its Chairman, of the minutes of its shareholders meeting approving the
entry into and execution by Seller of this Agreement and the Ancillary Agreements, the performance by Seller of this Agreement
and the Ancillary Agreements and the consummation by Seller of all transactions contemplated hereunder and thereunder, all in accordance
with the requirements of the Listing Rules of ASX Limited, the Corporations Act and Applicable Law, in form and substance reasonably
satisfactory to Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.3</TD><TD STYLE="text-align: justify">possession and control of the Acquired Assets that are capable of being delivered by Seller, including
all Assigned Agreements and files contained in one or more CDs or in such other format as may be agreed by the parties unless Buyer
requests those assets to be left in situ.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.4</TD><TD STYLE="text-align: justify">all deeds, bills of sale, endorsements, consents, assignments and documents that may be necessary
or appropriate to vest in Buyer all right, title <FONT STYLE="font-family: Times New Roman, Times, Serif">and </FONT>interest in,
to and under the Acquired Assets, including without limitation, fully executed &lsquo;recordal of assignment&rsquo; forms in respect
of all the patents associated with the Acquired Assets in the form required by IP Australia and/or any other Governmental Authority
in any other jurisdiction and any documents required to be entered into and executed by Borody to transfer legal and/or beneficial
ownership in such patents to Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.5</TD><TD STYLE="text-align: justify">copies of the Ancillary Agreements, duly executed by Seller or Borody, as applicable; as well as
all other Exhibits hereto in a form and containing the substance to be agreed between the Buyer and the Seller.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.6</TD><TD STYLE="text-align: justify">an undertaking duly signed by Pharmatel whereby it waives and releases all rights and interest
in and to the Patents and transfers all such rights and interests to Seller, in form and substance acceptable to Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.7</TD><TD STYLE="text-align: justify">the Borody Agreement signed by Borody.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.8</TD><TD STYLE="text-align: justify">copies of all Required Approvals and/or letters of assignment with regard to the Assigned Agreements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.9</TD><TD STYLE="text-align: justify">a compliance certificate given by an officer of Seller in form and substance reasonably acceptable
to Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.1.10</TD><TD STYLE="text-align: justify">such further instruments and documents as may be required to be delivered by Seller pursuant to
the terms of this Agreement or as may be reasonably requested by Buyer in connection with the closing of the transactions contemplated
hereby or to complete the transfer of the Acquired Assets to Buyer, including good, sufficient instruments of assignment with respect
to the Technology Intellectual Property in recordable form, endorsements, consents, assignments and other good and sufficient instruments
of conveyance and assignment necessary or appropriate to vest in Buyer all right, title and interest in, to and under the Acquired
Assets without Lien of any kind.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 64.65pt; text-indent: -32.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.45in">8.2.</TD><TD STYLE="text-align: justify"><U>Buyer&rsquo;s Closing Obligations.</U> At the Closing, and subject to the performance by Seller
of the obligations on its part to be performed in accordance with Section 8.1, Buyer shall deliver to Seller the following:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.2.1</TD><TD STYLE="text-align: justify">pay the amount of USD [****] to Seller pursuant to Section 6.1 above.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.2.2</TD><TD STYLE="text-align: justify">a duly executed copy of resolutions of its Board of Directors approving, inter alia<I>, </I>the
execution by Buyer of this Agreement and the Ancillary Agreements, the performance by Buyer of this Agreement and the consummation
by Buyer of all transactions contemplated hereunder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">8.2.3</TD><TD STYLE="text-align: justify">copies of the Ancillary Agreements duly executed by Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 64.65pt; text-indent: -32.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 32.4pt"></TD><TD STYLE="width: 32.25pt">8.3</TD><TD STYLE="text-align: justify"><U>Completion of Sale and Purchase.</U> The requirements under Sections 8.1 and 8.2 are interdependent
and must be completed contemporaneously.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 64.65pt; text-indent: -32.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 32.4pt"></TD><TD STYLE="width: 32.25pt">8.4</TD><TD STYLE="text-align: justify"><U>Remedy for Breach by Buyer</U>. In the event that Buyer does not perform its obligations set
out in Section 8.1 in breach of the terms of this Agreement and Seller does not grant an extension for Buyer to satisfy those obligations,
then:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 64.65pt; text-indent: -32.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 64.8pt"></TD><TD STYLE="width: 32.25pt">8.4.1</TD><TD STYLE="text-align: justify">Buyer must immediately deliver to Seller on demand, without counter claim or condition or invoking
any dispute resolution provision, properly executed documents required to fully discharge and release the Charges;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 97.05pt; text-align: justify; text-indent: -32.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 64.8pt"></TD><TD STYLE="width: 32.25pt">8.4.2</TD><TD STYLE="text-align: justify">Buyer will have no right to repayment of any part of the Advance that has been used by Seller in
payment of the costs and expenses listed in Exhibit 6.1A in the event that Seller terminates this Agreement pursuant to Section
15.1.6; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 97.05pt; text-align: justify; text-indent: -32.25pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 97.05pt; text-align: justify; text-indent: -32.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 64.8pt"></TD><TD STYLE="width: 32.25pt">8.4.3</TD><TD STYLE="text-align: justify">such release of the Charges and loss of right to repayment shall be Seller's sole and exclusive
remedy for such breach by Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 64.65pt; text-align: justify; text-indent: -32.25pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 32.4pt"></TD><TD STYLE="width: 32.25pt">8.4</TD><TD STYLE="text-align: justify"><U>Accounting</U>. From and after the Closing, Buyer shall have the right and authority to collect
for its own account all receivables and other related items that are included in the Acquired Assets, but only to the extent that
such items accrue after the Closing. To the extent that, after the Closing, Seller or any of its Affiliates receive any payment
that is for the account of Buyer or any of its Affiliates according to the terms of this Agreement or the Ancillary Agreements,
Seller shall deliver such amount to Buyer by depositing that amount into the bank account nominated in writing by Buyer. To the
extent that, after the Closing, Buyer or any of its Affiliates receive any payment that is for the account of Seller or any of
its Affiliates according to the terms of this Agreement or the Ancillary Agreements, Buyer shall deliver such amount to Seller
by depositing that amount into the bank account listed in Exhibit 6.1 unless otherwise directed in writing by Seller. All amounts
due and payable under this Section&nbsp;&lrm;8.4, if any, shall be due and payable by Buyer or Seller, as applicable, in immediately
available funds within thirty (30) days of receipt thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.45in; text-align: left">9.</TD><TD STYLE="text-align: justify"><B><U>Conditions to Closing</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 28.35pt">9.1.</TD><TD STYLE="text-align: justify"><U>Conditions to Buyer&rsquo;s Closing Obligations.</U> The obligation of Buyer to comply with
Section 8.2 of this Agreement is subject to the reasonable satisfaction or waiver in writing by Buyer of the following conditions
on or before the Closing Date:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.1.1</TD><TD STYLE="text-align: justify">Seller to procure Borody to enter into the Borody Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.1.2</TD><TD STYLE="text-align: justify">Seller shall have performed all of its obligations hereunder required to be performed by it at
or prior to the Closing Date and Borody shall have performed all of his obligations under the Borody Agreement required to be performed
by him at or prior to the Closing Date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.1.3.</TD><TD STYLE="text-align: justify">The representations and warranties of Seller contained in this Agreement and of Borody contained
in the Borody Agreement shall be true at and as of the Closing Date, as if the Closing Date was substituted for the date in such
representations and warranties, and any breach of the representations and warranties does not have a Material Adverse Effect.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.1.4</TD><TD STYLE="text-align: justify">All of the Required Approvals and letters of assignment with regard to the Assigned Agreements
shall have been obtained by Seller or Buyer, as applicable.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify">Buyer shall have obtained all
governmental permits that are necessary to entitle it to own or lease, operate and use the Acquired Assets or to carry on and conduct
the business in respect of same substantially as currently conducted by Seller. Without derogating from the foregoing, Buyer shall
have received all Approvals from the competent Governmental Authority(ies) in each applicable country necessary for it to become
the sponsor of each of the clinical trials currently being conducted with respect to the Technology in such country.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.1.5.</TD><TD STYLE="text-align: justify">Satisfactory completion of Buyer's financial, technical, regulatory, accounting, IP and legal due
diligence examination of the Technology, the Products, the Acquired Assets, the Assumed Liabilities and Seller no later than the
day prior to the general meeting of shareholders to be held by Seller to obtain approval of the transactions contemplated by this
Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.1.6</TD><TD STYLE="text-align: justify">No action, suit, investigation or proceeding have been instituted or, other than by AMTI have been
threatened, in each case that has not been withdrawn, dismissed or ceased to be threatened, to restrain or prohibit or otherwise
challenge the legality or validity of the transactions contemplated hereby or to restrain the effective operation or use by Buyer
of the Acquired Assets. No injunction or restraining order shall have been issued by any court of competent jurisdiction and be
in effect that restrains or prohibits any transaction contemplated hereby or the effective operation or use by Buyer of the Acquired
Assets. No Governmental Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, injunction
or other order (whether temporary, preliminary or permanent) that remains in effect and that has the effect of making the transactions
contemplated hereby illegal or otherwise restraining, enjoining or prohibiting consummation of the transactions contemplated by
this Agreement or the effective operation or use by Buyer of the Acquired Assets, and neither Buyer nor Seller shall have received
written notice from any Governmental Authority that it has determined to institute any suit or proceeding to restrain or enjoin
the consummation of the transactions contemplated or the effective operation or use by Buyer of the Acquired Assets or to nullify
or render ineffective this Agreement if consummated, or to take any other action that would result in the prohibition or a material
change in the terms of the transactions contemplated or restrain the effective operation or use by Buyer of the Acquired Assets.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.1.7</TD><TD STYLE="text-align: justify">There shall have been no adverse change in the technological and/or business status, condition
or prospects of the Acquired Assets, the Assumed Liabilities, the Technology or the Products or any complaints, investigations
or hearings (or communications indicating that the same may be contemplated) by any Governmental Authority, adjudicatory or arbitral
proceedings against any of Seller, the Acquired Assets, the Assumed Liabilities, the Technology or the Products or that may affect
the consummation of the transactions contemplated hereunder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 115.35pt; text-align: justify; text-indent: -50.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 64.9pt"></TD><TD STYLE="width: 50.45pt">9.1.8</TD><TD STYLE="text-align: justify">All corporate and other proceedings in connection with the transactions contemplated by this Agreement
and by the Ancillary Agreements shall have been performed or obtained by Seller (including receipt of its Board of Directors and
its shareholders&rsquo; approval) , all documents and instruments incident to such transactions and reasonably requested by Buyer
shall be reasonably satisfactory in substance and form to Buyer and its counsel, shall have been executed and Buyer and its counsel
shall have received counterpart originals or certified or other copies of such documents and instruments as Buyer or its counsel
may reasonably request.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 115.35pt; text-align: justify; text-indent: -50.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 64.9pt"></TD><TD STYLE="width: 50.45pt">9.1.9</TD><TD STYLE="text-align: justify">Each of (i) the agreement dated 23 March 2007 between Seller and Ind-Swift Laboratories Ltd. for
the purchase of Clarithromycin and (ii) the agreement dated 1 May 2006 between Seller and Orphan Australia Pty Ltd (a subsidiary
of the Sigma Pharmaceuticals Group) for the grant by Seller of the Myoconda marketing rights in Australia, New Zealand, South Africa,
Namibia and certain South East Asian countries shall have been terminated.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 115.35pt; text-align: justify; text-indent: -50.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 28.35pt">9.2.</TD><TD STYLE="text-align: justify"><U>Conditions to Seller&rsquo;s Closing Obligations</U>. The obligation of Seller to comply with
Section 8.1 of this Agreement is subject to the reasonable satisfaction or waiver in writing by Seller of the following conditions
on or before the Closing Date:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.65in; text-align: justify; text-indent: -0.75in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.75in">9.2.1</TD><TD STYLE="text-align: justify">Buyer shall have performed all of its obligations hereunder required to be performed by it at or
prior to the Closing Date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.65in; text-align: justify; text-indent: -0.75in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.75in">9.2.2</TD><TD STYLE="text-align: justify">The representations and warranties of Buyer contained in this Agreement shall be true at and as
of the Closing Date, as if the Closing Date was substituted for the date in such representations and warranties.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.65in; text-align: justify; text-indent: -0.75in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.75in">9.2.3</TD><TD STYLE="text-align: justify">All corporate and other proceedings required of Buyer in connection with the transactions contemplated
by this Agreement and by the Ancillary Agreements shall have been performed by Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.6in; text-align: justify; text-indent: -0.7in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.9in"></TD><TD STYLE="width: 0.7in">9.2.4</TD><TD STYLE="text-align: justify">No action, suit, investigation or proceeding other than AMTI shall have been instituted or threatened,
in each case that has not been withdrawn, dismissed or ceased to be threatened, to restrain or prohibit or otherwise challenge
the legality or validity of the transactions contemplated hereby. No injunction or restraining order shall have been issued by
any court of competent jurisdiction and be in effect that restrains or prohibits any transaction contemplated hereby No Governmental
Authority shall have enacted, issued, promulgated, enforced or entered any statute, rule, regulation, injunction or other order
(whether temporary, preliminary or permanent) that remains in effect and that has the effect of making the transactions contemplated
hereby illegal or otherwise restraining, enjoining or prohibiting consummation of the transactions contemplated by this Agreement,
and neither Buyer nor Seller shall have received written notice from any Governmental Authority that it has determined to institute
any suit or proceeding to restrain or enjoin the consummation of the transactions contemplated or to nullify or render ineffective
this Agreement if consummated, or to take any other action that would result in the prohibition or a material change in the terms
of the transactions contemplated.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 115.35pt; text-align: justify; text-indent: -50.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 28.35pt">9.3</TD><TD STYLE="text-align: justify"><U>Satisfaction of Conditions</U>. Each party must, to the extent reasonably required by the other
party, promptly co-operate with the other party to procure that its respective conditions set out in Sections 9.1 or 9.2, as the
case may be, are satisfied as soon as possible but no later than the Closing Date. Without limitation the foregoing, that obligation
includes:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 44.25pt">9.3.1</TD><TD STYLE="text-align: justify">providing all reasonably necessary and appropriate information; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 44.25pt">9.3.2</TD><TD STYLE="text-align: justify">executing all deeds, agreements, instruments, transfers or other documents as may be necessary
or desirable.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">9.4</TD><TD STYLE="text-align: justify"><U>Notice of Satisfaction or Request for Waiver</U>. Seller must give Buyer as soon as possible
after the Effective Date a written notice that specifies that the conditions in Section 9.1 have been satisfied, and the date on
which those conditions were satisfied, and provide documents that evidence to the reasonable satisfaction of Buyer the satisfaction
of those conditions. Buyer must give Seller as soon as possible after the Effective Date a written notice that specifies that the
conditions in Section 9.2 have been satisfied, and the date on which those conditions were satisfied, and provide documents that
evidence to the reasonable satisfaction of Seller the satisfaction of those conditions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.45in; text-align: left">10.</TD><TD STYLE="text-align: justify"><B><U>Further</U></B><U> <B>Assurances and Undertakings
following Closing</B></U></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">10.1.</TD><TD STYLE="text-align: justify">To the extent any of the Acquired Assets are not assigned or assignable to Buyer, or if the necessary
consent to such assignment shall not have been obtained by Seller, as of the Closing Date, Seller shall hold in trust for the benefit
of Buyer all of Seller's right, title and interest to such Acquired Assets and assign or deliver the same to Buyer as promptly
as possible following the Closing Date. Seller shall cooperate in any reasonable arrangements proposed by Buyer which seek to provide
Buyer with the use and benefits of such Acquired Assets as of the Closing Date. With respect to any Assigned Agreement not assigned,
transferred, or delivered to Buyer at Closing, the use and benefit of which is requested by Buyer, in the event that Seller is
required to make a payment on behalf of Buyer with respect to such Assigned Agreement, Buyer shall (in its discretion) pay that
amount itself or advance Seller the required amount for the sole purpose of that payment and Seller must provide a duly issued
invoice to Buyer together with receipts evidencing such payment; provided that Seller shall not make a payment under any such Assigned
Agreement without first consulting with Buyer. Without derogating from the foregoing, Seller shall terminate and/or cease order
and/or receipt of work or services under any Assigned Agreement, if requested to do so by Buyer, immediately upon written request
from Buyer, in accordance with the terms of the Assigned Agreement. Without limiting <FONT STYLE="font-family: Times New Roman, Times, Serif">the
</FONT>foregoing, Seller shall use its best efforts, in cooperation with Buyer, to obtain all third party approvals, and shall
use its best endeavours to submit letters of assignment with regard to all Assigned Agreements and the other Acquired Assets within
four (4) months of the Closing Date. In the event that any required consent as aforesaid is not received within four (4) months
as aforesaid, Buyer shall have the option to inform Seller that the provisions of this Section 10,1 shall cease to apply and all
rights and Liabilities in respect of relevant Asset shall remain with Seller.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">10.2</TD><TD STYLE="text-align: justify">If, after the Closing, Buyer becomes aware that an asset of Seller that was used in respect of
or that is related to the Acquired Assets, including any Intellectual Property, failed to be transferred to Buyer at Closing, Seller
covenants and agrees to transfer any such asset to Buyer promptly upon receipt of notice from Buyer to that effect for no additional
consideration and such asset shall be deemed to form a part of the Acquired Assets for all purposes under this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">10.3.</TD><TD STYLE="text-align: justify">After the Closing, Seller shall from time to time, at the reasonable request of Buyer and without
further consideration to Seller, promptly execute and deliver such other instruments of conveyance and transfer as Buyer may reasonably
request in order to more effectively consummate the transactions contemplated herein and to vest in Buyer good and marketable,
legal and beneficial title to the Acquired Assets except in relation to those assets not capable of transfer and that are the subject
of a licence granted pursuant to Section 4. Additionally, after the Closing, Seller shall deliver to Buyer any additional documents,
reports and data related to the Acquired Assets, the Assumed Liabilities, the Technology and the Products requested by Buyer promptly
following such request.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -28.9pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -28.9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">10.4</TD><TD STYLE="text-align: justify">To the extent assets and rights of Seller in existence at the Closing Date necessary for the exploitation
of the Acquired Assets and the conduct of business in respect thereof are omitted from the Acquired Assets at Buyer's request Seller
will, without additional consideration to it, take all necessary action to transfer the omitted assets or rights to Buyer, pursuant
to a bill of sale or assignment agreement, free and clear of all Liens unless those assets are not capable of transfer and are
the subject of a licence granted pursuant to Section 4. Nothing in this Section 10 shall derogate from the provisions of Section
13.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">10.5</TD><TD STYLE="text-align: justify">After Closing Seller must pay Buyer on demand without set-off, counterclaim or condition the Closing
Payment plus all costs incurred by Buyer in enforcing its Charges if a liquidator is appointed to Seller during the 6 month period
following the Closing Date and the liquidator disclaims this Agreement which results in the sale of the Acquired Assets by Seller
to Buyer being set aside or invalidated.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">10.6</TD><TD STYLE="text-align: justify">On the day immediately after the 6 month anniversary of the Closing Date, Buyer must give Seller
without counterclaim or condition a duly executed Deed of Release and an ASIC Form 312 in respect of the Charge in the form acceptable
to Buyer; provided that no allegation, claim or threat has been made by any person prior to that time which has resulted in or
which has not been rescinded and if compromised, conceded or litigated, could result in any transaction under this Agreement being
void, voidable, unenforceable or defective.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.45in; text-align: left">11.</TD><TD STYLE="text-align: justify"><B><U>Representations</U></B><U> <B>And Warranties of
Seller</B></U></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">Seller hereby represents and
warrants to Buyer that except as disclosed in the Disclosure Schedule annexed hereto as <B><U>Exhibit 11 </U></B>(which disclosures
shall qualify the corresponding paragraph of this Section 11) the statements contained in this Section 11 are true and correct
as at the Effective Date and will be true and correct as of the Closing Date, as if the Closing Date was substituted for the date
in such representations and warranties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.1.</TD><TD STYLE="text-align: justify"><U>Corporate Organization and Power</U>. Seller is a corporation duly organized and validly existing
under the laws of Australia, and has all requisite corporate power and authority, and all licenses, authorizations, consents and
Approvals of any Governmental Authority required to carry on its business and to own, lease and operate its assets and properties
as now owned, leased and operated, except where the failure to have such a license, authorization, consent or Approval, could not,
individually or in the aggregate, have a Material Adverse Effect.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.2.</TD><TD STYLE="text-align: justify"><U>Authorization</U>. Seller has the requisite corporate power and authority to enter into this
Agreement and the Ancillary Agreements and to carry out the transactions contemplated herein and therein. The Board of Directors
and the shareholders of Seller, to the extent required, have taken all action required by Applicable Law, ASX Listing Rules, and
the respective Corporate Documents of Seller and otherwise to duly and validly authorize and approve the execution, delivery and
performance by it of this Agreement, the Ancillary Agreements and the consummation by it of the transactions contemplated herein
and therein and no other corporate proceedings on the part of Seller are, or will be, necessary to authorize this Agreement, the
Ancillary Agreements or to consummate the transactions contemplated hereby and thereby. This Agreement has been, and the Ancillary
Agreements at Closing shall have been, duly and validly executed and delivered by Seller and constitute or shall constitute the
legal, valid and binding obligations of Seller, enforceable against each of them in accordance with their respective terms, subject
to laws of general application relating to bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting creditors'
rights generally and rules of law governing specific performance, injunctive relief or other equitable remedies.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.3.</TD><TD STYLE="text-align: justify"><U>Non-Contravention</U>. Neither the execution, delivery and performance by Seller of this Agreement
or the Ancillary Agreements nor the consummation of the transactions contemplated herein and therein will (i) contravene or conflict
with any Corporate Documents of Seller; (ii) contravene or conflict with or constitute a violation of any provision of any Applicable
Law binding upon or applicable to Seller, or any of the Acquired Assets, which could have a Material Adverse Effect; (iii) result
in the creation or imposition of any Lien on any of the Acquired Assets, or (iv) be in conflict with, constitute (with or without
due notice or lapse of time or both) a default under, result in the loss of any material benefit under, or give rise to any right
of termination, cancellation, increased payments or acceleration under any terms, conditions or provisions of any Assigned Agreements,
Approval, instrument or other material agreement or obligation relating to the Acquired Assets. Without derogating from the foregoing,
the Seller warrants and represents that the execution of this Agreement will not result in any breach under the asset purchase
agreement between Seller and Australian Medical Therapy Investments Pty Ltd in relation to the sale of &quot;Myoconda&quot;, which
agreement was terminated on 15 June 2010.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.4.</TD><TD STYLE="text-align: justify"><U>Consents and Approvals</U>. Except as described in <B><U>Exhibit 11.4</U></B> hereto (collectively
the &quot;<B>Required Approvals</B>&quot;), no Approval of or notification to any individual or entity or Governmental Authority
is required in connection with the execution, delivery or performance of this Agreement or the Ancillary Agreements by Seller or
the consummation by Seller of the transactions contemplated herein and therein.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.5.</TD><TD STYLE="text-align: justify"><U>Acquired Assets</U>. Seller has legal and beneficial ownership and good, valid and marketable
title in and to the Acquired Assets, free and clear of any Liens, other than in respect of: (a) the patents relating to the Acquired
Assets which are legally owned by Borody for the benefit of Seller and which Borody will transfer to Buyer at Closing, (b) the
Charges which will be created on the Effective Date in accordance with Section 6.1A; and (c) the Assumed Liabilities, and upon
delivery to Buyer at Closing of the instruments of transfer contemplated by Sections 8.1.3 and 8.1.5, Buyer shall thereby acquire
legal and beneficial ownership and good, valid and marketable title in and to the Acquired Assets, free and clear of any Liens,
other than the Assumed Liabilities or those Acquired Assets which are not capable of being transferred and are the subject of the
grant of a licence in accordance with Section 4. The Acquired Assets are in good and serviceable condition and are suitable for
the uses for which used by Seller. The Acquired Assets comprise all of the material assets, of any type, necessary for the exploitation
of the Acquired Assets or conduct of business with respect to the Acquired Assets and the exploitation of the Technology and the
Products by Buyer as same has been heretofore conducted by Seller, and there are no material assets or properties owned, controlled,
leased, licensed or used by Seller in the exploitation of the Acquired Assets or the operation of business in respect of the Acquired
Assets or the exploitation of the Technology and the Products that will not be transferred to Buyer hereunder. There are no outstanding
Liabilities or Liens related to the Acquired Assets or the Products other than the Assumed Liabilities.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.6.</TD><TD STYLE="text-align: justify"><U>Manufacturing and Marketing Rights</U>. Seller has not granted any rights to manufacture, produce,
assemble, license, market or sell any Products and no Person has any rights to manufacture, produce, assemble, license, market
or sell any Products with the exception of the Compounding Chemist.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.7.</TD><TD STYLE="text-align: justify"><U>Regulatory Matters</U>.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.7.1.</TD><TD STYLE="text-align: justify">Seller has obtained and holds all necessary and applicable Approvals required by any Governmental
Authority to permit the development, preclinical and clinical testing of the Products in jurisdictions where it currently conducts
such activities (for the purposes of this Section 11.7, the &quot;<B>Regulatory Approvals</B>&quot;). <B><U>Exhibit 11.7.1</U></B>
sets forth a list and description of each such Regulatory Approval, copies of which have been provided to Buyer. Each Regulatory
Approval is valid and in full force and effect and no event has occurred or condition or state of facts exists which constitutes
or, after notice or lapse of time or both, would constitute a breach or default under any such Regulatory Approval or which permits
or, after notice or lapse of time (other than the expiration of the term of a Regulatory Approval) or both, would permit revocation,
termination or result in a denial to renew of any such Regulatory Approval, or which would reasonably be expected to adversely
affect the rights of Seller under any such Regulatory Approval and (ii) no notice of cancellation, of default or of any dispute
concerning any Regulatory Approval, or of any event, condition or state of facts described in the preceding clause, has been received
by, or is known to, Seller. None of the Regulatory Approvals will be terminated, revoked, modified or become terminable or impaired
as a result of the consummation of the transactions contemplated hereunder and there are no facts or circumstances which could
or may cause any Regulatory Approval to be terminated, revoked, modified or become terminable or impaired. Seller is in compliance
with the terms and conditions of each Regulatory Approval and all applicable reporting requirements for all Regulatory Approvals
including, but not limited to, applicable adverse event reporting requirements.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.7.2.</TD><TD STYLE="text-align: justify">Seller has not received any written notice or other written communication from any Governmental
Authority (i) contesting the pre-market clearance or approval of the uses of or the labeling and promotion of any Product or (ii)
otherwise alleging any violation of Applicable Law or Regulatory Approval by Seller or the Products or Technology.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.7.3.</TD><TD STYLE="text-align: justify">Seller has not received any notice of, and there are no facts or circumstances with could or may
cause, any recalls, field notifications or seizures or adverse regulatory actions taken or, threatened by any Governmental Authority
with respect to any of the Products, including any facilities where any such Products are produced, processed, packaged or stored,
and Seller has never either voluntarily or at the request of any Governmental Authority, initiated or participated in a recall
of any of the Products or provided post-sale warnings regarding any of the Products.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.7.4.</TD><TD STYLE="text-align: justify">The clinical trials with respect to the Technology and the Products have been conducted with reasonable
care and in accordance with the stated protocols for such clinical trials. All clinical trials of the Products intended to be used
to support regulatory clearance or approval have been and are being conducted in compliance with all Applicable Laws in the European
Union, the United States and all other countries where such compliance is required, governing the conduct of such clinical trials.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.7.5.</TD><TD STYLE="text-align: justify">All filings with and submissions to all Governmental Authorities made by Seller with regard to
the Products, whether oral, written or electronically delivered, were true, accurate and complete in all material respects as of
the date made, and, to the extent required to be updated, as so updated remain true, accurate and complete as of the date hereof,
and do not misstate any of the statements or information included therein, or omit to state a fact necessary to make the statements
therein not misleading.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt; text-align: left">11.7.6.</TD><TD STYLE="text-align: justify">Seller has not received any notice of, and to the best
of the knowledge and belief of Seller after due enquiry there has been no, personal injury or damage to property suffered from
the use of any of the Products or the Technology in any clinical trial or otherwise.</TD>
</TR></TABLE>

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<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.8.</TD><TD STYLE="text-align: justify"><U>Compliance with Applicable Laws</U>. With respect to the transactions contemplated by this Agreement,
the Technology, the Products, the Acquired Assets and the Assumed Liabilities, Seller has not violated or infringed, nor is it
in violation or infringement of, any provision of Applicable Law or any order, writ, injunction or decree of any Governmental Authority
and Seller or Borody and each of its officers, directors, employees and agents have complied with all Applicable Laws. No claims
have been filed or threatened against Seller alleging a violation of any Applicable Law in connection with the Products, the Technology,
the Acquired Assets or the Assumed Liabilities nor does Seller know of any fact or circumstance which may cause such a claim to
be filed against it.</TD></TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">The exploitation of the Acquired
Assets or conduct of business with respect to the Acquired Assets comply and have complied with all Applicable Laws relating to
or addressing safety, human health, pollution or protection of the environment, emissions discharges or releases of Hazardous Materials
or the investigation, cleanup or other remediation thereof (&quot;<B>Environmental Laws</B>&quot;). Seller has obtained all environmental,
health and safety Regulatory Approvals necessary for the use and operation by the Company of the Acquired Assets and the conduct
of business with respect to the Acquired Assets and <B><U>Exhibit 11.8</U></B> sets forth a list and description of each such Regulatory
Approval, copies of which have been provided to Buyer. All such Regulatory Approvals are in full force and effect, Seller is and
has been in compliance with all material terms and conditions of such Regulatory Approvals, there is no action or proceeding pending,
alleged in writing or to the knowledge of Seller threatened against Seller to revoke or modify such Regulatory Approvals, and neither
the execution or delivery of this Agreement nor compliance by Seller with any of the provisions herein will result in the termination
or revocation of any such Regulatory Approvals. Seller does not use in the exploitation of the Acquired Assets or conduct of business
with respect to the Acquired Assets any material that is regulated under, or which is the subject of, applicable Environmental
Laws.</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.9.</TD><TD STYLE="text-align: justify"><U>Approvals</U>. Other than the Regulatory Approvals, there are no other Approvals of any Governmental
Authorities (or of any other Person) necessary for Seller to exploit the Technology and own and operate the Acquired Assets as
currently exploited, owned or operated.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.10.</TD><TD STYLE="text-align: justify"><U>Litigation</U>. There are no (i) current actions, suits, claims, hearings, arbitrations, proceedings
(public or private) or current governmental investigations, pending or to the best of the knowledge or belief of Seller after due
enquiry threatened, against or by Seller (collectively, &quot;<B>Proceedings</B>&quot;), nor any Proceedings or investigations
or reviews by any Governmental Authority, pending or to the best of the knowledge and belief of Seller after due enquiry threatened
against or relating to the Products, the Technology, any of the Acquired Assets or Assumed Liabilities or otherwise affecting the
Products, the Technology, any of the Acquired Assets or Assumed Liabilities, or which seek to enjoin or rescind the transactions
contemplated by this Agreement or the Ancillary Agreements; or (ii) existing orders, judgments or decrees of any Governmental Authority
naming Seller or Borody in connection with the Products, the Technology, any of the Acquired Assets or Assumed Liabilities.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.11.</TD><TD STYLE="text-align: justify"><U>Assigned Agreements</U>. Except for this Agreement, the Compounding Agreement and any Agreements
listed in <B><U>Exhibit 11.11</U></B>, Seller is not a party to or bound by any Agreement with respect to the Acquired Assets or
the conduct of business with respect to the Acquired Assets. Seller has delivered to Buyer true and correct copies (or summaries,
in the case of any oral Agreements) of all agreements listed in Exhibit 11.11. Each of the Assigned Agreements is in full force
and effect and each Assigned Agreement is a legal, valid and binding obligation of Seller, and to the knowledge of Seller each
other party thereto, enforceable against each such party thereto in accordance with its terms, except as may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or similar laws affecting creditors' rights generally and subject to general
principles of equity, and neither Seller nor, to the best of the knowledge and belief of Seller after due enquiry, any other party
thereto is or has been alleged to be in breach, violation or default thereunder and no event has occurred and no condition or state
of facts exists which, with the passage of time or the giving of notice or both, would constitute such a default or breach by Seller
or by any such other party. Seller is not currently renegotiating any of the Assigned Agreements or paying liquidated damages in
lieu of performance thereunder. Complete and correct copies of each Assigned Agreement have heretofore been delivered to Buyer
by Seller. Each Assigned Agreement may be transferred to Buyer pursuant to this Agreement and will continue in full force and effect
thereafter, in each case without breaching the terms thereof or resulting in the forfeiture or impairment of any rights thereunder
and without the consent, approval or act of, or the making of any filing with, any other party.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.12.</TD><TD STYLE="text-align: justify"><U>Restrictions on Business Activities</U>. There is no contract (including covenants not to compete),
judgment, injunction, order or decree binding upon Seller that has or could reasonably be expected to have, whether before or after
consummation of the transactions contemplated by this Agreement, the effect of prohibiting or impairing any current or future business
practice of Seller, any acquisition of property (tangible or intangible) by Seller or the conduct of business by Seller, all as
same relate to the Technology, the Products and the Acquired Assets. Without limiting the generality of the foregoing, Seller has
not entered into any customer or similar Contract that includes &ldquo;most favored licensee/manufacturer/distributor&rdquo; or
similar clauses restricting or otherwise impacting the right of Seller to develop, license, manufacture or commercialize the Products
in any manner or under which Seller is restricted from selling, licensing or otherwise distributing any of the Technology or Products
to, or from providing services to, customers or potential customers or any class of customers, in any geographic area, during any
period of time or in any segment of the market.</TD></TR></TABLE>

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<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.13</TD><TD STYLE="text-align: justify"><U>Technology Intellectual Property</U></TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.1.</TD><TD STYLE="text-align: justify"><B><U>Exhibit 11.13.1</U></B> lists all Technology Intellectual Property that is registered with,
has been applied for, or has been issued by the U.S. Patent and Trademark Office or a corresponding foreign governmental or public
authority, or that is licensed to or from any third party(ies). Seller has delivered or made available to Buyer complete and accurate
copies of correspondence, Agreements, file histories and office actions relating to the patents and patent applications and invention
disclosures listed in Exhibit 11.13.1. Each item of Technology Intellectual Property owned, licensed or used by Seller immediately
prior to the Closing Date will be owned, licensed to or available for use by Buyer on identical terms and conditions immediately
after the Closing Date once Buyer has attended to the registration of its ownership interest with the relevant Government Authority.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.2.</TD><TD STYLE="text-align: justify">Each item of Technology Intellectual Property is valid and subsisting, and all necessary registration,
maintenance and renewal fees in connection with such Technology Intellectual Property have been paid and all necessary documents
and articles in connection with such Technology Intellectual Property have been filed with the relevant patent, copyright, trademark
or other authorities in the United States or foreign jurisdictions, as the case may be, for the purposes of maintaining such Technology
Intellectual Property. There are no actions that must be taken by Seller within 180 days of the Closing Date, including the payment
of any registration, maintenance or renewal fees or the filing of any documents, applications or articles for the purposes of maintaining,
perfecting or preserving or renewing any Technology Intellectual Property. Seller has not claimed &ldquo;small business status&rdquo;
or other special status in the application for or registration of any Technology Intellectual Property.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.3.</TD><TD STYLE="text-align: justify">Except in relation to the Charges created in accordance with Section 6.1A of this Agreement, Seller
owns, free and clear of any Lien, and possesses all right, title and interest, in and to all Technology Intellectual Property.
The Technology Intellectual Property constitutes all the Intellectual Property necessary for the exploitation of the Technology
and the development and commercialization of the Products. There are no outstanding royalty obligations, honoria, Liens, or limitations
on use related to the Acquired Assets of any Person by reason of the ownership, development, modification, use, license, sublicense,
sale, distribution or other disposition of the Technology Intellectual Property other than the Assumed Liabilities and the Charges
created in accordance with this Agreement, as well as the Compounding Agreement. Seller has taken all reasonable security measures
to protect the secrecy, confidentiality and value of the Technology Intellectual Property.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.4</TD><TD STYLE="text-align: justify"><B><U>Exhibit 11.13.4</U></B> contains a complete and accurate list and description of all Patents
used in connection with, or necessary to exploit the Acquired Assets or conduct business with respect to the Acquired Assets. Seller
is the sole owner of all right, title, and interest in and to each of the Patents listed in Exhibit 11.13.4 free and clear of all
Encumbrances, equities, and other adverse claims and has the right to use the same without further payment to a third party, except
in relation to: (a) certain Myoconda Patents which are legally owned by Borody for the benefit of Seller as listed on Exhibit 11.13.4;
and (b) the Charges created in accordance with this Agreement.</TD></TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify">All of the issued Patents listed
in Exhibit 11.13.4 are currently in compliance with all Applicable Law (including payment of filing, examination, and maintenance
fees and proofs of working or use), and are not on the date hereof subject to any maintenance fees, Taxes, or actions falling due
within one hundred eighty days following the date hereof. With respect to all applications for the issuance of Patents listed in
Exhibit 11.13.4, such applications are pending and in good standing and there is no nonextendable filing, action, or response the
due date of which is or will be within one hundred eighty days following the date hereof.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify">No Patent listed in Exhibit
11.13.4 has been or is now involved in any interference, reissue, reexamination, or opposition proceeding, and, to the knowledge
of Seller, there are no potentially interfering patents or patent applications of any third party with respect to such Patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify">No Patent listed in Exhibit
11.13.4 has been challenged or, to the knowledge of Seller, threatened in any way.</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 99.25pt; text-align: justify">Seller has not expressly agreed
to indemnify any Person for or against any interference, infringement, misappropriation or other conflict with respect to the Patents
listed in Exhibit 11.13.4 with the exception of Borody in relation to those Myoconda Patents which he legally owns for the benefit
of Seller as listed on Exhibit 11.13.4.</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.5</TD><TD STYLE="text-align: justify"><B><U>Exhibit 11.13.5</U></B> identifies each item of the Technology Intellectual Property that
comprises a Trademark or registered design rights (including applications in respect thereof), and also identifies certain (non-exhaustive)
items of the Technology Intellectual Property that comprise a Copyright.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.6.</TD><TD STYLE="text-align: justify">All Technology Intellectual Property was created solely by either (i)&nbsp;employees of Seller
acting within the scope of their employment who have validly and irrevocably assigned all of their rights, including Intellectual
Property rights therein, to Seller or (ii) other Persons who have validly and irrevocably assigned all of their rights, including
Intellectual Property rights therein, to Seller, and no other Person owns or has any rights to any portion of such Technology Intellectual
Property. Seller is not using, and it will not be necessary to use, (i)&nbsp;any inventions or other Intellectual Property rights
of any of its past or present employees or contractors made prior to or outside the scope of their employment for Seller or (ii)&nbsp;any
confidential information or trade secrets of any former employer of any such person. All personnel, including employees, agents,
consultants and contractors, who have contributed to or participated in the conception or development, or both, of the Technology
Intellectual Property on behalf of Seller and all officers and technical employees of Seller either (i) undertook that work &quot;in
the course of their employment&quot; with Seller in accordance with Applicable Law that has accorded Seller full, effective, sole,
exclusive and original ownership or exclusive license of all tangible and intangible property thereby arising in such Technology
Intellectual Property, or (ii) have executed appropriate instruments of assignment in favor of Seller as assignee that have conveyed
to Seller effective, sole and exclusive ownership or license of all tangible and intangible property arising thereby.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.7.</TD><TD STYLE="text-align: justify">Seller is the sole and exclusive licensee or recipient of services under the Assigned Agreements
and the sole and exclusive owner or licensee of the Acquired Assets.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.8.</TD><TD STYLE="text-align: justify">Seller has not transferred ownership of, or, other than under the Compounding Agreement, granted
any exclusive license of or exclusive right to use, or authorized the retention of any exclusive rights in or to joint ownership
of, any Technology Intellectual Property to any other Person.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.9</TD><TD STYLE="text-align: justify">No Intellectual Property that is or was Technology Intellectual Property has been permitted to
lapse or enter the public domain.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.10</TD><TD STYLE="text-align: justify">The exploitation of the Technology and the development and commercialization of the Products by
Seller has not infringed, misappropriated or conflicted with and does not infringe, misappropriate or conflict with any Intellectual
Property right of any other Person, nor does same violate the rights of any Person (including rights to privacy or publicity),
or constitute unfair competition or trade practices under the laws of any jurisdiction in which Seller has exploited, owned or
operated the Technology. Seller has not received any notice from any third party of any infringement, misappropriation or violation
by Seller of any Intellectual Property right of any third party and no notice has been received by Seller challenging Seller's
rights to any of the Technology Intellectual Property. No claim by any third party contesting the validity of any Technology Intellectual
Property has been made or, to the knowledge of Seller, is threatened. Seller has not received any offer for a license of Technology
Intellectual Property, including but not limited to patent rights, from any Person in connection with an allegation by such Person
that Seller has infringed or misappropriated any of the Intellectual Property of such Person. Seller has not received any opinion
of counsel that any third party Patent has been, would be or is being directly or indirectly infringed by the exploitation of the
Technology, including with respect to any Product. No third party is infringing any Technology Intellectual Property.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.11</TD><TD STYLE="text-align: justify">The Assets (including the Products and the Technology) do not comprise any software code.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.12</TD><TD STYLE="text-align: justify">None of the Technology Intellectual Property that was developed or acquired by Seller was developed
by or on behalf of, or using grants or any other subsidiaries of, any Governmental Authority or any university, and no government
funding, facilities, faculty or students of a university, college, other educational institution or research center or funding
from third parties was used in the development of the Technology Intellectual Property. No current or former employee, consultant
or independent contractor of Seller, who was involved in, or who contributed to, the creation or development of any Technology
Intellectual Property, has performed services for a government, university, college, or other educational institution or research
center during a period of time during which such employee, consultant or independent contractor was also performing services for
Seller.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.13</TD><TD STYLE="text-align: justify">All Technology Intellectual Property is in such form and is described in sufficient detail and
content to identify and explain the Technology and Products to a qualified individual and to allow the full and proper use of such
Technology and Products by such qualified individual without reliance on the knowledge or memory of any particular other individual.
The Technology Intellectual Property is sufficient for the exploitation of the Acquired Assets or conduct of business with respect
to the Acquired Assets as conducted by Seller.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 35.45pt">11.13.14</TD><TD STYLE="text-align: justify">All Technology Intellectual Property will be fully transferable, alienable and licensable by Buyer
after the Closing without restriction and without payment of any kind to any Person.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.14.</TD><TD STYLE="text-align: justify"><U>Insurance</U>. <B><U>Exhibit 11.14</U></B> contains an accurate and complete list of all insurance
Policies owned or held by Seller in connection with or relating to the Technology and the Products (the &quot;<B>Policies</B>&quot;).
The Policies are in scope and amount customary and reasonable for businesses of a similar nature and are sufficient to cover all
of Seller's obligations under the Assigned Agreements and under the past clinical trials related to the Technology and the Products.
All of the Policies are in full force and effect and all premiums with respect thereto have been paid. Seller has not been denied
any form of insurance and no policy of insurance has been revoked or rescinded during the past five (5) years.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.15.</TD><TD STYLE="text-align: justify"><U>Relations with Suppliers</U>. In connection with the Technology and the Products, no material
current supplier of Seller has canceled any contract or order for provision of, and there has been no threat by any such supplier
not to provide, raw materials, products, supplies or services either prior to or following the Closing Date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">11.16.
<U>Indemnification Obligations</U>. Neither Seller nor Borody is a party to any Agreement in connection with the Technology and
the Products that require Seller or Borody to indemnify any Person with the exception of Borody in relation to the transfer of
the relevant Myoconda patents to Buyer at Closing.</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.17.</TD><TD STYLE="text-align: justify"><U>Absence of Certain Business Practices</U>. Neither Seller, nor any director, officer, employee
or agent of Seller, or any other Person acting on behalf of Seller, has, directly or indirectly, given or agreed to give any gift
or similar benefit or agreed to make or made any payment to any customer, supplier, governmental employee or other person who is
or may be in a position to help or hinder the business of Seller, taken as a whole (or assist it in connection with any actual
or proposed transaction) which (i) would reasonably be expected to subject any of Seller or Buyer to any damage or penalty in any
civil, criminal or governmental litigation proceeding; or (ii) violated or violates any Applicable Law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in"></TD><TD STYLE="text-align: justify">Furthermore, there have not been any prepaid expenses made by or to the Seller in respect of the
Acquired Assets, including any deposits with third Parties in respect of future performance.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.18.</TD><TD STYLE="text-align: justify"><U>Governmental Funding</U>. There are no outstanding obligations or royalty payments towards any
Governmental Authority related to the Technology or the Products.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.19</TD><TD STYLE="text-align: justify"><U>Budget</U>. The Budget annexed hereto as <B><U>Exhibit 11.19</U></B> (the &quot;<B>Budget</B>&quot;)
has been prepared in good faith with due diligence, care and consideration, and reflects in good faith Seller's estimation of the
resources necessary to accomplish the matters discussed therein.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.20</TD><TD STYLE="text-align: justify"><U>Affiliates</U>. Seller has no Affiliates other than Borody.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.21.</TD><TD STYLE="text-align: justify"><U>Taxes</U>. There are no material unpaid Taxes, assessments or public charges of any type or
nature whatsoever, due or payable to any Governmental Authority, which are or could become a Lien or charge against or otherwise
affect any of the Acquired Assets.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.22</TD><TD STYLE="text-align: justify"><U>Preferences; Solvency</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">11.22.1&#9;Seller is not now
insolvent within the meaning of section 95A of the Corporations Act and will not be rendered insolvent by any of the transactions
contemplated by this Agreement. Seller is not subject to an administration under Part 5.3A of the Corporations Act. Borody is not
a person who is disqualified from managing corporations under the Corporations Act or bankrupt under the <I>Bankruptcy Act 1966</I>
(Cth).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">11.22.2&#9;Immediately after
giving effect to the consummation of the transactions contemplated by this Agreement: (i) Seller will be able to pay its Liabilities
as they become due in the usual course of its business; (ii)Seller will have assets (calculated at fair market value) that exceed
its Liabilities; and (iii) taking into account all pending and threatened litigation, final judgments against Seller in actions
for money damages are not reasonably anticipated to be rendered at a time when, or in amounts such that, Seller will be unable
to satisfy any such judgments promptly in accordance with their terms (taking into account the maximum probable amount of such
judgments in any such actions and the earliest reasonable time at which such judgments might be rendered) as well as all other
obligations of Seller. The cash available to Seller, after taking into account all other anticipated uses of the cash, will be
sufficient to pay all such debts and judgments promptly in accordance with their terms.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">11.22.3&#9;There are no current
or past creditors of Seller to whom any law, rule or regulation requires the delivery of notice or from whom any form of consent
is required in conjunction with undertaking the transactions contemplated by this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.23</TD><TD STYLE="text-align: justify"><U>Absence of Material Adverse Changes</U>. Except in connection with the transactions contemplated
hereby, as expressly contemplated by this Agreement or consented to in writing by Buyer, since June 10, 2010, (a)&nbsp;there has
not been any circumstance, effect, change or event that has had or could reasonably be expected to have a Material Adverse Effect
on Seller, and (b)&nbsp;the Technology has been exploited only in the ordinary course of business, consistent with past practice.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.24</TD><TD STYLE="text-align: justify"><U>Brokers</U>. Other than a fee payable by Seller to TM Ventures Pty Ltd (ABN 95 128 246 293)
in the amount of 3% of the amounts paid to Seller hereunder, as to which Buyer is not assuming any responsibility, neither Seller
nor any of its directors, officers or employees has engaged any broker, finder, or financial advisor or incurred any liability
for any brokerage fee or commission, finder's fee or financial advisory fee, in connection with the transactions contemplated hereby.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">11.25.</TD><TD STYLE="text-align: justify"><U>Disclosure</U>. Seller has provided Buyer with all information Buyer has requested. Neither
this Agreement (including the Exhibits hereto), the Ancillary Agreements nor any certificates made or delivered in connection herewith
contains any untrue statement of a material fact or omits to state a material fact necessary to make the statements herein or therein
not misleading, in view of the circumstances in which they were made. To the best knowledge and judgment of Seller, there is no
material fact or information relating to the exploitation of the Acquired Assets or conduct of business with respect to the Acquired
Assets, the Products, the Technology, the Acquired Assets or the Assumed Liabilities that has not been disclosed by Seller to Buyer.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.45in; text-align: left">12.</TD><TD STYLE="text-align: justify"><B><U>Representations</U></B><U> <B>and Warranties of
Buyer</B></U></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">Buyer hereby represents and
warrants to Seller that the statements contained in this Section 12 are true and correct as of the Effective Date and the Closing
Date:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.45in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">12.1.</TD><TD STYLE="text-align: justify"><U>Corporate Existence and Power</U>. Buyer is a corporation duly organized, validly existing and
in good standing under the laws of the State of Israel and has all requisite corporate power and authority, and all licenses, authorizations,
consents and Approvals of any Governmental Authority, required to carry on its business as conducted prior to the Closing and to
own, lease and operate the assets and properties of Buyer as now owned, leased and operated, except where the failure to have such
a license, authorization, consent or Approval, could not, individually or in the aggregate, have a Material Adverse Effect.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">12.2.</TD><TD STYLE="text-align: justify"><U>Authorization</U>. Buyer has the requisite corporate power and authority to enter into this
Agreement and the Ancillary Agreements and to carry out the transactions contemplated herein and therein. The Board of Directors
of Buyer has taken all action required by Applicable Law and its Corporate Documents and otherwise to duly and validly authorize
and approve the execution, delivery and performance by Buyer of this Agreement and the Ancillary Agreements and the consummation
by Buyer of the transactions contemplated herein and therein and no other corporate proceedings on the part of Buyer are, or will
be, necessary to authorize this Agreement, the Ancillary Agreements or to consummate the transactions contemplated hereby and thereby.
This Agreement has been and the Ancillary Agreements at Closing shall have been duly and validly executed and delivered by Buyer
and constitute or shall constitute the legal, valid and binding obligations of Buyer, enforceable against it in accordance with
their respective terms, subject to laws of general application relating to bankruptcy, insolvency, reorganization, moratorium or
other similar laws affecting creditors' rights generally and rules of law governing specific performance, injunctive relief or
other equitable remedies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">12.3</TD><TD STYLE="text-align: justify"><U>Resources.</U> Buyer reasonably believes that it has and/or can procure the resources necessary
to commercialize and develop the Acquired Assets in accordance with the Diligence Obligation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.45in; text-align: left">13.</TD><TD STYLE="text-align: justify"><B><U>Covenants</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.1.</TD><TD STYLE="text-align: justify"><U>No Action</U>. Seller agrees that for the period ending on the Closing Date, Seller will not
directly or indirectly, through any agent or otherwise, solicit, accept, initiate or encourage (by providing Confidential Information
or otherwise) submission of proposals or offers from any person or entity or negotiate or suggest negotiations at any future time
with or to any other person any transaction related to or which may affect, directly or indirectly, the exploitation of the Acquired
Assets or conduct of business with respect to the Acquired Assets, the Acquired Assets, the Assumed Liabilities, the Technology
or the Products. The foregoing restriction does not prevent Seller from selling, licensing, or dealing with Hepaconda or Ibaconda
provided that those patents and associated intellectual property are not the subject of the Charges. The foregoing restriction
does not apply if Seller proposes to exercise or exercises its Buy Back Option.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.2.</TD><TD STYLE="text-align: justify"><U>Non-Competition</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -27.2pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in"><FONT STYLE="font-size: 10pt">13.2.1</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt"><U>Restraint.</U> Seller agrees and undertakes that neither Seller</FONT>
<FONT STYLE="font-size: 10pt">or its Affiliates nor Borody or his Affiliates, will, without the prior written consent of Buyer
directly or indirectly, as owner, part-owner, financier,</FONT> <FONT STYLE="font-size: 10pt">partner, joint venturer, stockholder,
employee, broker, agent, principal, corporate officer, director, licensor or in any other capacity whatever (a)</FONT> <FONT STYLE="font-size: 10pt">supply
or grant services or rights similar to or competing with the Products or the Technology; or (b) supply goods or services that</FONT>
<FONT STYLE="font-size: 10pt">assist any other person, entity, or organization in competing or in preparing to compete with the
Products or the Technology; all provided that Borody may, in the context of his private medical practice as a gastroenterologist
in his own private clinic treat patients afflicted with the same indications that the Products treat; provided that Borody does
not use the Technology Intellectual Property and provided further that Borody shall provide Buyer with prior written notice of
such activities and Buyer shall have a right of first refusal to purchase rights to such treatments on terms substantially similar
to those of a bona fide offer by a third party. The foregoing restrictions do not prevent Seller from selling, licensing, or dealing
with Hepaconda or Ibaconda provided that those patents and associated intellectual property are not the subject of the Charges.
The foregoing restrictions do not apply if Seller proposes to exercise or exercises its Buy Back Option. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">13.2.2</TD><TD STYLE="text-align: justify"><U>Period of Restraint</U>. The undertakings in Sections 13.1 and 13.2 are given for a period commencing
on the Effective Date and ending on</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.95in"></TD><TD STYLE="width: 0.55in">(a)</TD><TD>the date on which the Seller is no longer entitled to receive payments in accordance with Section 6.1 of this Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.95in"></TD><TD STYLE="width: 0.55in; text-align: left">(b)</TD><TD STYLE="text-align: justify">the tenth anniversary of the Effective Date; or</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.95in"></TD><TD STYLE="width: 0.55in; text-align: left">(c)</TD><TD STYLE="text-align: justify">the fifth anniversary of the Effective Date; or</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.95in"></TD><TD STYLE="width: 0.55in; text-align: left">(d)</TD><TD STYLE="text-align: justify">the date that is one year after the Closing Date; or</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.8pt; text-indent: -39.75pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(e)</TD><TD>the exercise of the Buy Back Option in respect of the Relevant Therapy.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 70pt; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">13.2.3</TD><TD><U>Geographic Restraint.</U> The undertakings given in Section 13.1 only apply if the activity prohibited under this clause
occurs:</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt; text-align: left">(a)</TD><TD STYLE="text-align: justify">globally;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(b)</TD><TD>within Israel, Australia, North America, Europe, or Asia;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(c)</TD><TD>within Israel, Australia, North America, or Europe;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(d)</TD><TD>within the United States of America;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt; text-align: left">(e)</TD><TD STYLE="text-align: justify">within Israel or Australia;</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt; text-align: left">(f)</TD><TD STYLE="text-align: justify">within Australia.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: 0in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">13.2.4</TD><TD STYLE="text-align: justify">Sections 13.2.1, 13.2.2, and 13.2.3 have effect together as if they consisted of separate provisions,
each being independent and severable from each of the others. Each separate provision results from combining each undertaking in
Section 13.2.1 with each period in Section 13.2.2 and combining each of those combinations with each separate area inSection 13.2.3.
If any of those separate provisions is invalid or otherwise unenforceable for any reason, the invalidity or unenforceability shall
not affect the validity or enforceability of any of the other separate provisions or other combinations of those separate provisions
of Sections 13.2.2 and 13.2.3.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 68.05pt; text-indent: -34.05pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">13.2.5</TD><TD>This Section 13.2.1 does not restrict:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(a)</TD><TD STYLE="text-align: justify">Borody (or any other employee of Seller) from performing any employment agreement with Buyer or
conducting his medical clinic;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(b)</TD><TD STYLE="text-align: justify">Seller or its Affiliates or Borody or his Affiliates holding 1% or less of any class of stock or
securities of a publicly listed company, provided that Seller or its Affiliates and Borody or his Affiliates have no active role
in that company;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(c)</TD><TD STYLE="text-align: justify">Seller or its Affiliates recruiting a person through a recruitment agency (except if the agency
targets Buyer's employees) or as a response to a newspaper, web page or other public employment advertisement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(d)</TD><TD STYLE="text-align: justify">Seller from selling, licensing, or dealing with Hepaconda or Ibaconda provided that those patents
and associated intellectual property are not the subject of the Charges or part of the Technology Intellectual Property or licensed
to Buyer under Section 4 hereto;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(e)</TD><TD STYLE="text-align: justify">Seller from proposing to exercise or exercising its Buy Back Option;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 39.75pt">(f)</TD><TD STYLE="text-align: justify">Seller from enjoying the full incidents of ownership of the Relevant Therapy acquired by it as
a result of exercising its Buy Back Option.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -39.95pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.4in">13.2.6</TD><TD>The Seller acknowledges that:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 102.05pt; text-align: justify; text-indent: -34pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 34pt">(i)</TD><TD STYLE="text-align: justify">all the prohibitions and restrictions contained in this Sections 13.2.1, 13.2.2., 13.2.3 and 13.2.4
are reasonable in the circumstances and necessary to protect the goodwill in the Products and Technology acquired by Buyer;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 102.05pt; text-align: justify; text-indent: -34pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 34pt">(ii)</TD><TD STYLE="text-align: justify">damages are not an adequate remedy if Section 13.2.1 is breached; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 102.05pt; text-align: justify; text-indent: -34pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 102.05pt; text-align: justify; text-indent: -34pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 68.05pt"></TD><TD STYLE="width: 34pt">(iii)</TD><TD STYLE="text-align: justify">Buyer may apply for injunctive relief if:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 136.1pt; text-align: justify; text-indent: -34.05pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 102.05pt"></TD><TD STYLE="width: 34.05pt">(A)</TD><TD STYLE="text-align: justify">Seller or its Affiliate breaches or threatens to breach Section 13.2.1; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 136.1pt; text-align: justify; text-indent: -34.05pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 102.05pt"></TD><TD STYLE="width: 34.05pt">(B)</TD><TD STYLE="text-align: justify">it believes Seller or its Affiliate is likely to breach Section 13.2.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.3</TD><TD STYLE="text-align: justify"><U>Operations Prior To Closing</U>. During the period from the Effective Date and continuing until
the Closing, Seller agrees to exploit the Technology in the ordinary course of business consistent with past practice. Furthermore,
Seller agrees to pay all indebtedness when due, to use reasonable efforts to pay or perform other obligations when due and agree
to preserve the business conducted with respect to the Acquired Assets, the Acquired Assets and Technology and preserve the relationships
of Seller with suppliers, investigators, distributors, licensors, licensees, and others having business dealings with them, all
with the goal of preserving unimpaired the goodwill and ongoing businesses of Seller relating to the Acquired Assets and the Assumed
Liabilities, the Technology and the Products at the Closing. Without limiting the generality of the foregoing, except (i) as expressly
contemplated herein or (ii) with the prior written consent of Buyer, Seller shall not until Closing:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">13.3.1.</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;sell, license or transfer to any person or entity any rights to any of the Acquired Assets, the
Assumed Liabilities, the Technology or the Products or enter into any agreement or undertake any new obligation with respect to
any of the same, with any person or entity;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">13.3.2.</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;terminate or extend, or amend, waive, modify, or violate the terms of, any Agreement related to
the Acquired Assets, the Assumed Liabilities, the Technology or the Products;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">13.3.3.</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;incur any indebtedness or create a Lien over any of the Acquired Assets, the Assumed Liabilities,
the Technology or the Products other than in relation to the Advance and Charges.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">13.3.4.</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;enter into any transaction for a merger of Seller or the sale of all or substantially all of the
shares of Seller, which may affect, directly or indirectly, the Acquired Assets, the Assumed Liabilities, the Technology or the
Products.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.4.</TD><TD STYLE="text-align: justify"><U>Material Adverse Effect</U>. Seller shall immediately notify Buyer, in writing, when it becomes
aware of the occurrence of any event or condition which may have a Material Adverse Effect on the technological and/or business
status, condition or prospects of the Acquired Assets, the Assumed Liabilities, the Technology or the Products, or of any complaints,
investigations or hearings (or communications indicating that the same may be contemplated) of any Governmental Authority or any
adjudicatory or arbitral proceedings against any of the Acquired Assets, the Assumed Liabilities, the Technology, the Products
or Seller, and shall keep Buyer fully informed of such events and shall permit Buyer prompt access to all necessary materials prepared
in connection therewith provided that Seller does not lose the right to assert &quot;legal professional privilege&quot; over those
documents. If Seller is unable to provide Buyer with a document because it would lose the right to assert &quot;legal professional
privilege&quot; over that document, then Seller must pursue any viable alternatives (if any) which will provide Buyer with substantially
similar information.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.5.</TD><TD STYLE="text-align: justify"><U>Insolvency Events</U>. Following the Closing, Seller undertakes:</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">13.5.1</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;not to voluntarily effect the winding up or dissolution of Seller, if the Seller is solvent in
accordance with the provisions of the Corporations Act;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">13.5.2</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;to notify Buyer immediately upon the commencement of any Insolvency Event or any other event that
could reasonably lead to an Insolvency Event; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">13.5.3</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;to promptly, at its expense, take all measures as are required for preventing, discharging, terminating,
removing or achieve a stay of any Insolvency Event.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.6.</TD><TD STYLE="text-align: justify"><U>Assistance</U>. Following the Closing and if so requested by Buyer, Seller will reasonably assist
Buyer at Buyer's expense in registering Buyer's rights in and to the Technology Intellectual Property with all Governmental Authorities
with which Buyer shall choose to register the same, including in the preparation and submittal of all applications and other documents
in connection therewith. At Buyer's request, Seller will execute all documents reasonably required in order to effect such registrations.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">Without derogating from the
foregoing, Seller hereby irrevocably undertakes to execute all rightful oaths, assignments, powers of attorney and other papers;
communicate to Buyer all facts known and documents available to Seller relating to the Acquired Assets and the history thereof
which Buyer shall reasonably consider desirable for aiding in securing its rights in and to the Acquired Assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">From and after execution of
this Agreement and for a period of 3 months following the Closing (the &ldquo;<B>Knowledge Transfer Period</B>&rdquo;), Seller
shall transfer to representatives of Buyer the know-how necessary or beneficial for the development and manufacture of Products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.7.</TD><TD STYLE="text-align: justify"><U>Use of Name and Trademarks</U>. Seller agrees on behalf of itself and its Affiliates, that from
and after the Closing that it will not use the names &ldquo;Myoconda&reg;&rdquo;, &ldquo;Heliconda&reg;&rdquo;, and &ldquo;Picoconda&reg;&rdquo;
or any abbreviation of or derivation from such names or any names similar to them in any form whatsoever, including in respect
of advertising and promotional materials, except as required in reports to regulatory authorities (including ASX and ASIC), in
audit reports for the Seller&rsquo;s annual reports, and in communications to Seller&rsquo;s shareholders in respect of Revenue
Sharing Payments and sublicensing fees received hereunder. Seller agrees that from and after the Closing, it will not use, license
or authorize any third party to use, any other name, slogan, logo, trade name or trademark (&ldquo;<B>Name</B>&rdquo;) or any abbreviation
of or derivation from any such Name or any Name similar to any Name used in connection with the Acquired Assets or the Technology
or the Products as of the Closing Date.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.8</TD><TD STYLE="text-align: justify"><U>Access to Information</U>. During the period from the Effective Date until the earlier of Closing
or termination of this Agreement, (i)&nbsp;Seller shall afford Buyer and its accountants, counsel and other representatives, reasonable
access during normal business hours to (A)&nbsp;all of Seller&rsquo;s properties, books, contracts, commitments and records relating
to the Technology and the Acquired Assets and (B)&nbsp;all other information concerning the business, properties and personnel
of Seller relating to the Technology and the Acquired Assets as Buyer may reasonably request, and (ii)&nbsp;Seller shall provide
to Buyer and its accountants, counsel and other representatives true, correct and complete copies of internal financial statements
promptly upon request.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">Subject to compliance with Applicable
Law, until the earlier of the termination of this Agreement and the Closing, Seller shall cause the officers of Seller to confer
from time to time as reasonably requested by Buyer with one or more representatives of Buyer to discuss any material changes or
developments in the operational matters of Seller and the general status of the ongoing business and operations of Seller, as relates
to the Acquired Assets.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">No information or knowledge
obtained in any investigation in accordance with this Section 13.8 shall affect or be deemed to modify any representation or warranty
contained herein or the conditions to the obligations of the parties hereto to consummate the transactions contemplated by this
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.9</TD><TD STYLE="text-align: justify"><U>No Liability for Employees</U>. Buyer does not assume any obligation of Seller to any of its
employees or consultants, or to any former employees or consultants of Seller and Seller shall remain solely and exclusively responsible
and liable therefor.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.10.</TD><TD STYLE="text-align: justify"><U>Public Statement</U>. Except if Seller needs to respond to any inquiry made by the ASX or make
an urgent announcement, the parties shall use their reasonable endeavours to agree upon a statement or communication to the public
or press or announcement to the ASX concerning this Agreement to be released upon the Closing. All other statements or communications
to the public or press concerning the transactions contemplated hereunder shall be mutually agreed upon, other than statements
and communications which contain information which was previously released as agreed upon between the parties, for which approval
is not required. Nothing herein shall prevent a party hereto from releasing any information if required to do so by Applicable
Law, in which case best efforts to consult with the other parties will be made prior to any such release so that they may seek
a protective order or other appropriate remedy, and further provided that in the event that such protective order or other remedy
is not obtained, the disclosing party shall furnish only that portion of the information which is legally required. Notwithstanding
the aforesaid, until the Closing, the parties may individually contact all relevant third parties in connection with the third
party approvals and/or letters of assignment contemplated by this Agreement and following the Closing, any such contact shall be
made only by Buyer or at Buyer's request by the parties together.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.12</TD><TD STYLE="text-align: justify"><U>Costs and Expenses of Transfer</U>. All costs and expenses related to the assignment of the
Acquired Assets and the Assumed Liabilities to Buyer shall be borne by Seller.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.13</TD><TD STYLE="text-align: justify"><U>Access to Records</U>. For a period of seven (7) years after the date of the last payment made
in accordance with Section 6.2, Buyer and its representatives shall have reasonable access to all of the books and records relating
to the Acquired Assets which Seller or any of its Affiliates may retain after the Closing Date. Such access shall be afforded by
Seller and its Affiliates upon receipt of reasonable advance notice and during normal business hours. If Seller or any of its Affiliates
shall desire to dispose of any of such books and records prior to the expiration of such seven (7) year period, Seller shall, prior
to such disposition, give Buyer a reasonable opportunity, at Buyer&rsquo;s expense, to segregate and remove such books and records
as Buyer may select.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.14</TD><TD STYLE="text-align: justify"><U>Combination Products</U>. If Buyer sells a Combination Product during the term of this Agreement,
then Buyer must promptly enter into good faith negotiations with Seller with a view to agreeing the value of the other product
or device included in the Combination Product before any Revenue Sharing Payments are made in respect of that Combination Product.
Buyer must also provide all information reasonably requested to determine the value of the other product or device included in
the Combination Product. If the parties are unable to agree the value of the other product or device included in the Combination
Product, then the dispute will be resolved in accordance with Section 17.5.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.15</TD><TD STYLE="text-align: justify"><U>Loss Leaders.</U> If Buyer gives away Products free of charge as &lsquo;loss-leaders&rsquo;
in order to promote sales of other products, Net Sales of such Products will be calculated based on the average unit selling price
of such Product at the relevant time.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.16</TD><TD STYLE="text-align: justify"><U>Insurance.</U> Buyer agrees to procure and maintain from a reputable insurer insurance policies
against such liabilities in respect of the development and commercialization of the Products as are customary and necessary in
the industry.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">13.17</TD><TD STYLE="text-align: justify"><U>Patents</U>. Buyer undertakes to inform Seller in writing promptly if Buyer decides not to prosecute
and maintain a Patent. In such event Seller shall have the right to take over the prosecution, maintenance, development and commercialization
of that Patent within the relevant jurisdiction at its own cost and expense by giving Buyer a written notice of its intention to
do so within 30 days of receiving the written notice from Buyer. If Seller exercises its foregoing right then: (a) Buyer will promptly
provide all information reasonably requested by Seller for the sole purpose of assisting Seller to prosecute, maintain, develop
and commercialise the Patent in the relevant jurisdiction; and (b) Seller will have the right to all revenue received from sales
of the Product made by Seller pursuant to such Patent in the relevant jurisdiction notwithstanding anything to the contrary in
this Agreement. The foregoing right does not prejudice the right of Seller to exercise its Buy Back Option pursuant to Section
5.2 in respect of the Relevant Therapy.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 32.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.5in">14.</TD><TD><B><U>Confidentality</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">14.1</TD><TD STYLE="text-align: justify">Subject to any obligation to comply with Applicable Law, ASX Listing Rule, court order, and except
as expressly set forth herein, whether or not the transactions contemplated hereby are consummated, all information obtained by
each party hereto (the &ldquo;receiving party&rdquo;) about the other party hereto (the &ldquo;disclosing party&rdquo;) shall be
maintained in strict confidence and the receiving party shall cause its affiliated entities, officers, employees and agents to
keep such information strictly confidential. In addition, receiving party shall not make any use of such information other than
strictly for purposes hereof. If this Agreement is terminated for any reason, receiving party shall promptly return or cause to
be returned to the disclosing party all written data, information, files, records and copies of documents in whatever form, obtained
by receiving party in connection with the transactions contemplated hereby. In the event that the receiving party is subject to
disclosure duties under Applicable Laws, the receiving party shall have the right to make any disclosure of information only to
the extent required under such laws. Furthermore, this confidentiality undertaking shall not apply with regard to information which:
(i) is or becomes generally available to the public other than as a result of disclosure thereof by any receiving party; (ii) is
lawfully received by the receiving party or any affiliate thereof from a third party under no obligation of confidentiality or
nondisclosure to the disclosing party; (iii) the receiving party or any affiliate thereof had prior knowledge with respect thereto,
as evidenced in written records. Notwithstanding the aforesaid, in connection with periodic and financial reports to its shareholders,
the receiving party may make general statements regarding the nature and progress of the transaction. A receiving party may disclose
the existence of this Agreement, the terms of this Agreement, and any Confidential Information to its professional advisers provided
those advisers are subject to an obligation of confidentiality. All obligations of Buyer under this Section 14.1 shall terminate
with respect to the Acquired Assets and the Assumed Liabilities simultaneously with the Closing.</TD></TR></TABLE>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">14.2</TD><TD STYLE="text-align: justify">From and after the Closing, Seller shall hold in strict confidence from any Person and shall not,
directly or indirectly, disclose, divulge or make any unauthorized use of, and shall cause its Affiliates and its and their respective
representatives to hold in strict confidence from any Person and to not, directly or indirectly, disclose, divulge or make any
unauthorized use of, any Confidential Information. As used herein, the term &ldquo;<B>Confidential Information</B>&rdquo; shall
mean and include any and all non-public information relating to the Acquired Assets, the Assumed Liabilities, and include any documents
and information provided by a disclosing party to a receiving party in accordance with this Agreement that does not satisfy the
carveouts set out in Sections 14.1(i) to 14.1(iii).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">14.3</TD><TD STYLE="text-align: justify">Seller, on behalf of itself, its Affiliates and its representatives, acknowledges that in view
of the nature of the Confidential Information and the objectives of each of Buyer and Seller in entering into this Agreement, the
restrictions contained in Section 14.2 are reasonable and necessary to protect the legitimate business interests of Buyer after
the Closing, and that any breach or threatened breach of the provisions of Section 14.2 will cause irreparable injury to Buyer
for which an adequate monetary remedy does not exist. Accordingly, in the event of any such breach or threatened breach of this
Section 14.2, Buyer shall be entitled, in addition to the exercise of other remedies, to seek and obtain injunctive relief, without
necessity of posting a bond, restraining Seller, its Affiliate or its representatives, as applicable, from committing such breach
or threatened breach.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 32.3pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.5in">15.</TD><TD><B><U>Termination.</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">15.1</TD><TD STYLE="text-align: justify"><U>Termination</U>. At any time prior to the Closing, this Agreement may be terminated, as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">15.1.1</TD><TD STYLE="text-align: justify">by mutual written consent of Buyer and Seller;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">15.1.2</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;by either Buyer, if the Closing shall not have occurred on or before 45 days following the Effective
Date (the &ldquo;<B>Termination Date</B>&rdquo;); provided, however, that the right to terminate this Agreement under this Section
&lrm;15.1.2 shall not be available to Buyer if it is in material breach of this Agreement and such breach of this Agreement has
resulted in the failure of the Closing to occur on or before the Termination Date;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">15.1.3</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;by either Buyer or Seller, if any permanent injunction or other order of a court or other competent
Government Authority preventing the consummation of the transactions contemplated by this Agreement shall have become final and
nonappealable.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.1pt; text-align: justify; text-indent: -28.9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">15.1.4</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;by Buyer if there shall be any action taken, or any statue, rule, regulation or order enacted,
promulgated or issued or deemed applicable to the transactions contemplated hereby by any Governmental Authority, that would (i)
prohibit Buyer&rsquo;s ownership or operation of any portion of the Acquired Assets or (ii) compel Buyer to dispose of or hold
separate all or any portion of the Acquired Assets as a result of the transactions contemplated hereby.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.1pt; text-align: justify; text-indent: -28.9pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">15.1.5</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;by Buyer, if Seller has committed a material breach of any representation, warranty or covenant
contained herein as qualified by the Disclosure Schedule and such material breach shall not have been cured within thirty days
after receipt by Seller of a written notice of such material breach provided, however, that no such cure period shall be available
or applicable to any such material breach which by its nature cannot be cured.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.85in"></TD><TD STYLE="width: 0.4in">15.1.6</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;by Seller, if Buyer shall has committed a material breach of any representation, warranty or covenant
contained herein and such breach shall not have been cured within thirty days after receipt by Buyer of a written notice of such
material breach provided, however, that no such cure period shall be available or applicable to any such breach which by its nature
cannot be cured.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">15.2</TD><TD STYLE="text-align: justify"><U>Effect of Termination</U>. If this Agreement is terminated in accordance with Section&nbsp;15.1,
this Agreement shall forthwith become void and there shall be no liability or obligation on the part of Buyer or Seller or their
respective officers, directors, shareholders or Affiliates; provided, however, that each party hereto shall remain liable for any
breaches of this Agreement prior to its termination; and provided, further, that the provisions of Sections&nbsp; 7 [Record Retention
and Audit], 13.13 [Access to Records], 14 [Confidentiality], 16 [Indemnification; Set &ndash;Off Right], 17 [Dispute Resolution],
18.3 [Taxes and Expenses], and 18.5 [Governing Law; Jurisdiction] shall remain in full force and effect and survive any termination
of this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">16.</TD><TD><B><U>Indemnification; Set-Off Right</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">16.1.</TD><TD STYLE="text-align: justify"><U>Indemnification by Seller</U>. Seller shall indemnify, defend and hold harmless Buyer, its Affiliates,
and each of their respective officers, directors, employees, agents and shareholders (&quot;<B>Buyer Protected Parties</B>&quot;),
from and against any and all Damages which any of them may suffer, sustain or become subject to, as a result of (i) any material
breach of warranty or inaccuracy in any representation of Seller contained in this Agreement; (ii) any breach of, or failure to
perform, any covenant or agreement of Seller contained in this Agreement or any Ancillary Agreement; (iii) the failure of Seller
to pay perform or discharge any Retained Liability, including any liability to TM Ventures Pty Ltd as described in Sectionn11.24;
(iv) any failure by Seller to obtain, prior to Closing, any consent set forth in Exhibit 11.4; and (v) enforcing the indemnification
rights pursuant to this Section. Without derogating from the foregoing, Seller shall indemnify, defend and hold harmless the Buyer
Protected Parties, from and against any and all Damages which any of them may suffer, sustain or become subject to, as a result
of any claim, action or proceeding by Australian Medical Therapys Investments Pty Limited.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 32.4pt"></TD><TD STYLE="width: 29.25pt">16.2</TD><TD STYLE="text-align: justify"><U>Limitations on Liability.</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">16.2.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Time</U>.
Buyer can only make a claim for breach of warranty under Section 16.1(i) if it has given written notice to Seller of the general
nature of the claim within 24 months following the Closing Date in respect of any claim for breach of warranty as aforesaid; provided
however, Buyer may make a claim for breach of warranty in respect of Sections 11.1, 11.2, 11.5, 11.13 and 11.20 during the period
of the statute of limitations in respect thereof.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">16.2.2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Indemnification
Threshold</U>. The Buyer Protected Parties may not recover Damages from Seller in respect of any claim for breach of warranty under
Section 16.1(i) unless and until Damages have been incurred, paid or accrued in an aggregate amount greater than USD&nbsp;$10,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">16.2.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Maximum
Liability.</U> Notwithstanding anything to the contrary in this Agreement, or any other right (whether arising under this Agreement,
at common law, under any statute or otherwise), the total amount which Buyer may recover from Seller for any and all loss arising
under or in relation to a breach of warranty under Section 16.1(i) will not exceed an amount equal to the Closing Payment and any
amounts due or paid to Seller from Buyer hereunder on account of Revenue Sharing Payments.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">16.2.3&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>General
Limitations.</U> Seller&rsquo;s liability under a claim for any loss made by Buyer or its Affiliates against Seller will be reduced
or extinguished to the extent that loss: (a) is contingent, unless and until the loss becomes an actual loss and is due and payable;
(b) arises from any act or omission by or on behalf of Seller at the written direction or instruction of Buyer; (c) arises from
act or omission after Closing by or on behalf of Buyer or its Affiliates that is in breach of this Agreement; (d) is special, indirect
or consequential damage including loss of profit; or (e) has been accurately and fairly disclosed in the Disclosure Schedule.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">16.2.4&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>No
Limitation</U>. The foregoing limitations of liability shall not apply in the event of fraud or willful misconduct.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">16.2.</TD><TD STYLE="text-align: justify"><U>Indemnification by Buyer</U>. Subject to the provisions of Section 16.1, Buyer shall indemnify,
defend and hold harmless Seller, its Affiliates, and each of their respective officers, directors, employees, agents and shareholders
(&quot;<B>Seller Protected Parties</B>&quot;) from and against any and all Damages which any of them may suffer, sustain or become
subject to, as a result of (i) any misrepresentation in any of the representations and warranties of Buyer contained in this Agreement;
(ii) any material breach of, or failure to perform, any covenant or agreement of Buyer contained in this Agreement or in any Ancillary
Agreement; and (iii) any and all Damages incurred in connection with enforcing the indemnification rights pursuant to this Section.
The foregoing indemnity is subject to the &lsquo;General Limitations&rsquo; set forth in Section&nbsp;16.2.3 and all references
in that Section to &quot;Buyer&quot; shall be read as a reference to &quot;Seller&quot;, and vice versa.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">16.3</TD><TD STYLE="text-align: justify"><U>Notice of Claims</U>. Any Protected Party (the &ldquo;<B>Indemnified Party</B>&rdquo;) seeking
indemnification hereunder shall give to the party obligated to provide indemnification to such Indemnified Party (the &ldquo;<B>Indemnifying
Party</B>&rdquo;), as soon as reasonably practicable, a notice describing in reasonable detail the facts giving rise to any claim
for indemnification hereunder and shall include in such notice (if then known) the amount or the method of computation of the amount
of such claim, and a reference to the provision of this Agreement or any other agreement, document or instrument executed hereunder
or in connection herewith upon which such claim is basedprovided, that a notice in respect of any pending or threatened action
at law or suit in equity by a third Person as to which indemnification will be sought (each such action or suit being a &ldquo;<B>Third
Person Claim</B>&rdquo;) shall be given promptly, but no later than 15 days, after the action or suit is commenced or threatened
in writing; provided further that failure to give such notice shall not relieve the Indemnifying Party of its obligations hereunder
except to the extent it shall have been prejudiced by such failure.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">16.4</TD><TD STYLE="text-align: justify"><U>Third Person Claims.</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">16.4.1&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If
(i) a Third Person Claim against any Indemnified Party is solely for money damages or, (ii) where Seller is the Indemnifying Party,
the Third Person Claim will have no continuing effect in any material respect on any Buyer Protected Party, the Acquired Assets
and, in each case, the Indemnifying Party has acknowledged and agreed in writing that, if the same is adversely determined, the
Indemnifying Party has an obligation to provide indemnification to the Indemnified Party in respect thereof, then the Indemnifying
Party shall have the right to conduct and control, through counsel of its choosing, the defense, compromise or settlement of any
Third Person Claim against such Indemnified Party as to which indemnification will be sought by any Indemnified Party from any
Indemnitor hereunder, and in any such case the Indemnified Party shall fully cooperate in connection therewith and shall promptly
furnish such records, information and testimony and attend such conferences, discovery proceedings, hearings, trials and appeals
as may be reasonably requested by the Indemnifying Party in connection therewith; provided, that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.2pt"></TD><TD STYLE="width: 28.9pt">(i)</TD><TD STYLE="text-align: justify">the Indemnified Party may participate, through counsel chosen by it and at its own expense, in
the defense of any such Third Person Claim as to which the Indemnifying Party has so elected to conduct and control the defense
thereof; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.1pt; text-align: justify; text-indent: -28.9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.2pt"></TD><TD STYLE="width: 28.9pt">(ii)</TD><TD STYLE="text-align: justify">the Indemnifying Party shall not, without the written consent of the Indemnified Party (which written
consent shall not be unreasonably withheld or delayed), pay, compromise or settle any such Third Person Claim.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">Notwithstanding the foregoing,
the Indemnified Party shall have the right to pay, settle or compromise any such Third Person Claim, provided, that in such event
the Indemnified Party shall waive any right to indemnity therefor hereunder unless the Indemnified Party shall have sought the
consent of the Indemnifying Party to such payment, settlement or compromise and such consent was unreasonably withheld, in which
event no claim for indemnity therefor hereunder shall be waived.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">16.4.2&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The
Indemnified Party shall have the right to conduct and control, through counsel of its choosing, the defense, compromise or settlement
of any Third Person Claim not covered in Section 16.4.1 against such Indemnified Party as to which indemnification will be sought
by any Indemnified Party from any Indemnifying Party hereunder, and in any such case the Indemnifying Party shall cooperate in
connection therewith and shall furnish such records, information and testimony and attend such conferences, discovery proceedings,
hearings, trials and appeals as may be reasonably requested by the Indemnified Party in connection therewith; provided, that:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.2pt"></TD><TD STYLE="width: 28.9pt">(i)</TD><TD STYLE="text-align: justify">the Indemnifying Party may participate, through counsel chosen by it and at its own expense, in
the defense of any such Third Person Claim as to which the Indemnified Party has so elected to conduct and control the defense
thereof; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.2pt"></TD><TD STYLE="width: 28.9pt">(ii)</TD><TD STYLE="text-align: justify">the Indemnified Party shall not, without the written consent of the Indemnifying Party (which written
consent shall not be unreasonably withheld), pay, compromise or settle any such Third Person Claim, except that no such consent
shall be required if, following a written request from the Indemnified Party, the Indemnifying Party shall fail, within 14 days
after the making of such request, to acknowledge and agree in writing that, if such Third Person Claim shall be adversely determined,
such Indemnifying Party has an obligation to provide indemnification hereunder to such Indemnified Party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">16.5</TD><TD STYLE="text-align: justify"><U>Buyer's Set-Off Right</U>. Except where contemplated by this Agreement, Buyer shall be entitled
to set-off against any amounts otherwise payable by Buyer to Seller under this Agreement or the Ancillary Agreements any amounts
(i) paid or borne by Buyer (including without limitation in respect of the filing and/or registration of each or any of the Charges
hereunder) which should have been paid or borne by Seller hereunder, and (ii) to which Buyer is entitled based on a claim for indemnification
by Buyer under this Section 16 (including without limitation, Royalty payments). Neither the exercise of, nor the failure to exercise,
such right of set-off will constitute an election of remedies or limit Buyer in any manner in the enforcement of any other remedies
that may be available to it.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.2pt"></TD><TD STYLE="width: 28.9pt">16.6</TD><TD STYLE="text-align: justify"><U>Payments affecting Purchase Price.</U> Any payment made by Seller to Buyer in respect of any
claim under or in relation to this Agreement will be a reduction of the Closing Payment. Any payment (including reimbursement)
made by Buyer to Seller in respect of any claim under or in relation to this Agreement will be an increase in the Closing Payment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.45in; text-align: left">17.</TD><TD STYLE="text-align: justify"><B><U>Dispute Resolution</U></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.55in">17.1</TD><TD STYLE="text-align: justify"><U>Disputes.</U>&nbsp;&nbsp;&nbsp;&nbsp;A party to this Agreement must not commence legal proceedings
against another party to this Agreement, unless the party wishing to commence legal proceedings has first complied with Sections
17.2 to 17.5 (inclusive). Sections 17.2 to 17.5 (inclusive) shall not apply if a party seeks an interlocutory injunction or order
of equitable relief from a court. The provisions of this Section 17 do not apply in relation to a dispute arising from the results
of an audit which shall be resolved in accordance with the provisions of Section 7.2.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.55in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.55in">17.2</TD><TD STYLE="text-align: justify"><U>Notice of Dispute.</U>&nbsp;&nbsp;&nbsp;&nbsp;When a party claims that a dispute has arisen
under this Agreement, that party must serve a written notice of that dispute to the other party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center; text-indent: -0.55in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.55in">17.3</TD><TD STYLE="text-align: justify"><U>Appointment of Representative.</U>&nbsp;&nbsp;&nbsp;&nbsp;Following the notification of a dispute
pursuant to Section 17.2, the parties must each within three days appoint a representative to resolve the dispute. The representatives
appointed pursuant to this Section 17.3 shall make good faith efforts to resolve the dispute within 30 days of the other party
receiving the notification in accordance with Section 17.2.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.55in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.55in">17.4</TD><TD STYLE="text-align: justify"><U>Independent Expert</U>.&nbsp;&nbsp;&nbsp;&nbsp;If the parties are unable to resolve the dispute
in accordance with Section 17.3 and the dispute relates to the fair market value of the consideration received from the Product
sales or the value of Net Sales generated from Combination Products or the fair market value of the Products given away as 'loss
leaders', then the parties will appoint an independent expert to resolve that dispute. If the parties are unable to agree the independent
expert within 5 days of the expiry of the notice period referred to in Section 17.3, then a party may ask the head of the Institute
of Certified Public Accountants in Israel to appoint an independent accountant to resolve the dispute. Both parties must co-operate
with the independent expert in good faith and provide all information reasonable required by the independent expert provided that
expert is subject to a confidentiality obligation. The independent expert must provide its draft report to Seller and Buyer for
their reasonable comment and review before finalizing same. The independent expert must provide its draft recommendations within
30 days of the date of their appointment. The parties must provide their comments on the draft report of the independent expert
within 5 days of receiving same. The independent expert must take into account the parties' comments on the draft recommendations
and finalize his report within 5 days of the expiry of the 5 day consultation period. A failure by a party to do so will be deemed
to constitute an acceptance of the recommendations of the independent expert. The determination of the independent expert will
be final and binding on the parties in the absence of manifest error. The costs of the independent expert will be shared by the
parties equally. This provision will not apply if a dispute in relation to the value of Net Sales generated from Combination Products
or 'loss leaders' arises as part of an audit which is to be resolved in accordance with Section 7.2.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.55in">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.55in">17.5</TD><TD STYLE="text-align: justify"><U>Commencement of Legal Proceedings.</U>&nbsp;&nbsp;&nbsp;&nbsp;If: (a) the parties have not reached
agreement upon a mechanism for the resolution of a dispute within 30 days after the notification of the dispute or any additional
period upon pursuant to Section 17.3; (b) the independent expert has not delivered a report within 30 days of being instructed
to do so or has failed to finalize his report within the prescribed timeframe or his finalized report contains manifest errors;
or (c) any party (other than the party notifying the dispute) shall fail to observe the timetable referred to in Section 17.5,
any party may commence proceedings in any court of competent jurisdiction in relation to that dispute. The parties are not entitled
to commence litigation in relation to the findings of an independent expert appointed in accordance with Section 7.2 or 17.4 unless
the report of the independent expert contains manifest errors.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -39.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0%"></TD><TD STYLE="width: 0.45in">18.</TD><TD><B><U>Miscellaneous</U></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.1.</TD><TD STYLE="text-align: justify"><U>Notices</U>. All notices, requests, demands, claims and other communications hereunder shall
be in writing. Any notice, request, demand, claim, or other communication hereunder shall be deemed duly given (i) if personally
delivered, when so delivered; (ii) if given by facsimile, once such notice or other communication is transmitted to the facsimile
number specified below and electronic confirmation is received; (iii) if sent by email, when the addressee acknowledges receipt
of the email; or (iv) if sent through an overnight delivery service in circumstances to which such service guarantees second day
international delivery, the second day following being so sent:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in">If to Seller, addressed to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in">Giaconda Limited<BR>
Ground Floor<BR>
44 East Street<BR>
FIVE DOCK NSW 2046</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in">AUSTRALIA</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in">Fax: +61 2 9712 1469</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.9in">Attention: Chief Executive Officer</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt">If to Buyer, addressed to:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-indent: 0.5in">RedHill Biopharma Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-indent: 0.5in">42 Givati Street</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-indent: 0.5in">Ramat-Gan 52232, Israel</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-indent: 0.5in">Attention: Mr. Dror Ben-Asher</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.35in; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">or to such other place and with
such other copies as any of the parties may designate as to itself by written notice to the others.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">Any party may give any notice,
request, demand, claim or other communication hereunder using any other means, but no such notice, request, demand, claim or other
communication shall be deemed to have been duly given unless and until it actually is received by the individual for whom it is
intended. Any party may change the address to which notices, requests, demands, claims and other communications hereunder are to
be delivered by giving the other parties notice in the manner herein set forth.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.2.</TD><TD STYLE="text-align: justify"><U>Amendments; No Waivers</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 28.35pt">18.2.1.</TD><TD STYLE="text-align: justify">Subject to Applicable Law, any provision of this Agreement may be amended or waived if, and only
if, such amendment or waiver is in writing and signed, in the case of an amendment, by both parties hereto, or in the case of a
waiver, by the party against whom the waiver is to be effective.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 92.15pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 63.8pt"></TD><TD STYLE="width: 28.35pt">18.2.2.</TD><TD STYLE="text-align: justify">No waiver by a party of any default, misrepresentation or breach of warranty or covenant hereunder,
whether intentional or not, shall be deemed to extend to any prior or subsequent default, misrepresentation or breach of warranty
or covenant hereunder or affect in any way any rights arising by virtue of any prior or subsequent occurrence. No failure or delay
by a party in exercising any right, power or privilege hereunder shall operate as a waiver thereof nor shall any single or partial
exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.3.</TD><TD STYLE="text-align: justify"><U>Taxes and Expenses</U>. Except as otherwise provided herein, all costs, fees, taxes, stamp duties
and expenses incurred in connection with the negotiation, preparation, execution, delivery and performance of this Agreement and
in closing and carrying out the transactions contemplated hereby shall be paid by the party incurring such cost, tax, stamp duty,
or expense; provided, however, that Seller shall be solely responsible for all stamp duty payable in Australia in connection with
this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.4.</TD><TD STYLE="text-align: justify"><U>Assignment</U>. Buyer may assign or transfer this Agreement, whether in whole or part, or any
of its rights or obligations under this Agreement, to any third party upon the provision of written notice to Seller.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">Seller may not assign or transfer
this Agreement to any third party, whether in whole or part, without the prior written consent of Buyer not to be unreasonably
withheld. The foregoing restriction does not apply to the assignment by Seller of all of its rights under this Agreement to an
Affiliate and an assumption by that Affiliate of all of the obligations of Seller under this Agreement provided Seller gives Buyer
written notice of that assignment; provided that such assignment shall not release Seller from its obligations hereunder.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.5.</TD><TD STYLE="text-align: justify"><U>Governing Law; Jurisdiction</U>. This Agreement and its interpretation shall be governed by,
construed and enforced in accordance with the laws of the State of New South Wales and the Commonwealth of Australia (regardless
of the laws that might otherwise govern under applicable principles of conflicts of law). Any dispute arising under or in relation
to this Agreement shall be resolved exclusively in the competent court located in London, England, and each of the parties hereby
irrevocably submits to the exclusive jurisdiction of such courts.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.6.</TD><TD STYLE="text-align: justify"><U>Counterparts; Effectiveness</U>. This Agreement may be signed in any number of counterparts
and the signatures delivered by facsimile, each of which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart
hereof signed by the other parties hereto.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.7.</TD><TD STYLE="text-align: justify"><U>Entire Agreement</U>. This Agreement (including the Ancillary Agreements, all Exhibits and all
other agreements referred to herein or therein which are hereby incorporated by reference) constitutes the entire agreement between
the parties with respect to the subject matter hereof and supersedes all prior agreements, understandings and negotiations, both
written and oral, between the parties with respect to the subject matter of this Agreement, including, without limitation, the
Term Sheet. Neither this Agreement nor any provision hereof is intended to confer upon any Person other than the parties hereto
any rights or remedies hereunder.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.8.</TD><TD STYLE="text-align: justify"><U>Captions</U>. The captions herein are included for convenience of reference only and shall be
ignored in the construction or interpretation hereof. All references to a Section include all sub-Sections thereof.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.9.</TD><TD STYLE="text-align: justify"><U>Severability</U>. If any provision of this Agreement, or the application thereof to any Person,
place or circumstance, shall be held by a court of competent jurisdiction to be invalid, unenforceable or void, the remainder of
this Agreement and such provisions as applied to other Persons, places and circumstances shall remain in full force and effect
only if, after excluding the portion deemed to be unenforceable, the remaining terms shall provide for the consummation of the
transactions contemplated hereby in substantially the same manner as originally set forth at the later of the date this Agreement
was executed or last amended.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -28.9pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -28.9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.10.</TD><TD STYLE="text-align: justify"><U>Construction</U>. The parties hereto intend that each representation, warranty and covenant
contained herein shall have independent significance. If any party has breached any representation, warranty or covenant contained
herein in any respect, the fact that there exists another representation, warranty or covenant relating to the same subject matter
(regardless of the relative levels of specificity) that the party has not breached shall not detract from or mitigate the fact
that the party is in breach of the first representation, warranty or covenant. For purposes of this Agreement, (i) the words &ldquo;include,&rdquo;
&ldquo;includes&rdquo; and &ldquo;including&rdquo; shall be deemed to be followed by the words &ldquo;without limitation,&rdquo;
(ii) the word &ldquo;or&rdquo; is not exclusive and (iii) the words &ldquo;herein&rdquo;, &ldquo;hereof&rdquo;, &ldquo;hereby&rdquo;,
&ldquo;hereto&rdquo; and &ldquo;hereunder&rdquo; refer to this Agreement as a whole. Unless the context otherwise requires, references
herein: (i) to Articles, Sections, Exhibits and Schedules mean the Articles and Sections of, and the Exhibits and Schedules attached
to, this Agreement; (ii) to an agreement, instrument or other document means such agreement, instrument or other document as amended,
supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement; and (iii)
to a statute means such statute as amended from time to time and includes any successor legislation thereto and any regulations
promulgated thereunder. The Schedules and Exhibits referred to herein shall be construed with and as an integral part of this Agreement
to the same extent as if they were set forth verbatim herein. This Agreement and the Ancillary Agreements shall be construed without
regard to any presumption or rule requiring construction or interpretation against the party drafting an instrument or causing
any instrument to be drafted.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.11.</TD><TD STYLE="text-align: justify"><U>Cumulative Remedies</U>. The rights, remedies, powers and privileges herein provided are cumulative
and not exclusive of any rights, remedies, powers and privileges provided by Applicable Law.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in; text-align: left">18.12</TD><TD STYLE="text-align: justify"><U>Rights.</U> A Party may exercise a right, at its discretion
and separately or concurrently with another right.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in; text-align: left">18.13</TD><TD STYLE="text-align: justify"><U>Time.</U> Time is of the essence in this Agreement
in respect of the obligations of Buyer and Seller.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.45in"></TD><TD STYLE="width: 0.4in">18.14</TD><TD STYLE="text-align: justify"><U>Counterparts.</U> This Agreement may be executed in any number of counterparts. Each counterpart
constitute an original of this document, all of which together constitute one instrument. A party who has executed a counterpart
of this document may exchange it with another party by faxing, or by emailing a pdf (portable document format) copy of, the executed
counterparty to that other party, and if requested by that other party, will promptly deliver the original by hand or post. Failure
to make that delivery will not affect the validity of this document.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.85in; text-align: justify; text-indent: -0.4in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">IN WITNESS WHEREOF, the parties hereto
have caused this Agreement to be duly executed by their respective authorized offices as of the date first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%"><FONT STYLE="color: windowtext"><B>Executed</B> by <B>Giaconda Limited</B> in</FONT></TD>
    <TD STYLE="width: 7%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>accordance with Section 127 of the</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-style: italic">Corporations Act 2001</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Trevor Moore</TD>
    <TD STYLE="font-size: 12pt; text-align: center"><FONT STYLE="font-family: Symbol; color: windowtext">&not;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Professor Thomas J. Borody</TD>
    <TD STYLE="font-size: 12pt; text-align: center"><FONT STYLE="font-family: Symbol; color: windowtext">&not;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Signature of director</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Signature of directo/company secretary</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>(Please delete as applicable)</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="color: windowtext">Trevor Moore</FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">Professor Thomas J. Borody</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name of director (print)</TD>
    <TD>&nbsp;</TD>
    <TD>Name of director/company secretary (print)</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: windowtext"><B>Executed</B> by <B>RedHill Biopharma Ltd</B></FONT><FONT STYLE="font-size: 10pt">.</FONT><FONT STYLE="font-family: Times New Roman, Times, Serif"> </FONT></TD>
    <TD STYLE="width: 7%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD STYLE="font-size: 12pt; text-align: center"><FONT STYLE="font-family: Symbol; color: windowtext">&not;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="font-size: 12pt; text-align: center"><FONT STYLE="font-family: Symbol; color: windowtext">&not;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Signature of director</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Signature of director/company secretary</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>(Please delete as applicable)</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">Dror Ben-Asher</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">Ori Shilo</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name of director (print)</TD>
    <TD>&nbsp;</TD>
    <TD>Name of director/company secretary (print)</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBITS </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ASSET PURCHASE AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DATED</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AUGUST 11, 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>BETWEEN</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>GIACONDA LIMITED </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AND</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REDHILL BIOPHARMA LTD.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 1A</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pro-Forma Patent Assignment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">ASSIGNMENT</P>

<P STYLE="font: 24pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><img src="tex4-4logo.jpg"></P>

<P STYLE="font: 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ASSIGNMENT OF PATENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">THIS ASSIGNMENT made this&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;day
of&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;two
thousand and ten BETWEEN Thomas Julius Borody, of Ground Floor, 44 East Street, Five Dock, New South Wales, 2046, Australia; (hereinafter
called &quot;the Assignor&quot;) of the first part AND Red Hill Biopharma Ltd., of 42 Givati Street Ramat-Gan 52232, Israel; (hereinafter
called &quot;the Assignee&quot;) of the second part.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">WHEREAS the Assignor is the owner of Australian Letters Patent
Nos 750813, 774329, 762890, and 771576 and all divisionals, renewals, continuations, continuations-in-part, extensions, reissues,
substitutions, confirmations, revalidations and additions of or to them (together, the <B>Letters Patent</B>).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">AND WHEREAS the Assignee is desirous of acquiring the Letters
Patents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">NOW THIS DEED WITNESSETH that in consideration of the sum of
$1.00 and other good and valuable consideration now paid by the Assignee to the Assignor the receipt whereof is hereby acknowledged
the Assignor as legal and beneficial owner hereby:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 35.3pt">(a)</TD><TD>assigns to the Assignee the benefit of the Letters Patents, the rights, titles and interest therein and all the rights, powers,
liberties and immunities conferred on the owner thereof by the grant of the Letters Patents free from all encumbrances and including:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.45pt"></TD><TD STYLE="width: 28.35pt">(i)</TD><TD>the right to sue for damages and other remedies in respect of any infringement of the Letters Patents whether it accrued prior
to, on or after the date hereof (and to retain any such damages obtained as a result of such action); and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 35.3pt"></TD><TD STYLE="width: 28.1pt">(ii)</TD><TD>the right to be recorded in the Australian register of patents as the owner of the Letters Patent; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 35.45pt">(b)</TD><TD>agrees to execute all documents, forms and authorisations and to do any and all such acts and things as may be necessary to
vest in the Assignee the rights assigned to the Assignee under this deed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">IN WITNESS WHEREOF the parties hereto have executed this assignment
as of the day and year first above written.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-weight: bold">Signed, sealed and delivered by the said</TD>
    <TD STYLE="width: 2%; font-weight: bold">)</TD>
    <TD STYLE="width: 48%; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Thomas Julius Borody</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">in the presence of:</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Witness</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-weight: bold">Executed as a deed</TD>
    <TD STYLE="width: 2%; font-weight: bold">)</TD>
    <TD STYLE="width: 48%; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">for and on behalf of the said</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Red Hill Biopharma Ltd.</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">in the presence of:</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">Name:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">Position:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid; font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">Witness</TD>
    <TD STYLE="font-weight: bold">)</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 1B</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Pro-Forma Contract Assignment</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Giaconda Limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>and</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Redhill Biopharma Ltd</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>and</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[insert continuing party's name]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Deed of Assumption and Release</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SWAAB ATTORNEYS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Level 1</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">20 Hunter Street</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SYDNEY NSW 2000</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">GPO Box 35</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">SYDNEY NSW 2001</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">DX 522 SYDNEY NSW</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">T +61 2 9233 5544</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">F +61 2 9233 5400</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">E mrc@swaab.com.au</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Reference:&nbsp;&nbsp;&nbsp;101206</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.25in"></P>




<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>This Deed of Assumption and Release</B> is made on &#9;2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Parties</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>1</B></TD><TD STYLE="text-align: justify"><B>Giaconda Limited (ABN 68 108 088 517) </B>of Ground Floor, 66 East Street, Five Dock, New South
Wales, Australia 2046 (<B><I>Giaconda</I></B>);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>2</B></TD><TD STYLE="text-align: justify"><B>Redhill Biopharma Ltd</B>, an<B> </B>Israeli company, having its business address at 42 Givati
Street, Ramat-Gan 52232, Israel (<B><I>Redhill</I></B>); and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>3</B></TD><TD STYLE="text-align: justify">[<B>insert continuing party's name</B>]<B> </B>of [<B>insert address</B>] (<B><I>Continuing Party</I></B>).</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Recitals</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>A</B></TD><TD STYLE="text-align: justify">Giaconda and the Continuing Party are parties to the Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>B</B></TD><TD STYLE="text-align: justify">Giaconda has agreed to transfer to Redhill all of its rights, title and interest in the intellectual
property known as Myoconda, Heliconda and Picoconda, which includes the novation of the Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>C</B></TD><TD STYLE="text-align: justify">Redhill assume the future rights and obligations of Giaconda, and Giaconda wishes to be released
from its future obligations, under the Agreement on and from the Closing Date, in accordance with the terms of this deed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>D</B></TD><TD STYLE="text-align: justify">The Continuing Party consents to the transactions referred to in this deed.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Agreed terms</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="text-align: justify; border-bottom: Black 1pt solid; width: 0.5in">1.</TD><TD STYLE="text-align: justify; border-bottom: Black 1pt solid">Definitions and interpretation</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">1.1</TD><TD STYLE="text-align: justify">Definitions</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">In this deed and its recitals:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B><I>Agreement</I></B> means [<B>insert</B>].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B><I>Asset Purchase Agreement </I></B>means the agreement
so entitled between Giaconda Limited and Redhill Biopharma Ltd on or about the date of this deed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B><I>Business Day </I></B>means a day on which banks
are open for business in Sydney, Australia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B><I>Closing</I></B> has the meaning given to that
term in the Asset Purchase Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B><I>Closing Date</I></B> has the meaning given to
that term in the Asset Purchase Agreement.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; padding-bottom: 1pt">1.2</TD><TD STYLE="text-align: justify; padding-bottom: 1pt">Interpretation</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">The interpretations outlined in clause [<B>insert</B>]
of the Agreement apply to the interpretation of this deed.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; border-bottom: Black 1pt solid">2.</TD><TD STYLE="border-bottom: Black 1pt solid">Conditions Precedent</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">This deed is conditional on Closing occurring, and
has no legal force or effect until Closing occurs.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; border-bottom: Black 1pt solid">3.</TD><TD STYLE="border-bottom: Black 1pt solid">Assumption</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">With effect on and from the Closing Date, Redhill:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">is entitled to the rights and benefits, and assume the obligations and liabilities, of Giaconda
under the Agreement which accrue on or after (but not before) the Closing Date; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">will be bound by and must comply with the Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="border-bottom: Black 1pt solid; width: 0.5in">4.</TD><TD STYLE="border-bottom: Black 1pt solid">Release of Giaconda</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">With effect on and from the Closing Date, the Continuing
Party:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">irrevocably and unconditionally releases and discharges Giaconda from all its obligations under
or in respect of the Agreement, except for any obligations that accrued before the Closing Date or are otherwise in respect of
events that occurred prior to the Closing Date;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">irrevocably and unconditionally consents to Redhill assuming the obligations in accordance with
clause 3 of this deed; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: justify">agrees that Redhill will be entitled to exercise all of the rights, privileges and benefits of
Giaconda and agrees to be bound by the terms of the Agreement as if a reference to &quot;Giaconda&quot; in the Agreement was a
reference to &quot;Redhill&quot;.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="border-bottom: Black 1pt solid; width: 0.5in">5.</TD><TD STYLE="border-bottom: Black 1pt solid">Warranties</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">Each party represents and warrants to the other parties to this deed that as at the date of this
deed it is a company duly incorporated and validly existing under the laws of the jurisdiction of its incorporation and has all
requisite powers to own property and has the necessary power to bind itself in the manner contemplated by this deed and to execute,
deliver and perform this deed and to become bound by it.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">Each party to this deed represents and warrants to the other parties to this deed that as at the
date of this deed, this deed has been validly executed and delivered by it and constitutes the valid, binding and enforceable obligations
of it in accordance with its terms, subject to the discretionary authority of a court in granting equitable remedies and all applicable
bankruptcy and insolvency laws.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="border-bottom: Black 1pt solid; width: 0.5in">6.</TD><TD STYLE="border-bottom: Black 1pt solid">Confirmation of Agreement</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Subject to this deed, the Continuing Party ratifies
and confirms the Agreement which remains fully effective.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="border-bottom: Black 1pt solid; width: 0.5in">7.</TD><TD STYLE="border-bottom: Black 1pt solid">General</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.1</TD><TD STYLE="text-align: justify">Amendments</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">This deed may only be amended by written agreement
between all parties.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.2</TD><TD STYLE="text-align: justify">Assignment</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">A party may only assign this deed or a right under
this deed with the written consent of the other party whose consent may not be unreasonably withheld.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.3</TD><TD STYLE="text-align: justify">Counterparts</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">This deed may be executed in any number of counterparts.
All counterparts together make one instrument.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.4</TD><TD STYLE="text-align: justify">No merger</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">The rights and obligations of the parties under this
deed do not merge on completion of any transaction contemplated by this deed.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.5</TD><TD STYLE="text-align: justify">Entire agreement</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">This deed supersedes all previous agreements about its subject matter and embodies the entire agreement
between the parties, with the exception of the Asset Purchase Agreement and as to Giaconda and RedHill the provisions of the Asset
Purchase Agreement between them shall prevail in the event of any conflict between the terms thereof and this Deed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">To the extent permitted by law, any statement, representation or promise made in any negotiation
or discussion other than the Asset Purchase Agreement, has no effect except to the extent expressly set out or incorporated by
reference in this deed.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.6</TD><TD STYLE="text-align: justify">Further assurances</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Each party must do all things reasonably necessary
to give effect to this deed and the transactions contemplated by it.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.7</TD><TD STYLE="text-align: justify">No waiver</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">The failure of a party to require full or partial performance of a provision of this deed does
not affect the right of that party to require performance subsequently.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">A single or partial exercise of or waiver of the exercise of any right, power or remedy does not
preclude any other or further exercise of that or any other right, power or remedy.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: justify">A right under this deed may only be waived in writing signed by the party granting the waiver,
and is effective only to the extent specifically set out in that waiver.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.8</TD><TD STYLE="text-align: justify">Governing law and jurisdiction</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">New South Wales and Australian law governs this deed.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.9</TD><TD STYLE="text-align: justify">Severability</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">A clause or part of a clause of this deed that is
illegal or unenforceable may be severed from this deed and the remaining clauses or parts of the clause of this deed continue in
force.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.10</TD><TD STYLE="text-align: justify">Notice</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">A notice, consent or communication under this deed is only effective if it is:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">in writing, signed by or on behalf of the person giving it;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">addressed to the person to whom it is to be given; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">given as follows:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(A)</TD><TD STYLE="text-align: justify">delivered by hand to that person's address;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(B)</TD><TD STYLE="text-align: justify">sent by prepaid mail (and by prepaid airmail if the person is overseas) to that person's address;
or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(C)</TD><TD STYLE="text-align: justify">sent by fax to that person's fax number where the sender receives a transmission confirmation report
from the despatching machine indicating the transmission has been made without error and showing the relevant number of pages and
the correct destination fax number or name of recipient.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">A notice, consent or communication delivered under clause 9.10(a) is given and received:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">if it is hand delivered or sent by fax:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(A)</TD><TD STYLE="text-align: justify">by 5.00pm (local time in the place of receipt) on a Business Day &mdash; on that day; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(B)</TD><TD STYLE="text-align: justify">after 5.00pm (local time in the place of receipt) on a Business Day, or at any time on a day that
is not a Business Day &mdash; on the next Business Day; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">if it is sent by post:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(A)</TD><TD STYLE="text-align: justify">within Australia &mdash; three Business Days after posting; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(B)</TD><TD STYLE="text-align: justify">to or from a place outside Australia &mdash; seven Business Days after posting.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.5in"></TD><TD STYLE="width: 0.5in">(C)</TD><TD STYLE="text-align: justify">A person's address and fax number are those set out in this deed, or as the person notifies the
sender.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Executed as deed</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%"><FONT STYLE="color: windowtext"><B>Executed</B> by <B>Giaconda Limited</B> in accordance with Section 127 of the <I>Corporations Act 2001</I></FONT></TD>
    <TD STYLE="width: 7%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD>&nbsp;</TD>
    <TD STYLE="font-family: Symbol; text-align: center"></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-family: Symbol; text-align: center"></TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Symbol">&not;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Symbol">&not;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Signature of director</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Signature of director/company secretary</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name of director (print)</TD>
    <TD>&nbsp;</TD>
    <TD>Name of director/company secretary (print)</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%"><FONT STYLE="color: windowtext"><B>Executed</B> by <B>RedHill Biopharma Ltd</B>. </FONT></TD>
    <TD STYLE="width: 7%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Symbol">&not;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Symbol">&not;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Signature of director</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Signature of director/company secretary</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name of director (print)</TD>
    <TD>&nbsp;</TD>
    <TD>Name of director/company secretary (print)</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.4in; text-indent: -0.4in"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 44%"><FONT STYLE="color: windowtext"><B>Executed</B> by <B>[insert continuing party's name]</B></FONT></TD>
    <TD STYLE="width: 7%; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="width: 7%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom">
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Symbol">&not;</FONT></TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font-family: Symbol">&not;</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Signature of director</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>Signature of director/company secretary</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name of director (print)</TD>
    <TD>&nbsp;</TD>
    <TD>Name of director/company secretary (print)</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 2.1</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify"><B>Myoconda</B>&reg; (a combination of Clarithromycin, Clofazamine and Rifabutin) for the treatment,
prevention, diagnosis or palliation of Crohn&rsquo;s and all other indications whatsoever (for both humans and animals).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify"><B>Heliconda</B>&reg; (a combination of Rifabutin, Amoxicillin and Pantoprazole) for the treatment,
prevention, diagnosis or palliation of <I>Helicobacter Pylori</I> infections and all other indications whatsoever (for both humans
and animals).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify"><B>Picoconda</B>&reg; (an oral bowel preparation for GI tract procedures and surgeries and all
other indications whatsoever (for both human and animals)).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 2.1A</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>A list of the physical assets related to Myoconda, Heliconda
and Picoconda:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>Myoconda:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>Files provided by Corealis and KABS Labs regarding the manufacture and Quality Control testing of the first GMP manufactured
batch. Some of these will be in hard copy only as no e-files were provided.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>Files provided by Trillium and Corealis regarding the Formulation and Manufacturing of the products for the first GMP manufactured
batch. These will be in hard copy only as no e-files were provided.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>Files provided by Biovail regarding the PK study including the raw data and final report. This will include hard copy as well
as CDs as it is a number of very large files.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD>Supporting clinical and scientific studies published on the application of anti-MAP therapy in the treatment of Crohn&rsquo;s
Disease.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD>Files relating to correspondence with and applications to regulatory authorities in:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: right; vertical-align: bottom">i.</TD><TD>&nbsp;&nbsp;&nbsp;The U.S. (FDA)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: right; vertical-align: bottom">ii.</TD><TD>&nbsp;&nbsp;&nbsp;The U.K. (MHRA)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: right; vertical-align: bottom">iii.</TD><TD>&nbsp;&nbsp;&nbsp;The E.U. (EMEA)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: right; vertical-align: bottom">iv.</TD><TD>&nbsp;&nbsp;&nbsp;Canada (TPD)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in"></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">f.</TD><TD>Physical inventory of the development and manufacturing materials including:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: right; vertical-align: bottom">i.</TD><TD>&nbsp;&nbsp;&nbsp;Finished product samples retained by Corealis Laboratories from the development process,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: right; vertical-align: bottom">ii.</TD><TD>&nbsp;&nbsp;&nbsp;Finished product samples retained by Trillium from the GMP manufactured batch,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-indent: -9pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in; text-align: right; vertical-align: bottom">iii.</TD><TD>&nbsp;&nbsp;&nbsp;Finished product samples retained by Biovail from the PK study,</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">g.</TD><TD>All internal files relating to market development (regulatory correspondence, market statistics, sales &amp; profit projections,
etc.)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">h.</TD><TD>Power Point presentations prepared for fundraising activities and made to various venture capitalists, investment bankers and
individual investors.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">i.</TD><TD>Critical path and PERT charts presented to various parties for the development and commercialization of the therapy.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>Heliconda</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>All internal files relating to market development (market statistics, sales &amp; profit projections, etc.)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>Publications and supporting documents for medical conference and professional journals relating to the Phase II clinical study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>Supporting clinical and scientific studies published on the treatment of <I>Helicobacter pylori </I>and resistant <I>Helicobacter
pylori</I>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>Picoconda</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>All internal files relating to market development (market statistics, sales &amp; profit projections, etc.)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>Publications and supporting documents for medical conference and professional journals relating to the Phase II clinical study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>Supporting clinical and scientific studies published on the use of colonic lavages, especially those containing picosulphate.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 2.3</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>A list of the Assigned Agreements </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>IP Deed between CDD &amp; Giaconda Limited May 5, 2005</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>IP Deed between Borody &amp; Giaconda Limited on April 29, 2005</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>The Compounding Agreement</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 4.2</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Hepaconda&reg;</B> - A combination therapy for the treatment
of Hepatitis C Virus.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Ibaconda&reg;</B> &ndash; A Combination Therapy for the Treatment
of Constipation-predominant Irritable Bowel Syndrome.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 5.2</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Allocation of Closing Payment Among Products</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Myoconda - $[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Heliconda - $[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Picoconda - $[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 6.1</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">All amounts payable by Buyer to Seller in accordance with this
Agreement shall be paid to the following account unless otherwise notified by Seller in writing:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 40%">Bank account name:</TD>
    <TD STYLE="width: 60%">Giaconda Limited</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Financial institution:</TD>
    <TD>Westpac Banking Corporation</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Branch address:</TD>
    <TD>National Communications Centre</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Level 3</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>SYDNEY NSW 2000</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>AUSTRALIA</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>BSB number:</TD>
    <TD>032006</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Account number:</TD>
    <TD>277277</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>SWIFT code:</TD>
    <TD>WPACAU2S</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 6.1A</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Permitted Use of Advance ($[****])</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>Patent renewal fees for Myoconda, Heliconda &amp; Picoconda - $[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>Patent prosecution of the new Myoconda US patent - $[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>Holding of the Extraordinary General Meeting to approve the Agreement including Registries fees and mailings - $[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">4.</TD><TD>Legal Fees part payment - $</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">5.</TD><TD>ASX Listing Fees - $[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">6.</TD><TD>Registries fees for list maintenance - $[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 11</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Disclosure Schedule to</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Asset Purchase Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Given by Giaconda Limited</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>11 August 2010</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>STRICTLY PRIVATE AND CONFIDENTIAL</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>SUBJECT TO DUE DILIGENCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This Disclosure Schedule is provided by Giaconda Limited pursuant
to Section 11 of the Asset Purchase Agreement between Giaconda Limited and Redhill Biopharma Ltd (the&nbsp;&quot;Agreement&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Terms of Provision</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This Disclosure Schedule is subject to the following terms and
conditions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(a)</TD><TD STYLE="text-align: justify">capitalized terms used and not otherwise defined have the meanings given to those terms in the
Agreement, unless the context indicates otherwise;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(b)</TD><TD STYLE="text-align: justify">the introductory language and headings to each section of this Disclosure Schedule are inserted
for convenience only and do not create a different standard for disclosure than the language set forth in the Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(c)</TD><TD STYLE="text-align: justify">the inclusion of any item in any section of this Disclosure Schedule, which section requires the
listing of a &ldquo;material&rdquo; item or an item or action that would have a Material Adverse Effect, is not an admission that
the included item is &ldquo;material&rdquo;;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(d)</TD><TD STYLE="text-align: justify">the inclusion of any item in any section of this Disclosure Schedule, which section requires the
listing of an item or action which is not in the ordinary course of business is not an admission that the included item or action
is not in the ordinary course of business;</TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: -40pt"></P><FONT STYLE="font-style: normal">&nbsp;</FONT>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-style: normal">(e)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-style: normal">where the terms of a document or other disclosure item have been
summarized or described in this Disclosure Schedule, that summary or description does not purport to be a complete statement of
the material terms of the document or other item and are qualified in their entirety by the document itself; provided however,
that Seller represents and warrants that such summary or description does not misstate any of the statements or information included
therein, or omit to state a fact necessary to make the statements therein not misleading;</FONT></TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: -40pt"></P><FONT STYLE="font-style: normal">&nbsp;</FONT>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-style: normal">(f)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-style: normal">disclosure of any information or document is not a statement or
admission that it is required to be disclosed;</FONT></TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: -40pt"><FONT STYLE="font-style: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: italic 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 40pt"><FONT STYLE="font-style: normal">(g)</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-style: normal">the Disclosure Schedule is not intended to constitute, and must
not be construed as constituting, representations or warranties or covenants of the Company, except as and to the extent provided
in the Agreement. The fact that any disclosure in the Disclosure Schedule is not required to be disclosed in order to render the
applicable representation or warranty to which it relates true, or that the absence of any disclosure in the Disclosure Schedule
would not constitute a breach of such representation or warranty, must not be deemed or construed to expand the scope of any representation
or warranty or to establish a standard of disclosure in respect of any representation or warranty. No implication can be drawn
that any information provided in the Disclosure Schedule is necessarily material or otherwise required to be disclosed, or that
the inclusion of any information establishes or implies a standard of materiality or any other standard set forth in the Agreement.
Nothing in this Disclosure Schedule constitutes an admission against Giaconda's interest. </FONT></TD></TR></TABLE>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: -40pt"><FONT STYLE="font-style: normal">&nbsp;</FONT></P>

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<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: -40pt">&nbsp;</P>

<P STYLE="font: italic 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 40pt; text-align: justify; text-indent: -40pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in"><B>Interpretation</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">The section numbers below
correspond to the section numbers of the representations and warranties in the Agreement most directly modified by the exceptions.
Any information disclosed in this Disclosure Schedule is disclosed and incorporated in any other sections, schedules or exhibits
of the Agreement where that disclosure is applicable if that applicability is readily apparent from the disclosure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.1</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Corporate Organization and Power)</P></TD>
    <TD STYLE="width: 71%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller was incorporated
        with ASIC on 23 February 2004.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Other than what is disclosed
        in the answer to Section 11.7.1, Seller is not required to and does not hold any licences, authorizations, consents and Approvals
        of any Governmental Authority required to carry on its business and to own, lease and operate its assets and properties as now
        owned, leased and operated.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">Section 11.2<BR>
(Authorization)</TD>
    <TD STYLE="padding-left: 0.5in; font-size: 10pt; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Seller have the power under clause 12.1 of the Seller's Constitution to authorise Seller to enter and bind itself to the Agreement and Ancillary Agreements subject to complying with the requirements of the Corporations Act 2001 (Cth) and the ASX Listing Rules.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt"></TD>
    <TD STYLE="padding-left: 0.5in; font-size: 10pt; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Board of Directors of Seller on Saturday 7 August 2010 resolved to enter into and execute the Agreement, Mortgage, Charge and any ancillary agreements.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; font-size: 10pt; text-indent: -0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller is required by ASX Listing Rule 11.1 to consult with the Australian Securities Exchange as soon as practicable after the Effective Date because it might be required by ASX Listing Rule 11.1.2 to seek and obtain shareholder approval for the sale of Acquired Assets.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; font-size: 10pt; text-indent: -0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;If required to do so by the ASX in accordance with ASX&nbsp;Listing Rule 11.1.2, Seller will call an extraordinary general meeting of its shareholders and seek shareholder approval for the Agreement, Ancillary Agreement and the consummation of the transactions contemplated by those agreements.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-size: 10pt">&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; font-size: 10pt; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.3</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Non-Contravention)</P></TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">Seller has sought and obtained advice from a barrister
        of the Supreme Court of New South Wales regarding the termination by it of the AMTI Asset Purchase Agreement on 15 June 2010. Seller
        has been advised that it is likely it properly exercised its common law rights to terminate that agreement and the prospects of
        AMTI obtaining an injunction to prevent the sale of Myoconda and its associated intellectual property by Seller to Buyer are low.
        This advice and the disclosure do not derogate from Seller's representations and warranties or from Seller's obligations in connection
        therewith.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.4</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Consents and Approvals)</P></TD>
    <TD STYLE="width: 71%; padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller is required by ASX Listing Rule 11.1 to consult with ASX regarding the proposed sale of Myoconda, Heliconda and Picoconda to determine if shareholder approval of Seller must be obtained in accordance with ASX Listing Rule 11.1.2.&nbsp; Seller will requisition an extraordinary general meeting if required to do so in accordance with ASX Listing Rule 11.1.2 to obtain shareholder approval for the Agreement, the Ancillary Agreements, and the transactions contemplated by those agreements.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in"><FONT STYLE="color: windowtext">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller is required to obtain the consent of Pharmatel Research &amp; Development Pty Ltd as the trustee for the &quot;Pharmatel Research and Development Trust&quot; (&quot;<B>Pharmatel</B>&quot;) to:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-indent: -0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the transfer by Seller of its 50% interest in Picoconda and the associated intellectual property to Buyer at Closing.&nbsp; That consent was obtained on 27&nbsp;July 2010 by way of a letter sent by Seller and signed by Pharmatel; and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-indent: -0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;the transfer by Pharmatel of its 50% interest in Picoconda and the associated intellectual property to Buyer at Closing.&nbsp; Seller has obtained that consent by way of its letter to Pharmatel dated 5 August 2010.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in"><FONT STYLE="color: windowtext">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller is required to obtain the consent of the Centre for Digestive Diseases Pty Limited (ACN 097 085 884) (<B>CDD</B>) to novate to Buyer the deed called the &quot;CDD Intellectual Property Deed&quot; between Seller and CDD on Closing in accordance with Section 8.1.3 of the Agreement.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller will be required to notify IP Australia and each corresponding Government Authority in those jurisdictions in which the Patents set out in Exhibit 11.13.4 and Trade Marks set out in Exhibit&nbsp;11.13.5 are registered for the purpose of procuring the transfer of legal and beneficial ownership of those assets to Buyer as soon as possible following Closing.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.5</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Acquired Assets)</P></TD>
    <TD STYLE="width: 71%; padding-left: 0.5in; text-indent: -0.45in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professor Borody legally owns the Myoconda and Picoconda patents and all associated intellectual property for the sole benefit of Seller.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professor Borody legally owns 50% of the Picoconda patent and all associated intellectual property for the sole benefit of Seller. As disclosed in paragraph 2(b) of the answer to Section 11.4 (Consents and Approvals), Seller is in the process of obtaining the consent of Pharmatel to transfer its 50% legal and beneficial interest to Buyer at Closing.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in"><FONT STYLE="color: windowtext">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whilst Professor Borody is subject to an injunction made by Justice Fowler of the Family Court of Australia on 15 August 2008 in proceedings number SYF 3923 of 2005 (set out at paragraph 15 of the orders) (the &quot;<B>Borody Family Court Proceedings</B>&quot;), that injunction does not prohibit, restrict, or restrain any of the transactions contemplated by the Agreement or:</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.95in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.95in; text-indent: -0.45in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;prohibit, restrict, or restrain Professor Borody from transferring legal title in Myoconda and Heliconda, as well as the 50% interest he holds in Picoconda, to Buyer; and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.95in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.95in; text-indent: -0.45in"><FONT STYLE="color: windowtext">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;grant or confer an interest on his separated wife, Ms&nbsp;Karen Marie Borg, (&quot;<B>Karen</B>&quot;) in Myoconda, Heliconda, or the 50% interest he holds in Picoconda.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">4.&nbsp;&nbsp;&nbsp;&nbsp;Myoconda, Heliconda and Picoconda are therapies in their early stages of development and are at different stages of development as described in the documents provided during the Due Diligence process and their effectiveness (in their current state of development) as treatments for their intended purposes has yet to be fully determined in accordance with further clinical research. These have been described in a number of Due Diligence documents including:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">(a)&nbsp;&nbsp; the Giaconda Products Comparison Table,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">(b)&nbsp;&nbsp; the Giaconda &ndash; Red Hill Due Diligence List of Questions,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">(c)&nbsp;&nbsp; the Davies MAP Presentation,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">(d)&nbsp;&nbsp; the Heliconda Summary of June 2010 and,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">(e)&nbsp;&nbsp; the Myoconda PERT chart.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in">Each of the therapies have concluded clinical and scientific&nbsp; testing to some degree:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.8in; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <TD STYLE="width: 29%">&nbsp;</TD>
    <TD STYLE="width: 71%; padding-left: 0.8in; text-align: justify; text-indent: -0.5in">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Myoconda has completed:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(ii)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(iii)&nbsp;&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(iv)&nbsp;&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(v)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(vi)&nbsp;&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(vii)&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(viii)&nbsp;&nbsp;&nbsp; [****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Heliconda has completed:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [****].</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 48.6pt; text-align: justify; text-indent: -27pt">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Picoconda has completed:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 84.6pt; text-align: justify; text-indent: -0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; [****]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The physical assets which Seller has in its possession that relate to Myoconda, Heliconda and Picoconda and will deliver at Closing, or as soon as possible after Closing, constitutes all of the physical assets which are owned by Seller that may assist Buyer to exploit the Technology and the Products.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller will use its best efforts to procure Pharmatel to deliver all physical assets in relation to Picoconda at Closing to assist Buyer to exploit the intellectual property associated with that patent.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">7.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has a liability to pay the patent renewal fees for each of the Patents and will pay those fees as soon as possible after the Effective Date but prior to Closing.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.45in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.6</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Manufacturing and Marketing Rights)</P></TD>
    <TD STYLE="padding-left: 30.6pt; text-align: justify; text-indent: -30.6pt">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller and [****] have entered into an agreement, dated 23 March 2007 for the purchase of Clarithromycin (one of the active ingredients in Myoconda). Further discussions with [****] have not been held since that date pending Giaconda&rsquo;s ability to raise funds to proceed.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 30.6pt; text-align: justify; text-indent: -30.6pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">&nbsp;</TD>
    <TD STYLE="width: 71%; padding-left: 30.6pt; text-align: justify; text-indent: -30.6pt">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller and [****] have entered into a non-binding Letter of Intent, dated 27 March 2006, for the grant by Seller to of the Myoconda marketing rights [****] . Further discussions with [****] have not been held since that date pending Giaconda&rsquo;s ability to raise funds to proceed.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 30.6pt; text-align: justify; text-indent: -30.6pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 30.6pt; text-align: justify; text-indent: -30.6pt"><FONT STYLE="color: windowtext">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller
    and Orphan Australia Pty Ltd (a subsidiary of the Sigma Pharmaceuticals Group)  (&ldquo;<B>Orphan Australia</B>&rdquo;)
    have     entered into an     agreement     dated 1 May     2006     for     the     grant by     Seller to Orphan Australia
     of     the     Myoconda     marketing rights in     [****]. Further     discussions with     Orphan     Australia
    have not       been held     since     that date pending     Giaconda&rsquo;s ability to     raise funds to
    proceed.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 30.6pt; text-align: justify; text-indent: -30.6pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.7.1</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD>
        <P STYLE="padding-left: 30.6pt; text-align: justify; text-indent: -30.6pt">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Seller has obtained approval for its
Investigational New Drug application (&ldquo;<B>IND</B>&rdquo;) (being #73,479 ) from the United States Food and Drug Administration
(&ldquo;<B>FDA</B>&rdquo;) on 17&nbsp;July 2007 for the clinical development of Myoconda to treat patients with Crohn&rsquo;s
disease infected with <I>Mycobacterium avium spp paratuberculosis </I>(the &ldquo;<B>FDA Approval</B>&rdquo;). The Seller has
maintained the IND with annual updates provided to the FDA.</P></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.7.2</TD>
    <TD>Seller has not received any written notice or other written communication from any Governmental Authority,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-align: justify; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;contesting the pre-market clearance or approval of the uses of or the labeling and promotion of any Product; or</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-align: justify; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;otherwise alleging any violation of Applicable Law or Regulatory Approval by Seller or the Products or Technology,</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>as none of the Products have been developed to a point where those matters would become an issue.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.7.3</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD>
    <TD STYLE="padding-left: 0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.7.4</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The clinical trial conducted by [****] in respect of [****]&nbsp; was conducted with reasonable care and in accordance with the protocols set out in [****]&rdquo; which is the sole stated protocol for that clinical trial; and</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The [****] was conducted in compliance with all Applicable Laws in the European Union, the United States and all other countries where such compliance is required, governing the conduct of such clinical trials.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.7.5</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has only made one filing which is the FDA Approval described at paragraph 2 of the answer to Section 11.7.1.&nbsp; The FDA responded to that filing with a &ldquo;no clinical hold&rdquo; advice.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has kept up-to-date the FDA Approval by lodging annual filings the last of which was lodged on 14 July 2010.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">&nbsp;</TD>
    <TD STYLE="width: 71%; padding-left: 0.5in; text-indent: -0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller reasonably anticipates that the FDA Approval will need to be revised to take into account the further developments achieved through the [****] and any requests made by the FDA. These are identified in the FDA correspondence of 17 July 2007 provided during the Due Diligence process.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-align: justify; text-indent: -0.5in">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;FDA has requested additional [****] both of which have been identified in the development program for Red Hill. Both of these are standard testing for new drugs and combination drug therapies:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1.5in; text-align: justify; text-indent: -0.5in">(i)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[****],</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-align: justify; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-align: justify; text-indent: -0.5in">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Recent guidelines in Europe recommend that clinical endpoints in Crohn&rsquo;s Disease clinical trials include remission as opposed to response.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.7.6</TD>
    <TD STYLE="padding-left: 0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.8</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Compliance with<BR>
Applicable Laws)</P></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Borody Family Court Proceedings which may cause Karen to file a claim against it in connection with the Products, the Technology, the Acquired Assets, or the Assumed Liabilities.&nbsp; However, the Seller believes that the likelihood of Karen taking such action to be low based on the advice of Professor Borody.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.9</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">1.&nbsp;&nbsp;&nbsp;&nbsp;The disclosures make in respect of paragraphs 2, 3 and 4 in connection with Section 11.4 also apply to this Section&nbsp;11.9.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(Approvals)</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">2.&nbsp;&nbsp;&nbsp;&nbsp;A Human Research Ethics Committee (IRB) has approved a [****] trial for Heliconda submitted by the [****]. This can be transferred to RedHill subject to revisions in the documentation regarding sponsorship, etc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.10</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Litigation)</P></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AMTI has threatened legal action against Seller on 24 July 2010 if Seller proceeds with the sale of all the intellectual property in Myoconda to Buyer. As disclosed in response to Section 11.3, Seller has obtained an opinion from a barrister in relation to that matter. This advice and the disclosure do not derogate from Seller's representations and warranties or from Seller's obligations in connection therewith.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.11</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Assigned Agreements)</P></TD>
    <TD STYLE="width: 71%; padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosures made in paragraph 2 in answer to Section 11.4 in relation to Picoconda.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;AMTI asserts in its letter to Giaconda dated 24 July 2010 that the AMTI Asset Purchase Agreement is still valid and effectual.&nbsp; Seller has received advice from a barrister of the Supreme Court of New South Wales to the effect that the termination by Seller on 15 July 2010 of the AMTI Asset Purchase Agreement was valid and effectual. This advice and the disclosure do not derogate from Seller's representations and warranties or from Seller's obligations in connection therewith.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Compounding Agreement has expired and may be terminated by Seller in accordance with its terms.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Each Assigned Agreement may be transferred by Seller to Buyer with the consent of the continuing party under that agreement.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.12</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Restrictions on Business Activities)</P></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has entered into the agreements with&nbsp; Pharmatel listed in Exhibit 11.11.&nbsp; Those agreements confer certain development and commercialisation rights in relation to the Picoconda Patent on Pharmatel.&nbsp; Seller has obtained the agreement of Pharmatel to transfer all of its right, title and interest in the Picoconda Patent to Buyer on Closing subject to Buyer discharging its closing obligations under the Asset Purchase Agreement.&nbsp; Seller will procure the transfer or termination of the agreement listed in Exhibit 11.11 at the request of Buyer.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.13.1</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="text-align: center">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.2</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has a liability to pay the patent renewal fees for each of the Patents and will pay those fees as soon as possible after the Effective Date but prior to Closing.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.3</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ownership arrangements in relation to the Patents are set out in the disclosures made above in paragraphs 1 and 2 in response to Section 11.5.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The disclosure made in paragraph 4 in respect to Section&nbsp;11.5 accurately describes the state of the Technology Intellectual Property.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The commercialisation arrangements disclosed in relation to Picoconda in Exhibit 11.11 set out the current limitations on the commercialisation and development of that Product.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">Section 11.13.4</TD>
    <TD STYLE="width: 71%; padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The ownership arrangements in relation to the Patents are set out in the disclosures made above in paragraphs 1 and 2 in response to Section 11.5.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosure made in response to Section&nbsp;11.3 and the disclosures made in paragraph 1 in response to Section 11.10 in relation to AMTI which claims to have an interest in Myoconda.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosure made in response to Section&nbsp;11.13.2 in relation to the status of the Patents and the payment of the renewal fees.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosure made above in response to Section 11.7.5 in relation to the status of the FDA Approval.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">5.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has given Professor Borody an indemnity on the terms of clause 7.5(2) of the deed entitled &quot;Borody Intellectual Property Deed&quot; between Seller and Borody dated 29 April 2005 which relates to certain undertakings given in respect of the Acquired Assets.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">6.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has given Professor Borody an indemnity on the terms of a letter dated 12 May 2010 to cover the costs incurred by him in respect of the transfer of Myoconda and all the associated intellectual property.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.55in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.13.5</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P></TD>
    <TD STYLE="padding-left: 0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Giaconda does not have any copyright in any publications related to the Patents which it is entitled to assert.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.6</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;With the exception of the Picoconda Product, all the Technology Intellectual Property was created solely by Professor Borody who has assigned his right, title and interest in those assets to Giaconda on the terms of an agreement between Professor Borody and Seller entitled &quot;Share Issue and IP Assignment Agreement&quot; dated 16&nbsp;August 2004.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whilst Professor Borody received 54,999,999 fully paid ordinary shares in Seller in consideration for that assignment, as well as the assignment of certain other intellectual property which is not the subject of the Agreement, the assignment of Myoconda, Heliconda and the 50% interest in Picoconda was not properly effected due to an administrative error on the part of Seller.&nbsp; Professor has acknowledged and agrees that he holds the legal title in the Myoconda and Heliconda patents, as well as the 50% interest in Picoconda, for the sole benefit of Seller.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Picoconda Product and all associated intellectual property was created by Professor Borody in conjunction with Nic Shortis.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">4.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosures made in paragraph 2 in respect to Section 11.4 for a description of the ownership arrangements in relation to the Picoconda Patent.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">Section 11.13.7</TD>
    <TD STYLE="width: 71%; padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosures made against Sections&nbsp;11.4 and 11.5 above for a description of the ownership arrangements in relation to the Acquired Assets.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.8</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosures made against Section 11.6 and the agreements and documents referred to in Exhibit&nbsp;11.11 in relation to the rights granted to any other Person to use any Technology Intellectual Property.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.9</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">1.&nbsp;&nbsp;&nbsp;&nbsp;Seller has allowed the old PCT applications&nbsp; for the Myoconda and Heliconda patents to lapse or enter the public domain: Argentina number P980101486 and Japan number 10-540998 for Myoconda and Finland&nbsp; Application No 99915381.0 and patent number 1073436</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in; text-align: justify; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.10</TD>
    <TD STYLE="padding-left: 0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.11</TD>
    <TD STYLE="text-align: left">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.12</TD>
    <TD STYLE="padding-left: 0.3in; text-indent: -0.25in">1.&nbsp;&nbsp;&nbsp;&nbsp;Seller obtained unsecured loans from its Directors to assist fund the development of the Patents.&nbsp; The terms of those unsecured loans are disclosed in the 2009 annual report which may be downloaded from the company announcements platform on the Australian Securities Exchange (www.asx.com.au).</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.3in; text-indent: -0.25in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.13</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Technology Intellectual Property along with the files provided to the Buyer is in a form and is described in such detail that a person who is a properly qualified medical researcher would understand the Technology and Products and allow the full and proper use thereof without reliance on the knowledge or memory of any particular other individual.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosures made in paragraph 4 in relation to Section 11.5 in relation to the state of the Acquired Assets and their sufficiency for exploitation.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.13.14</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please refer to the disclosures made in relation to Sections&nbsp;11.4 and 11.5 above which set out the ownership arrangements, as well as the consents and approvals which need to be obtained in relation to the Acquired Assets for the purpose of providing Buyer with the benefit of same on and from, or as soon as possible, after Closing.</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.14</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Insurance)</P></TD>
    <TD STYLE="padding-left: 0.5in; width: 71%">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in"></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.15</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Relations with Suppliers)</P></TD>
    <TD STYLE="padding-left: 0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.16</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Indemnification Obligations)</P></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please see the disclosures made in response to Section&nbsp;11.13.4 above which set out the indemnities given by Seller to Professor Borody.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.17</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Absence of Certain Business Practices)</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.18</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Government Findings)</P></TD>
    <TD STYLE="padding-left: 0.55in; text-indent: -0.05in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.55in; text-indent: -0.05in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.19</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Budget)</P></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in"><FONT STYLE="color: windowtext">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;The Budget attached to Exhibit 11.19 (the &quot;<B>Budget</B>&quot;) has been prepared in reliance of the quotations provided by potential suppliers and that information has not been verified by Seller. Consequently, the Seller does not warranty the accuracy of that information but reasonably believes such information to be accurate.</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.20<BR>
(Affiliates)</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller is not an &quot;Affiliate&quot; of Professor Borody within the meaning of that definition set out in Section 1 of the Agreement as Professor Borody does not &quot;control&quot; Seller within the technical meaning of section 50AA of the Corporations Act 2001 (Cth).&nbsp; That test is typically used in connection with Australian companies to determine the legal and practical control a person has over the relevant company.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">2.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Whilst Professor Borody, in his capacity as a shareholder of Seller, is the largest shareholder of Seller speaking for approximately 67% of all the fully paid ordinary shares on issue in Seller, he does not alone have the power to pass a special resolution (as defined by the Corporations Act 2001 (Cth)) to approve those matters which require the approval of 75% of the members present and voting (whether by person or proxy).</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">3.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Professor Borody, in his capacity as a director of Seller, does not have the ability alone to determine the outcome of decisions of the Board.</TD></TR>
</TABLE>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P>

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<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 29%">Section 11.21</TD>
    <TD STYLE="padding-left: 0.5in; width: 71%">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>(Taxes)</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.22.1</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Preferences; Solvency)</P></TD>
    <TD STYLE="padding-left: 1in; text-indent: -0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 1in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.22.2</TD>
    <TD STYLE="padding-left: 1in; text-indent: -0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.22.3</TD>
    <TD STYLE="padding-left: 0.5in">[No disclosure has been made against this warranty.]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Section 11.23<BR>
(Absence of Material<BR>
Adverse Changes)</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Please see the disclosures made in relation to AMTI as set out in Sections 11.10 and 11.11.&nbsp; It is the reasonable view of Seller based on the opinion of its barrister, that the prospects of AMTI successfully obtaining an interlocutory injunction from either the New South Wales Supreme Court or the Federal Court of Australia to prevent the transactions contemplated by this Agreement proceeding is low. This advice and the disclosure do not derogate from Seller's representations and warranties or from Seller's obligations in connection therewith.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.24</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Brokers)</P></TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">1.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Seller has an obligation to pay TM Ventures Pty Ltd a fee equal to 3% of the amounts received from Buyer by Seller. Seller shall indemnify Buyer from any claim by TM Ventures Pty Ltd in connection therewith.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.5in; text-indent: -0.5in">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Section 11.25</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">(Disclosure)</P></TD>
    <TD STYLE="padding-left: 0.5in">[No disclosure has been made against this warranty.]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit 11.4</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">No approval of a Government Authority or other third party is
required in connection with the execution, delivery or performance of this Agreement or the Ancillary Agreements by Seller or the
consummation by Seller of the transactions contemplated herein and therein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit 11.7.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>A list of the Regulatory Approvals held
by Giaconda for the purpose of the warranty given by Giaconda in favour of Redhill pursuant to Section 11.7.1.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify">An Investigative New Drug (IND) #73,479 approved by the FDA on 17 July 2007 via fax stating &ldquo;No
Clinical Hold Issues.&rdquo; This will be provided in both hard copy and CDs as it is an extremely large file.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit 11.8</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>A list of environmental, health and
safety Regulatory Approvals (if any) necessary for the use and operation by the Company of the Acquired Assets for the purpose
of Section 11.8.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify">None</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit 11.11</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>A list of all Agreements for the purpose of Section
11.11.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>Myoconda</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>Heliconda</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>[****].</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>Corealis Quote for formulation, development and GMP manufacture.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>[****].</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>Picoconda</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD>Shortis / Borody Deed of Assignment and Commercialization to CDD &amp; Pharmatel November 10, 2003.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD>Borody assignment of benefits of Picoconda to Giaconda Limited June 2, 2005.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD>Pharmatel agreement to assignments of Borody benefits to Giaconda August 16, 2004.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD>Corealis Quote for formulation, development and GMP manufacture</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">f.</TD><TD STYLE="text-align: justify">Memorandum of Understanding between Giaconda and CDD Physicians dated April 10, 2010 regarding
the potential license [****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit 11.13.1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>The list of Technology IP for the purposes
of Section 11.13.1.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>US patent file wrapper for Myoconda provided on CD due to large file</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2.</TD><TD>US patent file wrapper for Heliconda provided on CD due to large file</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">3.</TD><TD>US file patent wrapper for Picoconda provided on CD due to large file</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit 11.13.4- Patents</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1in; text-align: center"><B><U>Methods and compositions
for treating inflammatory bowel disease (MYOCONDA)</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1in; text-align: center"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Priority</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Country or</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Application No.</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Status</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Patent No.</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Next Due Date</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Expiry Date</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Application</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">Region</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Details</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">PO5940</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">filed 1 Apr 1997</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">PO9785</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">filed 14 Oct 1997</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Argentina</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">P980101486</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Lapsed</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">67127/98</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">750813</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">26123/02</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">774329</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Canada</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2285923</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Pending</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Europe<B>*</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Israel</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">132145</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">132145</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2012</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Japan</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">10-540998</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Lapsed</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Japan</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2007-232402</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Pending</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">New Zealand</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">500696</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">500696</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">New Zealand</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">517348</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">517348</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Norway</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">19994778</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">325947</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Philippines</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1-1998-00751</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1-1998-00751</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">14 Aug 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Philippines</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1-2003-00077</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1-2003-00077</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">29 Sep 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">South Africa</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98/2645</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98/2645</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Mar 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">USA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/381,960</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">6,277,836</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">21 Feb 2013</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">USA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/899,545</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">6,551,632</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">22 Oct 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">61/065144</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">USA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">filed 8 Feb 2008</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">PCT/AU2009/000129</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">PCT</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Pending</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">8 Aug 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">filed 5 Feb 2009</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1in; text-align: left">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Methods and compositions for treating
inflammatory bowel disease (MYOCONDA)</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Patents granted based on EP 98912149.6/EP0971735</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Priority</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Application</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Details</B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Country or</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Region</B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Application No.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Status</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Patent No.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Next Due Date</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Expiry Date</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Austria*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Belgium*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Switzerland &amp; Liechtenstein*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Cyprus*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Germany*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Denmark*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Spain*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Finland*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">France*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">United Kingdom*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Greece*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Ireland*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Italy*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Luxembourg*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Monaco*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">The Netherlands*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Portugal*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Sweden*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Albania***</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Latvia***</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Lithuania***</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Romania***</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Slovenia***</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Macedonia***</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">98912149.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">0971735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Apr 2018</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>* Validation out of EP 98912149.6</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>*** Extension States out of EP 98912149.6</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>Improved method for eradication of <I>H. pylori</I> (HELICONDA)</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Priority</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Application</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Details</B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Country or</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Region</B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Application No.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Status</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Patent No.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Next Due Date</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Expiry Date</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PP3253</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">filed 30 Apr 1998</P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">34006/99</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">762890</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Canada</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2330424</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2330424</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Europe</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">USA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/673,631</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">6,489,317</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">3 Jun 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><U>Patents granted based on EP 99915381.0</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Priority</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Application</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Details</B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Country or</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Region</B></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Application No.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Status</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Patent No.</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Next Due Date</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; text-align: center; font-weight: bold">Expiry Date</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Austria*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">1073436/</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">E344664</P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2011</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Belgium*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Switzerland &amp; Liechtenstein*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Cyprus*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Germany*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">1073436/</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">69933925.1</P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Denmark*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Spain*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Finland*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Lapsed</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">N/A</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Oct 2009</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">France*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">United Kingdom*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Greece*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Ireland*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Italy*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Luxembourg*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Monaco*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">The Netherlands*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Portugal*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Sweden*</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">99915381.0</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1073436</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2010</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">30 Apr 2019</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD><B>Validation of EP 1073436</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Improved preparation for colonic evacuation
(PICOCONDA)</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Priority Application Details</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Country or Region</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Application No.</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Status</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Patent No.</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold; border-bottom: Black 1pt solid">Expiry Date</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD NOWRAP STYLE="text-align: center; font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">PN6345</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">filed 3 Nov. 1995</P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">70568/96</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Lapsed</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">72239/00</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">771576</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Nov 2016</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Canada</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">2189418</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Pending</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">1 Nov 2016</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Europe<B>*</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">96307954.6</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Pending</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">-</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">1 Nov 2016</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center; font-style: italic">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">New Zealand</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">299685</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">299685</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Nov 2016</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">New Zealand</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">333493</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">333493</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1 Nov 2016</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">USA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">08/742,798</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">5,858,403</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">31 Oct 2016</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">USA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/200,781</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">6,103,268</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">31 Oct 2016</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">USA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">09/148,857</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Granted</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">6,132,767</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">31 Oct 2016</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>*</B> Designated states are Austria, Belgium, Cyprus, Switzerland
and Liechtenstein, Germany, Denmark, Spain, Finland, France, United Kingdom, Greece, Ireland, Italy, Luxembourg, Monaco, Netherlands,
Portugal and Sweden and Extension States are Albania Latvia Lithuania Romania and Slovenia.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>11.13.5 Trademarks</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; width: 15%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FB Rice</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Ref.</B></P></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 15%">Country</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 15%">Number</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 15%">Mark</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 14%">Status</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 20%">Goods</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">127086</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1037460</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">HELICONDA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Registered</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 5:</B> Pharmaceuticals</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 10:</B> Surgical and medical apparatus and instruments
        including apparatus for the dispensing of pharmaceuticals and diagnostic and testing apparatus</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">127088</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1037462</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">MYOCONDA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: windowtext">Registered</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 5:</B> Pharmaceuticals</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 10:</B> Surgical and medical apparatus and instruments
        including apparatus for the dispensing of pharmaceuticals and diagnostic and testing apparatus</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">130639</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Australia</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">1146090</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">PICOCONDA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Registered</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 5:</B> Pharmaceuticals</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 10:</B> Surgical and medical apparatus and instruments
        including apparatus for the dispensing of pharmaceuticals and diagnostic and testing apparatus</P></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; width: 14%">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>FB Rice</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Ref.</B></P></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 14%">Country</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 14%">Number</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 14%">Mark</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 12%">Status</TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD NOWRAP STYLE="border-bottom: Black 1pt solid; font-weight: bold; text-align: center; width: 26%">Goods</TD>
    <TD STYLE="width: 1%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">127735</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: windowtext">International<B>*</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">894653</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">HELICONDA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Registered</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 5:</B> Pharmaceuticals</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 10:</B> Surgical and medical apparatus and instruments
        including apparatus for the dispensing of pharmaceuticals and diagnostic and testing apparatus</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="11">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>* </B>Designated states are Bulgaria, Belarus,
        Europe (OHIM), Georgia, Croatia, Iceland, Liechtenstein, Lesotho, Morocco, Macedonia, Norway, Romania, Russia, Serbia, Switzerland,
        Turkey, Ukraine, USA</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><B>Protected</B>: As above.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="11">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">127737</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: windowtext">International<B>*</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">894655</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">MYOCONDA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Registered</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 5:</B> Pharmaceuticals</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 10:</B> Surgical and medical apparatus and instruments
        including apparatus for the dispensing of pharmaceuticals and diagnostic and testing apparatus</P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="11">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>* </B>Designated states are Bulgaria, Belarus,
        Europe (OHIM), Georgia, Croatia, Iceland, Liechtenstein, Lesotho, Morocco, Macedonia, Norway, Romania, Russia, Serbia, Switzerland,
        Turkey, Ukraine, USA</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><B>Protected</B>: As above.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="11">&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">130640</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="color: windowtext">International<B>*</B></FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">923036</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">PICOCONDA</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">Registered</TD>
    <TD>&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Class 5:</B> Pharmaceuticals</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B></B></P></TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="11">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">Designated states are Bulgaria, Belarus, Croatia,
        Europe (OHIM), Georgia, Iceland, Liechtenstein, Lesotho, Macedonia, Morocco, Norway, Romania, Russia, Serbia, Switzerland, Turkey,
        Ukraine, USA.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><B>Protected: </B>as above</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"></P></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Exhibit 11.14</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1.</TD><TD>Giaconda&rsquo;s product liability policy number 93391597 issued by Chubb Insurance Company of Australia Limited on 31 May
2010 and in force until 30 May 2011.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Exhibit 11.19</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">Budget</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in"><B>[****]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 4.13</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMIITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RESEARCH and TECH TRANSFER, MANUFACTURING
AND SUPPLY AGREEMENT FOR RHB-104 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[Clinical Trial Batches Only]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This <B>TECH TRANSFER,</B> <B>MANUFACTURING
AND SUPPLY AGREEMENT </B>(&ldquo;Agreement&rdquo;) is made as of this 28<SUP>th</SUP> day of April, 2011, (the &laquo;Effective
Date&raquo;) by and between 7810962 CANADA INC., a corporation having its principal place of business at 245 Victoria Ave, Suite
100, Montreal, QC H3Z 2M6, Canada, (&ldquo;PROVIDER&rdquo;) and <B> </B>RedHill Biopharma Ltd<B>.</B>, with principle place of
business at<B> 42 Givati St. Ramat-Gan 52232, Israel </B>(&ldquo;CUSTOMER&rdquo;). UMAN and CUSTOMER shall be collectively referred
as the &ldquo;Parties&rdquo;, with each being a &ldquo;Party&rdquo;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RECITALS</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">CUSTOMER desires that PROVIDER manufacture
and/or package the Product and/or render the Research and Tech Transfer (TT) Services (as hereinafter defined and termed Services)
for CUSTOMER in accordance with the provisions of this Agreement. PROVIDER is willing to manufacture and/or package the Product
and/or render the Services for CUSTOMER in accordance with the provisions of this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">CUSTOMER agrees that PROVIDER will engage
the services of UMAN PHARMA INC. as a third party subcontractor in order for PROVIDER to deliver the deliverables of this agreement.
CUSTOMER further agrees that where PROVIDER is stated in this agreement it shall mean PROVIDER shall perform given task or deliver
given deliverable or assume given responsibility or that PROVIDER shall cause UMAN to perform given task or deliver given deliverable
or assume given responsibility as is appropriate unless otherwise specified.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This Agreement is an appendix to and forms
part of the Master Service Agreement executed between CUSTOMER and PROVIDER on 28<SUP>th</SUP> April 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In consideration of the premises and of
the mutual promises hereinafter set forth, the parties agree as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DEFINITIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The terms defined in this Article 1 shall,
for all purposes of this Agreement, have the meanings specified in this Article 1 (applicable in both the singular and plural forms).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.1</TD><TD STYLE="text-align: justify">&ldquo;<U>Act</U>&rdquo; shall mean the Canadian Food and Drugs Act as amended from time to time.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.2</TD><TD STYLE="text-align: justify">&ldquo;<U>Affiliate(s)</U>&rdquo; means any corporation, firm, partnership, or other entity which
controls, is controlled by or is under common control with a party. For purposes of this definition, &ldquo;control&rdquo; shall
mean the ownership of at least fifty percent (50%) of the voting share capital of such entity or the power to appoint the majority
of the directors of such entity, or any other comparable equity or ownership interest.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.3</TD><TD STYLE="text-align: justify">&ldquo;<U>API</U>&rdquo; shall mean the active pharmaceutical ingredient described in <U>Exhibit
A</U> and related specifically to the execution of the Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.4</TD><TD STYLE="text-align: justify">&ldquo;<U>Applicable Laws</U>&rdquo; means FDA regulations, EU regulations and all laws, ordinances,
rules and regulations within the Territory, applicable to the Processing of the Product or any aspect thereof and the obligations
of PROVIDER or CUSTOMER, as the context requires under this Agreement, including, without limitation, (A) all applicable federal,
provincial and local laws and regulations of the Territory and (B) cGMPs.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.5</TD><TD STYLE="text-align: justify">&ldquo;<U>Batch</U>&rdquo; means a defined quantity of finished drug product which has been or
is being Processed in accordance with the Specifications.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.6</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&quot;<U>cGMPs</U>&quot; shall mean current Good Manufacturing
Practices as further defined in regulations promulgated by Health Canada or other Regulatory Authorities from time to time under
the Act or the Applicable Laws. </FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"></TD><TD STYLE="text-align: justify"></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.7</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&ldquo;<U>Change Order</U>&rdquo; shall have the meaning set
forth in Section 4.3.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.8</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&ldquo;<U>Contract Year</U>&rdquo; means each consecutive twelve
(12) month period beginning on the Commencement Date.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.9</TD><TD STYLE="text-align: justify">&ldquo;<U>CUSTOMER Technology</U>&rdquo; shall have the meaning set forth in Article 11.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.10</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&ldquo;<U>Defective Product</U>&rdquo; shall have the meaning
set forth in Section 5.3.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.11</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&ldquo;<U>Delivery Date</U>&rdquo; shall mean the date on which
PROVIDER shall tender the relevant Batch(es) to CUSTOMER. Each Delivery Date shall be specified by CUSTOMER on the relevant Purchase
Order and confirmed by PROVIDER as set forth in <U>Exhibit A</U>.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.12</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&ldquo;<U>Dispute</U>&rdquo; shall have the meaning set forth
in Section 18.9.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.12A</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&ldquo;Establishment License&rdquo;</FONT> <FONT STYLE="font-weight: normal">means
an obligatory license issued by Health Canada to drug establishments allowing them to fabricate, package, label, distribute, import,
wholesale, or test a drug.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.13</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">&ldquo;<U>Facility&rdquo; or &ldquo;Facilities</U>&rdquo; means
UMAN&rsquo;s facilities located in Candiac, Quebec or such other facility as may be agreed to between the Parties.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.14</TD><TD STYLE="text-align: justify">&ldquo;<U>Firm Commitment</U>&rdquo; shall have the meaning set forth in Section 4.1.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="font-weight: normal">1.15</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal"><U>&quot;Health Canada&quot;</U> shall mean Health Canada, any
of its successor agencies or departments, or any other federal or provincial agency serving the same or similar function in Canada.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.16</TD><TD STYLE="text-align: justify">&quot;<U>In bulk</U>&quot; shall mean quantities of Product packaged in non-retail size containers,
such Product intended for further packaging and/or labelling in accordance with the <U>Exhibit A</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.17</TD><TD STYLE="text-align: justify">&quot;<U>Initial Term</U>&quot; shall have the meaning set forth in Section 16.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.18</TD><TD STYLE="text-align: justify">&quot;<U>Losses</U>&quot; shall have the meaning set forth in Section 13.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.18A</TD><TD STYLE="text-align: justify">&quot;<U>Master Manufacturing Document</U>&quot; means the document specifying the manufacturing
process and Materials used to manufacture the Product which is to be created by PROVIDER as part of the Services and thereafter
maintained by PROVIDER.<B> </B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.19</TD><TD STYLE="text-align: justify">&ldquo;<U>Processing</U>&rdquo; means (i) the compounding, filling, encapsulation, producing, imprinting,
packaging, and inspection testing of the API and the Raw Materials into Product, and (ii) applying lot numbers, labeling, and arranging
for the shipment of the Products, each in accordance with the Specifications and the terms and conditions of this Agreement; and
&quot;<U>Process</U>&quot; has a corresponding meaning.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.20</TD><TD STYLE="text-align: justify">&ldquo;<U>Processing Date</U>&rdquo; means the day on which the Product is to be compounded by
PROVIDER.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.21</TD><TD STYLE="text-align: justify">&ldquo;<U>Processing Related Reference Documents</U>&rdquo; means (a) all completed production/Batch
records; (b) all quality control test/request forms (results worksheets) and associated data, (c) in-process monitoring performed
during Processing; (d) any alert/action notifications generated during Processing; (e) any planned or unplanned deviations associated
with the Product; (f) any out of Specification result investigations associated with the Product; (g) the Certificate of Analysis
for the Batch comparing testing to Specifications; (h) the appropriate disposition notification of the Batch; and a Yield statement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.22</TD><TD STYLE="text-align: justify">&quot;<U>Product</U>&rdquo; means product as described in <U>Exhibit A</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-align: justify; text-indent: -31.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.23</TD><TD STYLE="text-align: justify">&ldquo;<U>Purchase Order</U>&rdquo; shall have the meaning set forth in Section 4.2.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.23A</TD><TD STYLE="text-align: justify">&ldquo;Quality Agreement&rdquo; refers to the agreement between the Parties addressing the obligations
relating to the manufacture of the Product in accordance with the Specifications.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.24</TD><TD STYLE="text-align: justify">&ldquo;<U>Raw Materials</U>&rdquo; means all raw materials, supplies, components and packaging
materials necessary to manufacture the Product in accordance with <U>Exhibit A</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.25</TD><TD STYLE="text-align: justify">&ldquo;<U>Regulatory Approval</U>&rdquo; means all regulatory approvals required by Regulatory
Authorities necessary for PROVIDER to Process the Product at the Facility.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 31.5pt">1.26</TD><TD STYLE="text-align: justify">&ldquo;<U>Regulatory Authority</U>&rdquo; means any governmental regulatory authority within the
Territory and in the USA and EU, involved in regulating any aspect of the development, manufacture, market approval, sale, distribution,
packaging or use of the Product.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 31.5pt; text-align: justify; text-indent: -31.5pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.27</TD><TD STYLE="text-align: justify">&quot;<U>Renewal Term</U>&quot; shall have the meaning set forth in Section 16.1.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.28</TD><TD STYLE="text-align: justify">&quot;<U>Review Period</U>&quot; shall have the meaning set forth in Section 5.1</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.29</TD><TD STYLE="text-align: justify">&ldquo;<U>Rolling Forecast</U>&rdquo; shall have the meaning set forth in Section 4.1.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.30</TD><TD STYLE="text-align: justify"><U>&lsquo;&rsquo;Services&rsquo;&rsquo;</U> means the services in accordance with <U>Exhibit A</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.31</TD><TD STYLE="text-align: justify">&ldquo;<U>Specifications</U>&rdquo; means the procedures, requirements, acceptance criteria, standards,
quality control testing and other data and the scope of services as set forth in <U>Exhibit A</U> which are hereby incorporated
by reference into this Agreement, along with the processes for formulating the Product set forth in other documents transferred
or to be transferred to PROVIDER, and in each case any other valid amendments or modifications thereto</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.32</TD><TD STYLE="text-align: justify">&ldquo;<U>Technology Transfer</U>&rdquo; means those of the Services directed to the transfer of
technology and processes to enable PROVIDER to Process the Product at the Facility.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.33</TD><TD STYLE="text-align: justify">&ldquo;<U>Term</U>&rdquo; shall have the meaning set forth in Section 16.1.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.34</TD><TD STYLE="text-align: justify">&ldquo;<U>Territory</U>&rdquo; means the United States of America, the European Economic Area,
Canada, provinces and territories.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.35</TD><TD STYLE="text-align: justify">&ldquo;<U>PROVIDER Technology</U>&rdquo; shall have the meaning set forth in Article 11.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">1.36</TD><TD STYLE="text-align: justify">&ldquo;<U>$</U>&rdquo; and &ldquo;<U>dollars</U>&rdquo; mean United States dollars.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: center; text-indent: -35.45pt"><B>ARTICLE
2</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: center; text-indent: -35.45pt"><B>PROCESSING
AND RELATED SERVICES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: -35.45pt"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">2.1</TD><TD STYLE="text-align: justify"><U>Supply and Purchase of Product and/or Services</U>. During the Term, PROVIDER agrees to Process
the Product or to render the Services in accordance with the Specifications, the Act, Applicable Laws and the terms and conditions
of this Agreement, and with the skill, care and diligence reasonably to be expected of a competent pharmaceutical manufacturer.
CUSTOMER shall purchase Product and/or Services from PROVIDER in accordance with the terms and conditions of this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">2.2</TD><TD STYLE="text-align: justify"><U>Technology Transfer Co-operation</U>. The parties shall use commercially reasonable efforts
to ensure that the Technology Transfer is completed in accordance with its agreed timelines and in any event as soon as possible.
In particular, the parties shall co-operate with each other and with any required third party in good faith with respect to unforeseen
contingencies. PROVIDER shall provide timely assistance and documentation as reasonably requested by CUSTOMER from time to time.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">2.3</TD><TD STYLE="text-align: justify"><U>Project Team</U>. Forthwith after the Effective Date, the parties shall establish a Project
Team to oversee the Technology Transfer and the provision of the other Services (the &ldquo;<U>Project Team</U>&rdquo;). The Project
Team shall consist of representatives of each party who are appropriately skilled and knowledgeable about the Services and in the
case of PROVIDER directly involved in their performance. CUSTOMER shall be entitled to appoint one or more employees and/or consultants
of any downstream customer of the Product as its representatives.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">The parties may replace their
representatives on the Project Team from time to time, but any appointment by PROVIDER shall require the consent of CUSTOMER, which
shall not be unreasonably withheld or delayed.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">The Project Team shall meet
at least once every two weeks. At its meetings, each party shall communicate any useful information about the Technology Transfer,
and without prejudice to the generality of the foregoing any anticipated delays in the delivery of the Services. The Project Team
may make recommendations to the parties, but shall not have the authority to amend the scope of the Services; all such amendments
shall be made only by written agreement of duly authorised representatives of the parties,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">The parties shall pay their
own costs of attendance at meetings of the Project Team including travel and accommodation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">2.4</TD><TD STYLE="text-align: justify"><U>Conduct of Representatives</U>. Each party shall ensure that its personnel at the other&rsquo;s
facility comply with the other&rsquo;s safety and security rules and other rules applicable to those working at the applicable
facilities.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">2.5</TD><TD STYLE="text-align: justify"><U>Other Related Services</U>. PROVIDER may provide other services upon terms and conditions agreed
to by the Parties in writing from time to time.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MATERIALS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">3.1</TD><TD STYLE="text-align: justify"><U>API</U> For Processing of products, subject to CUSTOMER pre-approval in writing of both the
supplier and the costs, PROVIDER will purchase API as per <U>Exhibit A</U> in quantities sufficient to meet CUSTOMER&rsquo;s requirements
for the Product as further set forth in Article 4. PROVIDER shall conduct appropriate release testing of the API as outlined in
the Quality Agreement to be concluded further the conclusion of the Agreement as per Article 9.6 (&ldquo;Quality Agreement&rdquo;).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">3.2</TD><TD STYLE="text-align: justify"><U>Raw Materials (other then API)</U>.PROVIDER shall be responsible for procuring, inspecting and
releasing adequate Raw Materials as necessary to meet the Firm Commitment, unless otherwise agreed to by the Parties. The suppliers
and costs of Raw Materials will be specified in the Specifications or otherwise agreed to in writing in advance by CUSTOMER.<B>
The CUSTOMER should be advised of any changes to suppliers of non-API raw materials.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">3.3</TD><TD STYLE="text-align: justify"><U>Reimbursement for Materials</U>. In the event of (A) a Specification change requested by CUSTOMER
or PROVIDER for CUSTOMER&rsquo;s benefit and agreed by CUSTOMER, or to comply with any new requirement of a Regulatory Authority
and agreed by CUSTOMER, or (B) termination of this Agreement by CUSTOMER without cause or expiration of this Agreement, CUSTOMER
shall bear the cost of any unused Raw Materials (at PROVIDER&rsquo;s purchase cost) reasonably ordered consistent with the timelines
of this Agreement and that cannot otherwise be used by PROVIDER or returned for credit, provided that PROVIDER purchased such Raw
Materials in quantities consistent with CUSTOMER&rsquo;s most recent Firm Commitment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 4</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PURCHASING; CHANGES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">4.1</TD><TD STYLE="text-align: justify"><U>CUSTOMER&rsquo;s Modification or Cancellation</U>. At any time prior to the scheduled date for
delivery of Product, CUSTOMER may cancel such delivery or request a modification of the confirmed delivery date, Specifications
or quantity of Product or Services in such Purchase Order by submitting a written change order (&ldquo;Change Order&rdquo;) to
PROVIDER. If a Change Order is submitted less than sixty (60) days prior to the relevant Delivery Date, such Change Order shall
be effective and binding against PROVIDER only upon the written acceptance by PROVIDER, which approval shall not be unreasonably
withheld, delayed or conditioned.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">4.2</TD><TD STYLE="text-align: justify"><U>Unplanned Delay or Elimination of Processing</U>. PROVIDER shall in a timely manner fill each
requirement for Product, subject to the terms and conditions of this Agreement. PROVIDER shall notify CUSTOMER within not more
than 5 working days if PROVIDER determines that any Processing will be delayed or eliminated for any reason, provided that such
notice shall not relieve PROVIDER of any of its obligations under this Agreement, absent the written consent of CUSTOMER.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 5</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TESTING; SAMPLES; RELEASE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">5.1</TD><TD STYLE="text-align: justify"><U>Product release</U>. PROVIDER shall release to CUSTOMER, or its designee, the Product as per
the process outline in the Quality Agreement. If CUSTOMER determines that such Batch is defective or does not conform to the Specifications,
the Act and Applicable Laws, CUSTOMER shall promptly, but in no event no later than 45 business days after receiving the batch
of Product (the &ldquo;Review Period&rdquo;), provide to PROVIDER a notice of its determination. If PROVIDER agrees that such Batch
is defective or non-conforming as aforesaid, PROVIDER will, at CUSTOMER&rsquo;s option, either replace such Batch in accordance
with Section 5.3 below, or credit any payments made by CUSTOMER for such Batch, including the amount of lost API when supplied
and paid by CUSTOMER, if applicable. If PROVIDER does not agree with CUSTOMER&rsquo;s determination that such Batch fails to meet
the Specifications, then after reasonable efforts to resolve the disagreement, either Party may submit a sample from the Batch
to an independent third party in accordance with Section 5.2 below. If CUSTOMER (a) notifies PROVIDER that the Product meets the
Specifications, as provided above, or (ii) does not notify PROVIDER that the Product is non-conforming prior to the end of the
Review Period, then the Product shall be deemed to have been accepted by CUSTOMER, and PROVIDER shall invoice CUSTOMER for such
Batch.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">5.2</TD><TD STYLE="text-align: justify"><U>Disagreements Regarding Product Conformity</U>. In the event of a disagreement between the Parties
regarding whether the Product meets the Specifications, the Parties shall appoint KABS Pharmaceutical Services or another independent
laboratory that has been mutually agreed upon to review records, test data and to perform the comparative tests and/or analyses
set forth in the Specifications, on a sample of the alleged Defective Product (as defined in Section 5.3 below). KABS Pharmaceutical
Services shall conduct the conformity tests within a reasonable period of time to be agreed upon. The results of the independent
review shall be final and binding. Unless otherwise agreed to by the Parties in writing, the costs associated with such testing
and review shall be borne by the non-prevailing Party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">5.3</TD><TD STYLE="text-align: justify"><U>Replacement</U>. In the event that CUSTOMER alleges that Product does not comply with the warranty
set forth in Section 12.1, at CUSTOMER&rsquo;s sole option, PROVIDER shall replace such Product as soon as possible and in any
event within 60 (sixty) days following such request. If it is agreed or determined that such Product did not meet the warranty
referred to (&ldquo;Defective Product&rdquo;), such replacement shall be at PROVIDER&rsquo;s sole expense, including shipment expenses
of returning of the Defective Product and priority shipment of conforming Products to CUSTOMER. This is without prejudice to CUSTOMER&rsquo;s
right to claim additional damages. Where it is determined that such Product was not Defective Product, such expenses shall be for
the account of CUSTOMER, at prices consistent with those for the original shipment.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">5.4</TD><TD STYLE="text-align: justify"><U>Sample Retention</U>. Unless the parties agree otherwise in writing, PROVIDER will maintain
raw material, clinical supply and analytical samples in storage for a time period based upon sample retention policy, or such longer
period of time as CUSTOMER may reasonably request or any Regulatory Authority may request or require.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 6</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>DELIVERY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">6.1</TD><TD STYLE="text-align: justify"><U>Delivery</U>. PROVIDER shall segregate and store all Product until acceptance as set forth in
<U>Exhibit A</U>. Upon such acceptance, PROVIDER shall tender the Product for delivery, F.O.B. the Facility. CUSTOMER or designee
shall be responsible for all costs and risk of loss associated with shipment of the Product once Product is tendered for delivery.
Carrier to ship the Product shall be designate by the CUSTOMER or designee.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 7</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>PRICING AND PAYMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">7.1</TD><TD STYLE="text-align: justify"><U>Pricing</U>. CUSTOMER shall pay to PROVIDER the pricing set forth on <U>Exhibit A</U> (&ldquo;Pricing&rdquo;)
for all Product and Services delivered in accordance with the terms of this Agreement. No additional charges shall be payable for
any work conducted by PROVIDER except as expressly set forth in this Agreement or as pre-approved in writing by CUSTOMER.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">7.2</TD><TD STYLE="text-align: justify"><U>Payment Terms</U>. PROVIDER shall invoice CUSTOMER for all Product and Services as provided
in <U>Exhibit A</U> and payment for any undisputed portions of such invoices shall be due within thirty (30) days after the date
of the receipt of such invoice. Other than for invoices which are under dispute in good faith, in the event payment is not received
by PROVIDER on or before the forty-fifth (45<SUP>th</SUP>) day after the date of the receipt of the invoice, then such unpaid amounts
shall accrue interest at the rate of five percent (5%) per annum until paid in full.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 8</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CHANGES TO SPECIFICATIONS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">8.1</TD><TD STYLE="text-align: justify">All Specifications and any changes thereto agreed to by the Parties from time to time shall be
in writing, dated and signed by the Parties. No change in the Specifications shall be implemented by PROVIDER, whether requested
by CUSTOMER or requested or required by any Regulatory Authority, until the Parties have agreed in writing to such change, the
implementation date of such change, and any increase or decrease in costs, expenses or fees associated with such change. PROVIDER
shall respond promptly to any request made by CUSTOMER for a change in the Specifications, and both parties shall use commercially
reasonable, good faith efforts to agree to the terms of such change in a timely manner. If after initial Product qualification,
CUSTOMER requests a change in the Specifications for its own benefit or to comply with the requirements of a Regulatory Authority,
the Specifications shall be amended as soon as possible after a request is made for any change in Specifications, and PROVIDER
shall notify CUSTOMER of the costs associated with such change and shall provide such supporting documentation as CUSTOMER may
reasonably require. CUSTOMER shall pay all costs associated with such CUSTOMER's requested changes or changes required by a Regulatory
Authority as may be agreed upon by the Parties. Changes, agreed to between the Parties, for the benefit or at the request of PROVIDER,
shall be at the expense of PROVIDER. If there is a conflict between the terms of this Agreement and the terms of the Specifications,
this Agreement shall prevail.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 9</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>RECORDS; REGULATORY MATTERS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">9.1</TD><TD STYLE="text-align: justify"><U>Recordkeeping</U>. PROVIDER shall maintain for the duration of this Agreement and thereafter
for so long as specified by Applicable Law or Regulatory Authorities, true and accurate books, records, test and laboratory data,
batch documentation, reports and all other information relating to Processing under this Agreement, including all information required
to be maintained by all Specifications, the Act and Applicable Laws.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">9.2</TD><TD STYLE="text-align: justify"><U>Regulatory Compliance</U>. PROVIDER, with the assistance of CUSTOMER or designee, at PROVIDER's
expense, shall obtain all permits and licenses required by any Canadian federal, provincial or local regulatory agency or any other
Regulatory Authority with respect to the Product and the Processing under this Agreement, including any product licenses, applications
and amendments in connection therewith. PROVIDER will be responsible to obtain and maintain all permits and licenses required by
any Regulatory Authority with respect to the Facility. During the Term, PROVIDER will assist CUSTOMER or designee with all regulatory
matters relating to Processing under this Agreement, at CUSTOMER&rsquo;s request and at CUSTOMER&rsquo;s expense. Each party intends
and commits to cooperate to satisfy the Act and all Applicable Laws relating to Processing under this Agreement. PROVIDER shall
provide an Establishment License to CUSTOMER annually during the Term.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">9.3</TD><TD STYLE="text-align: justify"><U>Governmental Inspections and Requests</U>. PROVIDER shall immediately advise CUSTOMER if an
authorized agent of any Regulatory Authority requests to visit the Facility concerning the Product. PROVIDER shall permit CUSTOMER
to have a representative present for any such Product-specific Facility inspection. PROVIDER shall also advise the CUSTOMER of
any audits by Regulatory Authorities that may have an impact on the Product and provide audit results upon request.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">9.4</TD><TD STYLE="text-align: justify"><U>CUSTOMER Inspections and Audits</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">A.</TD><TD STYLE="text-align: justify">Except for circumstances as set forth in Section 9.4, during the term of this Agreement, duly-authorized
employees, agents and representatives of CUSTOMER (for the avoidance of doubt including any employees or consultants of a customer
of CUSTOMER, duly authorized) and all Regulatory Authorities shall be granted access upon prior notice, or in accordance with the
Applicable Law and at reasonable times during regular business hours to only the portion of the Facilities where PROVIDER Processes
the Product for the purpose of inspecting and verifying that PROVIDER is Processing the Product in accordance with cGMPs, the Specifications
and to PROVIDER's records related to the Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">B.</TD><TD STYLE="text-align: justify">With due regard to information and operations which constitute Proprietary Information of PROVIDER,
duly-authorized employees, agents and representatives of CUSTOMER (for the avoidance of doubt including any employees or consultants
of a customer of CUSTOMER, duly authorized) and all Regulatory Authorities shall have the right to inspect PROVIDER Batch Records
relating to Product and those portions of PROVIDER&rsquo;s Facilities used for Processing Product. CUSTOMER&rsquo;s Quality Assurance
Manager will arrange audit visits with PROVIDER Quality Management.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">9.5</TD><TD STYLE="text-align: justify"><U>Recall</U>. In the event PROVIDER believes a recall, field alert, Product withdrawal or field
correction may be necessary with respect to any Product provided under this Agreement, PROVIDER shall immediately notify CUSTOMER
in writing. In the event CUSTOMER or designee believes a recall, field alert, Product withdrawal or field correction may be necessary
with respect to any Product provided under this Agreement, CUSTOMER shall immediately notify PROVIDER in writing and PROVIDER shall
provide all necessary cooperation and assistance to CUSTOMER. CUSTOMER or designee shall solely control the implementation of such
recall, field alert, Product withdrawal or field correction. The cost of any recall, field alert, Product withdrawal or field correction
shall be borne by CUSTOMER or designee unless such recall, field alert, Product withdrawal or field correction is caused by PROVIDER&rsquo;s
breach of its representations, warranties and obligations under this Agreement or the Act or Applicable Laws or its negligence
or willful misconduct, then such cost shall be borne by PROVIDER. For purposes hereof, such cost shall be limited to reasonable,
actual and documented costs incurred by CUSTOMER for such recall, withdrawal or correction, and replacement of the Defective Product
to be recalled, in accordance with Article 5. CUSTOMER shall solely control the implementation of any such recall, field alert,
withdrawal or field correction.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">9.6</TD><TD STYLE="text-align: justify"><U>Quality Agreements</U>. Forthwith after executing this Agreement, the parties shall execute
a Quality Agreement in substantially the form attached to this Agreement as <U>Exhibit B</U>. The Quality Agreement shall in no
way determine liability or financial responsibility of the parties for the responsibilities set forth therein. In case of conflict
between the terms of the Quality Agreement and this Agreement, this Agreement shall prevail.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 10</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONFIDENTIAL INFORMATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.1</TD><TD STYLE="text-align: justify">In this Article 10, &ldquo;Confidential Information&rdquo; means confidential and proprietary information,
including inventions, works of authorship, trade secrets, specifications, designs, data, know-how and other proprietary information
relating to the Product, the Specifications, processing of the Product, processes, services and business of the disclosing party
which is or has been disclosed by the parties to each other in the course of its activities under this Agreement and is marked
or otherwise reasonably identified as confidential. For clarity, in the case of CUSTOMER, &quot;Confidential Information&quot;
also includes such information belonging to and/or relating to any person or entity to whom CUSTOMER may supply the Product, and
regardless of whether that information is disclosed to PROVIDER by such a person, by CUSTOMER, or by any third party acting for
either of them.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.2</TD><TD STYLE="text-align: justify">Any Confidential Information disclosed by the disclosing party shall be used by the receiving party
exclusively for the purposes of fulfilling the receiving party&rsquo;s obligations under this Agreement and for no other purpose.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.3</TD><TD STYLE="text-align: justify">Save as otherwise specifically provided herein (and in particular subject to Section 10.11), each
party shall disclose Confidential Information of the other party only to those employees, representatives and agents requiring
knowledge thereof in connection with fulfilling the party&rsquo;s obligations under this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.4</TD><TD STYLE="text-align: justify">Each party further agrees to inform all such employees, representatives and agents of the terms
and provisions of this Agreement relating to Confidential Information and their duties hereunder and to obtain their agreement
hereto as a condition of receiving Confidential Information.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.5</TD><TD STYLE="text-align: justify">Each party shall exercise the same standard of care as it would itself exercise in relation to
its own confidential information (but in no event less than a reasonable standard of care) to protect and preserve the proprietary
and confidential nature of the Confidential Information disclosed to it by the other party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.6</TD><TD STYLE="text-align: justify">Each party shall promptly, upon request of the other party, return all documents and any copies
thereof containing Confidential Information belonging to, or disclosed by, such other party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.7</TD><TD STYLE="text-align: justify">Any disclosure in breach of this Article 10 by any person informed by one of the parties is considered
a breach by the party itself.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.8</TD><TD STYLE="text-align: justify">Confidential Information shall be deemed not to include:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 35.45pt">10.8.1</TD><TD STYLE="text-align: justify">information which is in the public domain;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 35.45pt">10.8.2</TD><TD STYLE="text-align: justify">information which is made public through no breach of this Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 35.45pt">10.8.3</TD><TD STYLE="text-align: justify">information which is independently developed by a party, as evidenced by such party&rsquo;s records;
or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 35.45pt">10.8.4</TD><TD STYLE="text-align: justify">information that becomes available to a receiving party on a non-confidential basis, whether directly
or indirectly, from a source other than another party hereto, which source did not acquire this information on a confidential basis.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.9</TD><TD STYLE="text-align: justify">The parties agree that the obligations of this Article 10 are necessary and reasonable in order
to protect the parties&rsquo; respective businesses, and each party agrees that monetary damages would be inadequate to compensate
a party for any breach by the other party of its covenants and agreements set forth herein.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.10</TD><TD STYLE="text-align: justify"><U>Announcements</U>. Subject to Section 10.11, no announcement or public statement concerning
the existence, subject matter or any term of this Agreement shall be made by or on behalf of any party hereto without the prior
written approval of the other party or parties. The terms of any such announcement shall be agreed in good faith by the parties.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">10.11</TD><TD STYLE="text-align: justify"><U>Required Disclosures</U>. A party (the &ldquo;Disclosing Party&rdquo;) will be entitled to make
an announcement or public statement or to disclose Confidential Information that the Disclosing Party is required to make or disclose
pursuant to:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 35.45pt">10.11.1</TD><TD STYLE="text-align: justify">a valid order of a court or Governmental Authority; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 28.35pt"></TD><TD STYLE="width: 35.45pt">10.11.2</TD><TD STYLE="text-align: justify">any other requirement of law or any securities or stock exchange;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63.8pt; text-align: justify; text-indent: -35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">provided that if the Disclosing
Party becomes legally required to make such announcement, public statement or disclosure hereunder, the Disclosing Party shall
give the other party prompt notice of such fact to enable that other party to seek a protective order or other appropriate remedy
concerning any such announcement, public statement or disclosure, including confidential treatment and/or appropriate redactions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">The Disclosing Party shall
fully co-operate with the other party in connection with that other party's efforts to obtain any such order or other remedy. If
any such order or other remedy does not fully preclude announcement, public statement or disclosure, the Disclosing Party shall
make such announcement, public statement or disclosure only to the extent that the same is legally required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 11</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INTELLECTUAL PROPERTY</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">11.1</TD><TD STYLE="text-align: justify">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;As between PROVIDER and CUSTOMER, all PROVIDER and UMAN Technology, including, without limitation,
all improvements, developments, derivatives or modifications to the PROVIDER and UMAN Technology, shall be owned exclusively by
PROVIDER and/or UMAN and, except as set forth herein no right or license in PROVIDER or UMAN Technology is transferred or granted
to CUSTOMER. As between PROVIDER and CUSTOMER, all CUSTOMER Technology, including, without limitation, all improvements, developments,
derivatives or modifications to the CUSTOMER Technology shall be owned exclusively by CUSTOMER. CUSTOMER hereby grants to PROVIDER
a non-exclusive, royalty-free license for the term of this Agreement to use CUSTOMER Technology, if any, but solely for the purpose
of carrying out PROVIDER&rsquo;s obligations under this Agreement. For purposes hereof, PROVIDER Technology means all PROVIDER
or UMAN Confidential Information, intellectual property, and developments (including, all patents, patent applications, know-how,
inventions, designs, concepts, improvements or technical information), owned, licensed or used by PROVIDER or UMAN in developing,
formulating, manufacturing, filling, processing or packaging of pharmaceuticals and the packaging equipment, processes or methods
of packaging, or any improvements to any of the foregoing, in each case prior to the date of this Agreement. For purposes hereof,
CUSTOMER Technology means all Confidential Information, intellectual property and developments owned, developed, licensed or used
by CUSTOMER including, without limitation, patents, patent applications, know-how, inventions, designs, concepts, improvements,
technical information, trademarks or trade names owned, licensed or used by CUSTOMER or a Third Party that CUSTOMER is representing
or any improvements to any of the foregoing owned by CUSTOMER or a Third Party that Customer is representing prior to the date
of this Agreement. For the avoidance of doubt, all inventions or improvements with respect to the Product (&ldquo;NEW PRODUCT IP&rdquo;)
shall be the property of PROVIDER but will be immediately sold and assigned to CUSTOMER once the NEW PRODUCT IP comes into existence.
PROVIDER hereby sells and assigns to CUSTOMER all of PROVIDERS right, title and interest to the NEW PRODUCT IP and the cost of
sale and assignment of the NEW PRODUCT IP is included in the amount that CUSTOMER agrees to pay PROVIDER as described in EXHIBIT
A. Once the NEW PRODUCT IP is assigned by PROVIDER to CUSTOMER it then becomes the sole and exclusive property of the CUSTOMER.
The CUSTOMER shall have the right to use such NEW PRODUCT IP for any and all purposes, and shall have the full, unrestricted right
to assign, license or otherwise transfer any such NEW PRODUCT IP and the deliverables without any further payment to PROVIDER.
The Master Manufacturing Document shall for the avoidance of doubt be considered CUSTOMER Technology.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt; text-align: left">11.2</TD><TD STYLE="text-align: justify">PROVIDER shall not incorporate into its Processing of
the Product any PROVIDER or UMAN Technology.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 12</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>REPRESENTATIONS AND WARRANTIES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">12.1</TD><TD><U>PROVIDER</U> represents and warrants to CUSTOMER that:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">A.</TD><TD STYLE="text-align: justify">At the time of delivery of the Product and/or the Services as provided in Section 6.1, such Product
and/or Services will conform to and will have been Processed in conformance with the Specifications and the Act and Applicable
Laws;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">B.</TD><TD STYLE="text-align: justify">PROVIDER will be solely responsible for and will obtain all governmental approvals, permits and
licenses necessary or desirable in connection with the Processing of the Product in the Territory.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">C.</TD><TD STYLE="text-align: justify">It has, and shall have, good, complete and valid rights, title and interest to utilize the PROVIDER
Technology utilized in connection with the Product and as contemplated by this Agreement. There are no patents owned by others
which would be infringed or misused by PROVIDER&rsquo;s performance of the Agreement and, to its best knowledge, no trade secrets
or other proprietary rights of others which would be infringed or misused by PROVIDER&rsquo;s performance of this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">D.</TD><TD STYLE="text-align: justify">THE LIMITED WARRANTY SET FORTH IN THIS SECTION 12.1 IS IN LIEU OF ALL OTHER WARRANTIES, EXPRESS
OR IMPLIED, INCLUDING ANY WARRANTY OF MERCHANTABILITY AND ANY WARRANTY OF FITNESS FOR A PARTICULAR PURPOSE. EXCEPT FOR THE WARRANTY
EXPRESSED IN THIS SECTION 12.1, PROVIDER MAKES NO OTHER WARRANTY, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE PROCESSING OR
THE PRODUCT.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">12.2</TD><TD STYLE="text-align: justify"><U>CUSTOMER</U> represents, warrants and covenants to PROVIDER that:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">A.</TD><TD STYLE="text-align: justify">If CUSTOMER or a Third Party that CUSTOMER is representing supplies API to PROVIDER, API will comply
with all applicable Specifications, will have been produced in compliance with the Applicable Laws, and will be provided in accordance
with the terms and conditions of this Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">B.</TD><TD STYLE="text-align: justify">It or a Third Party that CUSTOMER is representing has all necessary authority and all right, title
and interest in and to any CUSTOMER Technology ;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">C.</TD><TD STYLE="text-align: justify">CUSTOMER will comply with all laws, rules, regulations and guidelines applicable to CUSTOMER&rsquo;s
performance under this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">12.3</TD><TD STYLE="text-align: justify"><U>Mutual.</U> Each party hereby represents and warrants to the other party that:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">A.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">S</FONT>uch party (1) is duly organized, validly existing and in good
standing under the laws in which it is organized, (2) has the corporate power and authority and the legal right to own and operate
its property and assets, and to carry on its business as it is now being conducted, and (3) is in compliance with all requirements
of applicable law, except to the extent that any noncompliance would not materially adversely affect such party&rsquo;s ability
to perform its obligations under the Agreement;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">B.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">S</FONT>uch party (1) has the corporate power and authority and the
legal right to enter into this Agreement and to perform its obligations hereunder and thereunder and (2) has taken all necessary
action on its part to authorize the execution and delivery of the Agreement and the performance of its obligations hereunder;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">C.</TD><TD STYLE="text-align: justify">This Agreement is validly executed and delivered on behalf of such party, and constitutes a legal,
valid, binding obligation, enforceable against such party in accordance with its terms;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">D.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">A</FONT>ll necessary consents, approvals and authorizations of all agencies
and other persons required to be obtained by such party in connection with the Agreement have been obtained; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">E.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">T</FONT>he execution and delivery of this Agreement and the performance
of such party&rsquo;s obligations hereunder (1) do not conflict with or violate any requirement of applicable laws or regulations
or any material contractual obligation of such party and (2) do not materially conflict with, or constitute a material default
or require any consent under, any material contractual obligation of such party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 13</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INDEMNIFICATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">13.1</TD><TD STYLE="text-align: justify"><U>Indemnification by PROVIDER</U>.PROVIDER shall indemnify and hold harmless CUSTOMER, its Affiliates,
directors, officers employees and agents from and against any and all suits, claims, losses, demands, liabilities, damages, costs
and expenses (including reasonable attorney&rsquo;s fees) in connection with any suit, demand or action by any third party (&ldquo;Losses&rdquo;)
arising out of or resulting from (A) any actual or alleged breach of its representations, warranties or obligations under this
Agreement; (B) any negligence or willful misconduct by PROVIDER , except to the extent that any of the foregoing arises out of
or results from the actual or alleged negligence, willful misconduct or breach of this Agreement by CUSTOMER; or (C) any actual
or alleged infringement or violation of any patent, trade secret, copyright, trademark or other proprietary rights by PROVIDER
in Processing the Product, except to the extent such process was provided by CUSTOMER.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">13.2</TD><TD STYLE="text-align: justify"><U>Indemnification by CUSTOMER</U>. CUSTOMER shall indemnify and hold harmless PROVIDER, its Affiliates,
directors, officers employees and agents from and against all Losses arising out of or resulting from (A) any actual or alleged
breach of its representations, warranties or obligations under this Agreement; (B) any actual or alleged infringement or violation
of any patent, trade secret, copyright, trademark or other proprietary rights arising from the Processing of the Product by PROVIDER
to the extent that such process is provided by CUSTOMER; or (C) any negligence or willful misconduct by CUSTOMER, except to the
extent that any of the foregoing arises out of or results from the negligence, willful misconduct or breach of by PROVIDER of its
representations, warranties or obligations under this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">13.3</TD><TD STYLE="text-align: justify"><U>Indemnification Procedures</U>. All indemnification obligations in this Agreement are conditioned
upon the party seeking indemnification (the &ldquo;Indemnified Party&rdquo;): (A) promptly notifying the indemnifying party (the
&ldquo;Indemnifying Party&rdquo;) of any claim or liability of which the party seeking indemnification becomes aware (including
a copy of any related complaint, summons, notice or other instrument),<FONT STYLE="color: black"> provided, however, that failure
to provide such notice within a reasonable period of time shall not relieve the Indemnifying Party of any of its obligations hereunder
except to the extent the Indemnifying Party is materially prejudiced by such failure;</FONT> (B) cooperating with the Indemnifying
Party in the defense of any such claim or liability (at the Indemnifying Party&rsquo;s expense), and (C) not compromising or settling
any claim or liability without prior written consent of the Indemnifying Party. The liability of an Indemnifying Party under Article
13 with respect to Losses arising from claims of any third party which are subject to the indemnification provided for in Article
13 (&ldquo;<B>Third Party Claims</B>&rdquo;) shall be governed by and contingent upon the following additional terms and conditions.
If an Indemnified Party shall receive notice of any Third Party Claim, the Indemnified Party shall give the Indemnifying Party
notice of such Third Party Claim within thirty (30) days of the receipt by the Indemnified Party of such notice; <I>provided</I>,<I>
however</I>, that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under
this Article 13 except to the extent the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall
be entitled to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice if it
gives notice of its intention to do so to the Indemnified Party within thirty (30) days of the receipt of such notice from the
Indemnified Party; <I>provided</I>,<I> however</I>, that if there exists a material conflict of interest that would make it inappropriate
for the same counsel to represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled
to retain its own counsel, at the expense of the Indemnifying Party, provided that the Indemnifying Party shall not be obligated
to pay the reasonable fees and expenses of more than one separate counsel for all Indemnified Parties, taken together. In the event
the Indemnifying Party exercises the right to undertake any such defense against any such Third Party Claim as provided above,
the Indemnified Party shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party,
all witnesses, pertinent records, materials and information in the Indemnified Party&rsquo;s possession or under the Indemnified
Party&rsquo;s control relating thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified
Party is, directly or indirectly, conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate
with the Indemnified Party in such defense and make available to the Indemnified Party, all such witnesses, records, materials
and information in the Indemnifying Party&rsquo;s possession or under the Indemnifying Party&rsquo;s control relating thereto as
is reasonably required by the Indemnified Party. The Indemnifying Party shall not, without the written consent of the Indemnified
Party (which shall not be unreasonably withheld or delayed), (a)&nbsp;settle or compromise any Third Party Claim or consent to
the entry of any judgment which does not include as an unconditional term thereof the delivery by the claimant or plaintiff to
the Indemnified Party of a written release from all liability in respect of such Third Party Claim or (b)&nbsp;settle or compromise
any Third Party Claim if the settlement imposes equitable remedies or material obligations on the Indemnified Party other than
financial obligations for which such Indemnified Party will be indemnified hereunder and which contains no admission of fault or
wrongdoing. No Third Party Claim shall be settled or compromised by the Indemnified Party without the written consent of the Indemnifying
Party (which shall not be unreasonably withheld or delayed) if such settlement or compromise would result in an obligation of the
Indemnifying Party to indemnify such Indemnified Party, or would otherwise result in liability of, or have an adverse impact upon,
such Indemnifying Party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 14</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>INSURANCE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">14.1</TD><TD STYLE="text-align: justify"><U>PROVIDER Insurance. </U>PROVIDER shall, at its own cost and expense, obtain and maintain<U>
</U>Commercial General Liability insurance and errors and emissions insurance with per-occurrence limits of not less than [****]
and general aggregate limits of not less than [****] , including umbrella coverage. PROVIDER shall cause<U> </U>UMAN to, at its
own cost and expense, obtain and maintain in full force and effect the following insurance during the term of this Agreement: (A)
Commercial General Liability insurance with per-occurrence limits of not less than $[****] and general aggregate limits of not
less than $, including umbrella coverage; (B) Products and Completed Operations Liability Insurance with per-occurrence and general
aggregate limits of not less than $[****]; and (C) Workers&rsquo; Compensation and Employer&rsquo;s Liability Insurance with statutory
limits for Workers&rsquo; Compensation and Employer&rsquo;s Liability insurance limits of not less than $[****]. In the event that
any of the required policies of insurance are written on a claims made basis, then such policies shall be maintained during the
entire Term and for a period of not less than three (3) years following the termination or expiration of this Agreement. PROVIDER
shall cause UMAN to furnish certificates of insurance for all of the above noted policies to CUSTOMER as soon as practicable after
the Effective Date of the Agreement and upon renewal of any such policies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">14.2</TD><TD STYLE="text-align: justify"><U>CUSTOMER Insurance. </U>CUSTOMER shall, at its own cost and expense, obtain and maintain in
full force and effect the following insurance starting from the date on which API is delivered to Uman and further during the term
of this Agreement as appears below: (A) Commercial General Liability insurance of not less than $[****] and general aggregate limits
of not less than $[****] , including umbrella coverage; (B) Product Liability Insurance with per-occurrence and general aggregate
limits of not less than $[****], including umbrella coverage; (C) All Risk Property Insurance in an amount equal to full replacement
value covering CUSTOMER&rsquo;s property while it is at UMAN&rsquo;s facility and (D) transit coverage in an amount not less than
$[****] while CUSTOMER&rsquo;s property is in transit to or from UMAN &rsquo;s facility. In the event that any of the required
policies of insurance are written on a claim made basis, then such policies shall be maintained during the entire Term and for
items A and B above for a period of not less than three (3) years following release of the clinical trial material. For items C
and D above such policies will be maintained only so long as CUSTOMER property is under Uman's legal responsibility , i.e. until
shipment of the material from Uman and its receipt by a third party. CUSTOMER shall furnish certificates of insurance for all of
the above noted policies to PROVIDER as soon as practicable after the insurance has to be effective according to the above and
upon renewal of any such policies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 15</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TERM AND TERMINATION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">15.1</TD><TD STYLE="text-align: justify"><U>Term</U>. This Agreement shall commence on the Effective Date and shall continue until the final
payment set out in Exhibit A has been made (the &ldquo;Term&rdquo;),</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">15.2</TD><TD STYLE="text-align: justify"><U>Termination by Either Party</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">A.</TD><TD STYLE="text-align: justify"><U>Material Breach</U>. Either party may terminate this Agreement effective upon thirty (30) days
prior written notice to the other party, if the other party commits a material breach of this Agreement and fails to cure such
breach by the end of such thirty (30) day period..</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">B.</TD><TD STYLE="text-align: justify"><U>Bankruptcy</U>. Either party may terminate this Agreement effective upon written notice to the
other party, if the other party becomes insolvent or admits in writing its inability to pay its debts as they become due, files
a petition for bankruptcy, makes an assignment for the benefit of its creditors or has a receiver, trustee or other court officer
appointed for its properties or assets.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">15.3</TD><TD STYLE="text-align: justify"><U>Without Cause</U>. CUSTOMER may terminate this Agreement without cause upon thirty (30) days
prior written notice to PROVIDER.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">15.4</TD><TD STYLE="text-align: justify"><U>Effect of Termination</U>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">A.</TD><TD STYLE="text-align: justify">Expiration or termination of this Agreement shall be without prejudice to any rights or obligations
that accrued to the benefit of either party prior to such expiration or termination.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">B.</TD><TD STYLE="text-align: justify">In the event of termination other than by expiry, the parties shall co-operate to achieve an orderly
winding down of the Services so as to reasonably protect the interests of both parties.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">C.</TD><TD STYLE="text-align: justify">Unless otherwise agreed, for termination initiated by CUSTOMER, CUSTOMER shall also be required
to pay for (A) completed but not yet shipped Product and (B) Product in process and Product shipped but not yet invoiced in the
event that this Agreement is terminated for reasons other than PROVIDER&rsquo;s default. In the event CUSTOMER breaches or terminates
this Agreement (other than as a result of a breach of this Agreement by PROVIDER ) or if PROVIDER terminates this Agreement under
Section 15.2 hereof, CUSTOMER will also be required to pay PROVIDER for its direct cost of all materials purchased by PROVIDER
for Processing. CUSTOMER shall specify the location to which delivery, at CUSTOMER&rsquo;s expense, of the foregoing is to be made.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">D.</TD><TD STYLE="text-align: justify">PROVIDER shall provide such assistance as CUSTOMER may reasonably request for the purpose of transferring
the process of manufacture of the Product to another manufacturer. The parties will co-operate in good faith to determine a plan
for such work, which shall be such as to minimize the disruption to PROVIDER's other business interests. Except where this Agreement
is terminated by CUSTOMER pursuant to Section 16.2 (breach or bankruptcy of PROVIDER), PROVIDER shall be entitled to charge CUSTOMER
for such work at its normal charge-out rate provided that such rate is commensurate with industry standards for the same type of
work and was pre-approved in writing by CUSTOMER.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 16</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>NOTICE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">16.1</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">All notices and other communications hereunder shall be in writing and
shall be deemed given: (A) when delivered personally; (B) when delivered by facsimile transmission (receipt verified); (C) when
received or refused, if mailed by registered or certified mail (return receipt requested), postage prepaid; or (D) when delivered
if sent by express courier service, to the parties at the following addresses (or at such other address for a party as shall be
specified by like notice; provided, that notices of a change of address shall be effective only upon receipt thereof):</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; padding-left: 0.48in">To PROVIDER:</TD>
    <TD STYLE="width: 70%">7810962 CANADA INC</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>245 Victoria Ave, Suite 100, Montreal, Quebec, H3Z 2M6, Canada</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Attention: Alain Guimond, PhD, Senior Director of Research</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Facsimile: +1 514-315-9029</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>To CUSTOMER:</TD>
    <TD>RedHhill Biopharma Ltd.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>42 Givati St. Ramat-Gan 52232, Israel</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Attention: Ori Shilo, VP Finance &amp; Operations</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Facsimile: +972 3 7255 723</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>ARTICLE 17</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>MISCELLANEOUS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.1</TD><TD STYLE="text-align: justify"><U>Entire Agreement; Amendments</U>. This Agreement including the attachments, as well as the Confidentiality
Agreement entered into on the date of this Agreement,constitute the entire understanding between the parties and supersedes any
contracts, agreements or understanding (oral or written) of the parties with respect to the subject matter hereof. No term of this
Agreement may be amended except upon written agreement of both parties, unless otherwise provided in this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.2</TD><TD STYLE="text-align: justify"><U>Captions</U>. The captions in this Agreement are for convenience only and are not to be interpreted
or construed as a substantive part of this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.3</TD><TD STYLE="text-align: justify"><U>Further Assurances</U>. The parties agree to execute, acknowledge and deliver such further instruments
and to take all such other incidental acts as may be reasonably necessary or appropriate to carry out the purpose and intent of
this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.4</TD><TD STYLE="text-align: justify"><U>No Waiver</U>. Failure by either party to insist upon strict compliance with any term of this
Agreement in any one or more instances will not be deemed to be a waiver of its rights to insist upon such strict compliance with
respect to any subsequent failure.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.5</TD><TD STYLE="text-align: justify"><U>Severability</U>. If any term of this Agreement is declared invalid or unenforceable by a court
or other body of competent jurisdiction, the remaining terms of this Agreement will continue in full force and effect.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.6</TD><TD STYLE="text-align: justify"><U>Independent Contractors</U>. The relationship of the parties is that of independent contractors,
and neither party will incur any debts or make any commitments for the other party except to the extent expressly provided in this
Agreement. Nothing in this Agreement is intended to create or will be construed as creating between the parties the relationship
of joint ventures, co-partners, employer/employee or principal and agent.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.7</TD><TD STYLE="text-align: justify"><U>Successors and Assigns</U>. This Agreement will be binding upon and inure to the benefit of
the parties, their successors and permitted assigns. Neither party may assign this Agreement, in whole or in part, without the
prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), except that
either party may, without the other party&rsquo;s consent, assign this Agreement to an Affiliate or to a successor to substantially
all of the business or assets of the assigning company <FONT STYLE="color: black">(or the assigning company&rsquo;s business unit
responsible for the performance of this Agreement), or, in the case of CUSTOMER, to a successor to all of the assets relating to
the Product</FONT> or to a customer of CUSTOMER to which the product relates<FONT STYLE="color: black">.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.8</TD><TD STYLE="text-align: justify"><U>Governing Law</U>. This Agreement shall be governed by and construed under the laws of the Province
of Quebec, Canada, excluding its conflicts of law provisions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt"><FONT STYLE="color: black">17.9</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: black"><U>Jurisdiction</U>. The parties agree that the courts of Quebec, Canada,
shall have exclusive jurisdiction to determine any dispute, controversy or disagreement between the Parties in connection with
this Agreement.</FONT><FONT STYLE="color: windowtext"> The Parties further agree that all proceedings will be in the English language.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.10</TD><TD STYLE="text-align: justify"><U>Counterparts</U>. This Agreement may be executed in one or more counterparts, each of which
will be deemed an original but all of which together will constitute one and the same instrument.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.11</TD><TD STYLE="text-align: justify"><U>Publicity</U>. Neither party will make any press release or other public disclosure regarding
this Agreement or the transactions contemplated hereby without the other party's express prior written consent (which shall not
be unreasonably withheld, conditioned or delayed), except as required under applicable law or stock exchange requirement or by
any governmental agency or Regulatory Authority, in which case the party required to make the press release or public disclosure
shall use commercially reasonable efforts to obtain the approval of the other party (which shall not be unreasonably withheld,
conditioned or delayed) as to the form, nature and extent of the press release or public disclosure prior to issuing the press
release or making the public disclosure.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.12</TD><TD STYLE="text-align: justify"><U>Survival</U>. The rights and obligations of the parties shall continue under <FONT STYLE="color: black">Articles
5 (Testing; Samples; Release), 7 (Payment Terms), 9 (Records; Regulatory Matters), 10 (Confidential Information), 11 (Intellectual
Property), 13 (Indemnification), 14 (Limitations of Liability), 15 (Insurance) to the extent expressly stated therein, 17 (Notice),
18 (Miscellaneous), Section 16.4 (Effect of Termination), </FONT>notwithstanding expiration or termination of this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.13</TD><TD STYLE="text-align: justify"><U>Force Majeure</U>. Neither party shall be liable in damages for, nor shall this Agreement be
terminable or cancelable by reason of, any delay or default in such party&rsquo;s performance hereunder if such default or delay
is caused by events beyond such party&rsquo;s reasonable control including, but not limited to, acts of God, war or insurrection
destruction of production facilities or materials by earthquake, fire, flood or storm, epidemic or failure of public utilities;
provided however, that the party seeking relief hereunder shall immediately notify the other party of such cause(s) beyond such
party&rsquo;s reasonable control. The party that may invoke this section shall use all reasonable endeavors to reinstate its ongoing
obligations to the other. If the cause(s) shall continue unabated for sixty (60) days, then both Parties shall meet to discuss
and negotiate in good faith what modifications to this Agreement should result from this force majeure.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify; text-indent: -28.35pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 28.35pt">17.14</TD><TD STYLE="text-align: justify">English Language. The parties hereto have requested that this service agreement be drafted in the
English language. Les parties ont exig&eacute; que ce contrat de services soit r&eacute;dig&eacute; en anglais.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The parties are executing this Agreement
on the date stated in the introductory clause.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold">7810962 CANADA INC.</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold; padding-left: 0.24in">REDHILL BIOPHARMA LTD</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 45%; border-bottom: Black 1pt solid">/s/ Dror Ben-Asher</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD>Name:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Dror Ben-Asher</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Its:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">Director of Research</TD>
    <TD>&nbsp;</TD>
    <TD>Its:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">CEO</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>SPECIFIC TERMS AND CONDITIONS</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Proposal for technology transfer and manufacturing of RHB-104
(Myoconda) Capsules</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This proposal serves to confirm our offer,
pricing, specifications and the terms and conditions for the above reference project. PROVIDER considers this proposal to be proprietary
and <B>confidential</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This proposal may be amended upon mutual
agreement of the CUSTOMER and PROVIDER. Any changes should be agreed upon through a change order signed by the CUSTOMER and PROVIDER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in"><B>I.</B></TD><TD><B>Scope of Services</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">The scope
of this project consists of </FONT>the services specified and detailed in this Agreement. In particular: [****]<FONT STYLE="font-size: 10pt">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PROVIDER will manufacture clinical and registration batches
under cGMP.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The present proposal covers the activities
described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Part I- Manufacturing process work up/optimization.<FONT STYLE="background-color: #D9D9D9"><U>
</U></FONT></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We understand the scope of this part consists
of common and obligatory technology transfer activities, such as transferring the process as described below.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Formulation and Process Transfer</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">PROVIDER will evaluate the formula and current process with in-process control to our manufacturing
facilities. PROVIDER will choose the appropriate equipment and operating parameters to meet the feasibility and regulatory requirements.
[****]. The CUSTOMER or designee will provide technical assistance to UMAN in the initial process work up</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">In order to confirm the process scale up and optimization, [****]. If the engineering trial conforms
to specifications, UMAN may proceed with release of the batch to the CUSTOMER for clinical-trial use.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-size: 10pt">o</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-size: 10pt">Cleaning assessment &ndash; Since the product is known to be difficult
to clean, PROVIDER will assess the adequacy of cleaning strategies and methods. Once cleaning strategy and method defined, PROVIDER
will discuss the cleaning validation strategy with the CUSTOMER. The product residues analytical method development/ validation,
sampling and analysis will be invoiced separately</FONT>, subject to CUSTOMER&rsquo;s pre-approval in writing<FONT STYLE="font-size: 10pt">.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">Packaging evaluation &ndash; PROVIDER will suggest the packaging components for this product, preferably
based on [****]. Should the CUSTOMER need other packaging type, PROVIDER will discuss with the CUSTOMER the development plan and
the cost will be quoted separately.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; border: Black 1pt solid"><B>Part I Cost:
&#9;</B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">Should this
phase require additional work, including and without limitations, formulation or process development, PROVIDER will inform the
CUSTOMER concerning the manpower required to execute such </FONT>additional <FONT STYLE="font-size: 10pt">development tasks and
the CUSTOMER and PROVIDER will agree on any additional work required prior to commencement.</FONT> Provided the additional work
is<FONT STYLE="font-size: 10pt"> pre-approved by CUSTOMER in writing, PROVIDER will execute and invoice as per the following hourly
rates. These rates include project supervision and overhead charges:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Part II: Analytical work description
to support manufacturing and stability testing </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We understand the scope of this part consists
of common and obligatory technology transfer activities, such as [****] as described below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">Should this
phase require additional work, including and without limitations, troubleshooting or method development, PROVIDER will inform the
CUSTOMER concerning the manpower required to execute such development tasks and the CUSTOMER and PROVIDER will agree on any additional
work required prior to commencement. </FONT>Provided<FONT STYLE="font-size: 10pt"> pre-approved by CUSTOMER in writing, PROVIDER
will execute and invoice as per the following hourly rates</FONT>, provided pre-approved in writing by CUSTOMER<FONT STYLE="font-size: 10pt">.
These rates include project supervision and overhead charges:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Part III: Manufacturing run 1</B>[****]<B>).
</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Upon satisfactory results from the tech
transfer activities and engineering trial, Uman will manufacture [****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PROVIDER will also manufacture one [****].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PROVIDER can package and label [****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The costs of material (APIs, excipients,
excluding the packaging materials), release testing, IPC and finished product release testing are included in this quotation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid">Part III Cost:</TD>
    <TD STYLE="width: 50%; font-weight: bold; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid">See &ldquo;Activity and summary costs&rdquo;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Part IV: Manufacturing run 2 (</B>[****]<B>).</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PROVIDER will manufacture [****] to support
the drug filing performed by the CUSTOMER. For the [****].</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 90%; border-collapse: collapse; margin-left: 0.5in">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%; text-decoration: underline">Primary packaging:</TD>
    <TD STYLE="width: 75%">TBD</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2"><U>Secondary packaging:</U> &nbsp;&nbsp;&nbsp;&nbsp;NA</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-decoration: underline">Shipper:</TD>
    <TD>TBD</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.4pt; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%; font-weight: bold; border-top: Black 1pt solid; border-bottom: Black 1pt solid; border-left: Black 1pt solid">Part IV Cost:</TD>
    <TD STYLE="width: 50%; font-weight: bold; border-top: Black 1pt solid; border-right: Black 1pt solid; border-bottom: Black 1pt solid">See &ldquo;Activity and summary costs&rdquo;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">I.</TD><TD STYLE="text-align: justify">Capital equipment and miscellaneous parts</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.75in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If any special equipment and/or change
parts are required for this project, it will be discussed and agreed to with the customer against specific &ldquo;User Requirements&rdquo;.
The required equipment will be purchased by PROVIDER and then subject to pre-approval by CUSTOMER in writing billed back to the
customer at cost plus administrative fees. This fee is to reflect the time and resources used for developing the equipment specifications,
negotiation with suppliers and procurement of the equipment. The equipment shall remain the property of the customer and shall
be Loaned Free of charge to PROVIDER at the Candiac site for the term of the supply contract.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-size: 10pt">[****]. PROVIDER
will invoice you during the project and if the budgeted amount is insufficient, PROVIDER and CUSTOMER will discuss and agree on
the additional funds to allocate to these items</FONT>, subject to pre-approval in writing by CUSTOMER<FONT STYLE="font-size: 10pt">.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Notwithstanding the foregoing, the aggregate amount which shall
be payable by CUSTOMER under this Agreement shall not exceed [****] unless otherwise agreed between the parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; padding-left: 0.1in; text-align: justify; text-indent: -0.1in; background-color: Silver"><B>*</B>The cost of finished product is estimated based on the following prices of API&rsquo;s provided by the suppliers. It may be modified as per the actual optimized costs of API&rsquo;s which PROVIDER is able to purchase. Due to quantity variations and API pricing, the price per capsule in the proposal is presented as a reference only. </TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; border: Black 1pt solid">[****]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -7.1pt"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; background-color: Silver">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1in; text-align: justify; text-indent: -0.1in"><B>*</B>The
        cost of finished product is estimated based on the following prices of API&rsquo;s provided by the suppliers. It may be modified
        subject to written pre-approval by the CUSTOMER as per the actual optimized costs of API&rsquo;s which PROVIDER is able to purchase.
        Due to quantity variations and API pricing, the price per capsule in the proposal is presented as a reference only.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.1in; text-align: justify; text-indent: -0.1in">&nbsp;</P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 14.2pt; text-align: justify; text-indent: -14.2pt"><B>&nbsp;</B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 100%; text-align: justify; background-color: Silver"><B>*</B>[****]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Exclusions and comments:&nbsp;</B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">To the best of our knowledge we currently
do not expect any additional cost for dedicated equipment except for the tooling described in section IV entitled &ldquo;Capital
equipment and miscellaneous parts&rdquo; However should any additional dedicated equipment be required, the equipment to be purchased
will be discussed and agreed in writing by the CUSTOMER prior to any ordering.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">PROVIDER is not responsible for regulatory
filing. Preparation of documentation for regulatory submission is out-of-scope.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 25.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 31%"><B>Terms of payment</B>:</TD>
    <TD STYLE="width: 69%">[****]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><B>Transport</B>:</TD>
    <TD>FOB: Uman Pharma, Candiac, QC</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT B</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>QUALITY AGREEMENT</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This Agreement defines the expectations and responsibilities
for critical quality processes as outlined in this document.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Uman Pharma Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>100 De L&rsquo;industrie blvd.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Candiac, Quebec</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Canada</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>J5R 1J1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>- hereafter named as &ldquo;UMAN&rdquo;
-</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>and</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CLIENT Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>- hereafter named as &ldquo;CLIENT&rdquo;
-</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold">Uman Pharma Inc.</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">CLIENT Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain B&eacute;rub&eacute;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Vice-President Compliance &amp;<BR>
Regulatory Affairs</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: </TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain Hubert</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Chief Operating Officer</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 247.5pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">1.</TD><TD><U>Purpose of the Agreement</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">This Agreement outlines operational
responsibilities of CLIENT and UMAN with respect to the conduct of activities governed by cGMP (as defined below), in relation
to the Products manufactured by UMAN for the benefit of CLIENT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">The following operations are
the subject of this Agreement: purchasing, manufacturing, packaging, control, release and storage before shipment.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 53.45pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">A matrix of responsibilities
included at the end of this Agreement identifies in tabular form the party primarily responsible for the various aspects of this
Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">2.</TD><TD><U>General</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">This Agreement commences with the effective date
of signature and shall terminate one year past the expiration date of the last Batch of product manufactured and/or packaged by
Uman for CLIENT (&ldquo;Term&rdquo;). In case of conflict between the terms of the Quality Agreement and the Supply Agreement between
CLIENT and Uman Pharma dated <B>[&bull;]</B>, the Quality Agreement shall control with respect to quality/compliance/regulatory
issues and the Supply Agreement shall control to all others issues.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN and CLIENT have the quality
related responsibilities specified in this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">It is the responsibility of
all parties to maintain this document current and to ensure that required approvals have been granted by the relevant persons.
Any request for amendment of the Agreement must be sent in writing to the other party stating the reasons for the amendment. Both
parties must approve the amendment by a written instrument signed by them prior to its implementation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Annex I is a detailed list of
activities per Product covered by this Agreement to be conducted by CLIENT and UMAN.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Annex II is a list of all key
contact persons of the parties with their titles and designations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Annex III lists UMAN approved
contract laboratories.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Annex IV is a detailed list
of the products covered by this Agreement as amended from time to time.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">3.</TD><TD><U>Communication</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN and CLIENT have identified key contact
personnel for critical quality processes to ensure responsible individuals are contacted to address issues that may arise.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">CLIENT and UMAN may, upon notice
to the other party, designate an employee of any of its affiliates to act as a contact person with regard to the responsibilities
and obligations hereunder or to fulfill the duties or exercise the rights set out herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">4.</TD><TD><U>Definitions</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">The following
capitalised terms and expressions, when used in this Agreement, shall have the following meaning:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.1</TD><TD STYLE="text-align: justify"><B>&ldquo;API&rdquo;</B> or active pharmaceutical ingredient shall mean the substance in a Product
that is pharmaceutically active;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.2</TD><TD STYLE="text-align: justify"><B>&ldquo;Batch Record&rdquo;</B> shall mean manufacturing document, packaging document, and exception
documentation, such as non-conformance report, Deviation Report, CoA and additional documentation, which may have been processed
as part of the production and packaging records of the Batch;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.3</TD><TD STYLE="text-align: justify"><B>&ldquo;Bulk Product&rdquo;</B> shall mean any Product, which has completed all manufacturing
stages up to, but not including packaging in a primary container;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.4</TD><TD STYLE="text-align: justify"><B>&ldquo;CoA&rdquo;</B> shall mean certificate of analysis</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.5</TD><TD STYLE="text-align: justify"><B>&ldquo;Contractor&rdquo;</B> shall mean any UMAN, packager or other third party that performs
processing, packaging and/or testing functions with respect to a Product or any other intermediate step of the manufacture of a
Product or provides any other Product support services;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.6</TD><TD STYLE="text-align: justify"><B>&ldquo;Deviation</B>&rdquo; is a temporary modification or exception to usual operating, manufacturing,
packaging, testing instructions, test results or procedures;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.7</TD><TD STYLE="text-align: justify"><B>&ldquo;Deviation Report&rdquo;</B> shall mean a report used to obtain approvals to temporarily
modify or to document exceptions to usual operating, manufacturing, packaging, testing instructions, test results or procedures.
A Deviation Report does not permanently change existing instructions or standard operation procedures; it is intended to be a specific,
&ldquo;one-time-use&rdquo; document;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.8</TD><TD STYLE="text-align: justify"><B>&ldquo;cGMP&rdquo; </B>shall mean good manufacturing practice requirements under applicable
laws, guidelines, policies, codes, requirements and standards from time to time promulgated or issued by any Canadian or US governmental
agency, which shall include the practices set out in the guidelines published as the Good Manufacturing Practices for Drug Manufacturers
and Importers by the Therapeutic Products Directorate of Health Canada, as amended from time to time, for the manufacture of pharmaceutical
Products, the Current Good Manufacturing Practices as defined in the United States 21CFR-210, et seq., as amended from time to
time, and the Current Good Manufacturing Practices as defined in the Directive 2001/83/EC as amended from time to time;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.9</TD><TD STYLE="text-align: justify"><B>&ldquo;Lot&rdquo; or &ldquo;Batch&rdquo;</B> shall mean a specific quantity of material expected
to be homogeneous within specified limits produced or packaged in a process or series of processes;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.10</TD><TD STYLE="text-align: justify"><B>&ldquo;Lot Number&rdquo;</B> shall mean a unique combination of numbers, letters and /or symbols
that identify a Batch and from which the production and distribution history can be determined. Each manufacturing and packaging
run conducted for a Product by UMAN will have its own Lot number issued by UMAN that identifies a Batch and from which the production
and distribution history can be determined;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.12</TD><TD STYLE="text-align: justify"><B>&ldquo;Material&rdquo;</B> shall mean all API, excipients, printed or unprinted components,
which are used during the manufacturing or packaging process for a Product;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.13</TD><TD STYLE="text-align: justify"><B>&ldquo;Product&rdquo; </B>shall mean any Product listed in Annex IV, which has completed all
processing stages up to final packaging defined in Annex IV.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.14</TD><TD STYLE="text-align: justify"><B>&ldquo;Quality of the Product&rdquo;</B> shall mean the quality of the product described in
Annex IV;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.15</TD><TD STYLE="text-align: justify"><B>&ldquo;Reinspection&rdquo;</B> shall mean a visual or mechanical evaluation performed to remove/correct
defective units and for which the process is not expected to have an adverse effect on product quality. Reinspection should involve
the use of a Deviation, except where standard procedure allows for such routine activity in the course of normal processing;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -27pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.16</TD><TD STYLE="text-align: justify"><B>&ldquo;Reprocessing&rdquo;</B> shall mean reprocessing all or part of a Lot of a Bulk Product
or Product to a previous step in the manufacturing process due to a failure to meet the Specifications for such Bulk Product or
Product. Reprocessing procedures are foreseen as occasionally necessary and pre-approved by the quality assurance departments of
UMAN and CLIENT;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.17</TD><TD STYLE="text-align: justify"><B>&ldquo;Rework&rdquo;</B> shall mean reworking a Bulk Product or Product of a single Lot that
failed to meet predetermined Specifications using an alternative manufacturing process. Reworking is an unexpected occurrence and
rework must be pre-approved by UMAN and CLIENT and documented per approved Rework documentation requirements and appended to a
Deviation Report;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 19.5pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">4.18</TD><TD STYLE="text-align: justify"><B>&ldquo;Specifications&rdquo;</B> shall mean a list of tests, references to analytical procedures
and appropriate acceptance criteria such as numerical limits, ranges, or any other criteria provided for the test described that
are used to determine whether the relevant material is acceptable for its intended used.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">5.</TD><TD><U>Supplier facilities</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN facility
is currently located at:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">100 de l&rsquo;Industrie blvd</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">Candiac, QC</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">Canada</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">J5R 1J1</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">Tel: 450-444-9989</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">Fax: 450-444-8100</P>

<P STYLE="font: normal 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN holds a valid establishment
license from Health Canada (License # 101692-A) to perform the activities contemplated herein. UMAN agrees and undertakes to maintain
its establishment license, current and in force throughout the Term of this Agreement, as per relevant Canadian laws and regulations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">6.</TD><TD><U>Change Control</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN shall maintain a documented
system of procedures for controlling changes that may affect the Products, including, but not limited to, changes to Materials,
Bulk Product, Product and manufacturing or packaging operations. CLIENT shall be notified of and shall approve, in writing, any
and all such changes prior to implementation. UMAN shall provide copies to CLIENT in timely manner. Should CLIENT initiate a request
for change on any applicable Specifications, the appropriate UMAN department shall be provided with the proposed Specifications
and appropriate documentation, which shall summarise and justify each change.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">7.</TD><TD><U>Master Manufacturing Document</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">The master
manufacturing document specifies the manufacturing process and Materials used to manufacture a specific Bulk Product (&ldquo;Master
Manufacturing Document&rdquo;). UMAN shall develop and maintain the Master Manufacturing Document that must be approved in a timely
manner by CLIENT prior to its use. CLIENT, with the assistance of UMAN, shall ensure that those documents are consistent with the
regulatory applications of the relevant Product. Original Master Manufacturing Documents shall be maintained on-site by UMAN and
remain available for inspection and review by CLIENT. UMAN shall provide CLIENT with copies of all revised Master Manufacturing
Documents on a timely basis. CLIENT shall retain a copy of the Master Manufacturing Documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">8.</TD><TD><U>Master Packaging Document</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">The master
packaging document specifies the packaging process and packaging materials used to package a specific Product (&ldquo;Master Packaging
Document&rdquo;). UMAN shall develop and maintain the Master Packaging Document that must be approved in a timely manner by CLIENT
prior to its use. CLIENT, with the assistance of UMAN, shall ensure that those documents are consistent with the regulatory applications
of the relevant Product. Original Master Packaging Documents shall be maintained on-site by UMAN and remain available for inspection
and review by CLIENT. UMAN shall provide CLIENT with copies of all revised Master Packaging Documents on a timely basis. CLIENT
shall receive a copy of the Master Packaging Document.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">9.</TD><TD><U>Material sourcing</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 15.6pt; text-align: justify">All Materials used to manufacture and/or package
a Product should be sourced as per this Agreement unless otherwise specified in writing and with the agreement of both UMAN and
CLIENT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 15.6pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.3in">9.1.</TD><TD><U>API</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -1.1pt">UMAN shall
utilize only API meeting CLIENT&rsquo;s Specifications and sourced from CLIENT&rsquo;s nominated supplier(s). API shall be ordered
from such supplier(s) as per UMAN&rsquo;s requirements. API ordered by UMAN will be delivered to the UMAN facility <FONT STYLE="color: black">with
a certificate of analysis from the API manufacturer</FONT>. UMAN shall not use an alternate source of API without the written consent
of CLIENT, which consent shall not be unreasonably withheld. UMAN shall supply a controlled copy of the Specifications for every
API used in the Product for review and approval by CLIENT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.3in">9.2.</TD><TD><U>Excipients</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">UMAN shall utilise only excipients defined in the
Master Manufacturing Document. Excipients shall either comply with the most recent Pharmacopoeia monograph (EP and USP) or UMAN&rsquo;s
Specifications where such excipients are not included in a Pharmacopoeia monograph. In all cases, UMAN shall supply to CLIENT a
control copy of the Specifications of each excipient for review and approval. UMAN shall source excipients from reputable companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.3in">9.3.</TD><TD><U>Packaging Materials (Unprinted)</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">UMAN shall
utilise only unprinted packaging materials as defined in the Master Packaging Document. UMAN shall supply to CLIENT a control copy
of the Specifications of such packaging materials for review and approval. UMAN shall order packaging materials only from reputable
companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.3in">9.4.</TD><TD><U>Packaging Materials (Printed)</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.5in">UMAN shall
utilise only printed packaging materials that meet CLIENT&rsquo;s Specifications and are approved by CLIENT. UMAN shall supply
to CLIENT a control copy of the Specifications of such packaging materials for review and approval. UMAN shall order packaging
materials only from reputable companies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">10.</TD><TD><U>Testing</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Analytical specifications used
for API, Bulk Products<FONT STYLE="color: red"> </FONT>and Products are to be developed and maintained by UMAN and subject to the
approval of CLIENT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN shall notify CLIENT in
accordance with the provisions of Article 6 herein and CLIENT shall approve, in writing, all modifications to the analytical methods
and Specifications prior to implementation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN is authorized to sub-contract
analytical tests to the contract laboratories listed in Annex III.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN must ensure that all analytical
testing is conducted in accordance with analytical Specifications and that upon receipt of a Lot or part Lot of API,<FONT STYLE="color: red">
</FONT>Bulk Product<FONT STYLE="color: red"> </FONT>and/or Product, UMAN samples the Lot as per requirements and sends the required
number of samples to the laboratory.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.75in">10.1.</TD><TD><U>API</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">UMAN shall
utilize laboratories listed in annex III to test all API. UMAN shall not change or modify the laboratory without the written consent
of CLIENT. UMAN QC unit shall have the responsibility for the final approval of the CoA and shall ensure that the results comply
with the Specifications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.75in">10.2.</TD><TD><U>Excipients</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">UMAN shall
utilize laboratories listed in annex III to test excipients. UMAN may use reputable sub-contractor laboratories previously approved
by UMAN; such sub-contractor laboratory must be disclosed to CLIENT. UMAN QC unit shall issue final approval of the CoA and shall
ensure that the results comply with the Specifications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.75in">10.3.</TD><TD><U>Bulk Product, Semi-Finished Product and Product</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">UMAN shall
utilize laboratories listed in annex III to test Bulk Product, Semi-Finished Product and Product. UMAN shall not change or modify
the laboratory without CLIENT&rsquo;s prior written consent. UMAN QC unit shall issue final approval of the CoA and shall ensure
that the results comply with the Specifications.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.1in">11.</TD><TD><U>Printed Packaging Materials Control</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.7pt">UMAN shall
maintain a formal system for printed packaging Materials control that shall ensure, <I>inter alia</I>, that only those labels,
printed matter and other packaging Materials that have been approved or provided by CLIENT shall be used. UMAN&rsquo;s control
of printed packaging Materials shall include, but shall not be limited to: (i) secure storage of all packaging Materials; (ii)
accountability records; and (iii) packaging line clearance of labelling. UMAN shall ensure that a sample of all printed packaging
Materials used in respect of a Product shall be included in the Batch/packaging record of the Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.7pt">UMAN shall
sample, examine and release all printed packaging Materials prior to use. <FONT STYLE="color: black">CLIENT shall provide,</FONT>
in writing, approved proof copy for all Printed Packaging Materials used by UMAN. UMAN shall supply to CLIENT a controlled copy
of its Specifications for review and approval. Any proposed change to the Specifications of the printed packaging material shall
be communicated to CLIENT for approval prior to implementation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.7pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">12.</TD><TD><U>Manufacturing of Bulk Product</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">Bulk Products
shall be manufactured at UMAN&rsquo;s facility according to the specific procedures and instructions described in the Master Manufacturing
Document.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><BR>
Bulk Products shall be manufactured in accordance with the Specifications supplied by CLIENT with the assistance of UMAN and in
compliance with all cGMP and any other applicable regulatory requirements and applicable laws and regulations. UMAN shall prepare
complete detailed documentation for each Lot, as agreed upon between CLIENT and UMAN. Such documentation shall be readily accessible
for review and inspection by CLIENT and/or regulatory authorities if requested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN shall
not be authorized to sub-contract the manufacturing of Bulk Products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">13.</TD><TD><U>Packaging of Bulk Product</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">The packaging
of Bulk Products shall be done at UMAN&rsquo;s facility according to the specific procedures and instructions described in the
Master Packaging Document.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"><BR>
The packaging of Bulk Products by UMAN shall be carried out in accordance with the Specifications supplied by CLIENT with the assistance
of UMAN and in compliance with all cGMP and any other applicable regulatory requirements and applicable laws and regulations. UMAN
shall prepare complete and detailed documentation for each Lot, as agreed upon between CLIENT and UMAN. Such documentation shall
be readily accessible for review and inspection by CLIENT and/or regulatory authorities if requested.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN shall
not be authorized to sub-contract the packaging of Bulk Products.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">14.&#9;<U>Inspection of the Product</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">The inspection
and in process testing of the Product shall be carried out by UMAN and appropriately documented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"> 15. <U>Release and Shipment of the Product</U></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">Approval
for final release and shipment of Product (i.e. release for clinical use), is CLIENT&rsquo;s responsibility. Approval for initial
release (i.e. release by UMAN to CLIENT), is UMAN&rsquo;s responsibility. In this regard, UMAN shall ensure prior to initial release
that the Product complies with the Master Manufacturing and/or Packaging Document and is produced in compliance with applicable
cGMP and meets CLIENT&rsquo;s requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN shall
proceed with the initial Product release to CLIENT upon satisfactory review and approval by UMAN Quality Assurance (QA) unit of
the following:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">15.1.</TD><TD>The executed manufactured Batch record.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">15.2.</TD><TD>The executed packaging Batch record.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">15.3.</TD><TD>Appropriate and relevant CoAs to test the Materials</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">15.4.</TD><TD>Appropriate CoAs to test the Bulk Product, Semi-Finished Product or Product.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.5in">15.5.</TD><TD>Exception documentation, such as, non-conformance material report, Deviation and additional documentation, which may have been
processed as part of the production/packaging record of the relevant Batch.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN shall
provide to CLIENT a certificate of manufacturing and cGMP compliance confirming the initial release of the Product along with
<FONT STYLE="color: black">copies of documents described in sections </FONT>15.1<FONT STYLE="color: black">, 15.2, 15.3, 15.4
and 15.5 above unless otherwise instructed by CLIENT</FONT>. UMAN shall not ship any Product until all the elements described
in section 15 are reviewed to the satisfaction of UMAN&rsquo;s QA department.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">CLIENT or
designee shall be responsible for the final release of the Product upon satisfactory review and approval of the documents generated
in accordance with the terms of this Agreement.<FONT STYLE="color: red"> </FONT><FONT STYLE="color: black">CLIENT or designee shall
issue a certificate of conformance confirming the final release of the Product.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">16.</TD><TD><U>Cold Chain Management</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">CLIENT or
designee shall be responsible for shipment and transport of the Product under the appropriate temperature conditions to maintain
Product&rsquo;s stability, integrity and effectiveness while minimizing the risks of tampering or theft. The Product must also
be kept free of contamination, deterioration and adulteration.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">17.</TD><TD><U>Notification and Approval of Deviations and Non-Conformance</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.35in">17.1.</TD><TD><U>Deviations</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">UMAN shall have a written procedure
in place to perform a systematic investigation in the event that (i) any Product or process fails to meet Specifications; or (ii)
any process Deviation occurs in respect of any Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: 0in">UMAN shall not
void out-of-specification (&ldquo;OOS&rdquo;) results by retesting unless the investigation determines that laboratory error caused
the OOS results. All OOS data and investigation results, whether or not the OOS results are voided by UMAN, shall be retained by
<FONT STYLE="color: black">UMAN under quarantine</FONT>. Upon completion of the OOS investigation by UMAN, all OOS data and investigation
results of confirmed OOS results shall be communicated to CLIENT for review and approval prior to initial Product release. UMAN
shall notify CLIENT within two (2) Business Days of the occurrence of any OOS results or unapproved Deviation in respect of any
Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt">All process Deviations shall be approved by CLIENT
prior to implementation unless the Deviation is such that it is not reasonable to do so. All Deviations shall be investigated and
fully documented by UMAN. This documentation shall be retained as part of the Batch documentation for the Lot affected.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.3in">17.2.</TD><TD><U>Non-Conformance</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -0.5in">Material
or Product that does not meet established Specifications shall be handled as non-conformances and documented as such, in accordance
with UMAN's standard operating</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify">procedures. Actions taken to investigate
non-conformance and to justify the release of the Lot of material shall be fully documented.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify"><BR>
UMAN and CLIENT shall approve all non-conformance documents prior to initial release. Any resulting corrective actions shall be
followed through timely closure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 45pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">18.</TD><TD><U>Retained Samples of Materials</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN shall
retain samples from each incoming lot of Material (with the exception of unprinted <FONT STYLE="color: black">and printed</FONT><FONT STYLE="color: green">
</FONT>packaging materials) in an amount sufficient to comply with any specific regulatory requirements applicable to the Material
and, in any case, sufficient to allow at least two (2) full rounds of release tests. UMAN shall hold and retain such samples for
a minimum of one (1) year following the expiration of the last Lot of Product containing said Material.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 9pt; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">At the request of CLIENT, acting
reasonably, UMAN shall provide such samples to CLIENT. UMAN agrees and undertakes to store the retained samples under appropriate
label and storage conditions in a secure area for a period of time defined in this Agreement. At the request of CLIENT, acting
reasonably, UMAN shall retain additional sample of Material (excepting unprinted <FONT STYLE="color: black">and printed</FONT><FONT STYLE="color: green">
</FONT>packaging materials) for the same period of time. CLIENT shall inform UMAN in advance of any such requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">19.</TD><TD><U>Retained Samples of Product</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN shall
retain samples of each lot of Product to comply with any specific regulatory requirements and in an amount sufficient to allow
at least two (2) full rounds of release tests. UMAN agrees and undertakes to store the retained samples under appropriate label
and storage conditions in a secure area for a period of time defined in this Agreement. At the request of CLIENT, acting reasonably,
UMAN shall retain additional sample of Product (excepting unprinted and printed packaging materials) for the same period of time.
CLIENT shall inform UMAN in advance of any such requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">20.</TD><TD><U>Storage of Product / Environmental Monitoring</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">UMAN agrees
to store the Bulk Product and/or Product under appropriate product label storage conditions and in a secure area to ensure that
they comply with all the quality Specifications and attributes and all applicable laws and regulations. If special storage conditions
are necessary, they shall be noted and supplied by CLIENT to UMAN. UMAN agrees and undertakes to comply with any such special storage
conditions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">Under no
circumstances should any other products which may present a potential hazard to Bulk Products, and/or Products, such as beta-lactam
and cephalosporin antibiotics, certain potent hormones, biological preparations or non-pharmaceutical chemicals be manufactured,
processed or packaged in the same facilities at the time used for the manufacturing of Bulk Product, and/or Product. CLIENT has
been made aware that UMAN handles cytotoxic compounds, and/or highly potent drugs in its facility. CLIENT acknowledges that the
activity related to such cytotoxic compounds, highly potent drugs are performed mostly in a separate and dedicated facility and
that the activities do not represent any risk to the Product. If UMAN contemplates handling other products of the classes mentioned
in this Article, UMAN shall so inform CLIENT in advance so that CLIENT may determine whether or not such handling is acceptable
during production of the Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">21.</TD><TD><U>Stability Activities</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">A stability protocol shall be prepared by UMAN and approved
by UMAN and CLIENT. Stability testing, Product sampling, data interpretation and reporting shall be UMAN&rsquo;s responsibility
and CLIENT shall update stability information in the regulatory documents for the Product. CLIENT shall inform UMAN in timely manner
of any change in the approved shelf life of Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">22.</TD><TD><U>[Not used]</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">23.</TD><TD><U>Product complaints</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">CLIENT shall
be solely responsible for investigating any adverse event or Product related complaint and for determining if, when and to what
extent such adverse event or Product related complaint shall be reported to a governmental or regulatory authority. UMAN shall
assist CLIENT in investigating Product related complaints and/or adverse events, if the reason is a Deviation of the Quality of
the Product, at the request of CLIENT and provide a written report on the results of the investigation to CLIENT in no more than
twenty (20) Business Days, or sooner if agreed to by the parties or if a more urgent need is recognized. UMAN shall assist CLIENT
by testing Product samples and reviewing Batch manufacturing and analytical records. CLIENT shall communicate with the customers
and/or regulatory authorities the results of the complaint investigation, if necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">24.</TD><TD><U>Returned Goods</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">The specific
handling of returned Product shall be under the responsibility of CLIENT, unless the return of such Products results from UMAN'
inappropriate performance of its obligations. UMAN shall in any event provide such logistical support as CLIENT reasonably requests.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">25.</TD><TD><U>Recall of the Product</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">CLIENT shall
have sole discretion for determining whether and when to recall any Product Lot and for all matters relating to such recall's implementation,
for any reason whatsoever. CLIENT shall inform immediately UMAN of any recall of Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">In the event
of recall, or withdrawal of raw Materials (if the Materials violates applicable laws, regulations, agreed upon Specifications,
or are deemed unacceptable for some other reason, whether or not such action is requested by any governmental agency) UMAN shall
immediately notify CLIENT in writing. During a Product recall or withdrawal, the Parties hereby undertake to fully cooperate with
each other in conducting the necessary investigational activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">26.</TD><TD><U>Audits and Inspections of Facilities and Product(s)</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN shall immediately notify CLIENT of any inspection
results or actions by regulatory agencies or other enforcement bodies, which could potentially have an impact on the Bulk Product,
and/or Product.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">CLIENT reserves the right to audit UMAN&rsquo;s facilities
located in Candiac, Quebec, Canada and systems, as they relate to the manufacturing, packaging and testing of Product, with the
exception of information and operations which constitute UMAN&rsquo;s trade secrets. CLIENT may perform these audits once a year,
with a 10-day notice. CLIENT audit shall be limited at two (2) days per year. UMAN shall respond to, and forward all responses
to observations, generated during an inspection of CLIENT, within thirty (30) days of receipt of the audit report.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">27.</TD><TD><U>Reprocessing and Rework</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">It is agreed between the parties
that reprocessing and reworking shall be exceptional. Reprocessing and/or Rework of Material or Bulk Product or Products must be
fully documented to state reason and justification for reprocessing and/or Rework. <FONT STYLE="color: black">Rework</FONT><FONT STYLE="color: green">
</FONT>activity can only be performed as per agreement between both UMAN and CLIENT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">28.</TD><TD><U>Validation</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN shall be responsible for
validation activities, which include analytical, cleaning, equipment, and facility, in accordance with cGMP and in compliance with
applicable regulations. CLIENT and UMAN shall be responsible for process validation activities in accordance with cGMP and in compliance
with applicable regulations. CLIENT and UMAN shall approve manufacturing and packaging process validation protocols and final reports.
Validation for cleaning, equipment, and facility shall be properly documented and accessible to CLIENT on request. Final analytical
and process validation report shall be provided by UMAN to CLIENT upon completion and approval. Validation cost responsibility
shall be defined in the Supply Agreement between CLIENT and UMAN.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">29.</TD><TD STYLE="text-align: justify"><U>Training</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0in">UMAN shall
ensure that its staff, employees and other personnel (i) are familiar with applicable cGMP and (ii) receive initial and ongoing
cGMP and other training relevant and specific to their job responsibilities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: 0in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">Only personnel
qualified in accordance with a written program shall conduct training relating to the above-mentioned matters. UMAN shall retain
all training records and shall periodically assess the effectiveness of its ongoing training program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">30.</TD><TD><U>Document retention</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">UMAN shall retain all documents,
records and reports associated with the Manufacturing of any and all Product Lots, for a period of at least one (1) year following
the Expiration Date for each such finished Product Lots, or such longer period as applicable regulatory authorities may require.
UMAN shall notify CLIENT in writing after the expiration of this retention period and CLIENT shall have the right to request that
the original batch documents for Finished Packaged Products be either returned to CLIENT or destroyed by UMAN. Upon receipt of
CLIENT&rsquo;s authorization for destruction, UMAN shall promptly destroy the original batch documents for Finished Packaged Products
and provide a certificate documenting the destruction of such original batch documents.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">All such documents, records
and reports shall be stored and maintained by UMAN in such a manner that they are (i) readily retrievable. At the request of CLIENT,
acting reasonably, UMAN shall provide copies of all such documents, records and reports to CLIENT.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">31.</TD><TD><U>Other services</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">Other services may be mutually
agreed upon on a case-by-case basis. UMAN and CLIENT shall add such services as an addendum to this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">32.</TD><TD><U>Notices</U></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">32.1.</TD><TD>A notice under or in connection with this Agreement (a &ldquo;Notice&rdquo;):</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify">shall be in writing;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify">shall be in the English language; and</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify">shall be delivered personally or sent by first class post pre-paid recorded delivery (and air mail
if overseas) or by fax to the party due to receive the Notice at its address set out in this Agreement or to another address or
fax number specified by that party by not less than seven days&rsquo; written notice to the other party received before the Notice
was despatched.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">32.2.</TD><TD>The address referred to in this Article is:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify">in the case of UMAN:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">Address:&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Uman Pharma Inc.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.45pt; text-indent: 34.35pt">100 De L&rsquo;industrie
blvd</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.45pt; text-indent: 34.35pt">Candiac, Quebec</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.45pt; text-indent: 34.35pt">Canada</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 107.45pt; text-indent: 34.35pt">J5R 1J1</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&#9;Fax:&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;+ (450) 444-8100</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify">in the case of CLIENT:</TD></TR></TABLE>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; font-weight: bold; text-decoration: none">&nbsp;</TD>
    <TD STYLE="width: 25%; font-weight: bold; text-decoration: none; padding-left: 0.48in; border-bottom: Black 1pt solid">Address</TD>
    <TD STYLE="width: 23%; font-weight: bold; text-decoration: none; border-bottom: Black 1pt solid">CLIENT Inc.</TD>
    <TD STYLE="width: 22%; font-weight: bold; text-decoration: none">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&#9;Fax:&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;+</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">32.3.</TD><TD>Unless there is evidence that it was received earlier, a Notice is deemed given:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(a)</TD><TD STYLE="text-align: justify">if delivered personally, when left at the address referred to this Article</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(b)</TD><TD STYLE="text-align: justify">if sent by post, except air mail, two business days after posting it;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(c)</TD><TD STYLE="text-align: justify">if sent by air mail, six business days after posting it;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">(d)</TD><TD STYLE="text-align: justify">if sent by fax, when confirmation of its transmission has been recorded by the sender&rsquo;s fax
machine.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 18pt"></TD><TD STYLE="width: 27pt">32.4.</TD><TD>In this Article business day means a day other than a Saturday or Sunday or a public holiday in either the country where the
Notice is posted or that to which it is sent.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Annex I</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: center"><B>Quality Agreement Distribution
of Responsibility Matrix</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[****] [3 pages redacted]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Legend:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">S: Shared responsibility between Uman and CLIENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">R: Primary Responsibility</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">A: Approval Required</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Annex I</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Quality Agreement Distribution of Responsibility
Matrix</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold">Uman Pharma Inc.</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">CLIENT Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid; padding-left: 0.12in">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2" STYLE="font-weight: bold; text-indent: 0.5in; padding-left: 0.12in">Alain B&eacute;rub&eacute;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD STYLE="padding-left: 0.12in">Vice-President Compliance &amp;<BR>
Regulatory Affairs</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: </TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain Hubert</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-indent: 0.5in">&nbsp;</TD>
    <TD STYLE="text-indent: 0; padding-left: 0.12in">Chief Operating Officer</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Annex II</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Quality Agreement &ndash; Primary Contacts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>UMAN:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 21%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Title</U></TD>
    <TD STYLE="width: 13%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Individual</U></TD>
    <TD STYLE="width: 17%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Quality
    process</U></TD>
    <TD STYLE="width: 27%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>E-mail
    address</U></TD>
    <TD STYLE="width: 13%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Phone</U></TD>
    <TD STYLE="width: 9%; border-top: windowtext 5.25pt double; border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Fax</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><U>CLIENT:</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 21%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Title</U></TD>
    <TD STYLE="width: 13%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Individual</U></TD>
    <TD STYLE="width: 17%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Quality
    process</U></TD>
    <TD STYLE="width: 27%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>E-mail
    address</U></TD>
    <TD STYLE="width: 13%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Phone</U></TD>
    <TD STYLE="width: 9%; border-top: windowtext 5.25pt double; border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold"><U>Fax</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-bottom: windowtext 5.25pt double; padding-right: 5.4pt; padding-left: 5.4pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Annex II</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Quality Agreement &ndash; Primary Contacts</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Uman Pharma Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P></TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">CLIENT Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-indent: 0.5in">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain B&eacute;rub&eacute;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Vice-President Compliance &amp;<BR>
Regulatory Affairs</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD></TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: </TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain Hubert</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-indent: 0.5in">&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Chief Operating Officer</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Annex III</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Quality Agreement &ndash; Contractor
Laboratories</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">UMAN uses these laboratories for the analysis of raw materials
only. No finished products are sent for analysis outside of UMAN laboratories except in the case of a dispute.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; padding: 1.45pt 5.75pt; border-bottom: windowtext 1pt solid; font-weight: bold"><U>Laboratory</U></TD>
    <TD STYLE="width: 49%; border-top: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt; font-weight: bold"><U>Address</U></TD>
    <TD STYLE="width: 27%; border-top: windowtext 5.25pt double; border-right: windowtext 5.25pt double; border-left: windowtext 1pt solid; padding: 1.45pt 5.75pt; border-bottom: windowtext 1pt solid; font-weight: bold"><U>Testing
    Category</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; padding: 1.45pt 5.75pt; border-bottom: windowtext 1pt solid">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-left: windowtext 1pt solid; padding: 1.45pt 5.75pt; border-bottom: windowtext 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; padding: 1.45pt 5.75pt; border-bottom: windowtext 5.25pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 5.25pt double; padding: 1.45pt 5.75pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-left: windowtext 1pt solid; padding: 1.45pt 5.75pt; border-bottom: windowtext 5.25pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center; color: red">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">UMAN uses these laboratories for the analysis of Bulk Product,
Semi-Finished Product and Product</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE ALIGN="CENTER" CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; border-collapse: collapse; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 24%; border-top: windowtext 5.25pt double; border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; padding: 1.45pt 5.75pt; border-bottom: windowtext 1pt solid; font-weight: bold"><U>Laboratory</U></TD>
    <TD STYLE="width: 49%; border-top: windowtext 5.25pt double; border-bottom: windowtext 1pt solid; padding: 1.45pt 5.75pt; font-weight: bold"><U>Address</U></TD>
    <TD STYLE="width: 27%; border-top: windowtext 5.25pt double; border-right: windowtext 5.25pt double; border-left: windowtext 1pt solid; padding: 1.45pt 5.75pt; border-bottom: windowtext 1pt solid; font-weight: bold"><U>Testing
    Category</U></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-left: windowtext 5.25pt double; padding: 1.45pt 5.75pt; border-bottom: windowtext 5.25pt double">&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 5.25pt double; padding: 1.45pt 5.75pt">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 5.25pt double; border-left: windowtext 1pt solid; padding: 1.45pt 5.75pt; border-bottom: windowtext 5.25pt double">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Uman Pharma Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P></TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">CLIENT Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-indent: 0.5in">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-indent: 0; padding-left: 0.12in">Alain B&eacute;rub&eacute;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Vice-President Compliance &amp;<BR>
Regulatory Affairs</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: </TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain Hubert</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Chief Operating Officer</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B><U>Annex IV</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Quality Agreement &ndash; Products Covered</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Product 1</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Product 2</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Uman Pharma Inc.</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P></TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="font-weight: bold">CLIENT Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">By:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-indent: 0.5in">&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain B&eacute;rub&eacute;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Vice-President Compliance &amp;<BR>
Regulatory Affairs</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>By:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">(Signature)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD COLSPAN="2">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: </TD>
    <TD STYLE="font-weight: bold; border-bottom: Black 1pt solid">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold; padding-left: 0.12in">Alain Hubert</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="padding-left: 0.12in">Chief Operating Officer</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>1692-Amendment 1</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">7810962-Redhill</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 194.2pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt"><B>Date: </B>June 6, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt; text-align: justify">This amendment outlines changes
to the original &ldquo;Research and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, Page 5, specific
terms and conditions&rdquo;, signed on April 28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold
Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt"><B><I>Purpose: To clarify responsibility toward API
sourcing as per section 3.1 of main agreement</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0.25in; text-align: left">3.1</TD><TD STYLE="text-align: left"><U>API. </U>For Processing of products, subject to
CUSTOMER pre-approval in writing of both the<U> </U>supplier and the costs, PROVIDER will purchase API as per <U>Exhibit A</U>
in quantities sufficient to meet CUSTOMER&rsquo;s requirements for the Product as further set forth in Article 4. PROVIDER shall
conduct appropriate release testing of the API as outlined in the Quality Agreement to be concluded further the conclusion of
the Agreement as per Article 9.6 (&ldquo;Quality Agreement&rdquo;). <B><I>The API supplier selection, certification and verification
of GMP compliance (ICH Q7A) are the responsibility of CUSTOMER.</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 21.2pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt">Cost: Not applicable</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.2pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%">Approved by RedHill:</TD>
    <TD STYLE="width: 25%; border-bottom: Black 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD STYLE="width: 15%">&nbsp;</TD>
    <TD STYLE="width: 5%">Date:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">November 10, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="padding-left: 0.24in">Dror Ben Asher, CEO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">November 16, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Dir R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amendment 2</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This amendment outlines changes to the
original &ldquo;Research and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions,
signed on April 28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Date:</B> June 23, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Purpose: To modify the payment terms of the original agreement.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-indent: -63pt">The original payment terms were
as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-indent: -63pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Terms of payment</B>:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total estimated cost of project - $[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 127.6pt; text-indent: -42.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">The payment and payment terms were modified as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-indent: -63pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD NOWRAP STYLE="width: 52%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">Revised cost</TD>
    <TD NOWRAP STYLE="width: 48%; padding-right: 5.4pt; padding-left: 5.4pt">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">[****]</P></TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD></TR>
<TR>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-decoration: underline; text-align: center">Amendments</TD>
    <TD NOWRAP STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD>
    <TD NOWRAP STYLE="border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD>
    <TD NOWRAP STYLE="border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD>
    <TD NOWRAP STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD></TR>
<TR>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD>
    <TD NOWRAP STYLE="border-bottom: windowtext 2.25pt double; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">[****]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Terms of payment</B>:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total estimated cost of project<B><I>
$</I>[****]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 106.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Additional process development</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><U>[****]</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Purpose: To perform additional </I>[****]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Cost of this task: $</I>[****]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Terms of payment: </I>[****]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Other additional cost</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><U>[****]</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Purpose: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Cost: $</I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Terms of payment: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><B><I>1.</I></B></TD><TD><B><I><U>Development reports</U></I></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Purpose: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Cost: $</I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Terms of payment: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><B><I>2.</I></B></TD><TD><B><I><U>Project management</U></I></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Purpose: To adjust the project management
fees based on the extra development work required to complete the project.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Cost: $</I></B>[****]<B><I> until the end
of the project</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Terms of payment: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Purpose: To perform </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Cost</I></B> [****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Terms of payment:</I></B>[****]<B><I>.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-indent: -63pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><B><I>3.</I></B></TD><TD><B><I><U>Additional work for </U></I></B>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Purpose: to perform additional development
work</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Cost: $</I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Terms of payment: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I><U>Additional stability</U></I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Purpose: To modify the </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>programs </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Placebo: To add </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 85%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 30%; text-align: right">RedHill:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="width: 30%; border-bottom: Black 1pt solid">February 29, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD NOWRAP>Ori Shilo, VP Finance and Operations&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD> Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Uri Hananel Aharon</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;February 29, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Uri Hananel Aharon, CAO</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD NOWRAP STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt; padding-left: 35.45pt">7810962 Canada Inc.:&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">February 29, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Dir. R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 184pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>1692-Amendment 3</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">7810962-Redhill</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 194pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Date: </B>June 6, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This amendment outlines changes to the
original &ldquo;Research and Tech transfer, manufacturing and supply agreement for the RHB -104, Exhibit A, specific terms and
conditions&rdquo;, signed on April 28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Purpose: Customer requested that Provider perform analysis
of API sample </I></B>[****] <B><I>for RHB-104 program.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost associated with these analyses: $ </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Terms of payment:</I></B>&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%">Approved by RedHill:</TD>
    <TD STYLE="width: 25%; border-bottom: Black 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">Date:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">October 11, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Dror Ben Asher, CEO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">November 16, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Dir R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>1692-Amendment 4</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">7810962-Redhill</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 194pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Date: </B>July 7, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This amendment outlines changes to the
original &ldquo;Research and Tech transfer, manufacturing and supply agreement for the RHB -104, Exhibit A, specific terms and
conditions&rdquo;, signed on April 28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Purpose: In the absence of a validation report for the
analytical methods by </I></B>[****]<B><I>; it is essential that a </I></B>[****]<B><I> study be performed to determine if the
methods are stability indicating.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost: associated to this development: $ </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Terms of payment:</I></B>&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%">Approved by RedHill:</TD>
    <TD STYLE="width: 25%; border-bottom: Black 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">Date:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">October 4, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Dror Ben Asher, CEO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">November 16, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Dir R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><B>1692-Amendment 5</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">7810962-Redhill</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 194pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Date: </B>August 24, 2011</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This amendment outlines changes to the
original &ldquo;Research and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, Page 20, specific terms
and conditions&rdquo;, signed on April 28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold
Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Purpose: Custom tooling is required for</I></B> [****]<B><I>.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><I>Provider will acquire the tooling
at its own cost and Customer will cover the cost of development and validation work.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Terms of payment:</I></B>&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 20%">Approved by RedHill: </TD>
    <TD STYLE="width: 25%; border-bottom: Black 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD STYLE="width: 10%">&nbsp;</TD>
    <TD STYLE="width: 5%">Date:</TD>
    <TD STYLE="width: 40%; border-bottom: Black 1pt solid">October 11, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD>&nbsp;Dror Ben Asher, CEO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962: </TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">November 16, 2011</TD></TR>
<TR STYLE="vertical-align: top">
    <TD></TD>
    <TD>Alain Guimond, Dir R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->46<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amendment 6</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This amendment outlines changes to the original &ldquo;Research
and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions, signed on April
28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]<B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%">Approved by RedHill:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 38%; border-bottom: Black 1pt solid">March 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Ori Shilo, VP finance and operationsDate</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Uri Hananel Aharon</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;March 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Uri Hananel Aharon, CAO</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">March 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Dir R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amendment 7</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This amendment outlines changes to the original &ldquo;Research
and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions, signed on April
28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Additional process development</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%">Approved by RedHill:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 38%; border-bottom: Black 1pt solid">&nbsp;March 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Ori Shilo, VP finance and Operations</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Uri Hananel Aharon</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;March 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Uri Hananel Aharon, CAO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;Date:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;March 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Sr. Dir R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;Date:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<!-- Field: Page; Sequence: 48; Value: 39 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amendment 8</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This amendment outlines changes to the original &ldquo;Research
and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions, signed on April
28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Additional testing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 35.45pt"><B><I>Cost of this task: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in"><B><I>Terms of payment:</I></B>&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%">Approved by RedHill:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 38%; border-bottom: Black 1pt solid">&nbsp;March 28, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Ori Shilo, VP finance and Operations</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Uri Hananel Aharon</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;March 28, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Uri Hananel Aharon, CAO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;Date:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;March 28, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Sr. Dir R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amendment 9</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This amendment outlines changes to the original &ldquo;Research
and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions, signed on April
28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Scope
changes&nbsp;: </B>[****]</FONT><FONT STYLE="font-size: 10pt; color: #1F1F1F">:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; color: #1F1F1F">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%">Approved by RedHill:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 38%; border-bottom: Black 1pt solid">June 13, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Ori Shilo, VP finance and operation</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;June 13, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Dror Ben-Asher, CEO</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>7810962 Canada Inc.:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond<B>_</B></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;June 13, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Dir. R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amendment 10</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This amendment outlines changes to the original &ldquo;Research
and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions, signed on April
28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>1.&#9;The customer requested modification of the stability
program (refer Amendment #2):</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in; text-align: left"><B><I>Cost:</I></B></TD><TD STYLE="text-align: justify"><B><I>The cost of the stability programs changes from
$</I></B>[****] <B><I>to analysis have been subtracted. including dissolution profiles for all batches in stability program. </I></B>[****]</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 1in"><B><I>Agreement:</I></B></TD><TD><B><I>Uman Pharma agrees to remove the </I></B>[****] <B><I>that applies on the tests to be performed by </I></B>[****] <B><I>during
stability program for CTM and the 3 subsequent NDA batches.</I></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Terms of payment:</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B><I>Work related to items 1 to 5 will be invoiced on a quarterly
basis based on the time-point reports and other stability activity that was completed during the quarter. Each time point tested
will be indicated on the invoice.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0in"></TD><TD STYLE="width: 0.25in; text-align: left"><B><I>2.</I></B></TD><TD STYLE="text-align: justify"><B><I>The customer requested the preparation of capsules
of analytical placebo to include in the stability programs.</I></B></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="border-collapse: collapse; width: 100%; font: 10pt Times New Roman, Times, Serif">
<TR STYLE="vertical-align: bottom">
    <TD NOWRAP STYLE="font-weight: bold; font-style: italic; text-align: center; border-bottom: Black 1pt solid">Task</TD><TD NOWRAP STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; font-style: italic; text-align: left; border-bottom: Black 1pt solid">CTM 100K</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic">&nbsp;</TD><TD NOWRAP STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD COLSPAN="2" NOWRAP STYLE="font-weight: bold; font-style: italic; text-align: left; border-bottom: Black 1pt solid">NDA 300K</TD><TD NOWRAP STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="width: 74%; font-weight: bold; font-style: italic; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Stability GMP set-up fee ($500/condition)</TD><TD STYLE="width: 1%; font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="width: 10%; padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: right">1500</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD><TD STYLE="width: 1%; font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="width: 10%; padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: right">1500</TD><TD STYLE="width: 1%; padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Master batch record for manual encapsulation ($1000/document)</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: right">1000</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: right">N/A</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Manual encapsulation (Time based: 12hrs @ $110/Hr)</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: right">1320</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: right">1320</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: White">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: left; padding-bottom: 1pt; padding-left: 5.4pt">Modification of stability protocol + change control ($1000/document)</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; font-style: italic; text-align: right">1000</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD><TD STYLE="border-bottom: Black 1pt solid; font-weight: bold; font-style: italic; text-align: right">N/A</TD><TD STYLE="padding-bottom: 1pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD></TR>
<TR STYLE="vertical-align: bottom; background-color: rgb(204,255,204)">
    <TD STYLE="font-weight: bold; font-style: italic; text-align: right; padding-bottom: 2.5pt; padding-left: 5.4pt">Subtotal</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; font-style: italic; text-align: right">4820</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD><TD STYLE="font-weight: bold; font-style: italic; padding-bottom: 2.5pt">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; font-style: italic; text-align: left">$</TD><TD STYLE="border-bottom: Black 2.5pt double; font-weight: bold; font-style: italic; text-align: right">2820</TD><TD STYLE="padding-bottom: 2.5pt; font-weight: bold; font-style: italic; text-align: left">&nbsp;</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost for this Item:
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
$7 640</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Terms of payment: 100% at completion of work.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%">Approved by RedHill:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 38%; border-bottom: Black 1pt solid">&nbsp;July 23, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Ori Shilo, VP Finance and Operation</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;July 23, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Dror Ben-Asher</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>7810962 Canada Inc.:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Paule Clermont</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;July 24, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Paule Clermont, Head Clinical Operation Date</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<!-- Field: Page; Sequence: 52; Value: 39 -->
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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Amendment 11</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This amendment outlines changes to the original &ldquo;Research
and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions, signed on April
28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in"><B><I>1.</I></B></TD><TD><B><I>The customer requested to perform </I></B>[****] <B><I>operation (</I></B>[****] <B><I>) on the blend for RHB-104 lot
</I></B>[****] <B><I>.</I></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost: </I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" ALIGN="CENTER" STYLE="width: 90%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 82%; border: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">[****] </TD>
    <TD STYLE="width: 18%; border-top: windowtext 1pt solid; border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">[****] </TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt">[****]</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">[****]</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; border-left: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 3.5in; font-style: italic; font-weight: bold">&nbsp;</TD>
    <TD STYLE="border-right: windowtext 1pt solid; border-bottom: windowtext 1pt solid; padding-right: 5.4pt; padding-left: 5.4pt; text-align: right">[****]</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost for this Item:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Terms of payment: 100% at completion of work.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%">Approved by RedHill:</TD>
    <TD STYLE="width: 35%; border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD STYLE="width: 2%">&nbsp;</TD>
    <TD STYLE="width: 38%; border-bottom: Black 1pt solid">&nbsp;August 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Ori Shilo, VP Finance and Operation</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Uri Hananel Aharon</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;August 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Uri Hananel Aharon, CAO</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>7810962 Canada Inc.:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1pt solid">&nbsp;August 19, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Dir. R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD>Date</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt">Amendment 12</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">to</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">7810962-Redhill RHB-104 Agreement (Uman)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">This amendment outlines changes to the original &ldquo;Research
and Tech transfer, manufacturing and supply agreement for the RHB-104, Exhibit A, specific terms and conditions, signed on April
28<SUP>th</SUP> 2011 referred to as Agreement PO# 1692. Changes are listed in <B><I>Bold Italic.</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Purpose:</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B><I>1.</I></B></TD><TD><B><I>The customer requested </I></B>[****] <B><I>. He also requested to ship a sample of </I></B>[****] <B><I>. Samples of
the </I></B>[****]<B><I> that were used in the clinical batches are also requested. All these samples will be shipped to</I></B>[****]
<B><I>.</I></B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost:</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><B><I>2.</I></B></TD><TD><B><I>The customer requested to perform a </I></B>[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Cost: </I></B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B><I>Cost:
</I></B></FONT><FONT STYLE="font-size: 10pt">[****]</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>Terms of payment:&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;100% at completion of work</I></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B><I>&nbsp;</I></B></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD>Approved by RedHill:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Ori Shilo</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 25%">&nbsp;</TD>
    <TD STYLE="width: 35%">Ori Shilo, VP Finance and Operation</TD>
    <TD STYLE="width: 5%">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt; width: 5%">Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid; width: 30%"> August 23, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>/s/ Uri Hananel Aharon</TD>
    <TD>&nbsp;</TD>
    <TD>Date:</TD>
    <TD> August 23, 2012&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Approved by 7810962:</TD>
    <TD STYLE="border-bottom: Black 1pt solid">/s/ Alain Guimond</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">Date:</TD>
    <TD STYLE="border-bottom: Black 1pt solid"> August 21, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>Alain Guimond, Sr. Dir. R&amp;D</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Supply Agreement - CUSTOMER</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<DOCUMENT>
<TYPE>EX-4.15
<SEQUENCE>6
<FILENAME>filename6.htm
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<HTML>
<HEAD>
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<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 4.15</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: italic bold 18pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CLINICAL SERVICES AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">between</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>7810962 Canada Inc.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">And</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RedHill Biopharma Ltd<B> </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">June 15, 2011</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">CLINICAL SERVICES AGREEMENT</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This Clinical Services Agreement (&ldquo;<B>Agreement</B>&rdquo;)
is made between</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(1)</TD><TD STYLE="text-align: justify">RedHill Biopharma Ltd<B>.</B>, having its principle place of business at<B> 21 Ha&rsquo;arba&rsquo;a
St., Tel Aviv 64739, Israel (hereafter &ldquo;SPONSOR&rdquo;)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(2)</TD><TD STYLE="text-align: justify"><B>7810962 Canada Inc.</B>, having its principal office at 245 Victoria Ave, Suite 100, Montreal,
Quebec, H3Z 2M6, Canada (hereinafter <B> &ldquo;MANAGER&rdquo;</B>);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When signed by both parties, this Agreement
will set forth the terms and conditions under which MANAGER agrees to provide certain services to SPONSOR as set forth herein.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Recitals:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">a)</TD><TD STYLE="text-align: justify">WHEREAS, MANAGER is in the business of providing services for the development of investigational
new drugs; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">b)</TD><TD STYLE="text-align: justify">WHEREAS, SPONSOR desires to contract with MANAGER, and MANAGER desires to be contracted by SPONSOR
for the purposes of providing such services to assist SPONSOR in the execution of two clinical investigations of RHB-104, an investigational
new drug (the &ldquo;<B>Drug</B>&rdquo;) and completion of other tasks as outlined in the attached exhibits; and</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">c)</TD><TD STYLE="text-align: justify">WHEREAS SPONSOR agrees that MANAGER will engage the services of PharmaNet (which includes PharmaNet
Canada INC. as the lead as well as PharmaNet LP and PharmaNet GmBH), (hereafter &ldquo;PharmaNet&rdquo;) as a third party subcontractor
in order for MANAGER to deliver the deliverables of this agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in">d)</TD><TD STYLE="text-align: justify">WHEREAS, this Agreement is an appendix to and forms part of the Master Service Agreement executed
between SPONSOR and MANAGER on 28<SUP>th</SUP> April 2011</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>Definitions:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;<B><U>All Applicable Laws and Regulations&rdquo;</U></B>
means all federal, state and/or local laws of the United States, and foreign countries having authority over the conduct of clinical
studies, and the review of the data obtained under this Agreement, and which govern the conduct of clinical studies or other activities
of MANAGER and PharmaNet in providing services under this Agreement. For studies conducted under an investigational new drug application
(&ldquo;IND&rdquo;), applicable laws and regulations include, but are not limited to, 21 CFR Pts. 312, 50, 56, and 11 (and 65/65/EEC,
75/318/EEC, 91/507/EEC for studies conducted in a European Union member state) and all conditions of approval imposed by the reviewing
IRB/Ethics Committee and FDA and other authorities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Drug&rdquo;</U></B> means
RHB-104 and placebo as defined in SPONSOR Protocol.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;ICH&rdquo;</U></B> means the
International Conference on Harmonization of Technical Requirements for Registration of Pharmaceuticals for Human Use.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Investigator&rdquo;</U></B>
means licensed physician who is a qualified clinical investigator willing and able, and engaged by PharmaNet with the prior written
approval of SPONSOR in accordance with the Agreement to conduct a clinical investigation of the Drug as set forth in the Study.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;<B><U>PharmaNet</U></B>&rdquo;<B>
</B>means the entity identified above as PharmaNet, including any of its Subsidiaries performing Services under this Agreement
pursuant to Article 15 below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Proposal&rdquo;</U></B> means
the document wherein MANAGER sets forth its obligations to SPONSOR as well as the costs associated therewith, attached hereto as
<B>Exhibit A</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Protocols&rdquo;</U></B> means
the relevant INDs and their European equivalents, including IND number 73.479 approved by the FDA (and a similar CTA and/or European
IND-equivalent to be approved by the MHRA and/or any other European Regulatory Authorities) entitled (in the case of the FDA IND)
<I>&ldquo;</I>[****] are detailed, wherein the regiments for the conduct of the respective Studies (defined below); and &quot;<B><U>Protocol</U></B>&quot;
means either and/or some and/or all of them as the context requires.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Regulatory Authorities&rdquo;</U></B>
means the United States Food and Drug Administration (&ldquo;<B>FDA</B>&rdquo;), or other foreign or domestic judicial, governmental
or regulatory bodies having jurisdiction over the conduct of the clinical studies, or review of the data obtained from such studies,
in which MANAGER is acting as a general contractor, project manager and scientific expert and PharmaNet is acting as a contract
research organization (&ldquo;CRO&rdquo;) and, as such, MANAGER and PharmaNet are collectively providing services under this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Services&rdquo;</U></B> means
the services to be provided by MANAGER to SPONSOR as described in detail in the Proposal, attached hereto and incorporated herein
by references as <B>Exhibit A</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Site Agreement&rdquo;</U></B>
means an agreement for the conduct of one or more clinical studies to be executed by (i) PharmaNet and (ii) clinical investigators
and/or the institution at which such studies will be conducted.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&ldquo;<B><U>Subsidiary</U></B>&rdquo;
means all entities controlled by MANAGER, as the case may be. The term &ldquo;control&rdquo; shall mean the ability to vote fifty
percent (50%) or more of the voting securities of any entity or otherwise having the ability to influence and direct the polices
and direction of an entity.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B><U>&ldquo;Studies&rdquo;</U></B> means
the two sets of clinical testing procedures and conditions set out in the respective Protocols (defined above); and &quot;<B><U>Study</U></B>&quot;
means either and/or some and/or all of them as the context requires.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TERMS</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">1.0</TD><TD><B>Obligations of PharmaNet; Other Matters.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(a)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Obligations
of MANAGER</U>. MANAGER will cause PharmaNet to conduct the Study in accordance with the Protocol and as outlined in the Proposal
attached as <B>Exhibit A</B>. The Study will be conducted in accordance with All Applicable Laws and Regulations and in a professional
manner, with due care and diligence in closely monitoring the Study.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Transfer
of Obligations</U>. Pursuant to 21 CFR 312.52, SPONSOR transfers its obligations (as more explicitly detailed in Section 1 of this
Agreement) for this clinical Study to MANAGER and MANAGER in turn transfers its obligations to PharmaNet and agrees that the same
should be included on FDA Form 1571, Section 13 and any relevant European equivalent. In the absence of a signed agreement regarding
the &ldquo;Transfer of Obligations&rdquo;, MANAGER will not consider the obligations to be transferred. MANAGER will perform and
cause PharmaNet to perform its obligations hereunder in a professional, workmanlike and timely manner, as a contract research organization
in accordance with 21 CFR 312.52 and in accordance with All Applicable Laws and Regulations, including but not limited to those
administered by FDA. MANAGER will cause PharmaNet to take all reasonable steps to ensure that personnel it uses to perform its
obligations under this Agreement are appropriately trained and qualified to monitor the progress of the Study in accordance with
the terms of this Agreement. MANAGER will cause PharmaNet to agree to carry out diligently all transferred obligations. Furthermore,
all duly accepted obligations as noted above become the responsibility of SPONSOR at the close of the project. The date of the
&ldquo;close of the project&rdquo; will need to be agreed in writing in advance by the Parties.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Status
Reporting</U>. All of the herein above described services shall be performed in close cooperation with SPONSOR and MANAGER will
cause PharmaNet to provide detailed status reports as provided in Exhibit A, which will include but not be limited to the status
and issues of the Study and detailed minutes of all SPONSOR &ndash; MANAGER-PharmaNet meetings that took place during the relevant
period (both in person and over the phone).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(d)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Clinical
Supplies</U>. MANAGER will cause PharmaNet to in a timely manner, having regard to the lead time for manufacture, inform MANAGER
and SPONSOR or its designee when to supply the Investigators with the packaged and labeled clinical supplies of the Drug and other
supplies as are agreed upon by SPONSOR and MANAGER for the timely completion of the Study (&quot;<B><U>Materials</U></B>&quot;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(e)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Use
of Materials</U>. MANAGER will cause PharmaNet to undertake that it shall not (i) use the Materials other than for the purpose
of performing the Projects; (ii) make the Materials available to any third party; (iii) allow access to the Materials by any of
its employees or students except those who are directly involved in performing the Projects;(iv) make any commercial use of the
Materials or any composition made using the Materials; or (v) analyse or otherwise attempt to determine the composition of the
Materials. Upon termination of the Agreement, any unused Materials shall, at SPONSORs option and sole discretion and expense, either
be destroyed or returned to SPONSOR or its designee.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(f)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Regulatory
Submission</U>. If MANAGER or PharmaNet is to submit any information to Regulatory Authorities, including any INDs, whether to
be sponsored by MANAGER, SPONSOR, PharmaNet or any Investigators, such regulatory submissions shall not be made without SPONSOR&rsquo;s
prior review and written pre-approval in its sole discretion, and any changes (other than entry of required information) also shall
be subject to SPONSOR&rsquo;s prior written approval.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(g)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT STYLE="color: black"><U>Investigator
Services Agreements and Third Party Vendors</U>. If </FONT>MANAGER causes <FONT STYLE="color: black">PharmaNet to execute or obtain
the execution of any Investigator Services Agreements or third party vendor (&quot;<B><U>Third Party Agreements</U></B>&quot;)
on behalf of</FONT> SPONSOR<FONT STYLE="color: black"> or in connection with the conduct of any study, such Third Party Agreements
as well as any </FONT>amendments<FONT STYLE="color: black"> thereto shall be approved in advance in writing by </FONT>SPONSOR<FONT STYLE="color: black">.
</FONT>MANAGER will cause <FONT STYLE="color: black">PharmaNet to exercise due skill, care and diligence in selecting such investigators
and third party vendors, and for clarity their approval by PharmaNet shall indemnify and hold harmless </FONT>SPONSOR and MANAGER<FONT STYLE="color: black">
to the full extent that PharmaNet is indemnified and held harmless by such Investigator and third party vendor, and shall at </FONT>SPONSORs<FONT STYLE="color: black">
sole option either take all reasonable steps to enforce such indemnities or permit </FONT>SPONSOR<FONT STYLE="color: black"> to
do so in MANAGERs and PharmaNet's name. MANAGER and PharmaNet shall not otherwise be liable for any Investigator or third party
vendor errors, omissions or consequences there from, unless they arise from or are due to the negligence actions/inactions or willful
misconduct of MANAGER or PharmaNet or from MANAGERs or PharmaNet's failure to follow the applicable protocol.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(h)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<U>Services
Oversight</U>. MANAGER will cause PharmaNet to procure that any Investigators, third party vendors and permitted subcontractors
(each, a &quot;<B><U>Relevant Third Party</U></B>&quot;) shall, at all times make available to SPONSOR, or to the responsible regulatory
authority, relevant records, programs and data as may reasonably be requested by SPONSOR to enable SPONSOR to have ongoing oversight
of the Services. In addition to its rights of inspection under Section 8.0, MANAGER shall cause PharmaNet to allow SPONSOR or his
designee to have the right upon reasonable advance notice to PharmaNet to visit any of the facilities where PharmaNet or a Relevant
Third Party are conducting the Services in order to monitor the operations of PharmaNet and Relevant Third Parties, to assess compliance
with All Applicable Laws and Regulations. During such visits, MANAGER will cause PharmaNet will facilitate SPONSORs or its designee&rsquo;s
right to inspect the work being done and materials used, to observe the procedures being followed, to examine the books, records
and other source data relevant to the Services. MANAGER will cause PharmaNet shall procure and ensure that all its subcontractors
comply with this provision.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in"><B>2.0</B></TD><TD STYLE="text-align: justify"><B>Invoicing and Payment of Professional Fees and Expenses. (A) Invoicing.</B> MANAGER shall invoice
SPONSOR once monthly. Monthly invoices should include a clear and detailed breakdown of all relevant costs and fees as set forth
in the Milestone Payment Schedule attached and incorporated herein as <B>Exhibit A </B>(the<B> &ldquo;Monthly Invoices&rdquo;</B>).
For the avoidance of any doubt, any expenses included in any of the above mentioned invoices submitted by MANAGER must be set forth
in budget of <B>Exhibit A</B>. Each Monthly Invoice shall be accurate and itemized in sufficient detail to permit independent auditing
and verification that the work covered by such Monthly Invoice has been properly performed. All expenses, investigator grants and
pass-through costs shall be included in the Monthly Invoices on an &ldquo;as-paid&rdquo; basis, without any added overhead, management
fee and/or profit factor whatsoever.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">If the Monthly Invoice encompasses
different separate invoices related to the relevant month, the different invoices will be mailed to SPONSOR simultaneously, itemized
on the basis of the following categories (a) PharmaNet fees; (b) Investigator grants-Quebec; (c) Investigator grants-rest of Canada;
(d) Investigator grants- non-Canadian (e) pass through costs &ndash; Canada (f) pass through costs - non-Canadian.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>(B)
Payment.</B> Within thirty (30) days following the date of the relevant Monthly Invoice, SPONSOR will make one monthly payment
for all the valid and undisputed invoices covered by the Monthly Invoice, in a single payment of the relevant amount in USD to
a single account destination, the details of which shall be provided by MANAGER together with the Monthly Invoice. MANAGER will
charge a late payment fee of 0.5% per month, or the maximum amount permitted by law if less than 0.5% per month, for any payment
not received within thirty (45) days from date of the relevant Monthly Invoice is due. If any portion of a Monthly Invoice is disputed,
then SPONSOR shall pay the undisputed amounts as set forth in the preceding sentence and the parties shall use good faith efforts
to reconcile the disputed amount within (60) days of date of the relevant Monthly Invoice.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">All payments shall be made in
US Dollars by direct transfer and shall be made free of any applicable local, withholding taxes, charges or remittance fees.&nbsp;
Invoices will be inclusive of applicable taxes as determined by local laws and regulations (&ldquo;<B>Local Taxes</B>&rdquo;),
provided, however, that MANAGER identifies and specifies, prior to the execution of this Agreement any and all such Local Taxes.
As of the date hereof, MANAGER has indicated that the only Local Taxes which impact the Services will be VAT which will be incurred
on &quot;de minimis&quot;&nbsp;local travel&nbsp;expenses in multiple foreign jurisdictions by personnel assigned to work on the
study in the course of performing the services which such VAT will be passed through to the SPONSOR up to a maximum of US$1000
of &quot;de minimis&quot; expenses per country per month. Further, for all other expenses in which MANAGER or PharmaNet incurs
VAT charges or equivalent sales taxes, MANAGER will not pass through these VAT charges or sales taxes to SPONSOR and MANAGER will
cause PharmaNet to assume the responsibility to claim back the VAT or other sales taxes from the relevant countries. For the avoidance
of any doubt and notwithstanding the foregoing, SPONSOR is not responsible for any Local Tax not specified in the preceding sentence;
provided however, any change in (a) the relevant tax laws or (b) scope of the Services which results in a Change Order (as defined
below) shall render the preceding sentence subject to further updating which may be performed in such Change Order. Notwithstanding
the foregoing, SPONSOR has the option, at its sole discretion, to pay the equivalent amount in the same currency in which Pass-Through
costs and expenses were incurred by MANAGER.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">3.0</TD><TD STYLE="text-align: justify"><B>Change Orders.</B> During the performance of Services under this Agreement, SPONSOR may request
that additional or new Services be performed by MANAGER or there may arise a material change in the assumptions upon which the
Agreement is based (including, but not limited to, changes in an agreed starting date for a project or suspension of a project
by SPONSOR). Such changes, provided they are sufficiently material and are not negligible, require changes to the budget and/or
timelines. To the extent that either of these circumstances results in the total budget (fees, expenses and pass-through costs)
being exceeded, prior written approval (&ldquo;<B><U>Change Order</U></B>&rdquo;) must be obtained from SPONSOR before any additional
costs are incurred.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Each Change Order shall detail
the requested changes to the applicable task, responsibility, duty, budget, time line or other matter. The Change Order will become
effective upon agreement by both parties, and MANAGER will be given a mutually acceptable period of time within which to implement
the changes. Both parties agree to act in good faith and promptly when considering a Change Order requested by the other party.
Notwithstanding the above MANAGER may begin initiating proposed changes before a formal Change Order is fully executed if SPONSOR
determines it is necessary to initiate the changes immediately and provides MANAGER explicit written instructions (i.e. instructions
by letter or fax)) to initiate the changes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">4.0</TD><TD STYLE="text-align: justify"><B>Term</B>. This Agreement shall commence on the date of execution and shall continue until all
Services are completed by MANAGER and all payments are made by SPONSOR in accordance with this Agreement, or until terminated by
either party in accordance with Section 14.0 below.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">5.0</TD><TD STYLE="text-align: justify"><B>Confidentiality</B>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(a) <U>Scope</U><B>. </B>It is
understood that during the course of this Agreement, MANAGER and its employees may be exposed to data and information, including
data and information developed as a result of the Services provided under this Agreement (including, but not limited to, all draft
and final case report forms, dictionaries, reports, site agreements, Study documentation, audit and monitoring records, and all
electronic records of Study data and documents), all of which are confidential and proprietary to SPONSOR. All such data and information
(hereinafter &ldquo;CLIENT <B><U>Confidential Information</U></B>&rdquo;) written or verbal, tangible or intangible, made available,
disclosed, developed or otherwise made known to MANAGER and its employees as a result of Services under this Agreement shall be
considered confidential and shall be considered the sole property of SPONSOR. All confidential information relating to the MANAGERS
business shall be handled as described in the Master Service Agreement signed between the Parties on 28<SUP>th</SUP> April 2011.<FONT STYLE="background-color: aqua">
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(b) <U>Obligations</U><B>. </B>The
Confidential Information shall be used by the receiving party and its employees only for purposes of performing the receiving party&rsquo;s
obligations hereunder. Each party agrees that it will not reveal, publish or otherwise disclose the Confidential Information of
the other party to any third party without the prior written consent of the disclosing party. Notwithstanding the provisions contained
within this Section 5.0, SPONSOR may use the prices provided hereunder and amounts paid for the Services for its internal budgeting,
estimation and bidding processes, and SPONSOR and/or its designees may disclose same to the extent required by securities and other
laws. Except as otherwise requested, upon expiration or termination of this Agreement and/or upon SPONSORs request, MANAGER shall
immediately and unconditionally deliver all SPONSORs Confidential Information to SPONSOR. These obligations of confidentiality
and nondisclosure shall remain in effect for a period of ten years after the return of all SPONSORs Confidential Information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(c) <U>Exceptions</U><B>. </B>The
foregoing obligations shall not apply to Confidential Information to the extent that it is clearly and convincingly shown that
such Confidential information: (a) is or becomes generally available to and known by the public other than as a result of a disclosure
by the receiving party; (b) becomes available to the receiving party other than in connection with this Agreement on a non-confidential
basis from a source which is not prohibited from disclosing such information; (c) was developed independently of any disclosure
by the disclosing party or was known to the receiving party prior to its receipt from the disclosing party, as shown by contemporaneous
written evidence; or (d) to the extent it is required by law or court order to be disclosed provided, however, that the receiving
party shall make the best effort to provide prompt notice of such court order or requirement to the disclosing party to enable
the disclosing party to seek a protective order or otherwise prevent or restrict such disclosure.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">6.0</TD><TD STYLE="text-align: justify"><B>Ownership of Inventions and other Intellectual Property</B>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(a) SPONSORs <U>Rights</U><B>.
</B>As between MANAGER and SPONSOR, all data, information, reports, and any discoveries, inventions, works of authorship, ideas,
suggestions that may evolve from the data and information described above that are generated as the result of Services performed
by MANAGER under this Agreement or through the use of or access to SPONSORs Confidential Information (collectively &ldquo;Developments&rdquo;),
shall initially be the property of MANAGER. but will be immediately sold and assigned to SPONSOR once the Developments come into
existence. MANAGER hereby sells and assigns to SPONSOR all of MANAGERs right, title and interest to the Developments and any related
patents, copyrights and other intellectual property rights. The cost of sale and assignment of the Developments is included in
the amount that SPONSOR agrees to pay MANAGER as described in EXHIBIT A. Once the Developments are assigned by MANAGER to SPONSOR
they then become the sole and exclusive property of the SPONSOR. The SPONSOR shall have the right to use such Developments for
any and all purposes, and shall have the full, unrestricted right to assign, license or otherwise transfer any such Developments
and the deliverables without any further payment to MANAGER. Parties hereby acknowledge and unconditionally agree that the transfer
and assignment of the Developments and any related patents, copyrights and other intellectual property rights as contemplated by
this clause will occur automatically, irrespective of any dispute between the SPONSOR and the MANAGER (and or any other party)
and irrespective of the payment by the SPONSOR of the amounts set forth in Exhibit A.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(b) <U>MANAGERs Rights</U><B>.
</B>Notwithstanding the foregoing, SPONSOR acknowledges that MANAGER&rsquo;s third party subcontractors including PharmaNet possesses
or may in the future possess certain inventions, processes, know-how, trade secrets, improvements, other intellectual properties
and other assets, including but not limited to analytical methods, procedures and techniques, computer program source code (written
in SAS, SQL, or other computer languages), procedure manuals, personnel data,<B> </B>financial information, computer technical
expertise and software, which have been independently developed by MANAGER&rsquo;s third party subcontractors including PharmaNet
and which relate solely to their business or operations (collectively &ldquo;<B><U>Subcontractor&rsquo;s Property</U></B>&rdquo;).
SPONSOR agrees that any Subcontractor&rsquo;s Property or improvements thereto which are used, improved, modified or developed
by subcontractors under or during the term of this Agreement are the sole and exclusive property of such subcontractor. To the
extent that Subcontractor's Property is employed by MANAGER in providing the Services and is necessary for the development and/or
commercialization of the Drug, MANAGER shall cause PharmaNet or any other relevant subcontractor to grant to CLIENT or its designee
a non-exclusive, perpetual, worldwide, fully paid up, royalty free, freely sub-licenseable and freely transferable license under
such Subcontractor&rsquo;s Property.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(c) <U>Data Retention</U><B>.
</B>In addition to the delivery of data and information as set forth above, at the completion of Services by MANAGER, all materials
and all other data owned by SPONSOR or its designee, regardless of the method of storage or retrieval, shall either be as elected
by SPONSOR at its sole discretion (a)&nbsp;delivered to SPONSOR or its designee in such form as is then currently in the possession
of MANAGER, subject to the payment obligations set forth in Section 2.0 hereof (provided, that under no circumstances shall MANAGER
withhold any SPONSOR Confidential Information, and shall not withhold any other data, information, reports or other materials in
the event that disputed payments or reasonable security in lieu for such amounts, are placed into an escrow account pending resolution
of such dispute), or (b) disposed of, at the sole direction and written request of SPONSOR, in each case at no extra cost to SPONSOR.
MANAGER, however, reserves the right to retain, at its own cost and subject to the confidentiality provisions herein, one copy
of all materials provided to SPONSOR as the result of the Services, to be used solely to satisfy regulatory requirements or to
resolve disputes regarding the Services, provided that such copy is placed in an archive not electronically or physically available
to MANAGERs personnel or others except as needed for and during the occurrence of any dispute for which reference to such archived
copy is needed, and that the confidentiality obligations shall apply to the archived copy so long as it exists.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">7.0</TD><TD STYLE="text-align: justify"><B>Independent Contractor Relationship</B>. For the purposes of this Agreement, the parties hereto
are independent contractors and nothing contained in this Agreement shall be construed to place them in the relationship of partners,
principal and agent, employer/employee or joint ventures. Neither party shall have the power or right to bind or obligate the other
party, nor shall it hold itself out as having such authority.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">8.0</TD><TD STYLE="text-align: justify"><B>Regulatory Compliance; Inspections, Warranties</B>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">(a) <U>Compliance</U><B>.
MANAGER </B>agrees, represents, warrants and covenants that its Services and the services provided by PharmaNet will be conducted
in compliance with All Applicable Laws and Regulations, including but not limited to the U.S. Food, Drug and Cosmetic Act and the
regulations promulgated pursuant thereto, and all applicable Regulatory Authorities and ICH guidance documents pertaining to the
Services provided hereunder, and with the highest standard of expert care customary in the contract research organization industry,
but no less than professional level of services, and to the extent not in conflict with any of the foregoing, with all applicable
MANAGER or PharmaNet procedures.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">MANAGER
hereby certifies that neither it nor any of its officers, directors, owners, principals or employees or those of PharmaNet has
been debarred by Regulatory Authorities or any other regulatory agency (each, a &quot;<B><U>Regulatory Agency</U></B>&quot;) under
applicable regulatory requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">MANAGER
hereby certifies that it has not and will not use or allow PharmaNet to use in any capacity the services of any individual, corporation,
partnership, or association who:&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">is under investigation by any Regulatory Agency under any applicable regulatory requirements; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">has a disqualification hearing pending or has been disqualified by any Regulatory Agency under
any regulatory requirements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">If during
the term of this Agreement, any person or entity referred to in Section 6(a)(i) or 6(a)(ii):</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(i)</TD><TD STYLE="text-align: justify">comes under investigation by any Regulatory Agency for debarment or disqualification;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(ii)</TD><TD STYLE="text-align: justify">is debarred or disqualified by any Regulatory Agency; or</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.5in">(iii)</TD><TD STYLE="text-align: justify">engages in any conduct or activity which could lead to any of the above- mentioned disqualifications
or debarment actions</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">MANAGER
shall immediately notify or cause PharmaNet to immediately notify SPONSOR in writing of same.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">MANAGER
further certifies that it will not knowingly employ any person or entity who is not properly qualified/licensed under/by directly
applicable laws, training, experience and supervision to carry out the tasks they are assigned in connection with this Agreement
and further, MANAGER will cause PharmaNet to do the same.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.55pt">Unless
prohibited from doing so, SPONSOR shall notify MANAGER promptly in writing of any Regulatory Authorities or other governmental
inspection or inquiry concerning the Services or which may reasonably affect the performance of the Services.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(b) <U>Inspections</U><B>. </B>If
any governmental or regulatory authority conducts, or gives notice to MANAGER or PharmaNet or a Relevant Third Party of its intent
to conduct, an inspection at any investigational site or to take any other regulatory action with respect to any Study or Services,
or which may reasonably affect the performance of the Services or the Study, provided under this Agreement, MANAGER will promptly
notify SPONSOR, and, where reasonably practicable, MANAGER will notify SPONSOR prior to complying with such a demand or request.
SPONSOR, however, acknowledges that it may not direct the manner in which MANAGER fulfills its obligations to permit inspection
by governmental entities. MANAGER shall in all cases promptly inform SPONSOR in writing of any Regulatory Authorities or other
governmental inspection or inquiry (including any Warning letters, FDA-483s, and EIRs) concerning any of the Services provided
by MANAGER or any subsidiary or Relevant Third Party providing Services under this Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(c) <U>Audits</U><B>. </B>During
the term of this Agreement, MANAGER will permit and will procure that each Relevant Third Party permits SPONSORs representatives
(unless such representatives are competitors of MANAGER or Relevant Third Parties) and SPONSOR to examine<B> </B>or reasonably
audit<B> </B>the work performed hereunder, the facilities systems and equipment at or with which the work is conducted, and personnel,
procedures, programming, and records related to such work, upon reasonable advance notice during regular business hours to determine
that the Study assignment is being conducted in accordance with the agreed requirements and that the facilities are adequate.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(d) <U>Electronic Systems</U><B>.
MANAGER will ensure that </B>PharmaNet represents and warrants that all computer systems and electronic records used by PharmaNet
or its subsidiaries or delivered to SPONSOR: (i) have been and shall be developed, validated, established and maintained in full
accordance with applicable Regulatory Authorities regulations (including 21 CFR Part 11), requirements and guidance documents;
(ii) are not subject to any errors, anomalies or impairment in connection with the use, calculation, representation or handling
of any form of date related information or upon, across or after any date; (iii) are free of any unintended programming (including
computer viruses and other harmful programming) and for any electronic records delivered to SPONSOR any form of lock or other access
or use control which may impair SPONSORs full and unconditional use of such electronic records; and (iv) are free of any lien or
license or any requirement to obtain any license for their use or products needed for their use (except for such readily available
software licenses normally required for the products used to handle and use such electronic records).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">9.0</TD><TD STYLE="text-align: justify"><B>Conflict of Agreements</B>. MANAGER represents to SPONSOR that it is not a party to any agreement
which would prevent it from fulfilling its obligations under this Agreement and that during the term of this Agreement, MANAGER
agrees that it will not enter into any agreement to provide Services which would in any way prevent it from providing, or interfere
in any way with its ability to provide, the Services contemplated under this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">10.0</TD><TD STYLE="text-align: justify"><B>Publication</B>. Study results may not be published, presented or referred to, in whole or in
part, by MANAGER, its subsidiaries and PharmaNet without the prior expressed written consent of SPONSOR, which SPONSOR may withhold
in its sole discretion. Neither party will use the other party&rsquo;s name in connection with any publication or promotion without
the other party&rsquo;s prior written consent.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">11.0</TD><TD STYLE="text-align: justify"><B>Limitation of Liability</B>. Under no circumstances shall either party be entitled to loss of
profits, loss of revenue, incidental, indirect, consequential or special damages under any theory of law (including, but not limited
to, contract, negligence, tort liability and strict liability in tort) arising in connection with such default or breach of its
obligations under this Agreement, or any documents related thereto.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">12.0</TD><TD STYLE="text-align: justify"><B>Indemnification by MANAGER</B>. MANAGER shall indemnify and hold harmless SPONSOR, entities
having the rights to the Drug, and their respective Affiliates, directors, officers, employees and agents from and against any
and all suits, claims, losses, demands, liabilities, damages, costs and expenses (including reasonable attorney&rsquo;s fees) in
connection with any suit, demand or action by any third party (&ldquo;<B><U>Losses</U></B>&rdquo;) arising out of or resulting
from (A) any breach of its representations, warranties or obligations under this Agreement; (B) any negligence or willful misconduct
by MANAGER, except to the extent that any of the foregoing arises out of or results from the negligence, willful misconduct or
breach of this Agreement by of SPONSOR.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">13.0</TD><TD STYLE="text-align: justify"><B>Indemnification by SPONSOR.</B> SPONSOR shall indemnify and hold harmless MANAGER, its Affiliates,
directors, officers employees and agents from and against all Losses arising out of or resulting from MANAGERs performance of the
Services under this Agreement, which Services are performed in accordance with the Protocol, the written instructions of SPONSOR
and All Applicable Laws and Regulations, or from any breach of its representations, warranties or obligations under this Agreement,
except to the extent that any of the foregoing arises out of or results from the negligence, willful misconduct or breach of by
MANAGER of its representations, warranties or obligations under this Agreement.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">14.0</TD><TD STYLE="text-align: justify"><B>Indemnification Procedures</B>. All indemnification obligations in this Agreement are conditioned
upon the party seeking indemnification (the &ldquo;<B><U>Indemnified Party</U></B>&rdquo;): (A) promptly notifying the indemnifying
party (the &ldquo;<B><U>Indemnifying Party</U></B>&rdquo;) of any claim or liability of which the party seeking indemnification
becomes aware (including a copy of any related complaint, summons, notice or other instrument), provided, however, that failure
to provide such notice within a reasonable period of time shall not relieve the Indemnifying Party of any of its obligations hereunder
except to the extent the Indemnifying Party is materially prejudiced by such failure; (B) cooperating with the Indemnifying Party
in the defense of any such claim or liability (at the Indemnifying Party&rsquo;s expense), and (C) not compromising or settling
any claim or liability without prior written consent of the Indemnifying Party. The liability of an Indemnifying Party with respect
to Losses arising from claims of any third party which are subject to the indemnification provided for in articles 12, 13 and 14
(&ldquo;<B><U>Third Party Claims</U></B>&rdquo;) shall be governed by and contingent upon the following additional terms and conditions.
If an Indemnified Party shall receive notice of any Third Party Claim, the Indemnified Party shall give the Indemnifying Party
notice of such Third Party Claim within thirty (30) days of the receipt by the Indemnified Party of such notice; provided, however,
that the failure to provide such notice shall not release the Indemnifying Party from any of its obligations under this Article
14 except to the extent the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall be entitled
to assume and control the defense of such Third Party Claim at its expense and through counsel of its choice if it gives notice
of its intention to do so to the Indemnified Party within thirty (30) days of the receipt of such notice from the Indemnified Party;
provided, however, that if there exists a material conflict of interest that would make it inappropriate for the same counsel to
represent both the Indemnified Party and the Indemnifying Party, then the Indemnified Party shall be entitled to retain its own
counsel, at the expense of the Indemnifying Party, provided that the Indemnifying Party shall not be obligated to pay the reasonable
fees and expenses of more than one separate counsel for all Indemnified Parties, taken together. In the event the Indemnifying
Party exercises the right to undertake any such defense against any such Third Party Claim as provided above, the Indemnified Party
shall cooperate with the Indemnifying Party in such defense and make available to the Indemnifying Party, all witnesses, pertinent
records, materials and information in the Indemnified Party&rsquo;s possession or under the Indemnified Party&rsquo;s control relating
thereto as is reasonably required by the Indemnifying Party. Similarly, in the event the Indemnified Party is, directly or indirectly,
conducting the defense against any such Third Party Claim, the Indemnifying Party shall cooperate with the Indemnified Party in
such defense and make available to the Indemnified Party, all such witnesses, records, materials and information in the Indemnifying
Party&rsquo;s possession or under the Indemnifying Party&rsquo;s control relating thereto as is reasonably required by the Indemnified
Party. The Indemnifying Party shall not, without the written consent of the Indemnified Party (which shall not be unreasonably
withheld or delayed), (a) settle or compromise any Third Party Claim or consent to the entry of any judgment which does not include
as an unconditional term thereof the delivery by the claimant or plaintiff to the Indemnified Party of a written release from all
liability in respect of such Third Party Claim or (b) settle or compromise any Third Party Claim if the settlement imposes equitable
remedies or material obligations on the Indemnified Party other than financial obligations for which such Indemnified Party will
be indemnified hereunder and which contains no admission of fault or wrongdoing. No Third Party Claim shall be settled or compromised
by the Indemnified Party without the written consent of the Indemnifying Party (which shall not be unreasonably withheld or delayed)
if such settlement or compromise would result in an obligation of the Indemnifying Party to indemnify such Indemnified Party, or
would otherwise result in liability of, or have an adverse impact upon, such Indemnifying Party.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">15.0</TD><TD STYLE="text-align: justify"><B>Termination.</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(a) <U>Termination by either
party</U><B>. </B>This Agreement may be terminated by either SPONSOR or MANAGER at any time during the term of the Agreement if
the other party commits a material breach of its contractual obligations under this Agreement. If the basis for termination is
the material breach of a party&rsquo;s contractual obligations, the non-breaching party must provide the breaching party prior
written notice (setting out the alleged breach), specifying the nature of the breach, and allow the breaching party thirty (30)
days from the receipt of such notice to take remedial actions to cure such a material breach. If such breach has not been substantially
cured as measured by reasonable standards of performance within the thirty (30) day period, then the non-breaching party is thereafter
empowered to terminate this Agreement. Additionally, either party may terminate this Agreement by written notice to the other party
if: (a) that other party goes into liquidation under the laws of any applicable jurisdiction (except for the purposes of amalgamation
or reconstruction and in such manner that the company resulting therefrom effectively agrees to be bound by or assume the obligations
imposed on that other party under this Agreement); (b) a receiver, administrator, examiner, trustee or similar officer is appointed
over all or substantially all of assets of that other party under the laws of any applicable jurisdiction; or (c) any proceedings
are filed or commenced by that other party under bankruptcy, insolvency or debtor relief laws, or anything analogous to any of
the foregoing under the laws of any applicable jurisdiction occurs in relation to that other party.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(b) <U>Termination by SPONSOR</U>:
In addition to termination of the Agreement in accordance with clause (a) above, SPONSOR shall have the right to terminate this
Agreement at any time without cause by giving MANAGER at least forty five (45) days prior written notice of the effective date
of such termination.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(c) <U>Procedure</U><B>.</B>
Upon receipt of a written termination notice under this Section 15.0, the parties will work diligently, in good faith and in cooperation
with each other, to devise a joint plan (&ldquo;Plan&rdquo;) to coordinate the orderly termination of the Agreement. The purpose
of this Plan is to safeguard patient safety, continuity of patient treatment, to comply with All Applicable Laws and Regulations
and immediately cease any and all expenses and costs related to the Studies and/or Services that are not absolutely necessary to
continue (as a result of legal and ethical requirements) upon termination. Accordingly, as from the receipt of a termination notice,
MANAGER shall use its best efforts to limit further expenses, and in particular (i) no new sites shall be started up without SPONSORs
approval, (ii) no new patients shall be enlisted without SPONSORs approval, and (iii) only those reports and analysis that SPONSOR
specifically requests in writing will be produced. After the parties have jointly agreed to the terms of the Plan in writing, the
parties will carry out the work necessary for the orderly closeout of the Study pursuant to the Plan terms. As part of the Plan,
MANAGER will perform a reconciliation of all activities performed for uncompleted milestones or units of work, and the parties
shall negotiate in good faith (i) payment for partially completed milestones and units and (ii) all costs and expenses actually
related to the close out activities of this Agreement, provided that in the event of termination by SPONSOR under Section 15.0(a)
(breach or insolvency of MANAGER), MANAGER shall not be entitled to any further payments not already accrued. Any unused funds
previously advanced by SPONSOR shall be returned forthwith after the final reconciliation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">(d)<B> </B><U>Withdrawal of authorization</U><B>.
</B>If the authorization and approval to conduct the Study hereunder in the United States or in other jurisdiction is withdrawn
by the U.S. Food and Drug Administration or other duly empowered government agency or if the emergence of any unanticipated significant
safety issue with the drug is of such magnitude or incidence to warrant termination, this Agreement may be terminated by either
party. Under such circumstances, SPONSOR shall also pay according to rates to be pre-agreed by the Parties, for any MANAGERs or
PharmaNets personnel assigned hereunder, subject to pre-approval in writing by SPONSOR, from the date of the notice of termination
until the completion of the Plan.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">16.0</TD><TD STYLE="text-align: justify"><B>Relationship with Subsidiaries</B>. SPONSOR agrees that MANAGER may allow PharmaNet to use the
services of its or PharmaNets corporate subsidiaries to fulfill Managers obligations under this Agreement upon prior written notice
to SPONSOR and with SPONSORs prior written consent, which will not be unreasonably withheld and provided that MANAGER shall be
responsible for ensuring the performance of such subsidiary. Any subsidiary so used shall be subject to all of the terms and conditions
applicable to MANAGER under this Agreement, and entitled to all rights and protections afforded MANAGER under this Agreement. PharmaNet
agrees that any of SPONSORs subsidiaries may use the services of MANAGER (and its subsidiaries) under this Agreement. In such event,
such SPONSORs subsidiaries shall be bound by all the terms and conditions of this Agreement and be entitled to all rights and protections
afforded SPONSOR under this Agreement executed by such subsidiary.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">17.0</TD><TD STYLE="text-align: justify"><B>PharmaNet Personnel. MANAGER shall assign and cause </B>PharmaNet to assign key Study personnel
(&ldquo;<B><U>Key Personnel</U></B>&rdquo;) to the Studies carried out under this Agreement, including, where applicable: (i) Project
Manager, (ii) Study Monitors, (iii) Medical Reviewer; and (iv) Chief Statistician. The Key Personnel for each Study shall be named
in the applicable Proposal, and shall be persons who MANAGER represents are qualified and well trained and experienced in the performance
of both their assigned tasks and in the performance of those tasks in connection with the type of study, and where possible, with
the clinical indication for such study that is the subject of this Agreement. During the term of this Agreement, so long as the
Key Personnel remain employed by or contracted by MANAGER, PharmaNet or its subsidiaries, they shall not be removed from SPONSORs
Studies, except with SPONSORs consent which will not be unreasonably withheld. MANAGER acknowledges and will cause PharmaNet to
acknowledge that Dr. Wolfgang Renz, one of its executives, is also a shareholder of SPONSOR. MANAGER will ensure and cause PharmaNet
to ensure that Dr. Renz is not involved in performing the Services and the Study and will not have access to any information related
to it.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"></P>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">18.0</TD><TD STYLE="text-align: justify"><B>Cooperation; CLIENT Delays; Disclosure of Hazards</B>. SPONSOR shall forward to MANAGER in a
timely manner all data and information known to SPONSOR and in SPONSORs possession or control and which SPONSOR is aware is reasonably
necessary for MANAGER to conduct the Services. MANAGER shall forward to SPONSOR in a timely manner all data and information known
to SPONSOR and in its possession or control and reasonably necessary for or relevant to SPONSOR to utilize the Services, and results
of such Services, or the Study to which the Services relate. If SPONSOR fails to provide data and information in its possession
or control that are necessary for MANAGER to complete the services under this Agreement, after having been notified in writing
thereof by MANAGER (such writing identifying both the need for the data and information and the risk of delay), MANAGER shall not
be liable to SPONSOR nor be deemed to have breached this Agreement for delays or other consequences to the extent arising from
SPONSORs failure to timely provide documents, materials or information in SPONSORs possession.. CLIENT shall not be liable to SPONSOR
nor be deemed to have breached this Agreement for errors, delays or other consequences arising from MANAGERs failure to timely
perform its obligations or to otherwise cooperate with SPONSOR.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><FONT STYLE="font-size: 10pt">SPONSOR
acknowledges that, if it materially delays or suspends performance of the Services, then the personnel and/or resources originally
allocated to the Study may be re-allocated, and MANAGER will not be responsible for delays due to required re-staffing or re-allocation
of resources. If MANAGER intends to re-allocate or re-staff personnel and/or resources allocated to the Study, it shall not do
so until after having given prior written notification at least 14 (fourteen) days before proceeding to such re-allocation or re-staffing.
If SPONSOR wishes to retain the personnel and/or resources allocated to the Study during the material delay or suspension, then
subject to SPONSOR pre-approval in writing at the relevant time, SPONSOR will pay the standard hourly rates of the allocated personnel
during the materially delay or suspension. This cost would be exclusive of the budget contained in <B>Exhibit A</B>.</FONT> <FONT STYLE="font-size: 10pt">If
MANAGER will be responsible for handling SPONSORs investigational drugs, SPONSOR shall provide MANAGER with all information reasonably
known to it regarding known or potential hazards associated with the use of any substances supplied to MANAGER by SPONSOR.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">19.0</TD><TD STYLE="text-align: justify"><B>Adverse Experiences</B>. In the event a patient enrolled in the project suffers an illness or
injury which MANAGER, the Investigator, PharmaNet and SPONSOR reasonably determine and agree to be an adverse experience to the
Drug, SPONSOR to pay all necessary and reasonable medical expenses directly associated with the emergency medical treatment of
such adverse reaction. In the event that diagnostic procedures are reasonably required to determine whether the patient&rsquo;s
symptoms are an adverse reaction to the Drug, SPONSOR shall pay the reasonable expenses of such diagnostic work-up. Payments under
this Paragraph shall be in addition to the payments specified in this Agreement. Further MANAGER shall be under no liability whatsoever
to SPONSOR, its Affiliates, directors, officers employees, agents and third party providers (whether in negligence or otherwise)
for any expense, loss, damage or injury of any kind (including, without limitation, any loss of profit or consequential damage)
sustained by PharmaNet its Affiliates, directors, officers employees, agents and third party providers for personal injury to a
subject directly caused by use of the Drug during the course of the Study, including, without limitation, the harmful or otherwise
unsafe effect of the Drug.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">20.0</TD><TD STYLE="text-align: justify"><B>Force Majeure</B>. In the event either party shall be delayed or hindered or prevented from
performing of any act required hereunder by reasons beyond its ability to reasonably anticipate and prevent or mitigate, including
failure of power or restrictive government or judicial orders (except for those arising from PharmaNet actual or alleged violation
of applicable laws or regulations), or decrees, riots, insurrection, war, Acts of God, inclement weather or other reason or cause
beyond that party&rsquo;s control, then performance of such act shall be extended for the reasonable period of such delay, and
either party shall be granted a reasonable period of time to perform after the cessation of the reason for the delay.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">21.0</TD><TD STYLE="text-align: justify"><B>Notices and Deliveries</B>. Any notice required or permitted to be given hereunder by either
party shall be in writing and shall be deemed given on the date received if delivered personally or by a reputable overnight delivery
service, or three days after the date postmarked if sent by registered or certified mail, return receipt requested, postage prepaid
to the following addresses:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 55%; border-right: windowtext 1pt solid">
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B>If to Redhill</B>:</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">RedHhill Biopharma Ltd.</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">21 Ha&rsquo;arba&rsquo;a St., Tel Aviv 64739,
        Israel</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Attention: Ori Shilo, VP Finance &amp; Operations</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: center">Facsimile: +972 3 7255 723</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P></TD>
    <TD STYLE="width: 45%">
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><B>If to 7810962 Canada Inc</B> <B>:</B></P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><FONT STYLE="font-weight: normal">Dr Alain Guimond</FONT></P>
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><FONT STYLE="font-weight: normal">245 Victoria Ave,</FONT></P>
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><FONT STYLE="font-weight: normal">Suite 100,</FONT></P>
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><FONT STYLE="font-weight: normal">Montreal, Quebec,</FONT></P>
        <P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.15in"><FONT STYLE="font-weight: normal">H3Z 2M6, Canada</FONT></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">22.0</TD><TD STYLE="text-align: justify"><B>Insurance</B>. The parties shall maintain insurance in an amount reasonably adequate to cover
their obligations and liability under this Agreement, and in no event less than the minimum amount of insurance required by applicable
law, and shall provide each other a certificate of insurance showing that such insurance is in place.&nbsp; Without limiting the
generality of the foregoing, SPONSOR shall maintain and MANAGER shall cause PharmaNet to maintain products liability insurance
with coverage of not less than $[****], which coverage shall be in force during the Services and for the greater of the expiration
of the applicable statute of limitations where the Services under the Agreement are being performed or&nbsp;[****] after the completion
of such Services. Notwithstanding the above, if SPONSOR fails to maintain the above reference insurance SPONSOR will be liable
to MANAGER for any losses resulting from that lack of insurance coverage.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">23.0</TD><TD STYLE="text-align: justify"><B>Assignment</B>. Except as stated above in Section 15.0 and except as otherwise provided in any
Site Agreements, neither party may assign, delegate, subcontract or transfer any of its rights or obligations under this Agreement
to any third party without the express, written consent of the other party, other than in connection with (i) a merger, consolidation,
sale of substantially all assets of the business to which this Agreement relates or other change of control transaction or (ii)
a transfer by MANAGER to SPONSOR.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in"></P>

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    <!-- Field: /Page -->
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">24.0</TD><TD STYLE="text-align: justify"><B>Choice of Law and Enforceability</B> This Agreement shall be governed by and construed in accordance
with the laws of Quebec. The parties agree that any and all disputes, claims or controversies arising out of or relating to this
Agreement that are not resolved by their mutual agreement shall be submitted to the exclusive jurisdiction of the courts of Quebec.
The parties further agree that all proceedings with regard to this Agreement will be in English.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">25.0</TD><TD STYLE="text-align: justify"><B>Entire Agreement and Modification</B>. This Agreement, its attachments, and exhibits referenced
herein, contains the entire understandings of the parties with respect to the subject matter herein, and supersedes all previous
agreements (oral and written), negotiations and discussions. Any modifications to the provisions herein must be in writing and
signed by the parties.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">26.0</TD><TD STYLE="text-align: justify"><B>Non-Solicitation</B>.&#9;Each party agrees that during
the term of this Agreement and for a period of six (6) months thereafter, it shall neither directly solicit for employment any
employee or contractor of the other party who the former party has met as a result of the other party&rsquo;s obligations hereunder,
provided however the foregoing shall not prohibit any employee from one party directly contacting the other party for employment
or employment opportunities or from responding to published employment advertisements, and, under these limited circumstances,
this restriction shall not prevent either party from interviewing and/or hiring such an employee.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in; text-align: left">27.0</TD><TD STYLE="text-align: justify"><B>Survival</B>.&#9;The rights and obligations of the
parties under Section<B> </B>(i) 5.0, 15.0, 22.0 and 26.0 in each case as stated therein; (ii) 2.0 insofar as it concerns the
manner of payment and the payment of interest only; and (iii) 1.0(e), 1.0(g), 6.0, 10.0, 11.0, 12.0, 13.0, 19.0, 21.0, 24.0 and
25.0,<B> </B>shall survive any termination or expiration of this Agreement.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>[REMAINDER OF PAGE INTENTIONALLY LEFT
BLANK]</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">IN WITNESS WHEREOF, this Agreement has
been executed by the parties hereto through their duly authorized officers on the date(s) set forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%; text-align: justify; font-weight: bold">REDHILL BIOPHARMA Ltd.</TD>
    <TD STYLE="width: 10%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 45%; font-weight: bold">For 7810962 Canada Inc:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="font-weight: normal">/s/ Dror Ben-Asher</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="font-weight: normal">/s/ Alain Guimond</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Name: Dror Ben-Asher</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-weight: normal">Name: Alain Guimond</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Title: CEO</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-weight: normal">Title: Senior Director of Scientific Research</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-decoration: underline; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal"><U STYLE="text-decoration: none">June 15, 2011</U></FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-decoration: none; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal"><U STYLE="text-decoration: none; vertical-align: baseline">June 15, 2011</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Date</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-weight: normal">Date</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-decoration: underline; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal"><U STYLE="text-decoration: none">/s/ Ori Shilo</U></FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Name: Ori Shilo</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Title: VP Finance and Operations</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-decoration: none; border-bottom: Black 1pt solid">Date: June 15, 2011</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THE SYMBOL &quot;****&quot; DENOTES
PLACES WHERE PORTIONS OF THIS DOCUMENT HAVE BEEN OMITTED PURSUANT TO A REQUEST FOR CONFIDENTIAL TREATMENT. SUCH MATERIAL HAS BEEN
FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT A and B</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This Exhibit to the Clinical Services Agreement
(&ldquo;<B>Exhibit</B>&rdquo;) is made between:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(3)</TD><TD STYLE="text-align: justify">RedHill Biopharma Ltd<B>.</B>, having its principle place of business at<B> 21 Ha&rsquo;arba&rsquo;a
St., Tel Aviv 64739, Israel (hereafter &ldquo;SPONSOR&rdquo;)</B></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.5in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">(4)</TD><TD STYLE="text-align: justify"><B>7810962 Canada Inc.</B>, having its principal office at 245 Victoria Ave, Suite 100, Montreal,
Quebec, H3Z 2M6, Canada (hereinafter <B> &ldquo;MANAGER&rdquo;</B>);</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">When signed by both parties, this Exhibit
will form an integral part of the Clinical Services Agreement executed between the Parties and will set forth the specific study
objectives, study details and schedule and specific payment terms and conditions under which SPONSOR agrees that MANAGER will conduct
and manage two Phase II/III clinical studies of RBH-104 in patients with MAP infected Crohns disease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Terms:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">SPONSOR agrees that Manager enters into a subcontract with PharmaNet
on the terms set out in the Proposal to be executed between 7810962 Canada Inc. and PharmaNet as shown below in Exhibits A and
B. For further clarity, SPONSOR agrees with the cost estimations described in Section IX of Exhibit A and agrees to the payment
schedule as described in Exhibit B.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">IN WITNESS WHEREOF, this Proposal has been
executed by the parties hereto through their duly authorized officers on the date(s) set forth below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%; text-align: justify; font-weight: bold">REDHILL BIOPHARMA Ltd.</TD>
    <TD STYLE="width: 10%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 45%; font-weight: bold">For 7810962 Canada Inc:</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="font-weight: normal">/s/ Dror Ben Asher</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid"><FONT STYLE="font-weight: normal">/s/ Alain Guimond</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Name: Dror Ben-Asher</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-weight: normal">Name: Alain Guimond</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Title: CEO</FONT></TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-weight: normal">Title: Senior Director of Scientific Research</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-bottom: 1pt"><FONT STYLE="font-weight: normal">Date: June 15, 2011</FONT></TD>
    <TD STYLE="padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="text-decoration: none; border-bottom: Black 1pt solid"><FONT STYLE="font-weight: normal"><U STYLE="text-decoration: none">June 15, 2011</U></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font-weight: normal">Date</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Ori Shilo</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD><FONT STYLE="font-weight: normal">Name: Ori Shilo</FONT></TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Title: VP Finance and Operations</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: June 15, 2011</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>EXHIBIT A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><U>Contents</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="width: 6%; text-transform: uppercase; font-weight: bold">I.</TD>
    <TD STYLE="width: 82%; text-transform: uppercase; font-weight: bold">Executive Summary</TD>
    <TD STYLE="width: 2%; text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="width: 10%; text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">23</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">II.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">PharmaNet Overview</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">III.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">The RHB-104 Program</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">25</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">IV.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Success Factors</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">27</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">IV.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Medical and Regulatory Considerations</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">29</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">V.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Operational Strategies</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">34</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">VI.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Experienced Project Team</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">43</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">VII.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Relevant Experience</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">VIII.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Program Timelines</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">IX.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Summary of Tasks and Deliverables</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">44</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">X.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Key Parameters and Assumptions</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">44</TD></TR>
<TR STYLE="vertical-align: top; background-color: White">
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right; vertical-align: bottom">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,255,204)">
    <TD STYLE="text-transform: uppercase; font-weight: bold">XI.</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold">Costs</TD>
    <TD STYLE="text-transform: uppercase; font-weight: bold; text-align: right">&nbsp;</TD>
    <TD STYLE="text-transform: uppercase; font-weight: normal; text-align: right; vertical-align: bottom">57</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase"><FONT STYLE="font-weight: normal; text-transform: none">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><U>Appendices</U></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="text-transform: uppercase"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Appendix A&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Project Team Curricula Vitae</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">Appendix B&#9;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Draft Payment Schedule</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.1in"></TD><TD STYLE="width: 0.4in"><FONT STYLE="font-family: Times New Roman, Times, Serif">I.</FONT></TD><TD>Executive Summary</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">PharmaNet is pleased to present to <FONT STYLE="font-size: 10pt">7810962
Canada Inc </FONT><FONT STYLE="color: black">a proposal for participation in two studies (Phase II and Phase III of RHB-104 to
treat patients with Crohn&rsquo;s Disease who are positive for MAP </FONT>(mycobacterium avium subspecies paratuberculosis) <FONT STYLE="color: black">Infection.
</FONT>They are entitled:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: 0.5in">It has been
determined that, generally speaking, the two studies will run, for the most part, in parallel for a combined program. As a result,
PharmaNet has prepared the cost as one global study introducing strategic, operational, and budgetary efficiencies accordingly.
[****]. Based on the information provided by the client in the request-for-proposal documents received on 5 January 2011, as well
as internal discussions at PharmaNet, we believe that the PharmaNet team will be a valuable contributor to the successful completion
of these studies for the following reasons:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif; color: black"><B>Strong Project Management
&ndash; </B>PharmaNet is able to offer an exceptionally strong Global Director and a Project Manager experienced in the conduct
and management of clinical research studies. </FONT> [****] is based in Canada and<B> </B>will<B> </B>be assigned as the Global
Director for the combined program and regional Project Manager for the North American study. [****] . [****]<B>, </B>will be assigned
as the Project Manager for the European study. She brings [****]. She is ideally positioned in Israel to facilitate communication
with The Client and ensure the smooth conduct of this important study. [****] More information on the proposed team, and its structure,
can be found in Section VI.</TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Gastroenterology Experience &ndash;
</B>PharmaNet has conducted over 40 gastroenterology trials involving approximately 1,000 sites and 7,500 patients with disorders
such as Ulcerative Colitis, Crohn&rsquo;s disease, <I>C. difficile</I> infections, and Irritable Bowel Syndrome. This experience
has enabled the PharmaNet teams to build strong long-standing relationships with Investigative sites, opinion leaders, key gastroenterology
groups, and ancillary service providers that all do research in the area of GI disease. Furthermore, it has helped the team to
forge a bespoke strategy for the execution of these studies, as detailed in Section VII.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Strong Relationships with Investigator
Community </B>&ndash; PharmaNet has developed a strong network of highly skilled and productive gastroenterology sites familiar
with specialized tests standard to diagnosing patients with Crohn&rsquo;s. This network has been cultivated through long-standing
working relationships. At PharmaNet we work closely with the sites to support the meeting of enrollment goals and remain top on
their list for repeat work. PharmaNet can easily support the client in the identification of potential sites for this trial.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>A high-level Project Steering Committee
(PSC)</B>, which would include select PharmaNet and the client senior managers, will ensure that the client and The Client have
access to high level decision-makers throughout the life of the program and relationship. The application of a PSC to this program
is a PharmaNet added-value at no cost to the client. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify">PharmaNet believes that the
involvement and commitment of senior management is essential to the success of both developing business relationships and also
conducting large-scale global studies. As a general business practice, PharmaNet encourages communication between senior management
in this way.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify">Regular PSC meetings will:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">Further promote a productive and cooperative relationship between the client and PharmaNet;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">Review the overall status of this program, including quality, timeliness of deliverables, and adherence
to the budget;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">Provide bilateral feedback on team performance;</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">Provide a venue for addressing issues regarding the client &ndash;PharmaNet team dynamics.</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.25in"></TD><TD STYLE="width: 0.25in">o</TD><TD STYLE="text-align: justify">Any other issues as requested by the team leaders or by senior management.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">PharmaNet&rsquo;s proposal addresses
<FONT STYLE="color: black">the client&rsquo; </FONT>request to [****].The final deliverable to the <FONT STYLE="color: black">Client
will be a completed Clinical Study Reports (CSRs).</FONT></P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-indent: -9.05pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<TD STYLE="width: 0.1in"></TD><TD STYLE="width: 0.4in"><FONT STYLE="font-family: Times New Roman, Times, Serif">II.</FONT></TD><TD>The RHB-104 Program</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">PharmaNet understands the client&rsquo;
objectives for the RHB-104-01 program. Our understanding arises from conversations with the client as well as our long standing
experience in this area of clinical research. As such, the team proposed for this combined program, know that the primary objectives
of these studies:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">To meet the timelines as set out by the
client. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Performing the study in the most time
and cost efficient way whilst ensuring that all resources are maximized. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">To achieve the aforementioned
goals, and ensure a consistent approach while realizing the uniqueness of each study, the client and PharmaNet will closely develop
a program management structure, with senior level oversight. Items to address in this type of model will include:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Integrated Senior Management oversight
from an operational perspective for the studies. PharmaNet will provide high level senior operational oversight to serve as a partner
with The client to monitor program progress and to discuss and advise on appropriate corrective actions as needed to support the
success of the program. This support will be led by [****] who will support both the management of the client relationship as well
as the operational management of ensuring project metrics are being met and team performance is of the highest quality. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">A high-level Project Steering Committee
(PSC), to include select PharmaNet and the client and its designees senior management, ensuring that the client has access to all
levels of decision-makers throughout the life of the program and the ongoing relationship. The application of a PSC to this program
is a PharmaNet added-value at no cost to the client. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">An issue-escalation and communication
plan, so that successes and challenges on both studies can be relayed to the global project team for consistency.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Reporting formats, including frequency,
format, content, and distribution lists will be standardized to allow for consistent project communications.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Since it has been agreed that
the client and PharmaNet move forward with an integrated model, utilizing the tools outlined above, efficiencies in both cost and
resources will be achieved in the following areas:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">A more efficient management structure,
with a reduction in the overall Full-Time Equivalent (FTEs) for project management, and an overlap in many resources at meetings.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Significant efficiencies in the development
of Case Report Form (CRF) pages and database development.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Standardization of templates for project
plans, communication plans, monitoring plans and status reports.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Utilization of similar information between
items in the Statistical Analysis Plan (SAP) and Clinical Study Report (CSR).</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-indent: -9.05pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2pt"></TD><TD STYLE="width: 25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">III.</FONT></TD><TD>Success Factors</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet is an ideal partner
for the client for the RHB-104-01<B> </B>program from both a scientific and operational perspective. PharmaNet places a great deal
of importance on integrity and strives to be as open as possible with regard to study planning and conduct, as well as budget estimation.
There are several areas that differentiate PharmaNet from competitors for the successful completion of the RHB-104-01 program.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Strong and Qualified Management
Team</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet recognizes the difference
that people make in the successful execution of a clinical trial and prides itself on the professionalism and capabilities of its
team members. We are pleased to present [****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">As these studies will be managed
as a combined program, both the Global Project Director and Project Manager will work together to oversee staff in their respective
regions. With significant timeline overlap, however, they will be able to ensure greater consistency and efficiencies across both
regions, resulting in cost savings and a greater ability to manage their resources more closely across the two protocols.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt">In all cases, [****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">The proposed PharmaNet program
team will be available to begin working on these studies immediately to ensure that all timelines are met as specified by the client.
All start-up activities will be conducted in an expedited manner by the CRAs that have been assigned to this study.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>PharmaNet&rsquo;s Gastrointestinal
Experience</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet&rsquo;s experience
in gastrointestinal studies makes it ideally positioned to conduct this study for the client. PharmaNet has managed over 40 studies
in gastrointestinal disorders including Crohn&rsquo;s disease, providing PharmaNet personnel with an understanding of the challenges
involved in conducting studies in this indication. Of particular importance to the client is PharmaNet&rsquo;s recent successful
conclusion of a Phase IIIb study in patients with Crohn&rsquo;s disease, including several of the countries we propose for the
European study. See Section IV for more detailed information regarding PharmaNet&rsquo;s gastrointestinal experience.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Pre-existing Relationships
with Gastrointestinal Investigators</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">As a result of the aforementioned
experience in the management of these gastrointestinal studies, we are very familiar with the investigator community that will
be involved in these studies. These relationships ensure familiarity with PharmaNet&rsquo;s monitoring processes and expectations,
helping to support more productive monitoring visits and site communication. Moreover, PharmaNet&rsquo;s experience with GI sites
allows for the rapid identification of additional sites if necessary.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Ensuring a Smooth Investigator
Contracting Process</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Another advantage of our familiarity
with these sites and Investigators is our ability to expedite the investigator contract process. To ensure that this process runs
efficiently, PharmaNet has an established dedicated group to manage all contract finalization activities.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">To support successful contract
finalization is to first identify a key contract contact person at each site who will work closely with the PharmaNet Grants &amp;
Contracts department. The PharmaNet team routinely includes a template contract with the regulatory document package, to allow
for an early review by the site of our standard contract language. PharmaNet will then proactively work to obtain any potential
language changes from the site for review. Any changes where no precedent has been set will be discussed with the client before
agreeing to any contract wording.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt"><B>Patient Recruitment Expertise</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet&rsquo;s Patient Recruitment
Group (PRG) is our recruitment, retention and site performance specialty division. PRG combines clinical and regulatory experience
with marketing knowledge to augment recruitment and overall site performance on the study.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">The PRG will create tools that
support subject identification and evaluation within the site, facilitate effective communication about the study, and build study
awareness. The nature and scope of these initiatives will vary depending on site characteristics. PharmaNet will work with site
personnel to develop subject recruitment and retention strategies that are specific to each site&rsquo;s situation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Country Selection &ndash;
</B>[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">The proposed country selection
for the [****] study was made by PharmaNet after analyzing the requirements for that particular RHB-104-01 study, reviewing our
recent working experience in this type of trial and identifying the countries successfully used in previous trials in this indication.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet&rsquo;s selection
of [****] is based on:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-indent: -9.05pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2pt"></TD><TD STYLE="width: 25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">IV.</FONT></TD><TD>Medical and Regulatory Considerations</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Medical Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">RHB-104 is a proprietary antibiotic
drug combination utilized for the treatment of&nbsp;Mycobacterium Avium Paratuberculosis (MAP) infection in Crohn&rsquo;s disease.
RHB-104 was acquired from Sydney-based Giaconda [ASX: GIA] in August 2010 by Redhill Biopharma Ltd.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">MAP infection is suspected as
an underlying cause for Crohn&rsquo;s disease symptoms in a portion of the Crohn&rsquo;s patients.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Crohn&rsquo;s Disease </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Crohn&rsquo;s disease is a chronic
relapsing and remitting inflammatory disease of the gastrointestinal tract. In European countries the incidence is approximately
4.4 per 100,000 populations. In the US there is a reported 700,000 Crohn&rsquo;s patients. Crohn&rsquo;s disease is characterized
by a granulomatous inflammation mostly affecting the ileocaecal (50%), colonic (30%) and ileocolonic (15%) parts of the bowel.
Anal involvement can be the initial presentation in up to 5% of patients with Crohn&rsquo;s disease, and over a lifetime as many
as one third of patients will have symptoms or complications from involvement of the anoperineal region. Rectal involvement is
frequently considered part of anoperineal disease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Aetiology</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">The cause of Crohn&rsquo;s disease
is contentious, and there are no specific markers for the disease.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Aetiological factors are thought
to include:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 26.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Over&ndash;expression of immune responses
to antigens normally present in the gut (particularly bacterial antigens in the distal bowel).</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 26.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The presence of an affected relative,
as about 20% of Crohn&rsquo;s Disease patients have an affected relative. Genes present at several distinct loci predispose to
Crohn&rsquo;s disease in families so there is a clear genetic component.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 44.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 26.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; color: black">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Immune mediated tissue injury.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Crohn&rsquo;s disease is a disorder
mediated by T lymphocytes, which arises in genetically susceptible individuals as a result of the breakdown of the regulatory constraints
on mucosal immune responses to enteric bacteria. Infectious agents such as childhood measles may play a role in conditioning mucosal
immune responsiveness and might trigger the disease. A specific infectious cause for Crohn&rsquo;s disease has been sought, with
candidates including <I>Mycobacterium paratuberculosis</I> and measles but the evidence is inconclusive.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">In the case of errors in immune
regulation in the intestinal mucosa, the generally protective intestinal flora is thought to trigger an abnormal immune response
and subsequently tissue injury. Activation of T cells and macrophages generates T-Helper type 1 cytokines, including Interferon
(IFN) and Tumor Necrosis Factor (TNF) leading to the release and activation of metalloproteinases digesting the stromal tissue.
These cytokines also challenge the epithelial barrier function and lead to the recruitment of neutrophils amplifying the tissue
damage increasing the permeability and uptake of bacteria from the lumen of the gut.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Therapeutic Options for Crohn&rsquo;s
Disease</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Traditionally, the treatment
of patients with Crohn's disease has focused on decreasing symptoms, improving quality of life, and decreasing complications related
to either the disease process or its therapy. Anal and perianal complications of Crohn's disease represent a major challenge for
both the gastroenterologist and colorectal surgeon. Anoperineal disease is one manifestation of Crohn's disease that significantly
adversely affects patient quality of life. Anoperineal involvement can lead to social isolation because patients have urgency,
frequency, and stool incontinence that can be related to either the disease itself or the iatrogenic complications. Other symptoms
of PCD include pain, soiling, sleep disruption, sexual dysfunction, and sepsis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Many anti-inflammatory strategies
have been employed in the management of Crohn&rsquo;s disease. Conventionally, corticosteroids, salicylates and immunosuppressants
such as cyclosporine have been used as first line therapy. Anti-cytokine therapies including anti-TNF are also now widely used.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Perianal disease (which can
include skin tags, hemorrhoids, anal fissure, fistulae (including recto vaginal), perianal abscesses and strictures) is difficult
to manage successfully and is often treatment resistant or will relapse after treatment is discontinued. Treatment failure can
lead to proctocolectomy and ileostomy.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Azathioprine (AZA) and 6-Mercaptopurine
(6-MP) are purine analogues that are frequently used to treat perianal fistulas. A meta-analysis of 5 controlled trials of AZA/6-MP
for CD showed that 22 (54%) of 41 patients who received AZA/6-MP responded to treatment vs. only 6 (21%) of 29 who received placebo.
The pooled odds ratio was 4.44 in favor of fistula healing. The incidence of adverse side effects in patients taking either 6-MP
or AZA ranges from 9% to 15% and the more common of these events include infections, pancreatitis, neoplasm, bone marrow suppression,
allergy and drug-induced hepatitis.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Anti-Tumor Necrosis compounds
have been shown to be successful in healing fistulas in approximately 50% of patients and their use is associated with generally
mild side effects, although the potential for developing infections limits their use in vulnerable patient populations.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Cyclosporine and tacrolimus,
which work by selective blockade of the activation of T-helper and cytotoxic lymphocytes, have also been used effectively for treatment
of patients with fistulising Crohn's disease. Adverse events do limit their use, and include renal insufficiency, hirsutism, and
transient hypertension. The majority of patients also developed mild parenthesis. Because of the high relapse rates and morbidity
associated with these agents and the need for prolonged therapy in combination usually with other immunosuppressant, investigators
have advocated them primarily as a &quot;rescue therapy&quot;.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Mycophenolate Mofetil (MMF)
is used for patients with refractory Crohn's disease who cannot tolerate AZA or 6-MP. This agent works by inhibiting purine synthesis
in T and B lymphocytes. MMF appears to have a quicker onset of action than either AZA or 6-MP. A small number of studies have suggested
beneficial effects of MMF in treating Crohn's disease, including patients with perianal fistulas. Minimal adverse effects have
been associated with MMF and include rash, nausea, and diarrhea. However, in the transplant literature, an increased rate of lymph
proliferative disorders has been reported among patients receiving MMF.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">A number of studies have used
methotrexate successfully to treat Crohn's exacerbations, but its use in treating perianal disease has not yet been defined.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Antibiotics, especially metronidazole
and ciprofloxacin, are useful short-term therapies to decrease or stop drainage, but relapse is immediate on discontinuation. Metronidazole
used orally is often associated with adverse effects such as a metallic taste and paraesthesia. Topical metronidazole would reduce
the incidence of events associated with systemic administration such metallic taste which is known to affect compliance. It has
shown to be effective in patients with perianal Crohn&rsquo;s disease decreasing the Perianal Crohn&rsquo;s Disease Activity Index
and anorectal pain.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>MAP infection and Crohn&rsquo;s
Disease</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Since
Crohn's disease bears significant similarities to known mycobacterial diseases in terms of the presence of granulomatous disease,
clinicians have been attempting to treat Crohn's disease with anti-mycobacterial drugs since 1975. Early treatment regimes were
composed of antibiotics chosen for their activity against</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">Mycobacterium
tuberculosis</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">(MTB), although both in-vitro and in-vivo data
for these antibiotics showed that they had little effect against Mycobacterium paratuberculosis (as</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">Mycobacterium
avium subspecies paratuberculosis</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">(MAP) was known at that
time). If cases of Crohn's disease were caused by infection with</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAP,
then it is not surprising that these early treatment regimes were, in general, failures. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
the 1980's, disease caused by</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">Mycobacterium Avium Complex</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">(MAC)
became prevalent. During the 1980's,</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">became
the leading cause of lethal infection in patients with Acquired Immune Deficiency Syndrome (AIDS). Clinicians attempted to treat
these</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">infections
with the only anti-mycobacterial drugs available, namely drugs active against</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">Mycobacterium
tuberculosis. Successes with these early regimes were rare, since</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">bacteria
were either resistant to anti-MTB</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">drugs, or quickly developed
resistance.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">The
outlook for patients with</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">disease
improved greatly in the late 1980's, with the development of macrolides. Two of these macrolides, Clarithromycin and Azithromycin,
were highly effective against</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">bacteria,
and revolutionized the treatment of</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">infections.
Although they were unable to eradicate</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">infections,
they had such a strong inhibitory effect that the chances of the host's own immune system bringing the infection under control
were greatly enhanced. However, development of macrolide resistance is a common problem, and there are still no antibiotics regimes
available which are guaranteed to eradicate a</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">MAC</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">infection.
</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">In
the 1990's, a group of clinicians in England began treating Crohn's disease patients with anti-mycobacteria regimes which included
macrolide antibiotics. To date, three groups of investigators have published results of open trials of anti-MAP</FONT>&nbsp;<FONT STYLE="font-family: Times New Roman, Times, Serif">treatment
which includes macrolide antibiotics. These are:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">1.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Giu et al,</FONT>&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">published
the paper &quot;Two year outcomes analysis of Crohn's disease treated with Rifabutin and macrolide antibiotics&quot; in 1997. They
treated 52 patients with a combination of Rifabutin and Clarithromycin/Azithromycin for between 6 and 35 months. They documented
remission in 43 out of 52 patients studied, as measured by the Harvey Bradshaw Crohn's disease activity index. Of the 9 patients
not in remission, 6 patients withdrew because of the severity of side effects, and 3 patients experienced no improvement.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">2.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Borody et al published their paper &lsquo;Treatment
of severe Crohn&rsquo;s Disease using antimycrobial triple therapy &ndash; Approaching a Cure?&rsquo; in 2002. They treated 12
patients with a combination of Rifabutin, Clarithromycin and Clofazimine.&nbsp; Their conclusion was that a reversal of severe
Crohn's disease had been achieved in 6/12 patients using prolonged combination anti-MAP</FONT>&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">therapy
alone.&nbsp; Three patients remain in long-term remission with no detectable Crohn's disease off all therapy.&nbsp; These results
support a causal role for</FONT>&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">MAP</FONT>&nbsp;<FONT STYLE="font: 10pt Times New Roman, Times, Serif">in
Crohn's disease while also suggesting that a cure may become possible.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.5in"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify">A trial conducted by Shafran in the USA, treated 29 Crohn's disease patients with a combination
of Rifabutin and Clarithromycin. After three months of treatment, the investigators found that 8 of the 29 patients were in clinical
remission, 9 of the 29 patients experienced marked improvement, 8 of the 29 patients experienced minor improvement, and 4 of the
29 patients had to be taken off the medication, due to intolerance of side-effects.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Regulatory Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Regulatory management is critical
to managing the timelines for this program. A clear and efficient strategy for study start-up will be critical for both studies.
Pivotal to this will be a strong regulatory process designed to minimize costly delay through proactive issue identification and
resolution as outlined below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet&rsquo;s experience
with over 300 initial submissions will enable us to set-up the best strategy for carrying out the submissions in Europe and North
America on behalf of the client. PharmaNet understands the specific regulatory requirements and will ensure that clinical trial
applications to Ethics Committees (ECs), Institutional Review Boards (IRBs) and Regulatory Authorities are formulated so as to
expedite clinical trial approval in the shortest possible timeframe.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet will conduct steps
in the regulatory process in parallel to expedite approval. For example, regulatory documents will be collected and translated
simultaneously with the site qualifications process, and site contracts will be negotiated in parallel with regulatory submissions.
Additionally, regulatory document templates will be prepared beforehand, in order to make the regulatory process more efficient.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The approximate overall time required for
EC, IRB, and other regulatory approvals based on our current experience for the initially proposed countries is summarized below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">28. Operational Strategies</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet has reviewed the RFP
provided by <FONT STYLE="color: black">the client.</FONT> The following comments address operational considerations of the PharmaNet
team.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Operational Management of
the RHB-104 Program</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet has provided costs
for the global management of RHB-104. The PharmaNet team agrees that one of the benefits of managing the studies as a one global
program is that consistency in study management can be best achieved rather than managing the program as two separate studies with
separate CRO vendors. The Project Manager in the North American study will serve as the Global Program Manager for the program
overseeing the European study&rsquo;s Project Manager to ensure consistency and standardization in all study activities. As mentioned,
a Project Manager will be named in each region that will report into the Global Program Manager. Training can be provided in tandem
during one training session by the PharmaNet Medical Monitor to both the North American and European teams to keep protocol understandings
consistent, which in turn will support consistent interpretation of the protocol by team members and sites and maintain a consistency
across monitoring of all sites worldwide.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">Additionally, efficiencies can
be recognized in the development of such key study templates/documents for both studies, as Visit Report templates, Monitoring
Guidelines, CRF Completion Guidelines, CRF/eCRF design, CSR, Stat Analysis Plan. The Global Project Director will be responsible
for drafting and finalizing a Project Plan that will detail all study processes and templates/documents that will be utilized across
both programs. Efficiencies have been captured in the budget, however, as the scope and timing is further developed, these efficiencies
may be increased.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Protocol Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet does not have all
details of the entry criteria or schedule of assessments except that the[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>Strategic Considerations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">After carefully analyzing the
information contained within the clients RFP documentation, the proposed PharmaNet team will apply, at no additional cost whatsoever
to the client, the following novel strategies for the successful and timely completion of these studies:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 44.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">[****]</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 44.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-weight: normal">[****]</FONT></TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 44.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Create awareness of the studies on various websites and patient and other relevant organizations.
Where regulatory authorities permit, the use of the Internet will allow patients to find information on the studies through Crohn&rsquo;s
Disease websites addressing the disease. The client may also wish to establish a patient orientated page with information about
the drug and the studies within their corporate website.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 44.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Invite Investigators (family practitioners and gastroenterology specialists) to participate or
refer patients into the studies through a personal letter from an opinion leader in the relevant country.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 44.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Produce an information package about the goals and objectives of the studies with key information
(e.g. study protocol, case record form completion guidelines, patient questionnaires and selected literature about the the client
compound to the investigators). This might also include useful items such as slide kits or CD ROMs on Crohn&rsquo;s disease that
the investigator could use, both as general educational material but also as a means of advertising the studies to peers. PharmaNet
has considerable experience in developing these materials for our clients</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 44.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Patients should be identified for participation through case finding activities such as dredging
the practice database, writing letters to Primary Care Physicians (PCPs) or other potential referral centers advertising on the
practice notice board.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 62.9pt; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 44.9pt"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Investigators&rsquo; contracts could contain certain incentives including grants for participation
in scientific meetings or a publication policy for these studies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify"><B>Site Motivation and Education</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">In PharmaNet&rsquo;s experience,
thorough site training is critical for study success and such site training is included in proposal for the RHB 104 study. We have
previously generated and delivered Informed Consent Workshops to research staff and have found these to be very well received and
regarded as highly valuable to the site staff, helping to focus them on the importance of this process. Within these workshops,
Key Opinion Leaders (KOLs) and higher-recruiting sites are often asked to share their experiences. Also, PharmaNet has initiated
workshops and &ldquo;lessons learned&rdquo; sessions for study site personnel in pediatric studies which have been well received
and can be implemented in the proposed studies. These have been performed by the CRAs on the team, in the past.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">PharmaNet CRAs have demonstrated
excellent organizational and motivational skills in building relationships with study sites and will support the study teams to
develop strategies to address concerns such as balance of risk/benefit, concerns with the specific tests and assessments, blood
draws, and interference with vacation schedules. Sites will be encouraged to communicate openly with patients and effectively address
any concerns. The CRA team will stay in close communication and discuss the requirements of the study staff. They will serve as
the study operations facilitator, trainer and monitor. They will frequently report to [****], which will allow ongoing consultation
and sharing of best practices within the study team about the potential requirements of the sites. This will allow us to quickly
identify any issues and provide solutions and contingencies where required.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify"><B>Patient Identification at
the Investigational Site</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">We expect many patients will
come from the Investigators&rsquo; practice and site population. PharmaNet staff will work closely with each site to ensure timely
identification of these patients, relying on the resources available at each site to conduct database searches, chart reviews,
and patient outreach to inform patients about the studies and elicit their participation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">Coaching tools and materials
will be provided to support the efficient search of patient databases and review of medical records from clinics or medical practices.
Sites may be supported in conducting on-site and other meetings with colleagues. Materials include:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 44.9pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 62.75pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pre-screening checklist</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 62.75pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Entrance criteria poster</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 62.75pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Laminated study information pocket card</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 62.75pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Referral letters</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 62.75pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Process guidance and support</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>Patient Retention </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">PharmaNet will provide sites
with a visit planning tool to create customized visit schedules to be provided to each patient. Appointment cards for patients
will include contact information and patient instructions prior to the next study visit. These materials will enhance the interaction
between the patient and coordinators, as well as providing the required information.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34.9pt; text-align: justify"><B>Key Factors for Study Start-Up</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Obtaining Regulatory approval,
as well as signed Clinical Trial Agreements (CTAs) can be a time-limiting factor during the start-up period of each trial. PharmaNet&rsquo;s
Project Management team is aware of particular challenges likely to occur in the study start-up period, and will rapidly identify
and set-up the necessary communication lines with all key contacts to streamline processes and ensure the most efficient start-up
possible.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The strategies to be implemented
are described below and will focus on the following key factors:</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Approval process timelines based on previous
experience</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Study start-up packs sent to qualified
sites</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Submissions completed in specified time
frame</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Proactively assist with IRB/EC and contracts
approval process </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">The following documents are of
critical importance for a rapid start-up:</P>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Final protocols</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Master Subject Information Sheet and Informed
Consent Forms</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Final eCRF</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Investigative site budget, contract template,
and contract negotiation guidelines</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Drug labeling and drug supplies Qualified
Persons (QP) release</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Insurance certificates including insurance
conditions</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Wingdings; margin: 0pt 0 0pt 1in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.75in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Wingdings">&sect;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Essential documents to be obtained from
the study site for submission to the Regulatory Authorities (CVs, FDFs, Protocol Signature Page, etc)</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">It is important that the essential
documents, such as the final protocol and master patient information sheet, are provided to PharmaNet rapidly. This will allow
PharmaNet to compile the Clinical Trial Application packages in parallel to the site qualification processes.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Close communication between the
client and PharmaNet and expeditious turn around times of documents are essential. PharmaNet&rsquo;s Project Management team will
facilitate this process through close follow-up and networking with all parties involved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34.9pt; text-align: justify"><B>Risk Management and Contingency
Plan</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">PharmaNet incorporates risk management
into its Project Planning process and ensures that back-up contingencies are devised for these eventualities. This ensures that
pro-active risk management will allow rapid resolution of issues and timely delivery of the project.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As with any clinical study, there
are a number of risks clearly associated with the running of the The client study in Crohn&rsquo;s Disease, which could have varying
degrees of impact on the success of the project.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">PharmaNet has placed an assessment
of the degree of risk and the impact this will have on the project. The risk grid shows these and this will be reviewed and adjusted
as the project proceeds. A suggested contingency plan is made. This plan will also be adjusted as more information on the project
becomes available and as activities begin. Contingency actions as set out below are included in the Proposal.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;<B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 34.9pt; text-align: justify"><B>Risk Assessment for the the
clients Crohn&rsquo;s Disease project</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">As part of this submission, PharmaNet
has developed a high-level risk assessment analysis, provided below. The first table addresses areas that may be of risk and their
relative impact. Following the table, is a list of contingencies for potential challenges.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in"><B>Risk:</B>&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Insufficient recruitment due
to competitive studies or insufficient eligible patients or patient drop out due to severity of disease</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>Contingency plan:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">1) Establish the reality of ongoing
or prospective competitive studies and the participation of centers proposed for this project through a detailed feasibility assessment
(part of the routine site selection process). This will involve contacting individual investigators and CD workgroups (ongoing).
Ensure only sites that can recruit the minimum required number of patients are entered into the study perhaps involving contractual
commitments. Investigate the potential to utilize back up sites and referral centers. Address possible implication from Medical
Ethical Perspective of the placebo control arm</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">2) Encourage investigator participation
in the project through study incentives such as administrative and logistical support such as study nurses, equipment. Ensure investigator
motivation through investigator meetings, training of study site personnel in the therapeutic area and in the conduct of clinical
studies, provision of grants for the attendance at scientific meetings, an attractive publication policy. Provision of adequate,
competitive, transparent and fair investigator grants for all disciplines participating</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">3) Ensure adequate monitoring
resource to ensure that the sites are contacted regularly through telephone calls or visits to maintain momentum and to underline
the site&rsquo;s commitment to recruitment.&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">4) Publish frequent Q&amp;As
to the investigational sites in order to share best practice. Issue newsletters which might contain scientific information, recruitment
statistics and other information that may help the site to recruit.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">5) Encourage patient participation
through CD patient groups, provide means to communicate with patients to stimulate their interest in the study through flyers and
desk top presenters in GP surgeries, posters in gastroenterology clinics</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risk:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Loss of patient due to competitive studies</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Contingency plan:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">This may well be inevitable although investigators
should be encouraged to stick with the study through incentives noted above. A feasibility study has been performed and summarizes
individual site commitments to ongoing studies, previous experience with anti-TNF antibodies and planned studies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Risk:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Non-compliance with study procedures and
ICH guidelines (in any event, compliance with ICH guidelines is the responsibility of Pharmanet).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Contingency Plan:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Require adequate training and guidance
of study site personnel at initiation visits and ongoing monitoring visits. Regular investigator or site personnel meetings or
teleconferences may allow sharing of best practices. Training may be provided by the sponsor at these meetings or by the provision
of educational grants to attend external courses.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Risk:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Slow response to regulatory queries delays
study start up.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>Contingency Plan:</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">PharmaNet aims to facilitate simultaneous
submissions and will assist sites in the preparation of local submissions. It is anticipated that queries may come from the ethical
committees with respect to the placebo control a thorough justification of the study design should be prepared in advance to answer
this.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">It may be possible in some countries to
obtain a central ethical committee review to shorten start up timelines further. Any queries previously received from regulatory
or ethical agencies for this compound should be already resolved and identified. All pre-clinical and clinical data including the
Investigator brochure should be up to date and contain adequate information to allow regulatory approval. The rationale for sample
size calculation should be addressed (practical vs. statistical).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In addition, there are a number of opportunities
arising from this study to improve pre-scriber and patient relations.</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Establish a steering committee comprising the key drivers of the study familiar with the the client
compound.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Create awareness of the study on various web sites (clients, CD pages etc) and communicate with
various patient and other relevant organizations.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;<FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Invite investigators (family practitioners and gastroenterology specialists) to participate or
refer patients into the study through a personal letter from an opinion leader in the relevant country.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Produce an information packages about the goals and objectives of the study with key information
such as Study protocol, case record form, patient questionnaires and selected literature about the the client compound to the investigators.
This might also include useful professional such as slide kits or CD roms on Crohn&rsquo;s Disease that the investigator could
use, both as general educational material but also as a means of advertising the study to the patient.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">A Kick-off Investigators&rsquo; Meeting (dinner, lunch or weekend venue) should be arranged to
stimulate investigator interest and commitment to the study. Invited speaker could be again, key opinion leaders. This can be done
on a regional basis and perhaps in staggered manner for cost efficiency.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">There should be an initiation visit at all sites from the CRAs and possibly the client representatives.
The investigator should be schooled in the essential elements of ICH, ethical issues and completion of study material such as CRF
and questionnaire(s).</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Patients should be identified for participation through case finding activities such a dredging
the practice database, writing letters to Primary Care Physicians or other potential referral centers advertising on the practice
notice-board. The use of the Internet is also increasing and patients could find information on the study through CD websites addressing
the disease. The client may wish to establish a patient orientated page with information about the drug and the study.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">The patients should receive an information pack on the study objectives the importance of their
participation.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Patients can be contacted between visits to check on their progress in the study whether they have
questions and for reminders about future appointments in order to encourage compliance, collection of accurate data and completion
of the study.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Patients should be offered stipends to cover transport costs related to the study and perhaps a
small gift in recognition of their participation can be given.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">The monitors should contact the investigator on an ongoing basis to stimulate recruitment and to
maintain motivation for completing the study in a timely fashion.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: justify">Investigators should be offered an appropriate grant for the study agreed in a contract if necessary
also signed by the institution employing them. Other incentives may include grants for participation in scientific meetings.</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol; font-weight: normal">&middot;</FONT></TD><TD STYLE="text-align: left">There should be a publication policy for this study providing another incentive.</TD></TR></TABLE>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: left; text-indent: -0.25in">&nbsp;&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">Provided here is a more succinct view
of some targeted approaches to support enrollment.</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-transform: uppercase; text-align: center"><B>Targeted Enrollment
Options</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 12%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Target</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 19%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Individualized</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 16%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Internet</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 12%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Meetings</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 13%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Media</TD>
    <TD STYLE="width: 1%; font-weight: bold; text-align: center; padding-bottom: 1pt">&nbsp;</TD>
    <TD STYLE="width: 23%; font-weight: bold; text-align: center; border-bottom: Black 1pt solid">Incentives</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: center">Investigator</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Provide support for completion of administrative materials.</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Newsletter</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Facilitated recruitment posted on patient
        websites</P></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Investigator meetings</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Scientific CD meetings</P></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Journals, CD rom, slide kits</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Publication strategy, appropriate fees, grants for attendance at scientific meetings, training material programs</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: center">Practice nurse</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Best practices training support</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Newsletter</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Facilitated appointments</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Facilitated administration</P></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">SSC meetings</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Journals</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Training, gift sets</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold; text-align: center">Patient</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Call center or toll free number access to
        site in case of problems</P>
        <P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">Contact from nurses</P></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Websites: study specific, patient support groups</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">CD patients associations</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Newspapers editorials</TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="text-align: center">Travel cost coverage</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><B>EDC System Selection</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Our experience using EDC has
demonstrated that one single system does not exist to fill the needs of all clinical studies. Our objective as a service provider
is to advise our clients on the most appropriate method for data collection which will ultimately serve the needs of the study
sites, as well as the project team, and enable total study success. PharmaNet has made investments in the appropriate training
and certification on the use of these tools, so that our staff can effectively act as more than just a user of a system. Our system
independent processes are consistent with PharmaNet&rsquo;s team approach to deliver the best operational plan for each study.
These processes encompass study start-up, in-process activities, and database finalization. A careful review of the study specifications
and data to be collected is used as the basis of PharmaNet&rsquo;s recommended EDC tool.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">From looking at the study specific
needs provided by the client, PharmaNet proposes that Phase Forward Inform serve as the EDC tool. Inform provides an efficient,
fully web based, part 11 compliant, EDC platform for executing this study. Inform enables sites to enter data and receive immediate
feedback on out of range or inconsistent data enhancing the quality of the data at the point of collection. Furthermore the InForm
platform can offer a dynamic workflow enabling sites to see only the eCRF pages and questions which pertain to the specific subject
enabling sites to be more efficient and ultimately resulting in higher entry and response compliance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2pt"></TD><TD STYLE="width: 25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">V.</FONT></TD><TD>Experienced Project Team</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">PharmaNet&rsquo;s experience
suggests that projects are most successful when the client and PharmaNet create a single, integrated project team. This permits
the development of interdependent working relationships with a sense of joint ownership of each project.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">[****] [4 pages redacted]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">Senior management from various
departments will advise, review, and provide input on a regular basis throughout the studies.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">Program Timelines</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 28.35pt; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt"><FONT STYLE="font-weight: normal">&nbsp;</FONT></P>

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<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt">&nbsp;</P>

<P STYLE="font: bold 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 17.85pt">Summary of Tasks and Deliverables</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify"><B>A summary of major tasks
and deliverables for the studies appears in the table below. Reference should also be made to the Key Parameters and Assumptions.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">[****] [3 pages redacted]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 26.9pt; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2pt"></TD><TD STYLE="width: 25pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">VI.</FONT></TD><TD>Key Parameters and Assumptions</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">In order to prepare this proposal,
PharmaNet carefully considered the information provided by <FONT STYLE="color: black">the client.</FONT> From that information,
a set of key parameters was developed. In addition, for areas that have not yet been thoroughly specified, assumptions have been
made to allow for the development of this proposal. These parameters and assumptions are listed below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">[****] [3.5 pages redacted]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">A.</TD><TD>The client/PharmaNet Project Planning and Communication</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">A Project Plan, including a communications plan, will be developed with <FONT STYLE="color: black">the
client at the</FONT> beginning of the project to identify the informational needs of the parties and suitable means of meeting
those needs. The Project Manager will develop and finalize this plan at the beginning of the study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">This Project Plan will identify the study specifics (i.e., the process for Investigator <FONT STYLE="color: black">selection,
site contacts, and monitoring intensity, data management plans,</FONT> etc.) and will give a thorough risk analysis with proactive
contingency plans.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">The Project Plan will include a detailed flow chart of all project activities, including a definition
of the responsibilities of team members in addition to the status of the project budgets, timelines, and achievements.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">B.</TD><TD>Study Reporting</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">PharmaNet will use standard reports to assure effective communication among team members, and to
augment the <FONT STYLE="color: black">the client/PharmaNet</FONT> relationship.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">The client and</FONT> PharmaNet will agree on the format and specific
content of these reports prior to project initiation.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">3.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">For
                                                                                                                                  these
                                                                                                                                  studies,
                                                                                                                                  PharmaNet
                                                                                                                                  will
                                                                                                                                  use
                                                                                                                                  PROMIS&trade;</FONT><SUP>*</SUP><FONT STYLE="font-family: Times New Roman, Times, Serif">,
                                                                                                                                  a
                                                                                                                                  web-based
                                                                                                                                  application,
                                                                                                                                  that
                                                                                                                                  facilitates
                                                                                                                                  the
                                                                                                                                  collection,
                                                                                                                                  management,
                                                                                                                                  and
                                                                                                                                  reporting
                                                                                                                                  of
                                                                                                                                  administrative
                                                                                                                                  and
                                                                                                                                  regulatory
                                                                                                                                  information
                                                                                                                                  related
                                                                                                                                  to
                                                                                                                                  the
                                                                                                                                  studies.
                                                                                                                                  The
                                                                                                                                  study
                                                                                                                                  team
                                                                                                                                  will
                                                                                                                                  use
                                                                                                                                  PROMIS&trade;
                                                                                                                                  to
                                                                                                                                  manage
                                                                                                                                  study
                                                                                                                                  information
                                                                                                                                  related
                                                                                                                                  to:</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">a.</TD><TD STYLE="text-align: justify">Institutions or research facilities</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">b.</TD><TD STYLE="text-align: justify">Investigators and site support staff</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">c.</TD><TD STYLE="text-align: justify">Protocol</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">d.</TD><TD STYLE="text-align: justify">Regulatory submissions and approvals (country, <FONT STYLE="color: black">local, IRB/IEC)</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">e.</TD><TD STYLE="text-align: justify">Regulatory document retrieval</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">f.</TD><TD STYLE="text-align: justify">Monitoring visits</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">g.</TD><TD STYLE="text-align: justify">Subject status (screened, enrolled, completed, discontinued)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">h.</TD><TD STYLE="text-align: justify">Subject visits</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">i.</TD><TD STYLE="text-align: justify">Protocol deviations</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">j.</TD><TD STYLE="text-align: justify">Protocol violations</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify">PROMIS&trade; will present
the study information in standard reports and displays accessible to clinical trial staff and the client via the Internet.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify">The project schedule will be
tracked via GANTT charts wherein the originally planned timelines will be compared with the actual timelines. The use of these
reports will identify any variances from the original plan so that, if necessary, corrective actions can be implemented quickly.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">PharmaNet will use the Earned Value Analysis (EVA) technique to monitor the budgetary status of
the project, wherein the percent of work completed will be compared with the percent of the budget spent for each project activity.
The EVA is an internal tracking budget tool that is utilized by all Project Managers to track against the agreed upon budget.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">C.</TD><TD>Investigators&rsquo; Meetings</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">PharmaNet will be responsible for presenting at the Investigators&rsquo; Meetings in conjunction
with <FONT STYLE="color: black">the client.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"></P>

<HR ALIGN="LEFT" NOSHADE STYLE="color: Black; width: 25%; height: 1pt; margin-top: 0; margin-bottom: 0">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><SUP>*</SUP></FONT>
<FONT STYLE="font-family: Times New Roman, Times, Serif">PROMIS is a trademark of PharmaNet Development Group, Inc. &nbsp;All rights
reserved.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">PharmaNet&rsquo;s <FONT STYLE="color: black">project team members</FONT> will attend the meeting
and conduct presentations or workshops, as necessary.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">5.</TD><TD STYLE="text-align: justify">PharmaNet will arrange the Investigators&rsquo; Meetings.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">D.</TD><TD>Project Team Meetings</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The Project Manager will arrange a kick-off meeting with <FONT STYLE="color: black">the client
</FONT>representatives and PharmaNet project team members from all involved departments. The purpose of this meeting is to facilitate
the development of the relationship, to share information, and to agree upon the approach that will be used to ensure successful
completion of the project.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">During the course of the project, regularly scheduled internal team meetings will be held at least
bi-weekly<FONT STYLE="color: black">. The client</FONT> may attend all internal team meetings, if desired. Team meetings will be
scheduled at times that allow participation of all members via conference call or videoconference; this will allow all parties
to become informed and attend to issues as they develop. Weekly calls have been assumed.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">PharmaNet will hold an end-of-project meeting to review PharmaNet&rsquo;s performance with<FONT STYLE="color: black">
the client</FONT>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">E.</TD><TD>Training</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The PharmaNet project team will undergo training with the <FONT STYLE="color: black">client&rsquo;s
</FONT>team as part of gaining an understanding of the medical, scientific, and logistical aspects of the studies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">Training will be provided by a PharmaNet Medical Monitor, and will include an extensive orientation
to the therapeutic area, protocol, and study drug. The clients team at <FONT STYLE="color: black">is</FONT> encouraged to assist
in the training program.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">The PharmaNet CRA will provide site training during the initiation visit and throughout the studies
as needed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">For the EDC application, all users will be trained on the application via self paced e-learning.
Hands on application functionality training are not included in this proposal.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">5.</TD><TD STYLE="text-align: justify">PharmaNet will provide a presentation of the eCRF and eCRF completion guidelines at the Investigator
Meeting(s). PharmaNet will provide Web Casts to review the eCRF and eCRF completion guidelines to support initial training and
subsequent training sessions for site turnover.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">F.</TD><TD>Site Statistics</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">[****] will participate in the study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">Final site selection will be the responsibility of <FONT STYLE="color: black">the client</FONT>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">This proposal <FONT STYLE="color: black">does include</FONT> costs to replace non-productive sites.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">G.</TD><TD>Enrolment Rates and Duration</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The approximate enrolment rate will be [****].</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117.1pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">This proposal may need to be revised if these assumptions are not met.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">H.</TD><TD>Protocol</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The protocol will be developed by <FONT STYLE="color: black">the client.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet team members will review the protocol for familiarization with the content.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">PharmaNet </FONT>will distribute the protocol to the study sites.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">I.</TD><TD>Electronic Case Report Form (eCRF)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">PharmaNet will design the electronic Case Report Form (eCRF) with review from the client.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will develop the eCRF completion guidelines. It is anticipated there will be two rounds
of review by the client. It is assumed the completion guidelines will be created and reviewed in tandem with the eCRFs.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">It is also assumed that all comments received for both eCRF development and eCRF completion guidelines
will be sent to PharmaNet as a consolidated document.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">J.</TD><TD>Study Site Materials</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">PharmaNet will be responsible for developing the Investigator/Coordinator study procedures manual
and the regulatory binders. PharmaNet will distribute these materials to the sites.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will provide drug accountability logs, monitoring conventions, and other study-specific
supplies, as appropriate, to the sites.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">The client will be responsible for preparing the Investigator Brochure and PharmaNet will distribute
the Investigator Brochure to the sites.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">K.</TD><TD>Records Management</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">During the active phase of the project, project files will be maintained in a secure place until
they can be archived at the end of the project. This &ldquo;on-site&rdquo; location will allow ready, but controlled, access to
files for day-to-day work. The files will be organized according to PharmaNet&rsquo;s file structures.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">Following completion of PharmaNet&rsquo;s internal audit procedures and archiving, PharmaNet will
transfer <FONT STYLE="color: black">the project files to the client. This process will be scheduled and conducted by the PharmaNet
Project Manager in accordance with the clients requirements.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">L.</TD><TD>Informed Consent Form (ICF)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The client will be responsible for preparing a draft Informed Consent Form (ICF). The ICF will
be developed in accordance with national regulations and ICH guidelines.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">M.</TD><TD>Monitoring Visits</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">PharmaNet will perform monitoring visits according to the schedule listed in the Summary Assumptions
table.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will perform 100% source document verification of eligibility criteria, primary efficacy
variables, adverse experience data, and concomitant medication data.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">[****].</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">PharmaNet CRAs will verify CRF entries against source documents. Source document verification will
include, but is not limited to, review of subject demographics, subject eligibility, subject visit dates, primary efficacy variables,
serious adverse experience reports (SAERs), adverse experience/intercurrent illnesses data and concomitant medications, and reason(s)
for premature subject withdrawal.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">5.</TD><TD STYLE="text-align: justify">CRAs will also work with sites to facilitate enrolment, answer questions from Investigators and/or
study coordinators, and check drug supplies with other general study supplies and materials.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">6.</TD><TD STYLE="text-align: justify">Monitoring reports and follow-up letters will be written within two weeks of the monitoring visit.
PharmaNet standard reports will be used.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">N.</TD><TD>Negotiation/Administration of Investigator Grants and Contracts</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">PharmaNet will negotiate Investigator contracts. It is assumed that:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">PharmaNet will negotiate investigator contracts according to PharmaNet standard processes and review
guidelines.&nbsp; Significant changes to the PharmaNet standard process or contract template may impact negotiations with sites,
and could result in a change in costs. PharmaNet acknowledges and accepts that the Investigator contracts budget planned by the
client is up to [****]) per Subject and that any deviation from that maximum total budget will require pre-approval in writing
by the client.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD STYLE="text-align: justify">PharmaNet will provide one general investigator contract template for the study.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">c.</TD><TD STYLE="text-align: justify">The client will review the general template and provide comments.&nbsp; One round of review is
assumed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">d.</TD><TD STYLE="text-align: justify">PharmaNet will negotiate contracts directly with sites. PharmaNet will advise client of site-requested
changes when such changes directly affect the client&rsquo;s rights, subject to 1.a, above.&nbsp;</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">e.</TD><TD STYLE="text-align: justify">Where possible, PharmaNet will be the only signatory.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">f.</TD><TD STYLE="text-align: justify">No amendments to the Investigator contracts are assumed during the course of the study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">g.</TD><TD STYLE="text-align: justify">PharmaNet can liaise with sites for additional supporting documents (i.e. client-site indemnity
letters, insurance certificates, powers of attorney).&nbsp; All such supporting documents are already included in the proposed
budget. Additional costs (if any) for such support services will need to be pre-approved in writing by the client.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">h.</TD><TD STYLE="text-align: justify">Ongoing consultative support is not included, but is available at an additional cost.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will negotiate Investigator grants for the study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">It is assumed that PharmaNet will generate the estimated costs per study procedure to generate
per patient costs. The client will review the general template and provide comments.&nbsp; One round of review is assumed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">b.</TD><TD STYLE="text-align: justify">Subject to 1.a. above, PharmaNet will negotiate the grant amount with each site within the guidelines
provided by the the client. For site budgets exceeding the guidelines, the sponsor will be consulted to obtain guidance and pre-approval
in writing.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">PharmaNet will administer site payments.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 2in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.75in"></TD><TD STYLE="width: 0.25in">a.</TD><TD STYLE="text-align: justify">PharmaNet will administer payments as specified in the approved budget.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">O.</TD><TD STYLE="text-align: justify">For purposes of this proposal it is assumed [****] </TD></TR>                                   <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>P.</TD><TD STYLE="text-align: justify">Independent Institutional Review Board (IRB)/Ethics
Committee (EC) Submission</TD></TR>
</TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">PharmaNet will select the central IRB/EC</FONT> for the study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will assist sites in submitting to the appropriate <FONT STYLE="color: black">IRB/EC</FONT>.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">PharmaNet will be responsible for all issues <FONT STYLE="color: black">surrounding IRB and EC</FONT>
submissions and approvals for all sites.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">PharmaNet will be responsible for maintenance of the study master files.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">5.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">PharmaNet</FONT> will be responsible for annual <FONT STYLE="color: black">IRB/EC</FONT>
updates and other <FONT STYLE="color: black">IRB/EC-</FONT>required documentation.</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">Q.</TD><TD>Submission to Regulatory Authorities</TD></TR></TABLE>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The client or its designee will handle the necessary regulatory submissions.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">R.</TD><TD>Selection and Management of Laboratory</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="color: black">1.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">PharmaNet and </FONT>the client <FONT STYLE="color: black">will select
the central laboratory.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">Insymbiosis</FONT> will manage and make payments to the central laboratory.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">S.</TD><TD>Medical Monitoring</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">PharmaNet will provide the medical monitor for the studies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will provide on-call medical coverage 24 hours per day, seven days per week.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 99.25pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">The PharmaNet medical monitor will perform the following tasks:</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">a.</TD><TD STYLE="text-align: justify">Provide medical oversight regarding protocol exemptions, protocol violations, protocol eligibility
issues, accepted medications, and general medical-related study issues.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">b.</TD><TD STYLE="text-align: justify">Conduct training for the project team concerning the disease, drug, study design, and procedures.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">c.</TD><TD STYLE="text-align: justify">Assist in the preparation of questionnaires for conduct of project feasibility.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">d.</TD><TD STYLE="text-align: justify">Review of the protocol.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">e.</TD><TD STYLE="text-align: justify">Assist in the preparation of the CRF.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 143.7pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 125.85pt"></TD><TD STYLE="width: 17.85pt">f.</TD><TD STYLE="text-align: justify">Provide a medical review of PharmaNet deliverables for the studies, as well as coding for adverse
experiences, concomitant medications, diseases and medical histories, and serious adverse events (SAEs).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">T.</TD><TD>Serious Adverse Events (SAEs)</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">1.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">PharmaNet&rsquo;s
                                                                                                                      Global Safety
                                                                                                                      and Pharmacovigilance
                                                                                                                      Group will
                                                                                                                      maintain
                                                                                                                      the safety
                                                                                                                      database
                                                                                                                      using ARISg&trade;</FONT><SUP>1</SUP><FONT STYLE="font-family: Times New Roman, Times, Serif">.
                                                                                                                      The database
                                                                                                                      will be
                                                                                                                      updated
                                                                                                                      as needed
                                                                                                                      to meet
                                                                                                                      the client&rsquo;
                                                                                                                      needs (e.g.,
                                                                                                                      MedDRA updates)
                                                                                                                      and regulatory
                                                                                                                      requirements.
                                                                                                                      This proposal
                                                                                                                      assumes
                                                                                                                      no updates
                                                                                                                      to the database
                                                                                                                      and that
                                                                                                                      one database
                                                                                                                      will serve
                                                                                                                      the needs
                                                                                                                      of all three
                                                                                                                      studies
                                                                                                                      in the program.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will prepare the Safety Management Plan (SMP), which will specify roles and responsibilities
for the oversight and reporting of SAEs. The client and PharmaNet will agree on the format and content of the SMP prior to study
initiation. The SMP will be updated as needed; no updates have been planned for this proposal. This proposal assumes that no protocol
amendments will change safety reporting requirements or procedures. There will be one SMP per study.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">PharmaNet will receive incoming SAEs from study sites and CRAs via SAE Report Forms. The SAE Report
Form will be agreed upon in the SMP. PharmaNet will oversee the distribution of SAE Report Forms to all study sites.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="color: black">4.</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">PharmaNet will </FONT>notify the client of the SAE and provide an SAE
Report to the client, using a MedWatch Form, within a specified number of working days, to be detailed and agreed in the SMP. In
addition to describing the course and treatment of the SAE, the SAE Report will include relevant medical history, laboratory data,
and<FONT STYLE="color: black"> concomitant medications. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"></P>

<HR ALIGN="LEFT" NOSHADE STYLE="color: Black; width: 25%; height: 1pt; margin-top: 0; margin-bottom: 0">
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><SUP>1
</SUP>ARISg is a trademark of ArisGlobal, LLC. All rights reserved.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">5.</TD><TD STYLE="text-align: justify">PharmaNet will identify information relevant to clinical understanding of the SAE and will pursue
this additional information from study sites. It is assumed that pursuit of additional information will result in two follow-up
SAE Reports.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="color: black">6.</FONT></TD><TD STYLE="text-align: justify">PharmaNet will be responsible for reporting to the appropriate Regulatory Authorities. The client
is responsible<FONT STYLE="color: black"> for providing PharmaNet with expedited reports from other clinical trials and post-marketing
sources, as applicable.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">7.</TD><TD STYLE="text-align: justify">PharmaNet&rsquo;s CRAs will be responsible for relaying all reportable SAEs to the Investigators.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">U.</TD><TD>Drug Supply Management</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The client will be responsible for the packaging and labeling of supplies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">PharmaNet will be responsible for coordinating shipment of the drug to sites. PharmaNet can assist
in the identification of drug depots if needed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify"><FONT STYLE="color: black">PharmaNet</FONT> will inventory supplies upon-site initiation and conduct
drug accountability during the studies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">At the end of the studies, supplies will be inventoried at the sites by PharmaNet personnel and
shipped to the client or its designee..</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">V.</TD><TD>Data Management</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in">EDC Assumptions</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">[****]</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">[****]</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">It is assumed that external data will
be managed external to the EDC System</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">It is assumed that medical coding will
be performed external to EDC System </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">It is assumed that all sites selected
will meet the minimum requirements in terms of software and internet connection to participate in the study which will be confirmed
through the use of automated site assessment tools.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt">This proposal does not includes costs to provision
computers to the sites and on-site technical support. Both of these services can be provided at additional costs [****] EDC System
Training</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Cost for training assumes training for
all system users </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Training will be delivered via self-paced
e-Learning training modules and/or Web casts</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in">EDC Hosting and Help Desk</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">System hosting will be performed by Oracle
under the following assumptions:</FONT></TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.25in">o</TD><TD>Oracle will monitor operational service levels, and manage system performance, network connectivity, and system backups</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.25in">o</TD><TD>Oracle will perform any scheduled maintenance within predefined maintenance windows (Sunday 3am-12pm EST)</TD></TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2in"></TD><TD STYLE="width: 0.25in">o</TD><TD>Oracle will provide Standard Disaster Recovery practices of 48 hour recovery</TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Oracle will provide 24x7 help desk support
in English for sites and the related study team members. Other languages can be covered on a per call charge. </FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.25in">EDC Study Termination</P>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 135.35pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 116.8pt"></TD><TD STYLE="width: 17.85pt"><FONT STYLE="font: 10pt Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">After the lock of the database, PharmaNet
will provide each site with a CD/DVD containing a PDF rendition of the site&rsquo;s eCRFs, eDCFs, and audit trail. Two copies of
the complete archive will be stored within the trial master file to be provided to the client</FONT> <FONT STYLE="font-size: 10pt">at
the end of the project.</FONT></TD></TR></TABLE>

<P STYLE="font: 10pt Symbol; margin: 0pt 0 0pt 63pt; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-align: justify; text-indent: 0.5in"><FONT STYLE="font-family: Symbol">&middot;&#9;</FONT><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Submission
Ready PDFs are included in this proposal.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 63pt; text-indent: 0.5in">General Assumptions</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">1.</TD><TD STYLE="text-align: justify">It is assumed PharmaNet will utilize all of its standard templates for all documents. .</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">2.</TD><TD STYLE="text-align: justify">It is assumed comments received by PharmaNet from all the clients representatives will be consolidated
into a single document.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">3.</TD><TD STYLE="text-align: justify">PharmaNet will be responsible for database design according to PharmaNet&rsquo;s standard database
specifications. PharmaNet will utilize their CDISC/CDASH entry modules for database design.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">4.</TD><TD STYLE="text-align: justify">PharmaNet will prepare the Data Management Plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">5.</TD><TD STYLE="text-align: justify">All data review conventions, electronic and manual will be specified in the Data Review specifications
and will remain essentially unchanged during the studies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">6.</TD><TD STYLE="text-align: justify">It is assumed that 90% of the data cleaning will be handled by electronic methods.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">7.</TD><TD STYLE="text-align: justify">The edit checks and data review listings will be specified by PharmaNet and programmed by PharmaNet
so that discrepant data can be identified automatically.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">8.</TD><TD STYLE="text-align: justify">User Acceptance Testing of the database design and the edit check programming will be performed
by PharmaNet.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">9.</TD><TD STYLE="text-align: justify">The investigator sites will be responsible for entry of all subject data. PharmaNet assumes that
no paper documents will be received by PharmaNet.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">10.</TD><TD STYLE="text-align: justify">Screen failures data can be collected in the EDC system. Pharmanet and Client need to further discuss
this item.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">11.</TD><TD STYLE="text-align: justify">PharmaNet assumes that non-standard CRF pages will not be received (i.e., laboratory reports, ECG
reports, etc).</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">12.</TD><TD STYLE="text-align: justify">PharmaNet will be responsible for assuring all data queries are resolved according to its standard
guidelines, and that sites have updated the database accordingly.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">13.</TD><TD STYLE="text-align: justify">PharmaNet's standard query and tracking reports will be utilized with no customisation. Modifications
will be made by the client and are included in this proposal.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">14.</TD><TD STYLE="text-align: justify">Dictionary coding will be performed using the MedDRA dictionary for medical history and adverse
experiences; the WHODRL dictionary will be used to code concomitant medications. Dictionaries are loaded using the dictionary vendor&rsquo;s
standard structure.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">15.</TD><TD STYLE="text-align: justify">Please be advised that PharmaNet, under the terms of its own license, is unable to distribute MedDRA
or WHODRL terminology and codes to the client unless the client is in possession of valid MedDRA and WHODRL subscription licenses.
Only a limited level license would be necessary for the purpose and can be purchased by contacting MedDRA or WHO.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">16.</TD><TD STYLE="text-align: justify">Interim data collection cut-offs are not included in these cost estimates; while these can be accommodated
if sufficient notice is given, a change in budget may be necessary.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1.4in"></TD><TD STYLE="width: 0.25in">17.</TD><TD STYLE="text-align: justify">The database Quality Control (QC) audit will be performed according to the standard PharmaNet Quality
Control plan.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 117pt; text-align: justify; text-indent: -0.25in">&nbsp;&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 1in"></TD><TD STYLE="width: 0.25in">W.</TD><TD>Statistical Analysis</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">The client will be responsible for the protocol.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">The PharmaNet statistician and statistical programmer will assist with the CRF and database design.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">PharmaNet will provide the randomisation schedule for the studies.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">PharmaNet will prepare the Statistical Analysis Plan (SAP) with input from the client.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">5.</TD><TD STYLE="text-align: justify">[****].</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">6.</TD><TD STYLE="text-align: justify">Once the SAP is finalized, the number of tables, listings, and figures actually planned for these
studies will be reviewed against the assumptions, and the costs may be adjusted accordingly. One review cycle is assumed and PharmaNet
will receive one set of consolidated comments from the client..</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">7.</TD><TD STYLE="text-align: justify">It is assumed that there will be no significant changes to the SAP and associated table formats
once final and approved by the client..</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">8.</TD><TD STYLE="text-align: justify">PharmaNet will produce derived data sets, summary tables, and statistical analyses based on specifications
in the final SAP and in compliance with PharmaNet SOPs for validation and quality assurance of computer-generated table output.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">9.</TD><TD STYLE="text-align: justify">[****].</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">10.</TD><TD STYLE="text-align: justify">The PharmaNet statistician will provide input to the statistical sections of the Clinical Study
Report (CSR) and review the entire document.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 89.85pt; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 72pt"></TD><TD STYLE="width: 17.85pt">X.</TD><TD>Clinical Study Report Preparation</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">1.</TD><TD STYLE="text-align: justify">[****]</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">2.</TD><TD STYLE="text-align: justify">It is assumed that the client will have one review of each of the draft CSR versions with the client
providing consolidated comments.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">3.</TD><TD STYLE="text-align: justify">PharmaNet assumes that for patients who died or had SAEs, the CIOMS/MedWatch reports will be appended
to the CSR as narratives. For patients who discontinued due to AEs, up to four brief narratives (&frac12; page in length) will
be provided.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt"></P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">4.</TD><TD STYLE="text-align: justify">It is assumed that the safety section of the statistical analysis will be based on the primary
endpoint and up to seven secondary endpoints resulting in up to [****] ables for the CSR.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">5.</TD><TD STYLE="text-align: justify">Costs for the compilation and assembly of appendices have been included in this proposal.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">6.</TD><TD STYLE="text-align: justify">The CSR and all appendices will be provided to the client in electronic format as PDF files without
full PDF bookmark and hypertext linking.&nbsp; If full publishing with hypertext linking and bookmarking is requested or if a paper
copy is requested this would be at an additional cost.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 98.95pt"></TD><TD STYLE="width: 17.85pt">7.</TD><TD STYLE="text-align: justify">Cost for one full QC of each of [****] final CSRs are included in this proposal.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 116.8pt; text-align: justify; text-indent: -17.85pt">&nbsp;</P>

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<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: bold 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 2pt"></TD><TD STYLE="width: 26pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">VII.</FONT></TD><TD>Costs</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The maximum total costs for this
program/combined studies are presented below in three categories; Professional Fees, Investigator Grants, and Pass-Through Costs
(individually and collectively referred to as the <B>&ldquo;Study Costs&rdquo;). </B>Any costs exceeding the Study Costs must be
justified in detail and in writing by Phamanet and pre-approved in writing by the client..</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>PharmaNet Fees</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">Based on the parameters and assumptions
outlined in this proposal, PharmaNet Fees are categorized by major activity in the table below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>Investigator Grants</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">Investigator Grants are presented
below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>Pass-Through Costs</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The table below specifies the maximum
total Pass-Through Costs.. In case actual Pass-Through Costs are about to exceed the expenses listed below (the &ldquo;<B>Additional
Costs</B>&rdquo;), PharmaNet shall immediately inform the client in advance, provide a detailed explanation of the deviation from
the agreed budget specified in the table below, and will only invoice<FONT STYLE="color: black"> </FONT>the client for actual costs
in these areas, subject to pre-approval in writing by the client of each and every such additional cost. Actual costs will be kept
to reasonable levels through adherence to PharmaNet&rsquo;s travel policy and prudent negotiation with outside providers of which
the client will be kept fully informed throughout the negotiation process.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">Pass-Through Costs are presented
below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>Total Costs</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">The total maximum Study Costs for
the studies is presented in the table below:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">*Estimated per RedHill and costs
associated with screen failed subjects are not included.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>Budget and Contract Annotations</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>Currency </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">This budget is quoted in US Dollars
and will be invoiced in US Dollars.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify"><B>Letter of Authorization </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: justify">PharmaNet will commence activity
upon execution of a Letter of Authorization (LOA) or full contract as mutually agreed. At such time and upon execution of the LOA
or contract, it is PharmaNet&rsquo;s expectation that the client will authorize payments in accordance to the Payment Schedule
specified below (Exhibit B) to ensure that PharmaNet maintains a cash-neutral position at all times with respect to fees and pass-through
costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-align: center"><B>EXHIBIT B</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>PAYMENT TERMS AND SCHEDULE</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">[****]</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>AMENDMENT # 1 </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>TO CLINICAL SERVICES AGREEMENT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>THIS AMENDMENT # 1</B> to the Clinical
Service Agreement signed on 15 June 2011 (&ldquo;<B>Agreement</B>&rdquo;) is by and between 7810962 Canada Inc. (hereafter &ldquo;MANAGER&rdquo;),
RedHill Biopharma Ltd, (hereafter, &ldquo;SPONSOR&rdquo;).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Unless otherwise indicated herein, capitalized
terms have the same meaning as set forth in the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Whereas the parties agree, as of March
1, 2012, to temporarily revise the Services set forth in Exhibit A and the payment schedule in Exhibit B within the Agreement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Whereas the parties agree to amend the
Agreement as follows:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">1)</TD><TD STYLE="text-align: justify">For the period starting March 1, 2012 through the time SPONSOR receives FDA approval to move forward
with the Study in North America, the agreed upon monthly fees for work performed by MANAGER will be a flat fee rate of $15,000
per month, until SPONSOR instructs MANAGER in writing to resume full activity. Any work in excess of that value in a given month
must be approved in writing by the SPONSOR prior to the work being conducted.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">At the point in time that the
MANAGER instructs MANAGER to resume full activity on the Studies, MANAGER will produce a Change Order to encompass the revised
scope of work for the Studies, factoring in the months of downtime at $15,000 per month, and devise a new payment schedule to reflect
the revised costs.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-indent: -0.25in">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in">2)</TD><TD STYLE="text-align: justify">Due to the temporary revision of the Study scope and&nbsp;based on revised amount of work performed,&nbsp;MANAGER
will credit the MANAGER for $92&nbsp;393 (&ldquo;Credit Amount&rdquo;) and will offset the Credit Amount against any future payment
until the Credit Amount is fully reimbursed.</TD></TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">All other terms of the Agreement remain
in full force.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">IN WITNESS WHEREOF, this Amendment has
been executed by the parties hereto through their duly authorized officers and is effective as the last date below.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 45%; font-weight: bold">REDHILL BIOPHARMA Ltd.</TD>
    <TD STYLE="width: 10%; font-weight: bold">&nbsp;</TD>
    <TD STYLE="width: 45%; font-weight: bold">7810962 Canada Inc.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD STYLE="font-weight: bold">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Dror Ben-Asher</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Alain Guimond</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name: Dror Ben-Asher</TD>
    <TD>&nbsp;</TD>
    <TD>Name: Alain Guimond PhD</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Title:&nbsp; CEO</TD>
    <TD>&nbsp;</TD>
    <TD>Title: Senior Director of R&amp;D</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: June 7, 2012</TD>
    <TD>&nbsp;</TD>
    <TD>Date June 7, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="font-weight: bold">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: windowtext 1pt solid">/s/ Ori Shilo</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Name: Ori Shilo</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Title: VP Finance and Operations</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>Date: June 7, 2012</TD>
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="margin: 0"></P>

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</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-15.1
<SEQUENCE>7
<FILENAME>filename7.htm
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><B><U>Exhibit 15.1</U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>CONSENT OF INDEPENDENT REGISTERED PUBLIC
ACCOUNTING FIRM</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">We hereby consent to the use in this
Registration Statement on Form 20-F/A of RedHill Biopharma Ltd. of our report dated December 2, 2012, relating to
the financial statements of RedHill Biopharma Ltd., which appears in such Registration Statement. We also consent to the
reference to us under the heading &ldquo;Auditors&rdquo; in such Registration Statement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 50%">&nbsp;Tel Aviv, Israel</TD>
    <TD STYLE="border-bottom: windowtext 1pt solid; width: 50%">/s/ Kesselman &amp; Kesselman</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>December 2, 2012</TD>
    <TD>Certified Public Accountants (Isr)</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>A member firm of PricewaterhouseCoopers International Limited</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

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    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>



<P STYLE="margin: 0"></P>

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<DOCUMENT>
<TYPE>GRAPHIC
<SEQUENCE>8
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`
end
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>COVER
<SEQUENCE>11
<FILENAME>filename11.htm
<TEXT>
<HTML>
<HEAD>
     <TITLE></TITLE>
</HEAD>
<BODY STYLE="font: 10pt Times New Roman, Times, Serif">

<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: left"><IMG SRC="image_001.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right">December 3, 2012</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">VIA EDGAR</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Jeffrey P. Riedler&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Assistant Director</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Securities and Exchange Commission</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Division of Corporation Finance&#9;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">100 F Street, N.E.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Washington, D.C. 20549&#9;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="width: 100%; font: 10pt Times New Roman, Times, Serif; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 9%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD>
    <TD STYLE="width: 91%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: center">Re:</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">RedHill Biopharma Ltd.</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">Amendment No. 1 to Draft Registration Statement on Form 20-F/A</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">Submitted: October 26, 2012</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-align: justify">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; font-weight: bold; text-decoration: underline; text-align: justify">CIK No. 0001553846</TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt"></U></B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Dear Mr. Riedler:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">We enclose responses
to the comments raised by the staff of the Securities and Exchange Commission (the &ldquo;Staff&rdquo;) in its comment letter,
dated November 8, 2012, with respect to Amendment No. 1 to the Registration Statement on Form 20-F/A (&quot;Form 20-F&quot;) of
RedHill Biopharma Ltd. (the &quot;Company&quot; or &quot;we&quot;) submitted on October 26, 2012.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">For your convenience,
the comments of the Staff have been restated below in their entirety in bold, with the response to each comment set forth immediately
under the respective comment. Capitalized terms used herein but not otherwise defined shall have the meanings ascribed to them
in the above referenced Form 20-F.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 28.35pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Item 4. Information on the Company,
page 26 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>B. Business Overview, page 26 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Acquisition and License Agreements,
page 38 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>1. Please refer to prior comment 23.
Please revise your disclosure on page 55 to remove the implication that clinical development for RHB-102 and RHB -103 had been
successfully completed by June 30, 2012. Also, add the expenses for clinical trials and research and development for the six months
ended June 30, 2012 to the tables on page 59, consistent with the information in your response. Also, you indicate the clinical
development costs for RHB-103 were $0.2 million in 2011 and $0.1 million in 2010. However, the table on page 59 appears to omit
the costs for 2010. Please revise accordingly.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In response to the Staff's comment, we
have revised the disclosure on page 55 and updated the tables on page 59 on the Form 20-F to include information for the nine
months ended September <FONT STYLE="color: windowtext">30, 2012. </FONT>Clinical developments costs for RHB-103 for 2010 were
omitted in the table of research and development expenses because they were less than $100,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: right"><FONT STYLE="font-size: 8pt"><B>Haynes and
Boone, LLP</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.2pt 0pt 0; text-align: right"><FONT STYLE="font-size: 8pt"><B>Attorneys
and Counselors</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.2pt 0pt 0; text-align: right"><FONT STYLE="font-size: 8pt">30
Rockefeller Plaza, 26th Floor</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.2pt 0pt 0; text-align: right"><FONT STYLE="font-size: 8pt">New
York, New York 10112</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.2pt 0pt 0; text-align: right"><FONT STYLE="font-size: 8pt">Phone:
212.659.7300</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0.2pt 0pt 0; text-align: right"><FONT STYLE="font-size: 8pt">Fax:
212.918.8989</FONT></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Red">Confidential</FONT></P>

<!-- Field: Page; Sequence: 1 -->
    <DIV STYLE="margin-top: 12pt; margin-bottom: 6pt; border-bottom: Black 1pt solid"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%; font-size: 10pt"><TR><TD STYLE="text-align: left; width: 100%"><!-- Field: Sequence; Type: Arabic; Name: PageNo -->1<!-- Field: /Sequence --></TD></TR></TABLE></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><TABLE CELLPADDING="0" CELLSPACING="0" STYLE="width: 100%"><TR><TD STYLE="text-align: center; width: 100%">&nbsp;</TD></TR></TABLE></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<IMG SRC="image_001.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: windowtext">30, 2012.
</FONT>Clinical developments costs for RHB-103 for 2010 were omitted in the table of research and development expenses because
they were less than $100,000.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><U>License Agreement for MAP diagnostic test related to RHB-104,
page 41</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>2. Please refer to your response to
Comment 22. Please expand your description of the license agreement governing RHB-104 to indicate that RedHill is entitled to terminate
the agreement at any time. It appears that Article X, Section B of the license agreement allows Redhill to terminate the agreement
with 90 days&rsquo; notice.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In response to the Staff's comment, we
have expanded the relevant description of the license agreement governing RHB-104.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Item 5. Operating and Financial Review
and Prospects </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>F. Tabular Disclosure of Contractual
Obligations, page 61 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>3. With regard to prior comment 29 clarify
in the disclosure if the milestone payments are contingent. If the milestone payments are not contingent the amounts due under
your manufacturing agreements should be included in the table of contractual obligations. Estimates of when contractually due amounts
will be paid can be made for purposes of preparing the table. Also, disaggregate obligations into less than 1 year, 1-3 years,
3-5 years and more than 5 years as specified in Item 5F of Form 20-F. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>In addition, the table should include
the $8 million and $4 million related to the clinical services agreement for RHB-104 disclosed on page 44.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In response to the Staff's comment, we
have amended the table of contractual obligations and clarified that the milestone payments are contingent.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Item 6. Directors, Senior Management
and Employees, page 62</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>B. Compensation, page 64</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>4. Please refer
to your response to Comment 30 and your discussion of employment agreements beginning on page 66. The employment agreements for
Messrs. Ben-Asher, Shilo, and Raday, and the consultancy services agreement with Dr. Fathi do not appear to fall within the exception
from filing of Instruction 4(c)(iv) to the Exhibits of Form 20-F. Notably, these agreements are not available by its terms to employees
generally, but contain payment terms specific to each named individual. In addition, these agreements must be filed pursuant to
Instruction 4(c) to the Exhibits of Form 20-F regardless of whether the public filing of these agreements is required in your home
country. Please file these agreements accordingly.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="color: windowtext">In response
to the comment, the Staff is respectfully advised that the Company's response to comment 30 to the previous comment letter contained
a typographical error. The public filing of the executed employment agreements with the Company executive officers is not required
in the Company's home country, nor have such agreements otherwise been publicly disclosed by the Company. Therefore, the Company
believes that it is not required to file such executed employment agreements in accordance with Instruction 4(c)(v) to the Exhibits
of Form 20-F. </FONT>The Company's response to comment 30 to the previous comment letter inadvertently referred to Instruction
4(c)(iv) rather than Instruction 4(c)(v).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="color: Red">Confidential</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;<IMG SRC="image_001.jpg" ALT=""></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Item 18. Financial Statements </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Note 2 - Summary of Significant Accounting
Policies, page F-16 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>5. With regard to prior comments 42
and 43, illustrate for us how recognition upon completion of development milestones results in recognizing research and development
expense as incurred. Clarify if &ldquo;milestones&rdquo; are just an event which triggers a payment under the contract.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">In response to the comment, the Staff is
respectfully advised that the Company enters into agreements with sub-contractors and service providers for the purchase of raw
materials, formulation services, manufacturing and development activities, performing clinical trials and other services. Each
agreement clearly outlines the service required and the time-frame for providing the work in connection with such project. Each
project is divided into pre-determined milestones. Payment by the Company of the consideration for the project is contingent upon
the achievement of each specific milestone. The achievement of each milestone is not contingent on the passage of time, but rather
represents enhancement of the value of the project; thus, these milestones are considered to be substantive. In addition, since
the Company may terminate the agreements, at its discretion and due to uncertainty as to the achievement of each milestone, the
Company accrues the expenses for each milestone on a separate basis and recognizes them in the period during which the milestone
is achieved.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As each milestone reflects only part of
the total agreement, accretion of the expense over the period instead of expensing them at achievement date would result in an
immaterial affect.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Note 12 - Mandatory Convertible Loans
and Royalty Obligation to Investors, page F-32 </U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>6. Please refer to prior comment 44.
Please explain to us your basis for concluding that the $391,000 value of the royalty obligation approximated its fair value in
August 2010. Also, explain to us how you determined the 27.98% effective interest rate and how this rate resulted in accretion
of $327,000 in 2010 and $168,000 in 2011. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">As
more fully described in response to prior comment 44, the royalty obligation</FONT> <FONT STYLE="font-family: Times New Roman, Times, Serif">was
initially measured as the difference between the consideration received by the Company and the fair value of the mandatory convertible
loans. As of the initial measurement of the obligation the Company estimated the reasonability of the resulting amount and also
made its own calculation to ensure that this amount also approximates its fair value. The fair value calculation was made using
the Company's assumption as to the future cash outflows resulting from this liability. </FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Following are the features estimated by
the Company:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Revenue forecast &ndash; based on the
estimate of the expected market size for the therapeutic candidate - expected market share of the Company's therapeutic candidate
out of the total market.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif; text-align: center"><FONT STYLE="color: Red">Confidential</FONT></P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"></P>

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<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif"><IMG SRC="image_001.jpg" ALT="">&nbsp;</P>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Timing projections &ndash; expected timing
for the final approval of the therapeutic candidate - estimate of the timing for the penetration process.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" WIDTH="100%" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0.25in"></TD><TD STYLE="width: 0.25in"><FONT STYLE="font-family: Symbol">&middot;</FONT></TD><TD STYLE="text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Probability assessment of successful completion
of the development and commercialization processes.</FONT></TD></TR></TABLE>

<P STYLE="margin-top: 0pt; margin-bottom: 0pt; font: 10pt Times New Roman, Times, Serif">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Having determined the projected cash flows,
the Company calculated the interest rate implied in the transaction that discounts such projected cash flows to a net present value
equaling the royalty obligation.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company used the assistance of an external
expert to verify the range of interest rates applicable for financing of such project at the same development stage. Based on Sahlman
and Scherlis method for valuing high-risk long-term investments and based on the Plummer study regarding joint ventures, the cost
of capital for companies in the bridge/IPO stage of development is within the range of 20% to 35%. As of the date of the inception
of the loan, the Company's presumption was that it is close to an IPO or a merger transaction. As such, the resulting interest
rate calculated above was within the range, and therefore the amount of the royalty obligation approximates its fair value.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Paragraph AG8 to IAS 39 states:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify"><I>If an entity revises its estimates
of payments or receipts, the entity shall adjust the carrying amount of the financial asset or financial liability (or group of
financial instruments) to reflect actual and revised estimated cash flows. The entity recalculates the carrying amount by computing
the present value of estimated future cash flows at the financial instrument's original effective interest rate or, when applicable,
the revised effective interest rate calculated in accordance with paragraph 92. The adjustment is recognised in profit or loss
as income or expense. </I></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">As time elapsed and the development process
of the therapeutic candidate continued, the Company's assumptions are evolving and are updated. In accordance with the provisions
of AG8, the Company adjusts the carrying amount of the liability to reflect the revised estimated cash flows; thus, the annual
accretion is composed of the annual interest expense calculated using the 27.98% rate with the addition of the adjustment of the
carrying amount due to a change in assumptions.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><U>Note 21-Loss Per Ordinary Share, page
F-45</U></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><B>7. Please refer to prior comment 47.
Your disclosure appears to indicate that basic and diluted earnings per share was calculated based on the weighted average of ordinary
shares issued in the period instead of the weighted average number of ordinary shares outstanding during the period, as stipulated
in IAS 33. Please revise your presentation of basic and diluted earnings per share for each period presented to be in accordance
with IAS 33. Also, your response indicates that your initial share capital of $3 million was determined by multiplying 960,000
ordinary shares issued in 2009 by the par value per share (NIS 0.01) and then dividing the result by the exchange rate of the New
Israeli Shekel to the US dollar at date of issuance. Please provide us the exchange rate used in this calculation. Also, explain
why you used 960,000 ordinary shares when your disclosure in on page F-45 indicates that 8.9 million ordinary shares were issued
in 2009. </B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; text-align: center; margin-bottom: 0pt"><FONT STYLE="color: Red">Confidential</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company respectfully acknowledges comment
of the Staff. As it relates to the Company, the shares used for the computation of the earning per share were all issued and outstanding
and thus inadvertently the Company used the term of issued shares. In response to the comment of the Staff the Company has revised
the wording in notes 2p and 21 to the financial statements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The share capital amount presented in the
statement of changes in equity is $3 thousand. This amount was computed as follows - 960,000 shares multiplied by the par value
per share of NIS 0.01 resulting in NIS 9,600. The NIS amount divided by the exchange rate of the US$ to the NIS as of the date
of issuance ($1=NIS 3.789) equals $3 thousand.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The Company was incorporated on August
3, 2009 and began its activities shortly thereafter. The statement of comprehensive income reflects the Company's activities for
the period from August 3, 2009 through December 31, 2009. However, the shares were issued and paid on August 14, 2009; thus they
are considered outstanding only for part of this period (139 days out of 150 days). Averaging the amount of shares over the operating
period resulted in 890,000 shares instead of 960,000 shares.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">The number of shares presented in the financial
statements is the total number of shares, 890,000, multiplied by 10 to 8,900,000 shares in order to retroactively reflect the Company&rsquo;s
10 for 1 distribution of bonus shares on February 3, 2011.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">* * * * *</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">If you have any questions or concerns,
please call the undersigned at 212-659-4974.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 3.5in; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 141.75pt; text-align: justify; text-indent: -117.3pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 99.25pt 0pt 1.5in; text-align: justify; text-indent: 0.5in">Very
truly yours,</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 99.25pt 0pt 1.5in; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 99.25pt 0pt 1.5in; text-align: justify; text-indent: 0.5in">/s/
Rick Werner</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 99.25pt 0pt 189pt; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 99.25pt 0pt 1.5in; text-align: justify; text-indent: 0.5in">Rick
Werner, Esq.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1.5in; text-align: justify; text-indent: 0.5in">Haynes and
Boone, LLP</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

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<TD STYLE="width: 0"></TD><TD STYLE="width: 0.5in">cc:</TD><TD STYLE="text-align: justify">Mr. Ori Shilo, Deputy Chief Executive Officer Finance and Operations, RedHill Biophama Ltd.</TD></TR>                                                                                                                                                                                                <TR STYLE="vertical-align: top">
<TD>&nbsp;</TD><TD>&nbsp;</TD><TD STYLE="text-align: justify">Mr. Perry Wildes, Adv.,
Gross, Kleinhendler, Hodak, Halevy, Greenberg &amp; Co.</TD></TR>
</TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in"></P>



<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin-top: 0; text-align: center; margin-bottom: 0"><FONT STYLE="color: Red">Confidential</FONT></P>

<P STYLE="margin: 0"></P>

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