Exhibit 10.2
LICENSE AND OPTION AGREEMENT
     THIS LICENSE AND OPTION AGREEMENT (the “Agreement”) is made this 22nd day
of October, 2002 (the “Effective Date”) by and between GENESOFT PHARMACEUTICALS,
INC., a Delaware corporation having its principal place of business at 7300
Shoreline Court, South San Francisco, CA, USA 94080 (“GS”) and LG LIFE SCIENCES,
LTD., a corporation organized under the laws of the Republic of Korea having its
principal place of business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu,
Seoul, 150-721, Republic of Korea (“LGLS”). LGLS and GS are sometimes referred
to herein individually as a “Party” and collectively as the “Parties”.
RECITALS
WHEREAS:
LGLS is the owner of all right, title and interest in certain patents and
know-how relating to Gemifloxacin (as hereafter defined); and
LGLS is the owner or licensee of certain patent rights, know-how, trademark
rights and other intellectual property related to Gemifloxacin; and
LGLS wishes to license to GS the foregoing intellectual property rights to
enable GS to develop and commercialize Gemifloxacin in the Territory (as
hereafter defined) and in the Field (as hereafter defined) and GS wishes to
obtain such a license, all on the terms and conditions set forth herein;
     NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, the Parties hereto agree as follows:
ARTICLE 1
DEFINITIONS
     When used in this Agreement, the following terms shall have the meanings
indicated below.
     1.1 “Active Pharmaceutical Ingredient” or “API” means Gemifloxacin in
active bulk form meeting the API Specifications.
     1.2 “Additional Indication” means an FDA-approved indication or formulation
for Gemifloxacin within the Field other than the Initial Indication(s).
     1.3 “Affiliate” means an individual, trust, business trust, joint venture,
partnership, corporation, association or any other entity which (directly or
indirectly) is controlled by,
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

1

--------------------------------------------------------------------------------

 

controls or is under common control with a Party. For the purposes of this
definition, the term “control” (including, with correlative meanings, the terms
“controlled by” and “under common control with”) as used with respect to any
Party, shall mean the possession (directly or indirectly) at least 50 percent of
the outstanding voting securities of a corporation or comparable equity interest
in any other type of entity.
     1.4 “API Specifications” shall mean the specifications for Active
Pharmaceutical Ingredient attached hereto as Schedule 1.4.
     1.5 “Combination Product” means a product consisting of Gemifloxacin and at
least one other biologically active ingredient.
     1.6 “Commercialization” means all activities undertaken relating to the
marketing, promotion, distribution, use, storage, sale and offer for sale of a
Product in the Territory including, without limitation, advertising and any
Phase IV clinical trials.
     1.7 “Development” means:
          (a) all activities relating to obtaining and/or maintaining Regulatory
Approval of the Product in the Territory for the Initial Indication including,
without limitation, clinical trials and the preparation, submission, review and
development of data or other information related thereto;
          (b) Phase IV clinical trials supporting pre-launch and
commercialization of the Product but not contributing to obtaining and/or
maintaining Marketing Authorization Applications of the Product for the Initial
Indication and any Additional Indications in the Territory;
          (c) all activities relating to obtaining and/or maintaining Marketing
Authorization of Product for an Additional Indication in the Territory,
including Phase III clinical trials and the preparation, submission, review and
development of data or other information related thereto; and
          (d) all formulation studies for intravenous administration and any
other new formulation of the Product.
The term “Development” shall not include process development or final finish or
fill of Product.
     1.8 “EMEA” means the European Agency for the Evaluations of Medical
Products.
     1.9 “FDA” means the U.S. Food and Drug Administration.
     1.10 “Field” means [***].
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

2

--------------------------------------------------------------------------------

 

     1.11 “Final Product” means the Product in final form for commercialization
and distribution, labeled in accordance with applicable regulatory requirements
and custom and meeting the Final Product Specifications.
     1.12 “Final Product Specifications” means the specifications for Final
Product attached hereto as Schedule 1.12.
     1.13 “Fully Burdened Cost of Manufacture” means: [***]
     1.14 “Gemifloxacin” means the racemic compound whose mesylate is
represented on Schedule 1.14 hereto as well as the pharmaceutically acceptable
salts, physiologically hydolyzable esters, and solvates thereof, but excluding
either enantiomer alone. The mesylate salt of Gemifloxacin is also known under
the trademark Factive®.
     1.15 “GLAXO” means GlaxoSmithKline plc and its Affiliates.
     1.16 “GLAXO Agreement” means a certain Termination and Transfer Agreement
dated on or about October 14, 2002, by and among GLAXO (including certain of its
Affiliates) and LGLS (including its Affiliate LG Chem Investment, Ltd.).
     1.17 “GLAXO Know-how” means that Information relating to the Product
identified on Schedule 1.17 hereto.
     1.18 “GLAXO Patents” means those patents and patent applications shown on
Schedule 1.18 hereto and the equivalents thereof in all countries in the
Territory and patents issuing from such patent applications, as well as
divisionals, continuations, continuations-in-part, reissues, reexaminations,
renewals, extensions, utility models, additions and supplementary protection
certificates to any such patents and patent applications which are necessary or
useful for the development, use, importation, manufacture, formulation,
packaging, sale or offer for sale of Product in the Territory.
     1.19 “GS” means Genesoft Pharmaceuticals, Inc. and its Affiliates.
     1.20 “GS Know-how” means all Information relating to the Product developed
by GS as a result of its activities under this Agreement and any and all patent
applications and patents covering or claiming any such Information.
     1.21 “Information” means, whether or not patentable: (i) techniques and
data including inventions, practices, methods, know-how, data (including
pharmacological, toxicological and clinical test data, regulatory submissions
and data and analytical and quality control data), marketing, distribution, and
sales data or descriptions, (ii) compounds, compositions of matter, assays and
biological materials, and (iii) dossiers of information necessary for Regulatory
Approvals.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

3

--------------------------------------------------------------------------------

 

     1.22 “Initial Indication(s)” means the first indication(s) for a Product
approved by Regulatory Authorities anywhere in the Territory, formulated in the
manner so approved.
     1.23 “Launch” means the first commercial sale of a Product in a country in
the Territory by GS or any of its Affiliates or sub-licensees following receipt
of Regulatory Approval in such country.
     1.24 “[***]” shall mean that compound represented on Schedule 1.24 hereto,
as well as [***].
     1.25 “LGLS” means LG Life Sciences, Ltd. and its Affiliates.
     1.26 “LGLS Know-How” means all Information now or hereafter within the
Control of LGLS necessary or useful for the Development or Commercialization of
the Product in the Territory, or for the filling, labeling and packaging of the
Product anywhere in the world for use or sale in the Territory.
     1.27 “LGLS Patents” means: (i) those patents and patent applications shown
on Schedule 1.27 attached hereto and the equivalents thereof in all countries in
the Territory, (ii) all patents issuing from such patent applications,
divisionals, continuations, continuations-in-part, reissues, reexaminations,
renewals, extensions, utility models, additions and supplementary protection
certificates to any such patents and patent applications, and (iii) all patents
and patent applications now or hereafter owned or controlled by LGLS necessary
or useful for the development, use, importation, formulation, packaging, sale or
offer for sale of Product in the Territory.
     1.28 “Marketing Authorization Application” means an application for
Regulatory Approval required before commercial sale or use of the Product in the
Field in a regulatory jurisdiction in the Territory.
     1.29 “Memorandum of Understanding” means an agreement between the Parties
so titled and dated August 23, 2002.
     1.30 “Net Sales” means, with respect to a Product that is not a Combination
Product, the gross receipts representing sales of Product to Third Parties by GS
and its Affiliates and sub-licensees in the Territory, less deductions for the
following items:
(i) reasonable transportation and insurance charges borne by the selling party,
(ii) sales and excise taxes or customs duties paid by the selling party and any
other governmental charges imposed upon the sale of the Product,
(iii) rebates or allowances actually granted or allowed, including government
and managed care rebates,
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

4

--------------------------------------------------------------------------------

 

(iv) quantity discounts, cash discounts or chargebacks actually granted, allowed
or incurred in the ordinary course of business in connection with the sale of
the Product, and
(v) allowances or credits to customers, not in excess of the selling price of
the Product, on account of governmental requirements, rejection, outdating,
recalls or return of the Product.
Sales between GS and its Affiliates and sub-licensees shall be excluded from the
computation of Net Sales and no royalties shall be payable on such sales. With
respect to a Combination Product, [***].
     1.31 “Patent Expenses” means governmental fees and the reasonable fees and
expenses of outside counsel and payments to Third Parties incurred after the
Effective Date in connection with the preparation, filing, prosecution and
maintenance of patents or patent applications, including the costs of patent
interference, opposition and revocation proceedings related thereto or to any
Third Party patents containing claims which cover the manufacture, use, sale,
offer for sale, importation or exportation of Product in the Territory.
     1.32 “Product” means any compound including Gemifloxacin as an active
ingredient.
     1.33 “Regulatory Approvals” means all approvals (including pricing and
reimbursement approvals) and licenses, registrations or authorizations of a
Regulatory Authority, necessary for the use, import, storage, export, transport,
filling, labeling, packaging (to the extent that filling, labeling or packaging
are carried out by GS or its Affiliates) or sale of a Product in a regulatory
jurisdiction in the Territory. “Regulatory Approval” shall not, however, include
any regulatory approvals related to the manufacture of API and supply of API by
LGLS to GS as contemplated herein.
     1.34 “Regulatory Authority” means a governmental entity with the authority
to grant Regulatory Approvals.
     1.35 “Steering Committee” means the entity described in Article 3, below.
     1.36 “Territory” means the United States of America, Canada, Mexico,
France, Germany, the United Kingdom, Luxembourg, Ireland, Italy, Spain,
Portugal, Belgium, the Netherlands, Austria, Greece, Sweden, Denmark, Finland,
Norway, Iceland, Switzerland, Andorra, Monaco, San Marino and Vatican City.
     1.37 “Third Party” means an entity or person other than LGLS or GS or their
respective Affiliates.
     1.38 “Trademarks” means those trademarks, trade names, domain names and
logos identified on Schedule 1.38 hereto.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

5

--------------------------------------------------------------------------------

 

ARTICLE 2
PRODUCT DEVELOPMENT
     2.1 Scope of Development. Upon the Effective Date, GS will assume lead
responsibility for Development throughout the Territory for the Initial
Indication(s), in consultation with LGLS. Following the Effective Date GS shall
in good faith establish internal and external competence and controls
appropriate for the assumption of full responsibility for Development for the
Initial Indication and, on notice to LGLS not later than the date on which first
Regulatory Approval is received in the Territory LGLS shall, to the extent
permitted by law, transfer to GS ownership of all pending Marketing
Authorization Applications and Regulatory Approvals including, without
limitation, New Drug Application Nos. 21-158 and 21-376 (the “NDA”). Following
the Effective Date, GS shall have sole responsibility for such Additional
Indications as GS, in its sole discretion, elects to pursue; provided, however,
that GS shall notify LGLS prior to filing a Marketing Authorization Application
for any Additional Indication.
     2.2 Development Effort. GS shall carry out its responsibilities under
Section 2.1 using reasonable efforts consistent with prudent business judgment,
and in accordance with all applicable legal and regulatory requirements
including, without limitation, then-current Good Laboratory Practices, and Good
Clinical Practices.
     2.3 Ownership of Regulatory Approvals. Following the transfer of ownership
provided in Section 2.1, above, all Marketing Authorization Applications shall
be filed and maintained in the name of GS and GS shall be the owner of all
resulting Regulatory Approvals. Through meetings of the Steering Committee, GS
shall: (i) keep LGLS informed regarding the schedule and progress for the
preparation and submission of Marketing Authorization Applications in the
Territory, and (ii) permit LGLS a reasonable opportunity to comment on such
Marketing Authorization Applications.
     2.4 Communication with Regulatory Authorities. GS shall have primary
responsibility for dealing with Regulatory Authorities in the Territory,
including filing all supplements and other documents with such authorities with
respect to obtaining Regulatory Approvals, reporting all adverse drug
experiences related to the Product, and handling all Product complaints. At each
meeting of the Steering Committee, GS shall provide to the Steering Committee a
report describing the regulatory filing status of each Product throughout the
Territory.
     2.5 Costs of Development. All Development expenses shall be borne by GS.
Without limiting the foregoing, within 30 days after receipt of an appropriate
invoice from LGLS, GS shall reimburse LGLS for Development expenses in the
Territory incurred between August 23, 2002 and the Effective Date, as
contemplated by the Memorandum of Understanding; provided, however, that the
amount of reimbursement due for LGLS activities during such period in the
Territory but outside of the United States of America shall not exceed [***]
unless GS shall have previously approved such excess.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

6

--------------------------------------------------------------------------------

 

ARTICLE 3
MANAGEMENT OF THE COLLABORATION
     3.1 Steering Committee. Within 30 days after the Effective Date, LGLS and
GS shall create a Steering Committee consisting of an equal number of qualified
representatives of each Party. A Party may change or replace its representatives
on the Steering Committee as it deems appropriate, by notice to the other Party.
Each Party will designate one of its members of the Steering Committee as
co-chairperson. The co-chairperson appointed by each Party shall be empowered to
bind such Party to decisions of the Steering Committee to the extent
contemplated herein.
     3.2 Meetings of the Steering Committee. The Steering Committee shall hold
meetings at such times and places as shall be determined by the co-chairpersons.
The meetings shall be held no less frequently than once every six months in the
period from the Effective Date through the third year after the first Launch in
the United States of America, and not less than once every 12 months thereafter.
Steering Committee meetings may be held in person or by telephone or video
conference. The co-chairpersons shall alternate in keeping written minutes that
shall reflect the decisions taken at the meetings. Such minutes shall be
circulated to the Steering Committee for review and approval within two weeks
after each meeting.
     3.3 Function of the Steering Committee. The Steering Committee shall
coordinate the activities of the Parties under this Agreement, and perform such
other functions as appropriate to further the purposes of this Agreement as
determined by the Parties.
     3.4 Decision Making. To the extent feasible, the Steering Committee shall
make decisions and take actions [***].
     3.5 Limitations of Powers of the Steering Committee. The Steering Committee
shall have only such powers as are expressly delegated to it in this Agreement.
The Steering Committee is not a substitute for the rights or the obligations of
the Parties and, inter alia, shall not have the authority to amend this
Agreement.
     3.6 Liaison Manager. Each Party will designate one of its members of the
Steering Committee to act as its liaison manager to facilitate the performance
of its rights and satisfaction of its obligations hereunder.
     3.7 Development and Commercialization Outside the Territory. LGLS shall
have the sole responsibility for development and commercialization of the
Product outside of the Territory. LGLS shall regularly disclose to GS its plans
for such development and afford GS a reasonable opportunity to comment thereon.
During the term of this Agreement, LGLS shall assure that its development of
Product outside of the Territory (whether directly or through one or more
sub-licenses) is conducted in a manner which minimizes the risk of disruption of
or other adverse effects on the development and commercialization of the Product
in the Territory by GS as contemplated herein. Without limiting the foregoing:
[***]. At LGLS’s request, the
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

7

--------------------------------------------------------------------------------

 

Parties shall in good faith discuss the matters for which GS approval or
consultation is required pursuant subsections (ii) and (iii), above, at each
meeting of the Steering Committee.
ARTICLE 4
COMMERCIALIZATION
     4.1 Commercialization Efforts. Commencing on the Effective Date, and
subject to Section 4.3, below, GS shall be responsible for carrying out
Commercialization, at its sole expense, using reasonable efforts consistent with
prudent business judgment. GS, directly or through one or more Affiliates or
sub-licensees, shall [***].
     4.2 Pricing in the Territory. GS shall [***] obtain such Product pricing
approvals as may be required in each country of the Territory. GS shall be free
to set the sale price of the Product in the Territory as it deems appropriate.
     4.3 Co-Promotion. (a) LGLS shall have the option, exercisable on notice to
GS prior to July 1, 2007, to co-promote Product in the Territory commencing on
January 1, 2008. If LGLS timely exercises this option, the Parties shall
promptly and in good faith negotiate a co-promotion agreement which establishes
their respective rights and obligations, which agreement shall become effective
on January 1, 2008. [***].
     (b) If LGLS exercises its option pursuant to subsection (a), above, all GS
royalty obligations under Section 10.4, below, shall terminate with respect to
Product sales occurring on or after January 1, 2008, but GS’s obligations under
Section 10.2 shall remain in full force and effect.
ARTICLE 5
MANUFACTURE AND SUPPLY
     5.1 General. (a) The intent of the Parties is that: (i) between the
Effective Date and July 1, 2004, LGLS shall supply to GS, and GS shall
exclusively purchase from LGLS all of GS’s requirements of Product in final form
according to the Final Product Specifications, and (ii) following July 1, 2004
LGLS shall supply to GS, and GS shall purchase from LGLS all of GS’s
requirements of Product in bulk form according to the API Specifications, with
final finish and fill to be provided either by LGLS or a Third Party, as
provided in Section 5.1(b). The terms and conditions of LGLS supply pursuant to
subsection (i) are as set forth in this Article 5. The terms and conditions of
LGLS supply pursuant to subsection (ii) shall be set forth in a supply agreement
to be entered into as provided in Section 5.2.
     (b) The Parties acknowledge that secure long-term supply of Product for GS
is essential to the success of the relationship reflected herein. No later than
December 31, 2002 that Parties shall identify and, to the extent practicable,
contractually commit to a long-term final
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

8

--------------------------------------------------------------------------------

 

finish and fill facility for the Product. Either the Parties will jointly agree
on a Third Party or LGLS shall commit to provide these services, either directly
through the acquisition of a U.S.-based facility or by contract with a mutually
acceptable third party. If LGLS elects to provide these services, it shall
notify GS to that effect no later than December 31, 2002. Regardless of whether
final finish and fill is provided by LGLS or through a Third Party, GS shall
have the right to approve the site selected for final finish and fill, which
approval shall not be unreasonably withheld.
     5.2 Supply Agreement. Not later than December 31, 2002, the Parties shall
complete and enter into a supply agreement covering the supply of API by LGLS
for the remainder of the term of this Agreement. Such supply agreement shall be
consistent with the terms and conditions of this Agreement with respect to
supply of Final Product and shall include such other terms and conditions as the
Parties may mutually agree including, without limitation, adequate provision for
API shortages and supply interruption events to assure GS a secure long-term
source of supply of API as well as license to GS or its designee of the right to
manufacture API in the event that LGLS fails to supply. The supply price for API
provided under the Supply Agreement shall be equal to [***] percent of LGLS’s
Fully Burdened Cost of Manufacturing for API supplied thereunder, which shall in
no event [***]$[***] per kg [***]$[***] per kg. In addition, the supply
agreement shall provide that: (i) if GS purchases more than [***] kg of API in
any calendar year, the $[***]supply price shall be reduced by $[***] for each
[***]kg of API purchased in such year in excess of [***] kg, and (ii) the bulk
supply price (including the [***] such price) shall be renegotiated in good
faith in the event that [***] purchases more than [***] kg of API in any
12 month period.
     5.3 Manufacturing Approvals. GS shall be promptly notified of any proposed
change in the process for the manufacture of Product pursuant to this Article 5
which potentially impacts the Marketing Authorization Applications or Regulatory
Approval in the Territory including, without limitation, any proposed change as
to the site at which such manufacture is to occur. No Product incorporating any
such proposed change and no Product manufactured at any proposed new facility
shall be supplied by LGLS to GS hereunder without such changes having first been
approved by the appropriate Regulatory Authorities or by mutual agreement by the
Parties, which regulatory approvals the Parties agree to pursue diligently
following notice from LGLS of such proposed changes.
     5.4 Specifications. LGLS warrants that the Product it supplies hereunder
shall meet the Final Product Specifications, and shall have been manufactured in
accordance with all applicable laws and regulations including, without
limitation, then-current Good Manufacturing Practice (“GMP”) compliance
standards.
     5.5 Purchase Order and Forecasting. On or before the later of:
(i) December 31, 2002, or (ii) three business day after the date on which the
NDA is accepted by the FDA, GS shall place a [***] for the amount of Product
produced to Final Product Specifications which [***]. On [***], GS shall provide
to LGLS a [***] forecast of [***]. As shall be provided in the
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

9

--------------------------------------------------------------------------------

 

supply agreement, this forecast shall be updated by GS on [***] of each calendar
year for the following [***]. Within [***] after receipt of each such forecast,
LGLS shall provide to GS a [***] forecast of the Fully Burdened Cost of
Manufacturing of the supply forecast by GS.
     Without limiting the foregoing, GS shall use [***] to provide LGLS with
supply orders for the delivery of Final Product or API within the following
dates:

  (i)   [***], GS shall provide its supply orders for delivery during the [***];
    (ii)   [***], GS shall provide its supply orders for delivery during the
[***];     (iii)   [***], GS shall provide its supply orders for delivery during
the [***]; and     (iv)   [***], GS shall provide its supply orders for delivery
during the [***].

     5.6 Delivery. The first order of [***] placed by GS pursuant to Section 5.5
shall be delivered to GS no more than [***] to the date on which the Parties in
good faith anticipate receipt of final FDA approval of the Product for the
Initial Indication(s). All deliveries of Product shall be made Ex Works (“EXW”)
as such term is defined in the INCOTERMS 2000. Title to the Product and all
risks of loss or damage to Product shall remain with LGLS until Product is
delivered to the carrier for shipment at the EXW point, at which time title and
all risks of loss or damage shall transfer to GS. LGLS agrees, in accordance
with GS’s reasonable written instructions, to arrange for shipping and
insurance, to be paid by GS from the EXW point to such locations as are
requested by GS.
     5.7 Inspection and Rejection.
          5.7.1 GS shall, [***] upon receipt of a shipment of Product from LGLS,
inspect such shipment for defects that cause the Product to deviate from the
Final Product Specifications (other than those resulting subsequent to delivery
of Product to GS). If GS discovers such a defect, GS may reject such defective
Product, and shall promptly notify LGLS in writing of the rejection and the
reason therefor.
          5.7.2 Any rejection of defective or non-conforming Product by GS must
occur within [***] from delivery, failing which GS shall be deemed to have
accepted such shipment and to have irrevocably waived any claims it may have
with respect to such shipment failing to meet the Final Product Specifications.
          5.7.3 At the request of LGLS, GS shall either allow a representative
of LGLS to inspect the rejected Product and to make a determination as to the
cause of the defect, or return a
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

10

--------------------------------------------------------------------------------

 

sample of the defective Product to LGLS for such inspection. If LGLS disagrees
with GS’s determination, it shall notify GS within [***] after inspection by
LGLS as provided in this Section 5.7.3, whereupon the Parties shall select an
independent laboratory to draw a sample and determine whether such Product in
fact conformed to the Final Product Specifications at the time of delivery to
GS. The determination of such independent laboratory shall be final. The Party
whose determination was not accurate shall bear the cost of the independent
analysis.
          5.7.4 At the request and expense of LGLS, Product under the control of
GS found to be defective shall be returned to LGLS (if by permitted by law) or
disposed of in accordance with LGLS’s lawful instructions. With respect to
payments previously made by GS with respect to defective Product, GS shall be
entitled, at its discretion, either to a refund or a credit against amounts
otherwise due to LGLS for supply hereunder.
     5.8 Remedies.
          5.8.1 If GS asserts that a shipment of Product was defective or
non-conforming at the time of delivery to GS, LGLS shall as soon as practical
replace the rejected or disputed Product, pending resolution of the question of
whether such original shipment was or was not defective.
          5.8.2 The remedies set forth in this Article 5 are GS’s [***] for
claims by GS against LGLS based on Product supplied by LGLS pursuant to this
Agreement not conforming to the Final Product Specifications.
     5.9 Supply Price and Payment Mechanism.
          5.9.1 Product for use by GS non-commercial purposes (including,
without limitation, clinical trials and for pre-Launch compassionate use) shall
be supplied by LGLS at[***].
          5.9.2 Product for commercial use shall be supplied by LGLS at [***].
          5.9.3 Payment for API and Final Product supplied by LGLS hereunder
shall be due [***] after delivery to GS’s premises pursuant to Section 5.6,
above; provided, however, that payment for the [***] ordered by GS pursuant to
Section 5.5, above, shall be due in two equal installments. The first such
installment shall be due [***] after delivery to GS’s premises pursuant to
Section 5.6, above, and the second such installment shall be due [***] after the
first installment is due.
          5.9.4 Notwithstanding the foregoing, in the event that any of the
Product ordered by and delivered to GS pursuant to this Article 5 is unused by
GS because of: (i) the expiration of FDA- or EMEA- approved Product dating, or
(ii) commercial considerations which make such Product unusable (including,
without limitation, because the Product is not approved by the FDA or the EMEA),
GS shall return such unused Product to LGLS (or at LGLS’s request
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

11

--------------------------------------------------------------------------------

 

and expense lawfully dispose of such Product). LGLS shall be responsible for the
[***] of such returned Product and, if GS has previously paid for such Product,
shall give GS a credit or prompt reimbursement for such amount. GS shall be
responsible for the [***] associated with such returned Product.
     5.10 Release Certificate. LGLS shall provide to GS with each delivery of
Final Product a Release Certificate, a Certificate of Analysis and a Certificate
of Compliance signed by a responsible person duly authorized by LGLS to certify
the quality of the API delivered, each in a form reasonably acceptable to GS.
The Release Certificate shall, inter alia, state that the results of the agreed
upon testing procedures are in compliance with the Final Product Specifications
as well as any additional applicable requirements of Regulatory Authorities.
Without limiting the foregoing, unless expressly agreed by the Parties all Final
Products supplied hereunder shall meet all release criteria established by the
FDA or EMEA with respect to such Final Product.
     5.11 Production Records. LGLS shall maintain records related to its
manufacture and handling of Final Product in accordance with the applicable
rules and regulations and conditions of its licensure (including applicable
rules of the FDA and EMEA and any other applicable regulatory requirements for
record retention), for the longer of: (i) [***] years after the date of
manufacture of each batch of API, and (ii) the period required by applicable
law. LGLS shall notify GS of any intent to destroy or dispose of records related
to the manufacture or handling of API and allow GS an opportunity to secure said
records for additional storage periods in accordance with the written procedures
of GS or its designee. Upon GS’s request with no fewer than five days’ prior
notice, and at GS’s sole expense, LGLS shall send to GS copies of the relevant
documents or permit GS or an independent auditor selected by GS to have access
to such records from time to time during ordinary business hours to verify
compliance by LGLS with such rules and regulations. The provisions set forth in
this section shall survive termination of the Agreement for a period of 10
years.
     5.12 Post Expiration Supply. The Parties recognize that following the
expiration of the term of this Agreement GS may (or may not) continue to sell
Product under the Trademark as contemplated by Sections 10.4 and 11.4. In the
event that GS does so and in the further event that LGLS or any Affiliate of
LGLS is at such time producing API in commercial quantities, LGLS shall offer to
supply API to GS on a [***].
ARTICLE 6
CONFIDENTIALITY
     6.1 Confidentiality; Exceptions. The receiving Party shall keep
confidential and shall not publish or otherwise disclose or use for any purpose
other than as provided for in this Agreement any Information and other
information and materials furnished to it by the other Party pursuant to this
Agreement, or any provision of this Agreement that is the subject of an
effective
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

12

--------------------------------------------------------------------------------

 

order of the Securities Exchange Commission granting confidential treatment
pursuant to the Securities Act of 1934, as amended (collectively, “Confidential
Information”), except to the extent that it can be established by the receiving
Party that such Confidential Information:

  (i)   was already known to the receiving Party at the time of disclosure by
the other Party;     (ii)   was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving Party;
    (iii)   became generally available to the public or otherwise part of the
public domain after its disclosure by the disclosing Party and other than
through any act or omission of the receiving Party in breach of this Agreement;
    (iv)   was disclosed to the receiving Party, other than under an obligation
of confidentiality, by a Third Party who had no obligation to the disclosing
Party not to disclose such information to others; or     (v)   was developed by
the receiving Party’s employees without the use of or access to confidential
information of the disclosing Party, as demonstrated by contemporaneous written
records of the receiving Party.

     6.2 Authorized Disclosure. A Party may disclose Confidential Information of
the other Party to the extent such disclosure is reasonably necessary in filing
or prosecuting patent applications, prosecuting or defending litigation,
complying with applicable governmental regulations or conducting pre-clinical or
clinical trials, provided that if a Party is required by law to make any such
disclosure it will, to the extent practicable, give reasonable advance notice to
the other Party of such disclosure requirement and, except to the extent
inappropriate in the case of patent applications, use reasonable efforts to
secure confidential treatment of such Confidential Information required to be
disclosed. In addition, each Party shall be entitled to disclose Confidential
Information, under a binder of confidentiality containing provisions as
protective as those of this Article 6, to a Third Party for the purpose of
carrying out activities authorized under this Agreement, including disclosures
to authorized or potential sub-licensees. Nothing in this Article 6 shall
restrict any Party from using for any purpose outside the Field any Information
developed by it during the course of the collaboration hereunder.
     6.3 Survival. This Article 6 shall survive the expiration or termination of
this Agreement for a period of five years; provided, however, that Confidential
Information regarding LGLS’s manufacturing process for API shall be kept
confidential by GS during the term of this Agreement and for a further period of
10 years after the expiration or termination of this Agreement, subject to the
exceptions in Section 6.1, above.
ARTICLE 7
INFORMATION AND REPORTS
     7.1 Information and Reports During Development and Commercialization.

13

--------------------------------------------------------------------------------

 

          7.1.1 To the extent permitted by law, GS and LGLS will each regularly
disclose and make available to the other without charge all Information
(including, without limitation, copies of all pre-clinical and clinical reports
and training, marketing and promotional materials) known to them. Without
limiting the foregoing, promptly following the Effective Date, and at reasonable
intervals thereafter, LGLS shall disclose and transfer to GS all LGLS Know-how
and GLAXO Know-how and GS shall disclose and transfer to LGLS all GS Know-how.
          7.1.2 Upon reasonable prior notice, each Party shall have the right
to: (i) review the raw data generated in any clinical trial conducted by the
other Party with respect to Product, (ii) visit clinical investigators and
centers involved in performance of such clinical trials, and (iii) discuss any
such clinical trial and its results in detail with such clinical investigators.
     7.2 Publicity Review.
          7.2.1 Neither Party shall originate any publicity, news release, or
other announcement disclosing any non-public terms of this Agreement
(collectively, “Disclosure”), without the prior prompt review and written
approval of the other, which approval shall not be unreasonably withheld. Once
specific information has been approved for disclosure, that information may be
reiterated in any subsequent Disclosure without further approval; provided,
however, that the Parties shall, to the extent lawful, maintain the
confidentiality of financial information contained in this Agreement and
resulting from the activities contemplated hereunder.
          7.2.2 Notwithstanding Section 7.2.1, a Party may make any Disclosure
it believes in good faith based upon the advice of its counsel or its auditors
is required by applicable law and without the prior approval of the other Party
may make such disclosures as are required by the rules or regulations of the
U.S. Securities and Exchange Commission or its relevant foreign counterpart.
With respect to disclosures other than those required under such rules or
regulations, prior to making such Disclosure, the disclosing Party shall provide
the other Party with a written copy or rendition of the materials proposed to be
disclosed and provide the receiving Party with an opportunity to promptly review
the proposed Disclosure.
     7.3 Use of Names. Except as required by law or in furtherance of the
exercise of its rights hereunder, neither Party shall use the name of the other
in any public announcement, press release or other public document related to
this Agreement or the understanding reflected herein without the written consent
of such other Party, which consent shall not be unreasonably withheld or
delayed. No such approval shall be required to republish a disclosure previously
made or otherwise in the public domain.
     7.4 Adverse Drug Events. Each Party shall promptly report to the other
Party any adverse event observed during any use of a Product. Prior to the first
commercial sale of a Product in the Territory, the Parties shall in good faith
enter into a data safety exchange agreement consistent with applicable law and
regulatory requirements and practices in the United States and European Union.
     7.5 Recall

14

--------------------------------------------------------------------------------

 

          7.5.1 Any necessary recall of Product or any batch of Product from the
market in the Territory shall be effected by GS at GS’s reasonable discretion
following, to the extent practicable, consultation with LGLS. Upon any Product
recall, any then-pending orders of Product pursuant to Article 5, above, shall
be suspended until the reinstatement of the Product or revocation of the recall.
          7.5.2 If any Product is recalled either: [***], then GS shall bear all
costs and expenses of such recall including, without limitation, expenses or
obligations to Third Parties, the cost of notifying end users and costs
associated with shipment of any recalled Products from end users and destruction
of such Products.
          7.5.3 If any Product is recalled as a result of [***], then LGLS shall
bear all costs and expenses of such recall including, without limitation, refund
of the supply price of the recalled Products, expenses or obligations to Third
Parties, the cost of notifying end users and costs associated with shipment of
any recalled Products from end users and destruction of such Products.
          7.5.4 If a recall of Products is necessary for reasons attributable in
part to each of the Parties, then LGLS and GS shall be responsible for a
proportionate share of such recall costs on the basis of their respective
responsibilities with respect to the event justifying the recall.
          7.5.5 In the event of a recall of Products, each Party shall
immediately notify the other Party and cooperate in a manner which is
appropriate and reasonable under the circumstances.
     7.6 Except as may be expressly provided herein and without prejudice to
either Party’s responsibility for Third Party damages as provided for in
Article 14, below, no claim for compensation, losses or damages (including,
without limitation, punitive, exemplary, incidental or consequential damages)
may be made by one Party against the other as a result of any Product recall or
any other act or omission of a Party pursuant to this Agreement (including,
without limitation, the termination of this Agreement by either Party).
ARTICLE 8
PATENT RIGHTS
     8.1 LGLS Patents and GLAXO Patents. (a) During the term of this Agreement,
LGLS shall [***] maintain the LGLS Patents and the GLAXO Patents in the
Territory and shall use [***] to convert any currently pending or future filed
patent applications into granted patents without [***] delay. LGLS shall use
patent counsel selected by LGLS and reasonably approved by GS for such
prosecution and maintenance and LGLS shall bear all related Patent Expenses. GS
shall cooperate fully with LGLS in all such matters, at GS’s expense.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

15

--------------------------------------------------------------------------------

 

     (b) LGLS shall promptly disclose to GS the text of all LGLS Patents filed
after the Effective Date as well as all information received after the Effective
Date concerning the institution or possible institution of any interference,
opposition, re-examination, reissue, revocation, nullification or any official
proceeding involving an LGLS Patent or GLAXO Patent any where in the Territory.
GS shall have the right to review all such pending applications and other
proceedings and make recommendations to LGLS with respect thereto. LGLS shall
keep GS promptly and fully informed of the course of patent prosecution and
other proceedings and shall provide GS with copies of all substantive
communications, search reports and Third Party observations submitted to or
received from patent offices throughout the Territory. All such disclosures
shall be considered “Confidential Information” subject to Article 6, above.
     8.2 Abandonment. LGLS shall be free, on at least 30 days’ prior notice to
GS, to abandon and stop funding Patent Expenses related to any of the LGLS
Patents in any country in the Territory. In such event, GS may, at its sole
option, assume and continue prosecution or maintenance of the LGLS Patents and
GLAXO Patents in question, and shall thereafter bear all related Patent
Expenses. Following such abandonment of a LGLS Patent by LGLS, LGLS shall have
no further rights hereunder with respect to the LGLS Patent in question to the
extent of such abandonment, and the term “LGLS Patents” shall be deemed to have
been modified accordingly. LGLS shall not abandon any GLAXO Patent nor stop
funding Patent Expenses related thereto without the prior consent of GS, which
consent shall not be unreasonably withheld.
     8.3 Infringement. If either Party learns of an infringement or threatened
infringement of the LGLS Patents or GLAXO Patents in the Territory in the Field
it shall promptly notify the other Party and shall provide the latter Party with
all information reasonably available to the notifying Party evidencing such
infringement or threatened infringement. Thereafter, the Parties shall in good
faith consult and cooperate in abating such infringement or threatened
infringement.
     GS shall have the right, but not the obligation, to bring, defend and
maintain any appropriate suit or action for abatement of the infringement or
threatened infringement of the LGLS or GLAXO Patents in the Territory and in the
Field, at GS’s sole expense. If GS requests LGLS to join GS as a party in such
suit or action, LGLS shall execute all papers and perform such other acts as may
be reasonably requested by GS, at GS’s expense. LGLS shall have the right to
participate in any such suit or action using independent counsel, at its sole
expense. Any amount recovered by GS as a result of such suit or action shall
first be applied to reimburse each of the Parties, pro rata, for any costs or
expenses incurred in bringing, defending and maintaining any such action. The
balance (the “Net Recovery”) shall be for the sole benefit of GS. The Net
Recovery shall be considered “Net Sales” with respect to the calendar quarter in
which payment to GS was received, and royalties shall accordingly be paid on the
amount of the Net Recovery exclusively at the rate(s) specified in Section 10.3,
below. The Net Recovery shall be considered “Net Sales” for purposes of
calculating annual Net Sales in accordance with Milestone 3 and in Section 10.2,
below.
     If GS fails to initiate suit or action within 90 days after first notice of
infringement or threatened infringement of the LGLS Patents or the GLAXO
Patents, or if having initiated such suit or action it thereafter diligently
fails to prosecute such suit or action, LGLS shall have the

16

--------------------------------------------------------------------------------

 

right, but not the obligation, to bring, defend and maintain any appropriate
suit or action for abatement of the infringement or threatened infringement, at
LGLS’s sole expense. If LGLS requests GS to join LGLS as a party in such suit or
action, GS shall execute all papers and perform such other acts as may be
reasonably requested by LGLS, at LGLS’s expense. GS shall have the right to
participate in any such suit or action using independent counsel, at its sole
expense. Any amount recovered by LGLS as a result of such suit or action shall
first be applied to reimburse each of the Parties, pro rata, for any costs or
expenses incurred in bringing, defending and maintaining any such action. The
balance shall be divided equally between the Parties. The amount of any
recovery, net of the amounts necessary to reimburse the Parties as provided
above shall be considered “Net Sales” for purposes of calculating annual Net
Sales in accordance with Milestones 3 and in Section 10.2, below. If such
recovery is apportioned by the court such that portions thereof are attributed
to infringing activity in different calendar years, or if such apportionment of
the recovery can otherwise be readily ascertained, then such apportionment shall
govern as to the calendar year(s) in which Net Sales shall be deemed to have
occurred for purposes of such Milestones. Otherwise, the amount of such recovery
shall be apportioned equally over the number of calendar years in which
infringement was found to have occurred (or in the event of a settlement, over
the number of calendar years in which it was alleged to have occurred).
     8.4 Third Party Claims. If a Third Party asserts that a patent or other
right owned by it is infringed by the development, manufacture, import, use,
sale or offer for sale of a Product by GS or its Affiliates or sub-licensees in
the Territory in the Field, the Party first obtaining knowledge of such claim
shall immediately provide the other Party notice of such claim and the related
facts in reasonable detail. In such event, the Parties shall determine how best
to control the defense of any such claim. In the event the Parties cannot agree
on the defense of such claim, such defense shall be controlled by GS with
respect to sales of Product in the Territory and by LGLS with respect to Product
sales outside of the Territory. In each such case, the other Party shall have
the right, at its own expense, to participate in such defense and to be
represented in any such action by counsel of its choice at its sole discretion.
With respect to any such claim, the Party entitled to control defense shall also
have the right to control settlement of such claim; provided, however, that no
settlement shall be entered into without the written consent of the other Party,
which consent shall not be withheld unreasonably.
     8.5 Ownership. Subject to Section 9.2, below, each Party shall have and
retain sole and exclusive title to all inventions, discoveries and know-how
which are made, conceived, reduced to practice or generated solely by its
employees or agents in the course of or as a result of this Agreement. Each
Party shall own an equal undivided interest in all such inventions, discoveries
and know-how made, conceived, reduced to practice or generated jointly by the
employees or agents of one Party and the employees or agents of the other Party.
ARTICLE 9
LICENSES and OPTIONS
     9.1 License Grant by LGLS. Subject to the terms and conditions of this
Agreement, LGLS hereby grants to GS and GS hereby accepts from LGLS a sole and
exclusive license under the LGLS Patents, LGLS Know-How, GLAXO Patents, GLAXO
Know-how to use, import,

17

--------------------------------------------------------------------------------

 

package, sell and offer for sale Products within the Field in the Territory, as
well as the exclusive right to use the Trademarks in the Territory in
conjunction with the use or sale of Products.
     9.2 License Grant by GS. Subject to the terms and conditions of this
Agreement, GS hereby grants to LGLS and LGLS hereby accepts from GS a [***]
license under the GS Know-How to develop, use, import, formulate, package, sell
and offer for sale Products outside of the Territory. Without limiting the
foregoing, the Parties agree that any patent application filed by or on behalf
of GS prior to January 1, 2010 which covers or claims any novel use or
formulation or means of administration of Product shall be jointly owned by the
Parties regardless of inventorship, and to the extent of LGLS’s ownership
interest shall be considered an “LGLS Patent” for purposes of this Agreement. At
LGLS’s request GS shall take all steps reasonably required to assign to LGLS its
joint ownership interest.
     9.3 Sub-licensing. GS may sub-license the license granted to it hereunder
on prior notice to LGLS. LGLS may sub-license the license granted to it with
respect to GS Know-how [***].
     9.4 Use of Licenses. Neither Party shall use or disseminate the Know-how of
the other Party other than as expressly provided under this Agreement. In
addition, GS warrants that it shall not adapt the GLAXO databases included in
the GLAXO Knowhow or software operating on such databases for uses unrelated to
the uses of Product authorized herein.
     9.5 [***]. During the period commencing on the Effective Date and ending on
December 31, 2002 (the “Negotiating Period”), the Parties shall in good faith
negotiate the terms and conditions on which LGLS would grant to GS [***]. During
the Negotiating Period LGLS shall not solicit or otherwise participate in any
communications with any Third Party regarding [***].
     9.6 DNA Nanobinder Compounds. Schedule 9.6 hereto describes GS’s DNA
nanobinder compounds being developed for use in the fields of [***] (each, a “GS
Option Field”). Promptly following the completion of the first Phase II clinical
trial for a DNA nanobinder compound in each of the GS Option Fields, GS shall
notify LGLS and disclose to LGLS all available preclinical and clinical data
regarding the use of such DNA nanobinder compound in the GS Option Field in
question. During the [***]period following such closure the Parties shall in
good faith negotiate the terms and conditions on which GS would grant to LGLS
the exclusive right to develop and commercialize such DNA nanobinder compound in
the GS Option Field in question in East Asia, including Japan. If the Parties
are unable to reach agreement by the end of such [***]period, GS shall be free
to develop and commercialize such DNA nanobinder compound in the GS Option Field
in question as it sees fit.
     9.7 [***]. In the event that LGLS proposes to grant commercial rights in
the Territory with respect [***] to a Third Party, it shall first offer such
rights to GS on definitive terms. GS shall have [***] after receipt of such
offer to accept, failing which LGLS shall be free to offer
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

18

--------------------------------------------------------------------------------

 

such rights to a Third Party on overall terms and conditions no more favorable
to such Third Party than those offered to GS. In the event that LGLS proposes to
develop and commercialize [***] in the Territory directly or in a collaboration
with a Third Party, it shall notify GS. Upon request by GS within [***]
following such notice, the Parties shall in good faith negotiate commercially
reasonable terms and conditions on which GS would receive from LGLS an exclusive
license with respect to such proposed development and commercialization. If the
Parties are unable to reach such agreement within [***] after GS’s notice, at
GS’s request the terms of such an exclusive license shall be set by [***], and
the Parties shall promptly execute a license agreement consistent with [***].
ARTICLE 10
PAYMENTS TO LGLS
     10.1 License Fee. Within 45 days following the Effective Date GS shall:
(i) pay to LGLS a non-refundable license fee of $5.5 million, and (ii) deliver
to LGLS 4,749,659 fully-paid up and non-assessable shares of GS common stock
(the “Shares”). GS represents and warrants that the Shares represent
14.0 percent of the total equity of GS on October 22, 2002, calculated on a
fully diluted basis. The rights and further characteristics of the Shares
(including, without limitation, certain anti-dilution rights) are as set forth
in the Stock Purchase Agreement and related documents attached hereto as
Schedule 10.1.
     10.2 Milestone Payments. Within [***] after the achievement of each
milestone set forth below, GS shall owe to LGLS a non-refundable milestone
payment to LGLS in the amount set forth below. Each milestone payment shall be
due only once, notwithstanding the number of Products actually developed or
commercialized by GS hereunder. Milestone payments 3 and 4, when earned by LGLS,
shall be payable [***]. All other milestone payments shall be due [***] after
the relevant milestone event.

          Milestone Event   Payment
1. Upon FDA approval of the Product for the Initial Indication. If at the time
of such approval GS has not received and accepted the first shipment of Product
required pursuant to Section 5.8, one half of this milestone shall be deemed to
have been earned, with the second half earned upon receipt and acceptance by GS
of such shipment
  $5.0 million
 
       
2. Upon an initial public offering (“IPO”) by GS of its shares or a sale of GS
if, at the time of such IPO or sale, Product has been approved for an Initial
Indication
  $8.0 million

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

19

--------------------------------------------------------------------------------

 

          Milestone Event   Payment
3. Upon both: (i) approval for the first Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $[***]
  $ [***]  
 
       
4. Upon both: (i) approval for a second Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $380 million
  $ [***]  
 
       
5. Upon approval of the Product for an Initial Indication in the United Kingdom
  $ [***]  
 
       
6. Upon approval of the Product for an Initial Indication in the first of Italy,
Germany, France or Spain
  $ [***]  

As used in this Section 10.2, “IV formulation” shall mean a formulation of
Product for intravenous administration.
     10.3 Royalty Payments. In addition to the foregoing license fee and
milestone payments, GS shall, subject to Sections 4.3 and 10.4, pay to LGLS
royalties on Net Sales in each calendar year at the following rates:

      Annual Net Sales   Royalty Rate
on the first $100 million
  [***] percent
over $100 million to $150 million
  [***] percent
over $150 million to $200 million
  [***] percent
over $200 million
  [***] percent

The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at
a rate of [***] percent of Net Sales for the use of the GLAXO Patents, the GLAXO
Know-how and the Trademarks (the “GLAXO Royalty”). During the first two years
following first commercial sale of a Product in the Territory, GS shall be
solely responsible for payment of the GLAXO Royalty and shall pay all amounts so
due to LGLS in accordance with Sections 10.7 through 10.11, below. Thereafter,
LGLS shall be responsible for payment of the GLAXO Royalty and shall indemnify
GS and hold GS harmless from and against any claims by GLAXO as a result of such
use.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

20

--------------------------------------------------------------------------------

 

     10.4 Term of Royalty Obligations. GS’s obligation to make royalty payments
pursuant to Section 10.3 with respect to a Product shall commence on the date of
the first commercial sale of such Product in a given country in the Territory
and shall continue until the later of: (i) the expiration of the last to expire
of the LGLS Patents and GLAXO Patents claiming or covering such Product in such
country, and (ii) 10 years after first commercial sale of such Product in such
country. Following the expiration of GS’s royalty obligations, GS shall retain a
non-exclusive, royalty-free right to use, sell and offer for sale Product in the
Territory, using LGLS Know-how and GLAXO Know-how licensed to GS as of the
Effective Date and the exclusive right to use the Trademarks for such purposes.
GS shall continue to pay to LGLS a royalty in return for such right to use the
Trademark, as provided in Section 11.4, below.
     10.5 Royalty Reductions. If GS is required to pay royalties to Third
Parties in order to exercise the license granted to GS in Section 9.1, above,
with respect to any Product in any country in the Territory, GS will be entitled
to deduct [***] percent of the amount due to such Third Parties from the amounts
due to LGLS pursuant to Section 10.3, above, with respect to Net Sales of such
Product in such country. In no event shall any such royalty reductions in any
calendar quarter be more than [***] percent of the royalty payment due to LGLS
with respect to such calendar quarter in a given country. Any royalty reduction
to which GS would otherwise be entitled may be carried forward by GS and used by
GS in a future period (subject to the maximum reductions specified in this
Section 10.5).
     10.6 Royalties Payable Only Once; Sales to Affiliates and Sub-Licensees.
The obligation to pay royalties is imposed only once with respect to the same
unit of each Product. Sales of Products between GS and its Affiliates or
sub-licensees, or among such Affiliates and sub-licensees, shall not be subject
to royalties under Sections 10.3 but in such cases the royalties shall be
calculated on the Net Sales by such Affiliates or sub-licensees to Third
Parties.
     10.7 Reports. GS shall deliver to LGLS, within 60 days after the end of
each calendar quarter, reasonably detailed written accountings of Net Sales that
are subject to royalty payments due to LGLS for such calendar quarter. Such
quarterly reports shall indicate gross sales on a country-by-country and
Product-by-Product basis. When GS delivers such reports to LGLS, GS shall also
deliver all royalty payments due to LGLS hereunder for such calendar quarter.
     10.8 Accounting and Audits.
          (a) GS shall keep, and shall require its Affiliates and sub-licensees
to keep, complete and accurate records of the latest five years of sales of
Products on which royalties are due hereunder. For the purpose of verifying
royalties due to LGLS hereunder, LGLS shall have the right annually, at LGLS’s
expense, to retain an independent certified public accountant selected by LGLS
and reasonably acceptable to GS, to review such records in the location(s) where
such records are maintained by GS, its Affiliates or its sub-licensees upon
reasonable notice and during regular business hours and under obligations of
confidence. Results of such review shall be made available to both LGLS and GS.
If the review reflects an underpayment of
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

21

--------------------------------------------------------------------------------

 

royalties to LGLS such underpayment shall be promptly remitted to LGLS, together
with [***]. If the underpayment of royalties is equal to or greater than [***],
then GS pay all of the costs of such review.
          (b) LGLS shall keep complete and accurate records of the latest five
years of supply hereunder sufficient to enable GS to confirm LGLS’s cost of
goods. For the purpose of verifying cost of goods, GS shall have the right
annually, at GS’s expense, to retain an independent certified public accountant
selected by GS and reasonably acceptable to LGLS, to review such records in the
location(s) where such records are maintained, upon reasonable notice and during
regular business hours and under obligations of confidentiality. Results of such
review shall be made available to both LGLS and GS. If the review reflects an
overcharge by LGLS, such overcharge shall be promptly remitted to GS, together
with interest calculated in the manner provided in Section 10.9, below. If the
amount of such overcharge is equal to or greater than [***], then LGLS pay all
of the costs of such review. If the review reflects an undercharge by LGLS, GS
shall promptly refund the amount of the overpayment to LGLS, together with
[***].
     10.9 Currency and Method of Payment. All payments due or payable hereunder
shall be made in US Dollars, delivered by wire transfer to such account as LGLS
may identify from time to time on notice to GS. Royalty payments due hereunder
with respect to sales not denominated in US Dollars shall be converted using the
applicable conversion rates quoted in the Wall Street Journal for buying US
Dollars in accordance with U.S. generally accepted accounting principles,
consistently applied. GS shall pay interest to LGLS on the amount of any
payments that are not paid on or before the date such payments are due under
this Agreement at a rate of [***] for the applicable period, calculated on the
number of days such payment is delinquent.
     10.10 Tax Withholding. The Parties shall use all reasonable and legal
efforts to reduce tax withholding on payments made to LGLS hereunder.
Notwithstanding such efforts, if GS concludes that tax withholdings under the
laws of any country are required with respect to payments due to LGLS, GS shall
withhold the required amount and pay it to the appropriate governmental
authority. In such a case, GS will promptly provide LGLS with original receipts
or other evidence reasonably desirable and sufficient to allow LGLS to document
such tax withholdings adequately for purposes of claiming foreign tax credits
and similar benefits. No withholding deduction shall be made if LGLS furnishes
lawful documentation demonstrating that the payment due is exempt from
withholding according to the applicable convention for the avoidance of double
taxation between the United States and the Republic of Korea or other applicable
law or treaty.
     10.11 Blocked Payments. If, by reason of applicable laws or regulations in
any country, it becomes impossible or illegal for GS or its Affiliates or
sub-licensees to transfer, or have transferred on its behalf, royalties or other
payments due hereunder to LGLS, such royalties or other payments shall be
deposited in local currency in the relevant country to the credit of
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

22

--------------------------------------------------------------------------------

 

LGLS in a recognized banking institution designated by LGLS or, if none is
designated by LGLS within a period of 30 days after inquiry from GS, in a
recognized banking institution selected by GS and identified by notice to LGLS.
ARTICLE 11
TRADEMARKS
     11.1 Responsible Party. GS, in consultation with LGLS, shall be responsible
for maintaining the trademark Factive® in all countries in the Territory in
which such mark is registered as of the Effective Date and for establishing and
maintaining such trademark in other countries in the Territory in which GS
intends to Commercialize the Products, all at GS’s expense.
     11.2 Infringement and Third Party Claims. Each party shall afford the other
full cooperation in the defense and assertion of the Trademarks against Third
Parties. Absent agreement by the Parties, the provisions of Sections 8.2 and 8.3
shall apply by analogy with respect to infringement of or Third Party challenges
to the Trademarks.
     11.3 Termination of the Agreement. Following termination of this Agreement
for any reason (but not expiration of its term) GS will refrain from all further
use of the Trademarks in the Territory.
     11.4 Expiration of the Agreement. Following expiration of GS’s royalty
obligations as provided in Section 10.4, above, and for so long as GS continues
to use the Trademark in the use or sale of Product, GS shall pay to LGLS a
royalty equal to [***] percent of Net Sales. Such royalty shall be calculated
and payable as provided in Sections 10.7 through 10.11, above.
ARTICLE 12
REPRESENTATIONS, WARRANTIES AND COVENANTS
     12.1 Joint Representations and Warranties. Each of the Parties hereby
represents and warrants to the other Party that this Agreement is a legal and
valid obligation binding upon such Party and enforceable in accordance with its
terms. The execution, delivery and performance of the Agreement by such Party
does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a Party or by which it is bound, nor violate any law or
regulation of any court, governmental body or administrative or other agency
having jurisdiction over it.
     12.2 Representations and Warranties by LGLS. LGLS represents and warrants
to GS that, as of the Effective Date, to the actual knowledge of the executive
officers and directors of LGLS:
          (a) The information disclosed to GS during the course of its “due
diligence” review of materials related to the Product was true and correct and,
through the Effective Date,
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

23

--------------------------------------------------------------------------------

 

no material information has been omitted from the “due diligence” disclosures
made to GS by LGLS.
          (b) No litigation exists or is threatened which would, if successful,
adversely affect the rights granted to GS hereunder.
          (c) All material safety issues related to the Product and to its
manufacture have been disclosed to GS.
          (d) All renewal fees related to the LGLS Patents, the GLAXO Patents
and the Trademarks have been paid in full.
          (e) LGLS has good title to the LGLS Patents, the GLAXO Patents, the
LGLS Know-how and the GLAXO Know-how and to the Trademarks (to the extent that
filings thereof exist as of the Effective Date), free and clear of any liens or
encumbrances.
          (f) As of the Effective Date LGLS has not been served with notice of
any interference proceedings with respect to the LGLS Patents or the GLAXO
Patents and to the actual knowledge of LGLS, no such proceedings have been
instituted. To the actual knowledge of LGLS, as of the Effective Date there is
no existing Third Party infringement of the LGLS Patents, the GLAXO Patents or
the Trademarks.
          (g) The information submitted to the Regulatory Authorities with
respect to the Product is true and correct.
          (h) It has disclosed to GS the complete texts of all of the LGLS
Patents and the GLAXO Patents existing as of the Effective Date as well as all
information known to LGLS as of the Effective Date concerning the institution or
possible institution of any interference, opposition, re-examination, reissue,
revocation, nullification or any official proceeding involving any of the LGLS
Patents or GLAXO Patents any where in the Territory.
     12.3 Covenants by LGLS. LGLS hereby covenants that: (i) the Transition Plan
contemplated by Section 2.1 of the GLAXO Agreement shall be completed in full
not later than December 31, 2002, (ii) LGLS shall use its best efforts to
finalize the Technology Transfer Agreement contemplated by Section 3.4 of the
GLAXO Agreement not later than January 31, 2003, and (iii) LGLS shall use its
best efforts to finalize the Supply Agreement contemplated by Section 8.1 of the
GLAXO Agreement, on terms and conditions consistent with this Agreement, not
later than January 31, 2003. LGLS shall indemnify GS and hold GS harmless from
and against any and all losses resulting from the failure by LGLS to complete
the Transition Plan or to finalize the Technology Transfer Agreement or the
Supply Agreement by the dates specified in this Section 12.3.
     [***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

24

--------------------------------------------------------------------------------

 

     12.4 Performance by Affiliates and Sub-licensees. The Parties recognize
that each may perform some or all of its obligations under this Agreement
through Affiliates or, to the extent permitted, by sub-licensees. Nonetheless,
each Party shall remain responsible and shall be the guarantor of the
performance by its Affiliates and sub-licensees and shall cause its Affiliates
and sub-licensees to comply with the provisions of this Agreement in connection
with such performance. In the event of a dispute arising out of the actions of
an Affiliate or sub-licensee under this Agreement, each of GS and LGLS may
proceed directly against the other Party, without any obligation to first
proceed against the Affiliate or sub-licensee.
ARTICLE 13
TERM AND TERMINATION
     13.1 Term. The term of this Agreement shall commence on the Effective Date
and shall expire upon the termination or expiration in all of the countries of
the Territory of the royalty obligations as set forth in Section 10.4, above.
     13.2 Termination for Material Breach. If either Party materially breaches
this Agreement at any time, which breach is not cured within 30 days of notice
thereof from the non-breaching Party, the non-breaching Party shall have the
right to terminate this Agreement on notice to the Party in breach following the
expiration of such cure period; provided, however, that if the Party alleged to
be in breach shall have invoked the dispute resolution mechanism of Article 15
prior to the expiration of such cure period then termination shall not be
effective until the sooner of abandonment of such proceedings by the Party
alleged to be in breach or completion of the dispute resolution proceedings and
a non-appealable finding in arbitration in favor of the non-breaching Party.
     13.3 Termination for Challenge to Patent Rights. If either Party challenges
the validity and/or enforceability of any of the other Party’s patent rights to
which a license is granted hereunder, the latter Party shall have the right, to
the extent lawful, to terminate the license granted pursuant to this Agreement
with respect to the challenged patents.
     13.4 Unilateral Termination by GS. GS may, at any time by delivery of
30 days’ prior notice to LGLS, elect to abandon its rights and obligations with
respect to any country in the Territory, or to terminate this Agreement in its
entirety. GS shall be entitled to suspend or discontinue its Development,
distribution and/or sale of any Product immediately upon notice to LGLS if
[***]. Upon notice by GS pursuant to this Section 13.4, this Agreement and all
obligations of LGLS and GS hereunder with respect to the country or countries in
question shall terminate and GS shall promptly transfer to LGLS all Marketing
Authorization Applications and Regulatory Approvals and the Trademarks with
respect to the country or countries in question, as well as all other
Information and know-how related to such country or countries. In the event that
GS terminates its rights with respect to one or more countries but not the
entire Territory, then this Agreement shall remain in effect with respect to the
countries not subject to such termination which countries shall, thereafter, be
considered the “Territory.”
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

25

--------------------------------------------------------------------------------

 

     13.5 Bankruptcy. All rights granted hereunder are, and shall otherwise be
deemed to be, for purposes of Section 365(n) of the U.S. Bankruptcy Code (the
“Code”) licenses of rights to “intellectual property” as defined in
Section 101(52) of the Code. The licensee Party under this Agreement shall
retain and may fully exercise all of its rights and elections under the Code,
subject to performance by such Party of its obligations under this Agreement. In
the event of the commencement of a bankruptcy proceeding by or against a Party
under the Code, the licensee Party shall, to the extent permitted by law, be
entitled to a complete duplicate of (or complete access to, as appropriate) any
such intellectual property and all embodiments thereof, which shall promptly be
delivered to the licensee Party, at its sole expense: (i) upon written request
following commencement of a bankruptcy proceeding, or (ii) if not delivered
pursuant to subsection (i), above, upon written request following the rejection
in bankruptcy of this Agreement by or on behalf of the bankrupt Party. In the
event of a filing for bankruptcy or insolvency by a Party, such Party shall, to
the extent permitted by law, confirm to the receiver, trustee or liquidator that
the intellectual property rights licensed hereunder are, notwithstanding such
license, the sole property of the licensor Party and may not be disposed of by
licensee except as expressly provided herein.
     13.6 Minimum Sales. LGLS shall have the right to terminate this Agreement
on notice to GS in the event that GS’s aggregate gross sales of Products in the
Territory in the 12 month period commencing on the third anniversary of the date
of first commercial of Product in the United States is less than $30 million
[***]; provided, however, that such right to terminate shall not apply in the
event that GS sales of Product were at any time materially impeded by either
force majeure or failure of supply outside of GS’s control.
     13.7 Effect of Termination
          13.7.1 Termination of this Agreement shall not relieve the Parties of
any liability, including any obligation to make payments hereunder, which
accrued hereunder prior to the effective date of such termination, nor preclude
a Party from pursuing all rights and remedies it may have hereunder or at law or
in equity with respect to any breach of this Agreement nor prejudice a Party’s
right to obtain performance of any obligation which accrued hereunder prior to
the effective date of such termination. Upon termination (but not expiration of
the term of this Agreement), all licenses and rights to Patents and Know-How
granted hereunder shall terminate.
          13.7.2 Upon termination of this Agreement (but not expiration of its
term), all Confidential Information supplied by one Party shall be returned by
the other Party except for one copy of such information retained solely for
legal archival or regulatory purposes.
          13.7.3 Upon termination of this Agreement (but not expiration of its
term), GS shall cooperate in the prompt transfer to LGLS of all Marketing
Authorization Applications and Regulatory Approvals related to the Products in
the Territory, and shall diligently take such other actions and execute such
other instruments, assignments and documents as may be necessary to effect the
transfer or reconveyance of rights hereunder to LGLS and the relinquishment of
such rights by GS.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

26

--------------------------------------------------------------------------------

 

          13.7.4 Following termination of this Agreement, GS shall have 120 days
to sell any Product in its possession as of the effective date of termination,
subject to its obligation to pay royalties to LGLS as provided hereinabove with
respect to such sales.
     13.8 Memorandum of Understanding. The Memorandum of Understanding shall
terminate effective as of the Effective Date.
     13.9 Surviving Rights. The rights and obligations set forth in this
Agreement shall extend beyond the term or termination of the Agreement only to
the extent expressly provided for herein, or the extent that the survival of
such rights or obligations are necessary to permit their complete fulfillment or
discharge. Without limiting the foregoing, the following shall survive the
expiration or termination of this Agreement: Sections 5.11, 6.1, 6.2, 6.3, 7.4,
7.5, 7.7, 8.3, 8.4, 10.7, 10.8, 11.2, 11.3, 11.4, and 13.7 and Articles 14, 15
and 16.
ARTICLE 14
INDEMNIFICATION
     14.1 Indemnification by GS. GS shall defend and hold LGLS and its agents,
directors and employees harmless from and against any and all suits, claims,
actions, demands, damages, obligations, settlements, penalties, fines, costs,
liabilities, expenses and/or loss claimed by a Third Party, including reasonable
attorneys’ fees and expenses (collectively, “Losses”), resulting from [***],
except to the extent such Losses result from [***].
     14.2 Indemnification by LGLS. LGLS shall defend and hold GS and its agents,
directors and employees harmless from and against any and all Losses resulting
from: [***], except to the extent such Losses result from [***].
     14.3 Procedure. A Party seeking indemnification under Section 14.1 or
Section 14.2, shall inform the other Party of a claim as soon as reasonably
practicable after it receives notice of the Third Party claim, permit the
indemnifying Party to assume direction and control of the defense of the Third
Party claim (including the right to settle the claim solely for monetary
consideration), and cooperate as requested (at the expense of the indemnifying
Party) in the defense of the Third Party claim.
     14.4 Insurance. Promptly following the Effective Date and for a period of
[***] after the expiration or termination of this Agreement, each Party shall
obtain and thereafter maintain, at its sole cost and expense, product liability
insurance in amounts which are reasonable and customary in the U.S.
pharmaceutical industry for companies of comparable size and activities at the
respective place of business of each Party. Such product liability insurance
shall insure against all liability arising as a result of activities completed
or permitted under this Agreement (including, without limitation, liability for
personal injury, physical injury and property damage). Each Party shall provide
written proof of the existence of such insurance to the other Party promptly
upon request.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

27

--------------------------------------------------------------------------------

 

ARTICLE 15
DISPUTE RESOLUTION
     15.1 Disputes. All disputes arising between the Parties hereunder or with
respect to this Agreement shall be resolved solely as provided in this
Article 15. Any such dispute that the Parties are unable to resolve directly may
be referred by either Party to the Steering Committee for resolution. If the
Steering Committee is unable to resolve such dispute within 30 days after
referral, either Party may, on notice to the other, have such dispute referred
to the CEOs of LGLS and GS for attempted resolution by good faith negotiation.
If such individuals are unable to resolve such dispute within 30 days after
referral, then either Party may thereafter seek to resolve the dispute through
arbitration in accordance with the Rules of Arbitration of the International
Chamber of Commerce by one or more arbitrators appointed in accordance with such
rules, in English. The place of arbitration shall be London, England.
     15.2 Applicable Law. This Agreement shall be governed by and construed
under the substantive laws of the State of California, without regard to
conflicts of law principles.
ARTICLE 16
MISCELLANEOUS
     16.1 Assignment.
          16.1.1 Either Party may assign all of its rights and obligations under
this Agreement to an Affiliate with the consent of the other Party, such consent
not to be unreasonably withheld or delayed.
          16.1.2 A Party may assign its rights or obligations under this
Agreement to a non-Affiliate without the approval of the other Party only in
connection with a merger of that Party with a Third Party, acquisition of that
Party by a Third Party, a similar reorganization affecting that Party, or in
connection with the sale by that Party to a Third Party of all or substantially
all of the assets to which this Agreement relates. This Agreement shall survive
any such merger, acquisition or reorganization of a Party with or into, or such
sale of assets to, another party and no consent for such merger, acquisition,
reorganization or sale shall be required hereunder; provided, however, that in
the event of such merger, acquisition, reorganization or sale, no intellectual
property rights of the other merging or acquiring corporation shall be included
in the intellectual property licensed hereunder. This Agreement shall be binding
upon and inure to the benefit of the successors and permitted assigns of the
Parties. Any assignment not in accordance with this Agreement shall be void.
          16.1.3 In the event of an assignment resulting from a merger or
acquisition permitted pursuant to Section 16.1.2, above, LGLS and its successor
entity shall endeavor to assure that GS confidential information provided under
this Agreement is kept confidential and distributed within the successor entity
solely to the limited extent necessary in order to satisfy such entity’s
obligations, and exercise such entity’s rights, with respect to Gemifloxacin
hereunder.

28

--------------------------------------------------------------------------------

 

     16.2 Force Majeure. Except as otherwise expressly provided herein, neither
Party shall lose any rights hereunder or be liable to the other Party for
damages or losses on account of failure of performance by the defaulting Party
if the failure is occasioned by government action, war, acts of gods, or any
other similar or dissimilar cause beyond the control of the defaulting Party,
provided that the Party claiming force majeure has exerted all reasonable
efforts to avoid or remedy such force majeure.
     16.3 Further Actions. Each Party agrees to execute, acknowledge and deliver
such further instruments, and to do all such other acts, as may be necessary or
appropriate in order to carry out the purposes and intent of this Agreement.
     16.4 Notices. All notices hereunder shall be in writing and shall be deemed
given if delivered personally or by facsimile transmission with confirmed
answer-back, mailed by registered mail (return receipt requested), postage
prepaid, or sent by internationally recognized express courier service, to the
Parties at the addresses first set forth above (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). Notice by personal
delivery shall be deemed effective upon receipt. Notice by courier or registered
mail shall be deemed effective three business dates after the date sent. Notice
by fax shall be deemed effective upon receipt by the sending Party of
confirmation of receipt of the fax by the receiving Party.
     16.5 Waiver. The waiver from time to time by either of the Parties of any
of their rights or their failure to exercise any remedy shall not operate or be
construed as a continuing waiver of same or of any other of such Party’s rights
or remedies provided in this Agreement.
     16.6 Severability. If any term, covenant or condition of this Agreement or
the application thereof to any Party or circumstance shall, to any extent, be
held to be invalid or unenforceable, then the remainder of this Agreement, or
the application of such term, covenant or condition to Parties or circumstances
other than those as to which it is held invalid or unenforceable, shall not be
affected thereby and each term, covenant or condition of this Agreement shall be
valid and be enforced to the fullest extent permitted by law. In such event the
Parties shall in good faith attempt to reform this Agreement to reflect the
intent and anticipated consequences of the invalidated or unenforceable
provision, to the extent possible in a way that is lawful.
     16.7 Ambiguities. Ambiguities, if any, in this Agreement shall not be
construed against either Party, irrespective of which Party may be deemed to
have authored the ambiguous provision.
     16.8 Headings. The section and article heading contained herein are for the
purposes of convenience only and are not intended to define or limit the
contents of said sections or articles.
     16.9 Counterparts. This Agreement may be executed in two counterparts, each
of which shall be deemed an original, but which together shall constitute one
and the same instrument.

29

--------------------------------------------------------------------------------

 

     16.10 Entire Agreement. This Agreement (including all Schedules hereto)
sets forth all the covenants, promises, agreements, warranties, representations,
conditions and understanding between the Parties hereto and supersedes and
terminates all prior agreements and understanding between the Parties.
     16.11 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO
THE OTHER HEREUNDER FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL
DAMAGES, WHETHER IN CONTRACT, WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE.
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by their proper officers as of the Effective Date.

                      GENESOFT PHARMACEUTICALS, INC.       LG LIFE SCIENCES,
LTD.    
 
                   
By:
       /s/ David B. Singer       By:         /s/ Heung Joon, Yang    
 
 
 
      David B. Singer          
 
      Heung Joon, Yang    
 
                   
Its:
       Chairman and CEO       Its:        President and CEO    
 
 
 
         
 
   

30

--------------------------------------------------------------------------------

 

Schedule 1.4
API Specification
Chemical Name
(R,S)-7-[(4Z)-3-(aminomethyl)-4-(methoxyimino)-l-pyrrolidinyl]-l-cyclopropyl-6-fluoro-l,4-dihydro-4-oxo-l,8-naphthyridine-3-carboxylic
acid, monomethanesulfonate
(FORMULA) [b77488b7748801.gif]
Molecular Formula: C18H20FN5O4ŸCH4O3S
Molecular Weight: 485.49
Description (Visual examination)
White to light brown solid
[***]
[***]
[***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

Schedule 1.12
Final Product Specification
Material: FactiveTM Tablet 320mg
Tablet
Description (Visual)
A white to off-white, oval, film-coated tablet with breaklines in both faces and
debossed with GE 320 on both faces
[***]
[***]
[***]
[***]
[***]
[***]
[***]

     
Package

For commercial use:
 

320 mg * 5 tablets in Blister
 
  320 mg * 7 tablets in Blister
 
  320 mg * 30 tablets (3*10 tablets) in Blister
 
  320 mg * 30 tablets in Bottle
 
     For Promotional use: 320 mg Single tablet in Blister

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

Schedule 1.14
Gemifloxacin
Chemical Name
(R,S)-7-[(4Z)-3-(aminomethyl)-4-(methoxyimino)-l-pyrrolidinyl]-l-cyclopropyl-6-fluoro-l,4-dihydro-4-oxo-
l,8-naphthyridine-3-carboxylic acid, monomethanesulfonate
(FORMULA) [b77488b7748801.gif]
Molecular Formula: C18H20FN5O4ŸCH4O3S
Molecular Weight: 485.49

 

--------------------------------------------------------------------------------

 

Schedule 1.17
GLAXO Knowhow
“GLAXO Knowhow” shall mean the following inventions and discoveries, to the
extent that they were conceived, devised and/or reduced to practice by GSK as of
the September 30, 2002, and which are not yet the subject of patent
applications:
[***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

Schedule 1.18
GLAXO Patents

                         
 
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

                         
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

                         
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]        
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]   [***]        
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]   [***]        
[***]
  [***]   [***]   [***]   [***]        
 
  [***]   [***]   [***]   [***]   [***]    
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]        
[***]
  [***]   [***]   [***]   [***]        
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]   [***]        
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

                         
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            

[***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

Schedule 1.24
[***]
Chemical Name
[***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

Schedule 1.27
LGLS Patents

                         
 
  [***]   [***]   [***]   [***]   [***]   [***]  
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]   [***]   [***]    

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

                         
[***]
  [***]   [***]   [***]   [***]   [***]    
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]                
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

                         
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]        
 
  [***]   [***]   [***]       [***]    
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

                         
[***]
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]   [***]   [***]    
[***]
  [***]   [***]   [***]   [***]   [***]    
[***]
  [***]   [***]   [***]   [***]   [***]   [***]
[***]
  [***]   [***]   [***]   [***]   [***]    
[***]
  [***]   [***]   [***]   [***]   [***]    
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

                         
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]   [***]   [***]   [***]    
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]   [***]   [***]
 
  [***]   [***]       [***]   [***]    
 
  [***]   [***]                
 
  [***]   [***]       [***]        
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
 
  [***]   [***]   [***]   [***]        
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
[***]
  [***]   [***]   [***]            
 
  [***]   [***]   [***]            

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

Schedule 1.38
Trademark
FACTIVE

                                            Country     Class(es)     Status    
App. No.   App. Date     Reg. No.   Reg. Date  
Andorra
    5       Registered     12191     19/11/1998     11723     19/11/1998
 
                                        5) MEDICINES FOR HUMAN USE;
PHARMACEUTICAL PRODUCTS; REMEDIES FOR HUMAN USE
 
                                       
Austria
    5       Registered     AM2218/96   12/04/1996     166024     30/08/1996
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE
 
                                       
Canada
    Filed       79870600       01/12/1995                  
 
                                        5) ANTI-VIRAL PREPARATIONS AND
SUBSTANCES FOR HUMAN USE
 
                                       
Denmark
    5       Registered     VA 199600283   16/01/1996   VR199600791   02/02/1996
 
                                        5) PREPARATIONS AND SUBSTANCES FOR THE
TREATMENT OF RESPIRATORY DISORDERS
 
                                       
European Union
    5       Registered     000950352     08/10/1998     000950352     31/01/2000
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES
 
                                       
Finland
    5       Registered     T199802485     21/07/1998     214152     14/05/1999
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE; SPECIFICALLY AN ANTI-BACTERIAL
 
                                       
France
    5       Registered     95600030     07/12/1995     95600030     07/12/1995
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE
 
                                       
Greece
    5       Registered     128137     31/01/1996     128137     17/03/1998
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE

 

--------------------------------------------------------------------------------

 

                                          Country     Class(es)   Status    
App. No.   App. Date     Reg. No.   Reg. Date  
Iceland
    5     Registered     351/1996     12/03/1996     1216/1996      
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE, INCLUDING AN ANTI-VIRAL
 
                                       
Ireland
    5     Registered     95/8291     05/12/1995     171292     05/12/1995
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE
 
                                       
Italy
    5     Registered     MI95C012228   06/12/1995     00733838     14/11/1997
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE
 
                                       
Mexico
    5     Registered     260065     17/04/1996     542746     27/02/1997
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE
 
                                       
Monaco
    5     Registered     020534     17/02/1999     99.20373     17/02/1999
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES
 
                                       
Netherlands Antilles
    5     Registered     D-900     24/12/1998     21301     09/02/1999
 
                                        5) PHARMACEUTICAL, VETERINARY AND
SANITARY PREPARATIONS; DIETETIC SUBSTANCES ADAPTED FOR MEDICAL USE, FOOD FOR
BABIES; PLASTERS, MATERIALS FOR DRESSINGS; MATERIAL FOR STOPPING TEETH, DENTAL
WAX; DISINFECTANTS; PREPARATIONS FOR DESTROYING VERMIN; FUNGICIDES, HERBICIDES
 
                                       
Norway
    5     Filed     200112664     25/10/2001            
 
                                        5) ANTI-INFECTIVE PREPARATIONS FOR HUMAN
USE
 
                                       
Norway
    5     Registered     19961885     19/03/1996     182042     15/05/1997
 
                                        5) PHARMACEUTICAL PREPARATIONS FOR THE
TREATMENT OF RESPIRATORY DISORDERS
 
                                       
Portugal
    5     Registered     314842     15/01/1996     314842     14/10/1996
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE
 
                                       
Spain
    5     Registered     2184599     18/09/1998     2184599     05/10/1999
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE

 

--------------------------------------------------------------------------------

 

                                      Country     Class(es)   Status     App.
No.   App. Date     Reg. No.   Reg. Date  
Sweden
    5     Registered     95-14489     13/12/1995     315811     09/08/1996
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE
 
                                       
Switzerland
    5     Registered     00225/1996     16/01/1996     433454     30/12/1996
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE, EXCEPT FOR DISINFECTANT OR
STERILIZATION PURPOSES
 
                                       
United Kingdom
    5     Registered     2041126     13/10/1995     2041126     13/10/1995
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE; BUT NOT INCLUDING ANY SUCH GOODS
BEING DISINFECTANTS OR STERILIZING PREPARATIONS
 
                                       
USA
    5     Registered     75045500     19/01/1996     2281877     28/09/1999
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES FOR HUMAN USE, NAMELY, ANTI- VIRALS AND
ANTI-INFECTIVES   FACTIVE DEV.     Country     Class(es)   Status         App.
No.   App. Date     Reg. No.   Reg. Date  
Andorra
    5     Registered                     14905     14/07/2000
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES
 
                                       
Austria
    5     Registered         AM4560/2000   21/06/2000     195230     04/04/2001
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES
 
                                       
Canada
          Filed         1066283     06/07/2000            
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES, NA MELYANTI-VIRALS AND ANTI-INFECTIVES
 
                                       
European Union
    5     Registered         001721273     23/06/2000     001721273    
29/05/2001
 
                                        5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES
 
                                       
Iceland
    5     Registered         2304/2000     29/06/2000     1149/2000    
01/09/2000

 

--------------------------------------------------------------------------------

 

                                      Country     Class(es)   Status     App.
No.   App. Date     Reg. No.   Reg. Date 5) PHARMACEUTICAL AND MEDICINAL
PREPARATIONS AND SUBSTANCES
 
                                   
Mexico
    5     Registered     444544     28/08/2000     688725     28/02/2001
 
                                    5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS
AND SUBSTANCES
 
                                   
Monaco
    5     Registered     022925     06/07/2001     01.22636     06/07/2001
 
                                    5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS
AND SUBSTANCES
 
                                   
Netherlands Antilles
    5     Registered     D-395     10/07/2000     22486     01/11/2000
 
                                    5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS
AND SUBSTANCES
 
                                   
Norway
    5     Registered     200007413     27/06/2000     205945     07/12/2000
 
                                    5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS
AND SUBSTANCES
 
                                   
Switzerland
    5     Registered     07922/2000     03/07/2000     480382     18/01/2001
 
                                    5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS
AND SUBSTANCES FOR HUMAN USE, EXCEPT FOR DISINFECTANT OR STERILISATION
 
                                   
United Kingdom
    5     Registered     2236543     20/06/2000     2236543     20/06/2000
 
                                    5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS
AND SUBSTANCES FOR HUMAN USE; BUT NOT INCLUDING ANY SUCH GOODS BEING
DISINFECTANTS OR STERILISING PREPARATIONS
 
                                   
USA
    16     Filed     76054224     23/05/2000            
 
                                    16) PRINTED EDUCATIONAL MATERIALS, NAMELY,
BROCHURES AND PAMPHLETS CONCERNING HEALTHCARE RELATED ISSUES AND PHARMACEUTICAL
TREATMENTS FOR INFECTION
 
                                   
USA
    42     Filed     76052305     18/05/2000            
 
                                    42) PROVIDING INFORMATION, VIA GLOBAL
COMPUTER NETWORKS, CONCERNING INFECTIOUS DISEASES, INCLUDING RESPIRATORY TRACT
INFECTIONS AND TREATMENTS THEREFOR
 
                                   
USA
    5     Filed     76054223     23/05/2000            
 
                                    5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS

 

--------------------------------------------------------------------------------

 

FACPAC3 DAY

                                  Country   Class(es)   Status     App. No.  
App. Date   Reg. No.   Reg. Date
USA
  5     Filed     78086704     03/10/2001        
 
                                5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN
TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO ENSURE PATIENT COMPLIANCE WITH
RESPECT TO COMPLETE COURSE OF MEDICATION
 
                               
USA
  5     Filed     78032521     26/10/2000        
 
                                5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN
TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO ENSURE PATIENT COMPLIANCE WITH
RESPECT TO COMPLETE COURSE OF MEDICATION   FACPAC7 AND DEV.   Country  
Class(es)   Status     App. No.   App. Date   Reg. No.   Reg. Date
USA
  5     Filed     78028794     03/10/2000        
 
                                5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN
TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO
ENSURE PATIENT COMPLIANCE WITH RESPECT TO COMPLETE COURSE OF MEDICATION  
FACPAC7 DAY   Country   Class(es)   Status     App. No.   App. Date   Reg. No.  
Reg. Date
USA
  5     Filed     78086707     03/10/2001        
 
                                5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN
TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO ENSURE PATIENT COMPLIANCE WITH
RESPECT TO COMPLETE COURSE OF MEDICATION

 

--------------------------------------------------------------------------------

 

FACPAC7 (STYLIZED)

                                  Country   Class(es)   Status     App. No.  
App. Date   Reg. No.   Reg. Date
USA
  5     Filed     78032520     26/10/2000        
 
                                5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN
TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO ENSURE PATIENT COMPLIANCE WITH
RESPECT TO COMPLETE COURSE OF MEDICATION   FAST. ACTIVE. FACTIVE   Country  
Class(es)   Status     App. No.   App. Date   Reg. No.   Reg. Date
USA
  16     Filed     76092242     19/07/2000        
 
                                16) PRINTED EDUCATIONAL MATERIALS, NAMELY
BROCHURES, PAMPHLETS, AND BOOKLETS CONCERNING RESPIRATORY TRACT INFECTIONS AND
TREATMENTS THEREOF
 
                               
USA
  5     Filed     76092240     19/07/2000        
 
                                5) PHARMACEUTICALS, NAMELY ANTIBIOTICS

FACTIVE.COM
FACTIVE.ORG
FACTIVE.NET
FACTIVE.BIZ
FACTIVE.INFO

 

--------------------------------------------------------------------------------

 

Schedule 9.6
DNA Nanobinder Compounds
DNA nanobinder compounds are compounds that [***]. DNA nanobinder compounds
include, but are not limited to, compounds covered by one or more of the
following GS patent applications
US Patent Application No. 09/808,729, filed March 14, 2001 (PCT equivalent
PCT/US 01/08252, filed March 14, 2001). [GS ref. GSFT005]
US Patent Application No. 10/165856, filed June 6, 2002 (PCT equivalent PCT/US
02/17952, filed June 6, 2002). [GS ref. GSFT007]
US Patent Application No. 10/132,887, filed April 24, 2002 (PCT equivalent
PCT/US 02/13199, filed Apr. 24, 2002). [GS ref. GSFT009]
[***]
US Patent Application No. 10/165,433, filed June 6, 2002 (PCT equivalent PCT/US
02/17953, filed June 6, 2002). [GS ref. GSFT011]
US Patent Application No. 10/165,857, filed June 6, 2002 (PCT equivalent PCT/US
02/17954, filed June 6, 2002). [GS ref. GSFT012]
US Patent Application No. 10/165764, filed June 6, 2002 (PCT equivalent PCT/US
02/17951, filed June 6, 2002). [GS ref. GSFT013]
[***]
[***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

AMENDMENT NO. 1 TO LICENSE AND OPTION AGREEMENT
     THIS AMENDMENT NO. 1 TO LICENSE AND OPTION AGREEMENT (the “Amendment”) is
made and entered into this 21st day of November, 2002 (the “Effective Date”) by
and between GENESOFT PHARMACEUTICALS, INC., a Delaware corporation having its
principal place of business at 7300 Shoreline Court, South San Francisco, CA,
USA 94080 (“GS”) and LG LIFE SCIENCES, LTD., a corporation organized under the
laws of the Republic of Korea having its principal place of business at LG Twin
Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721, Republic of Korea
(“LGLS”). LGLS and GS may be referred to herein individually as a “Party” and
collectively as the “Parties.”
RECITALS
WHEREAS:
LGLS and GS entered into the License and Option Agreement on October 22, 2002
(“License”).
The Parties have identified several typographical errors in Section 8.3 of the
License.
The Parties seek to amend Section 8.3 to reflect the original intent of the
Parties.
NOW, THEREFORE, in consideration of the promises and mutual covenants herein
contained, the Parties agree as follows:
AMENDMENT
1. The Parties agree to delete Section 8.3 in its entirety and to replace it
with the revised Section 8.3 set forth below:
Infringement. If either Party learns of an infringement or threatened
infringement of the LGLS Patents or GLAXO Patents in the Territory in the Field
it shall promptly notify the other Party and shall provide the latter Party with
all information reasonably available to the notifying Party evidencing such
infringement or threatened infringement. Thereafter, the Parties shall in good
faith consult and cooperate in abating such infringement or threatened
infringement.
GS shall have the right, but not the obligation, to bring, defend and maintain
any appropriate suit or action for abatement of the infringement or threatened
infringement of the LGLS or GLAXO Patents in the Territory and in the Field, at
GS’s sole expense. If GS requests LGLS to join GS as a party in such suit or
action, LGLS shall execute all papers and perform such other acts as may be
reasonably requested by GS, at GS’s expense. LGLS shall have the right to
participate in any such suit or action using independent counsel, at its sole
expense. Any amount recovered by GS as a result of such suit or action shall
first be applied to reimburse each of the Parties, pro rata, for any costs or
expenses incurred in bringing, defending and maintaining any such action. The
balance (the “Net Recovery”) shall

 

--------------------------------------------------------------------------------

 

be for the sole benefit of GS. The Net Recovery shall be considered “Net Sales”
with respect to the calendar quarter in which payment to GS was received, and
royalties shall accordingly be paid on the amount of the Net Recovery
exclusively at the rate(s) specified in Section 10.3, below. The Net Recovery
shall be considered “Net Sales” for purposes of calculating annual Net Sales in
accordance with Milestones 3 and 4 and in Section 10.2, below.
     If GS fails to initiate suit or action within 90 days after first notice of
infringement or threatened infringement of the LGLS Patents or the GLAXO
Patents, or if having initiated such suit or action it thereafter diligently
fails to prosecute such suit or action, LGLS shall have the right, but not the
obligation, to bring, defend and maintain any appropriate suit or action for
abatement of the infringement or threatened infringement, at LGLS’s sole
expense. If LGLS requests GS to join LGLS as a party in such suit or action, GS
shall execute all papers and perform such other acts as may be reasonably
requested by LGLS, at LGLS’s expense. GS shall have the right to participate in
any such suit or action using independent counsel, at its sole expense. Any
amount recovered by LGLS as a result of such suit or action shall first be
applied to reimburse each of the Parties, pro rata, for any costs or expenses
incurred in bringing, defending and maintaining any such action. The balance
shall be divided equally between the Parties. The amount of any recovery, net of
the amounts necessary to reimburse the Parties as provided above shall be
considered “Net Sales” for purposes of calculating annual Net Sales in
accordance with Milestones 3 and 4 and in Section 10.2, below. If such recovery
is apportioned by the court such that portions thereof are attributed to
infringing activity in different calendar years, or if such apportionment of the
recovery can otherwise be readily ascertained, then such apportionment shall
govern as to the calendar year(s) in which Net Sales shall be deemed to have
occurred for purposes of such Milestones. Otherwise, the amount of such recovery
shall be apportioned equally over the number of calendar years in which
infringement was found to have occurred (or in the event of a settlement, over
the number of calendar years in which it was alleged to have occurred).
2. Except as is expressly provided herein, the License shall remain in full
force and effect.
IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by the proper officers as of the Effective Date.

                  GENESOFT PHARMACEUTICALS, INC.       LG LIFE SCIENCES, LTD.
 
               
By:
  /s/ David B. Singer       By:   /s/ Soon-Jae Park
 
               
 
               
Its:
                 CEO       Its:                  Vice President
 
               

 

--------------------------------------------------------------------------------

 

AMENDMENT NO. 2 TO THE
LICENSE AND OPTION AGREEMENT
     THIS AMENDMENT NO. 2 TO THE LICENSE AND OPTION AGREEMENT (“Amendment”) is
made and entered into as of December 6, 2002, by and among GeneSoft
Pharmaceuticals, Inc., a Delaware corporation (the “GS”), and LG Life Sciences,
Ltd., a corporation organized under the laws of the Republic of Korea (“LGLS”).
Capitalized terms not otherwise defined in this Amendment shall have the meaning
given them in that certain License and Option Agreement by and among GS and LGLS
dated as of October 22, 2002 (the “Agreement”).
RECITALS
     WHEREAS, each of GS and LGLS deem it advisable to enter into this Amendment
to amend certain of the payment obligations under the Agreement;
     NOW, THEREFORE, in consideration of the mutual promises and covenants
hereinafter set forth, and certain other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, GS and LGLS hereby
agree as follows:
     1. Section 10.1 of the Agreement shall be amended and restated in its
entirely to read as follows:
     “License Fee. Within 45 days following the Effective Date GS shall: (i) pay
to LGLS a non-refundable license fee of $2.5 million, (ii) issue to LGLS a
promissory note with a principal amount of three million dollars ($3,000,000) in
the form attached hereto as Exhibit A (the “Note”) and (iii) deliver to LGLS
4,749,659 fully-paid up and non-assessable shares of GS common stock (the
“Shares”). GS represents and warrants that the Shares represent 14.0 percent of
the total equity of GS on October 22, 2002, calculated on a fully diluted basis.
The rights and further characteristics of the Shares (including, without
limitation, certain anti-dilution rights) are as set forth in the Stock Purchase
Agreement and related documents attached hereto as Schedule 10.1.”
     2. Section 13.2 of the Agreement shall be amended and restated in its
entirety to read as follows:
     “Termination for Material Breach. Subject to the last sentence of this
Section 13.2, if either Party materially breaches this Agreement at any time,
which breach is not cured within 30 days of notice thereof from the
non-breaching Party, the non-breaching Party shall have the right to terminate
this Agreement on notice to the Party in breach following the expiration of such
cure period; provided, however, that if the Party alleged to be in breach shall
have invoked the dispute resolution mechanism of Article 15 prior to the
expiration of such cure period then termination shall not be effective until the
sooner of abandonment of such proceedings by the Party alleged to be in breach
or completion of the dispute resolution proceedings and a non-appealable finding
in arbitration in favor of the non-breaching Party. Notwithstanding the
foregoing, if GS fails to make any payment of principal and interest required by
the terms of the Note on the date on which

 

--------------------------------------------------------------------------------

 

such payment is due, which failure (a “Payment Failure”) is not cured within 2
business days of notice thereof from LGLS, LGLS shall have the right to
terminate this Agreement on notice to GS following the expiration of such cure
period and GS shall have no right to invoke the dispute resolution mechanism set
forth in Article 15 hereof with regard to or in connection with such Payment
Failure.”
     3. Section 15.1 of the Agreement shall be amended and restated in its
entirety to read as follows:
     “Disputes. Except as set forth in Section 13.2 above, as amended, all
disputes arising between the Parties hereunder or with respect to this Agreement
shall be resolved solely as provided in this Article 15. Any such dispute that
the Parties are unable to resolve directly may be referred by either Party to
the Steering Committee for resolution. If the Steering Committee is unable to
resolve such dispute within 30 days after referral, either Party may, on notice
to the other, have such dispute referred to the CEOs of LGLS and GS for
attempted resolution by good faith negotiation. If such individuals are unable
to resolve such dispute within 30 days after referral, then either Party may
thereafter seek to resolve the dispute through arbitration in accordance with
the Rules of Arbitration of the International Chamber of Commerce by one or more
arbitrators appointed in accordance with such rules, in English. The place of
arbitration shall be London, England.”
     4. This Amendment shall be governed by and construed under the substantive
laws of the State of California, without regard to conflicts of law principles.
     5. This Amendment may be executed in two or more counterparts, each of
which shall be deemed an original, but all of which together shall constitute
one and the same instrument.
     6. This Amendment, when executed by GS and LGLS, shall be binding upon each
of GS and LGLS and each of their successors and assigns.
     7. The Agreement and this Amendment and the documents referred to therein
and herein constitute the entire agreement between the parties hereto pertaining
to the subject matter thereof and hereof.
     8. Except as modified hereby, all other terms and provisions of the
Agreement are hereby ratified and confirmed in all respects.

 

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
first above written.

               

GENESOFT PHARMACEUTICALS, INC.
        By:   /s/ David B. Singer         Name: David B. Singer        Title:
Chairman and CEO        Address: 7300 Shoreline Court
South San Francisco, CA, USA 94080

LG LIFE SCIENCES, LTD.
        By:   /s/ Heung Joon Yang         Name: Heung Joon Yang        Title:
President and CEO        Address: LG Twin Tower
20 yoido-dong, Youngdungopo-gu
Seoul, 150-721, Republic of Korea
   

 

--------------------------------------------------------------------------------

 

AMENDMENT NO. 3 TO LICENSE & OPTION AGREEMENT
     THIS AMENDMENT NO. 3 TO LICENSE & OPTION AGREEMENT (“the Amendment”) is
made and entered into this 16th day of October, 2003 (the “Amendment Effective
Date”) by and between GENESOFT PHARMACEUTICALS, INC., a Delaware corporation
having its principal place of business at 7300 Shoreline Court, South San
Francisco, CA, USA 94080 (“GS”) and LG LIFE SCIENCES, LTD., a corporation
organized under the laws of the Republic of Korea, having its principal place of
business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721,
Republic of Korea (“LGLS”). LGLS and GS may be referred to herein individually
as a “Party” and collectively as the “Parties.”
RECITALS
WHEREAS:
LGLS and GS entered into the License and Option Agreement on October 22, 2002
(“License Effective Date”) and amended said License and Option Agreement by
Amendment No. 1 thereto on November 21, 2002 and Amendment No. 2 thereto on
December 6, 2002 (as amended, the “License”);
The License sets forth the terms by which LGLS grants to GS the sole and
exclusive license to use, import, package, sell, and offer for sale Products
within the Field in the Territory, and the exclusive right to use the Trademarks
in the Territory in conjunction with the use or sale of the Products;
The License further sets forth the terms by which LGLS agrees to supply to GS
Final Product or Active Pharmaceutical Ingredient (“API”); and
The Parties now seek to amend the License to conform its terms to the terms by
which Final Product is to be supplied to LGLS under the supply agreement entered
into between LGLS and SB PHARMCO PUERTO RICO, INC. and its affiliates (“GLAXO”
or “GSK Supply Agreement”) on February 26, 2003 and to revise certain other
terms set forth herein.
NOW, THEREFORE, in consideration of the premises and mutual covenants herein
contained, the Parties agree as follows:
1. Section 1.13 shall be deleted in its entirety and replaced with the following
revised paragraph:
     “Fully Burdened Cost of Manufacture” means: [***].
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

1

--------------------------------------------------------------------------------

 

2. Section 1.32 shall be revised to define “Product” as follows:
     “Product” means any compound containing Gemifloxacin as an active
ingredient, including API and Final Product.
3. A new Section 1.39 shall be inserted to define “Obsolete Materials” as
follows:
     “Obsolete Materials” mean any Materials ordered at the request of GS that
will become obsolete as a result of (i) the expiration or termination of the GSK
Supply Agreement or (ii) changes in Final Product Specifications and/or the
changes in labeling and packaging.
4. A new Section 1.40 shall be inserted to define “Materials” as follows:
     “Materials” mean all material except API used in the manufacture, storage,
and shipment of Final Products.
5. A new Section 1.41 shall be inserted to define “Long Lead Time Materials” as
follows:
     “Long Lead Time Materials” means [***].
6. A new Section 1.42 shall be inserted, which defines “Second Source Supplier”
as follows:
     “Second Source Supplier” means a contract manufacturer, which is retained
to produce API in the event of an interruption to LGLS’s supply, and which has
an existing manufacturing plant suitable for the production of API.
7. A new Section 1.43 shall be inserted, which defines “Adverse Event” as
follows:
     “Adverse Event” shall have the meaning ascribed to the term “adverse drug
experience” by the FDA in 21 CFR 310.305(b).
8. A new Section 1.44 shall be inserted, which defines “Serious Adverse Event”
as follows:
     “Serious Adverse Event” shall have the meaning ascribed to the term
“serious adverse drug experience” by the FDA in 21 CFR 310.305(b).
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

2

--------------------------------------------------------------------------------

 

9. A new Section 1.45 shall be inserted to define “Non-Commercial Use” as
follows:
     “Non-Commercial Use” means any use of a Product by GS, which is
non-commercial in nature, including but not limited to the distribution of
samples, use in clinical trials, pre-Launch compassionate use, and any other use
from which GS derives no direct commercial benefit.
10. Section 5.1 shall be deleted in its entirety and replaced with the following
revised text:
     5.1 General.
          (a) Intent of the Parties. The intent of the Parties is that:
     (i) between the Effective Date and until the expiration or termination of
the GSK Supply Agreement, (including any renewal periods thereof, the “Initial
Period”), LGLS shall supply to GS, and GS shall exclusively purchase from LGLS,
all of GS’s requirements of Final Product according to the Final Product
Specifications, and
     (ii) following the expiration or termination of the Initial Period and
until the expiration or termination of this Agreement (“Remaining Period”), LGLS
shall supply to GS, and GS shall exclusively purchase from LGLS, all of GS’s
requirements of API in bulk form according to the API Specifications.
          (b) Terms and Conditions. The terms and conditions by which LGLS shall
supply GS and GS shall purchase from LGLS Final Product or API, as applicable,
pursuant to Section 5.1(a) are set forth in this Article 5.
          (c) Manufacturing Site Change.
     (i) Prior to the expiration or termination of the Initial Period, GS shall
          (A) select and contract with a Third Party to conduct final finish and
fill operations at a facility operated by such Third Party during the Remaining
Period to produce Final Product from API supplied by LGLS pursuant to
Section 5.l(a)(ii); provided, however, that GS shall have no liability to LGLS
for costs or damages resulting from the performance or failure of performance by
such Third Party, except to the extent that such costs or damages result from
the negligence or willful misconduct of GS, and the agreement with such Third
Party shall contain provisions, enforceable by LGLS as a third party
beneficiary, pursuant to which such Third Party agrees to indemnify and hold
LGLS harmless from and against claims made against LGLS as a result of the
negligence or willful misconduct of such Third Party; and
          (B) obtain all necessary Regulatory Approvals for the engagement of
such Third Party to so produce such Final Product.

3

--------------------------------------------------------------------------------

 

     (ii) The commencement of such finish and fill operations at such facility
operated by such Third Party in accordance with such Regulatory Approvals so
obtained is referred to in this Amendment as the “Manufacturing Site Change”.
     (iii) Within thirty (30) days (the “Plan Preparation Period”) following the
execution of this Amendment, GS shall, subject to the approval of LGLS, which
approval shall not be unreasonably withheld, complete the preparation of a plan
(as so completed and approved, the “Manufacturing Site Change Plan”) for
effecting the Manufacturing Site Change and obtaining the Regulatory Approvals
for doing so. Promptly following the Plan Preparation Period, GS shall begin
implementation of the Manufacturing Site Change Plan. Until such time as the
Manufacturing Site Change occurs, GS shall advise LGLS in writing no less
frequently than once per month as to the status of the implementation of the
Manufacturing Site Change Plan.
     (iv) GS shall use [***] to cause the Manufacturing Site Change to occur on
or before the date of expiration or termination of the Initial Period, and LGLS
shall provide such assistance as GS reasonably requests to cause such
Manufacturing Site Change to so occur.
          (d) Assured Inventory Levels.
          If, at any time during the Initial Period, GS and LGLS mutually agree
in their reasonable discretion that it is unlikely that the Manufacturing Site
Change will occur on or before the date of expiration or termination of the
Initial Period and/or that the actual capacity of the facility contemplated by
the Manufacturing Site Change will be less than its rated capacity and/or that
the delivery times of Final Product from such contemplated facility will not be
in accordance with the scheduled delivery times previously agreed by GS and
LGLS, and that a shortage of Final Product inventory will thereby occur in
respect of projected sales of Final Product following such date as set forth in
GS’s then most recent forecast (the amount of such shortage as initially
forecasted and adjusted from time to time in accordance with the procedures set
forth below being the “Missed Manufacturing Site Change Shortage”), then LGLS
shall use commercially reasonable efforts to undertake any combination of the
following actions in order to avoid any such shortage:
     (i) (A) negotiate with GLAXO to extend the term of the GSK Supply Agreement
and (B) so extend such term, provided that if such term is so extended, then the
Initial Period shall be extended for the same length of time as the GSK Supply
Agreement is so extended,
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

4

--------------------------------------------------------------------------------

 

     (ii) (A) cause GLAXO to increase its production of Finished Product during
the Initial Period by the amount of the Missed Manufacturing Site Change
Shortage and (B) require GS to purchase such Missed Manufacturing Site Change
Shortage according to the terms and conditions of this Article 5.
     The Missed Manufacturing Site Change Shortage shall be initially calculated
before June 30, 2004 by forecasting the combined influence of the anticipated
delay or supply shortfall and other related factors agreed to by the parties.
Thereafter, the Missed Manufacturing Site Change Shortage shall be adjusted from
time to time as LGLS and GS may agree to account for the actual experience with
such factors through the passage of time and revisions to the initial
assumptions of the Parties regarding the extent and duration of the problem.
11. Section 5.2 shall be deleted in its entirety and replaced with the
following:
     Supply Price.
     (i) The supply price for Final Product provided by LGLS to GS during the
Initial Period until June 30, 2004, shall be equal to [***] percent of LGLS’s
Fully Burdened Cost of Manufacture for Final Product supplied thereunder, which
shall [***] $[***] per finished tablet, [***] $[***] per finished tablet. Final
Product provided by LGLS to GS for Non-Commercial Use shall be [***] provided,
however, that the prices of Final Product shall [***] per finished tablet [***].
     (ii) The supply price for Final Product provided by LGLS to GS, following
June 30, 2004 and the expiration or termination of any renewal or extension
periods to the GSK Agreement, shall be equal to [***] percent of LGLS’s Fully
Burdened Cost of Manufacture for Final Product supplied thereunder, which shall
[***] $[***] per finished tablet, [***]. The supply price for Final Product
provided by LGLS to GS for Non-Commercial Use shall be [***].
     (iii) The supply price for API provided by LGLS to GS during the Remaining
Period, shall be equal to [***] percent of LGLS’s Fully Burdened Cost of
Manufacture for API supplied thereunder, which shall in no event [***] $[***]
per kg [***] $[***] per kg. In addition, (i) if GS purchases more than [***] kg
of API in any calendar year, the $[***] supply price shall be reduced by $[***]
per kg for each additional [***] kg of API purchased in such year in excess of
[***] kg, and (ii) the bulk supply price (including the [***]price) shall be
renegotiated in good faith in the event that GS purchases more than [***] kg of
API in any 12 month period. In the event that there is an interruption in LGLS’s
supply of API for any reason, which continues uncured for more than [***], then
GS shall have the right to procure an alternative source of supply for the
duration of the interruption (“Second Source”). Notwithstanding the foregoing,
GS shall only have the right to procure a Second Source in the event that the
interruption arises with respect to a supply order quantity, which is less than
or equal to [***] percent of the quantity anticipated by GS in the most recently
updated forecast, immediately preceding the submission of the supply order. LGLS
shall have the opportunity to resume its
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

5

--------------------------------------------------------------------------------

 

supply of API upon the elimination or resolution of the events causing the
interruption; provided that, however, LGLS shall not resume its role as the
exclusive supplier until GS is able to negotiate a termination of its purchase
obligations with the Second Source Supplier. LGLS shall be responsible for any
expenses incurred in excess of the price set forth herein, including any
expenses related to the termination of any agreement with the Second Source
Supplier; provided, however, that LGLS shall not be responsible for such excess
expenses to the extent that such interruption is due to the negligence or
willful malfeasance of GS.
12. Section 5.4 shall be deleted in its entirety and replaced with the
following:
     Specifications.
     5.4.1 LGLS warrants that the Final Product it supplies hereunder during the
Initial Period shall meet the Final Product Specifications, and shall have been
manufactured in accordance with all applicable laws and regulations including,
without limitation, then-current Good Manufacturing Practice (“cGMP”) standards.
LGLS further warrants that the API comprising Final Product supplied hereunder
and the API supplied hereunder in bulk form shall meet the API Specifications.
     5.4.2 If, during the Initial Period, GS requests LGLS to make changes to
the Final Product Specifications or the labeling and packaging, then LGLS shall
initiate such changes and GS shall be responsible for the costs incurred by LGLS
in making such change, including without limitation, the cost of any change
requested in order to maintain the Specifications or packaging and labeling in
conformity with the Final Product’s drug application filed with the FDA,
applicable cGMPs, and applicable regulatory acts or legal requirements
(including, without limitation, with respect to any of the materials used in the
Final Product), not generally applicable to the manufacture of pharmaceutical
products or types of dosage forms (e.g., blister packs or sterile vials). GS
retains the right and responsibility for Regulatory Approvals of the Final
Product Specifications.
     5.4.3 During the Initial Period, GS shall provide to LGLS, at GS’s sole
cost and expense, camera-ready artwork for the Final Product Specifications as
approved for each market, relating to graphics. GS shall bear all artwork costs
and expenses incurred as a result of any revision to the Final Product
Specifications.
     5.4.4 During the Initial Period, GS shall pay for Obsolete Materials in the
amount of [***]; provided, however, that to the extent that such Obsolete
Materials are solely attributable to LGLS’s ordering quantities of materials in
excess of quantities necessary to fulfill volumes projected in the Nonbinding
Forecast, GS shall not be required to pay for such Obsolete Materials.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

6

--------------------------------------------------------------------------------

 

13. Section 5.5 shall be deleted in its entirety and replaced with the following
paragraphs set forth below:
     Purchase Order and Forecasting.
     5.5.1 During the Initial Period, GS shall provide to LGLS a nonbinding
projection of [***] of the anticipated volumes of each Final Product for each
market to be ordered by GS pursuant to Section 5.5.3 below. GS shall provide
such projections to LGLS on [***] during the Initial Period; provided that GS
shall provide to LGLS the first such report no later than the execution of this
Amendment No. 3.
     5.5.2 On or before March 1, 2003, GS shall place a firm order for the
amount of Final Product produced to Final Product Specifications which
incorporates [***] of API. With GS’s permission, LGLS may request that GLAXO
order Long Lead Time Materials to fulfill such firm order, subject to GS
obtaining any required Regulatory Approval from the FDA. LGLS shall have no
responsibility for lost Long Lead Time Materials due to FDA delays or
requirements, and GS shall pay for such Long Lead Time Materials regardless of
any FDA delay or requirement relating to the Final Product.
     5.5.3 All subsequent supply orders for the delivery of Final Product,
submitted prior to the expiration or termination of Initial Period, shall
specify the aggregate volumes of Final Product ordered for each market and the
delivery date, and each such supply order shall be submitted to LGLS not less
than [***] prior to the delivery date on which GS has requested shipment
pursuant to such supply order; provided that, however, in the event that GS
purchases long lead time materials (as defined in Article I and Section 2.4(c)
of the GSK Supply Agreement), then such supply orders shall be submitted to LGLS
not less than [***] prior to the requested delivery date for each such supply
order. GS shall submit [***] supply orders for the aggregate Final Product
volumes for each market, which volumes shall be equivalent to the minimum order
quantity for each Final Product in a particular market. The minimum order
quantity shall be [***].
     5.5.4 LGLS shall not be obligated to produce more than [***] of Final
Product (totaling approximately [***] tablets) in 2003, unless on or before
[***], GS submits an additional supply order for Final Product to be
manufactured in 2003, for delivery on or before [***]. Such order shall be for
[***] of Final Product.
     5.5.5 Upon the commencement of the Remaining Period, GS shall provide to
LGLS a non-binding forecast of the quantities of API to be manufactured during
the [***] period. This forecast shall be updated by GS on or before [***] of
each [***] for the following [***]. Within [***] after the receipt of such
forecast, LGLS shall provide to GS a good faith non-binding forecast of the
Fully Burdened Cost of Manufacture of the supply of API forecasted by GS for the
[***].
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

7

--------------------------------------------------------------------------------

 

     5.5.6 Notwithstanding the foregoing, GS shall use [***] to provide LGLS
with supply orders for the delivery of Final Product or, upon the commencement
of the Remaining Period, API, within the following dates:
     In [***], GS shall provide its supply orders for delivery during the [***];
     In [***], GS shall provide its supply orders for delivery during the [***];
     In [***], GS shall provide its supply orders for delivery during the [***];
and
     In [***], GS shall provide its supply orders for delivery during the [***].
     GS shall issue each supply order to LGLS at least [***] prior to the
delivery date on which GS has requested LGLS to ship pursuant to each such
supply order.
14. Section 5.6 shall be deleted in its entirety and replaced with the following
paragraph:
     Delivery.
     5.6.1 During the Initial Period, all Final Product shall be shipped FCA
GLAXO’s manufacturing facility located at Road 172 Km 9.1, Bo. Certenejas,
Cidra, Puerto Rico (as defined in the INCOTERMS, 2000 edition, published by the
International Chamber of Commerce, ICC Publication 560), except with regard to
title and risk of loss. LGLS shall arrange for pickup from the facility by a
freight forwarder, and title and risk of loss with respect to Final Product
shall pass to GS upon pick up of the Final Product by the carrier or freight
forwarder at the facility. LGLS agrees, in accordance with GS’s reasonable
written instructions, to arrange for shipping and insurance to such locations as
are requested by GS, at the expense of GS. During the Remaining Period, the
Parties agree that API shall be shipped Ex Works (“EXW”), as such term is
defined in INCOTERMS 2000, in which case, title and all risks of loss or damage
to the API shall remain with LGLS until the API is delivered to the carrier for
shipment at the EXW point, at which time title and all risks of loss or damage
shall transfer to GS. During the term of this Agreement, GS shall promptly
reimburse LGLS for the cost of any duties incurred in conjunction with the
delivery of the Final Product, and any insurance purchased at the request of GS
to cover any risks of loss to GS arising from shipment.
     5.6.2 The initial supply order for Final Product shall be delivered by
August 30, 2003, and the delivery date for all subsequent supply orders shall be
the later to occur of (a) the date set forth in the applicable supply order, or
(b) the date that is [***] after LGLS’s receipt of the applicable supply order;
provided that, however, the delivery of Product purchased under the initial
Product supply order shall be contingent upon (i) preliminary indication of
artwork and NDC number for GS on or before April 4, 2003, (ii) LGLS obtaining
NDA approval for the Product from the FDA on or before July 1, 2003; and
(iii) GS delivering final artwork specifications to LGLS on or before July 1,
2003. In the event of any delays regarding the delivery of the initial Product
supply order, which arise as a result of the failure to meet any of
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

8

--------------------------------------------------------------------------------

 

the foregoing contingencies, LGLS shall not be obligated to deliver the initial
Product purchase order until November 15, 2003. Products shall be delivered in
the volumes set forth on the applicable supply order, plus or minus [***] due to
normal production variances and waste.
     5.6.3 GS shall pay and otherwise be responsible for all applicable sales
taxes in connection with any payment made by GS related to Final Product and/or
API by LGLS pursuant to this Agreement.
15. Sections 5.7.1, 5.7.2, 5.7.3, and 5.8.2 shall be amended to insert “or API
Specifications, as applicable” immediately following the words “Final Product
Specifications, as applicable to whether Final Product or API is being sold.”
16. Sections 5.9.1 and 5.9.2 shall be deleted in their entirety.
17. Section 5.9.3 shall be amended to delete both references “to GS’s premises.”
18. Section 5.9.4 shall be amended to delete “pursuant to this Article 5” and to
replace it with the phrase “pursuant to Section 5.5.2 and delivered to GS
pursuant to Section 5.6.2.”
19. A new Section 5.9.5 shall be added, which shall state as follows:
     During the Initial Period, on or before March 15, 2004, LGLS shall provide
to GS an accounting and reconciliation statement, showing the difference between
LGLS’s actual cost of manufacture and supply of the Final Product and the
estimated cost invoiced and paid by GS for such manufacture and supply during
the period beginning on the Effective Date and continuing until December 31,
2003. In the event that LGLS’s actual cost for such manufacture and supply
exceeds the cost paid by GS during such period, LGLS shall invoice GS for the
difference in cost, and GS shall pay such invoice within [***] after receipt
thereof. In the event that the cost paid by GS for such manufacture and supply
during such period exceeds LGLS’s actual cost, LGLS shall credit GS for such
difference and apply such credit toward future costs. LGLS shall provide a
similar accounting and reconciliation statement within [***] following the
expiration or termination of the Initial Period for the period beginning
January 1, 2004 and ending on the date of the expiration or termination of the
Initial Period, and LGLS shall invoice or reimburse GS for any difference in
costs, accordingly. Upon the reasonable request of GS within [***] following
GS’s receipt of an accounting and reconciliation statement under this
Section 5.9.5, LGLS shall allow GS to review LGLS’s documentation to support the
accounting and reconciliation statement. Notwithstanding the foregoing, any
reconciliation of costs by GS under this Section 5.9.5 shall be subject to the
terms and conditions of this Agreement, including Section 5.2
20. Section 5.10 shall be deleted and revised as follows:
     Release Certificate. LGLS shall provide to GS with each delivery of Final
Product or API a Release Certificate, a Certificate of Analysis, and a
Certificate of Compliance signed by a
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

9

--------------------------------------------------------------------------------

 

responsible person duly authorized by LGLS or GLAXO to certify the quality of
Final Product or API delivered, each in a form reasonably acceptable to GS. The
Release Certificate shall, inter alia, state that the results of the agreed upon
testing procedures are in compliance with the Final Product or API
Specifications as well as any additional applicable requirements of Regulatory
Authorities. Without limiting the foregoing, unless expressly agreed by the
Parties all Final Products or API supplied hereunder shall meet all release
criteria established by the FDA or EMEA with respect to such Final Product or
API.
21. Section 5.11 shall be revised to replace the term “Final Product” with the
term “API.”
22. A new Section 5.13 shall be added, along with a new Schedule 10.2 attached
hereto, which shall state as follows:
     Quality. The Parties have agreed to adopt certain manufacture and control
procedures for API Production, which are set forth in Schedule 10.2 attached
hereto.
23. A new Section 7.1.3 shall be added to state as follows:
     During the Initial Period and prior to the release of Final Products, LGLS
shall ensure that the Final Product is tested in accordance with the testing
procedures outlined in the Specifications and shall provide to GS a Certificate
of Analysis and batch summary for each batch of the Final Products.
24. Section 7.4 shall be amended to add to the end of the paragraph the
following:
     Upon receipt of any information from GLAXO regarding an Adverse Event, LGLS
shall provide, or cause GLAXO to provide, written notice to GS of the occurrence
of the Adverse Event as soon as possible, but (i) no later than twenty-four
(24) hours following its receipt of information concerning a possible Serious
Adverse Event and (ii) no later than forty-eight (48) hours following its
receipt of information of a possible Adverse Event that is not a Serious Adverse
Event.
25. Section 7.5.5 shall be amended to add the following:
     LGLS shall further have the obligation to immediately notify GLAXO of the
recall, and to cause GLAXO to cooperate with LGLS and GS in administering the
recall as the Parties require.
26. A new Section 7.7 shall be inserted, which states the following:
     Deviation Reports. If during the manufacture or other handling of a Final
Product by GLAXO, (i) the process or analytical limits vary from the typical or
established report ranges, release guidelines, or release limits,
(ii) Specifications or cGMPs were not followed in the production of the
Products, or (iii) the Products fail to conform to Specifications, then LGLS
shall provide to GS, or cause GLAXO to provide to GS, the written report
detailing such deviation (“Deviation Report”) prepared by GLAXO, along with all
supporting documentation. The Deviation Report shall be attached to, and shall
accompany, copies of all relevant batch records. Any batch or shipment of Final
Product that is the subject of a nonconformity or a

10

--------------------------------------------------------------------------------

 

Deviation Report shall not be shipped to GS, unless otherwise directed by GS,
or, if such Final Product was shipped and is held in stock by GS, then it shall
be given a “Hold” or “Unpassed” status and shall not be released into the passed
inventory of GS until GS has completed any investigations related to such
Products and approved the disposition of the Final Product. GS shall provide
written instructions to LGLS regarding the destruction of any nonconforming
Final Products. The cost of destruction and the replacement cost of Final
Product [***].
27. A new Section 7.8 shall be inserted, which states the following:
     Product Complaint. LGLS shall provide, or cause GLAXO to provide prompt
written notification to GS of, any complaints of which GLAXO becomes aware
relating to any Final Product, including, without limitation, those complaints
which implicate GLAXO’s manufacturing or other processes.
28. A new Section 7.9 shall be inserted, which states the following:
     Regulatory Inspections. During the period that any Glaxo facility is
engaged in the manufacture, packaging, generation, storage, testing, treatment,
holding, transportation, distribution, release, or other handling or receiving
of Final Product distributed or to be distributed by GS and LGLS is notified
that any such Final Product or facility will be subject to inspection, LGLS
shall promptly advise, or cause GLAXO to advise, GS of such inspection.
29. A new Section 7.10 shall be inserted which states the following:
     Audit and Inspection. During the period that any Glaxo facility is engaged
in the manufacture, packaging, generation, storage, testing, treatment, holding,
transportation, distribution, release, or other handling or receiving of Final
Products distributed or to be distributed by GS, in the event of an Adverse
Event associated with any Final Product or any proposed or actual inspection by
the FDA or other governmental body of such Glaxo facility, or upon request by GS
reasonably related to compliance by such Glaxo facility with applicable cGMP
standards, LGLS shall promptly arrange for an audit and inspection of the
portions of such GLAXO facility or facilities. All audits shall be conducted by
an independent third party, who is selected by LGLS upon the prior written
approval of GS, and copies of all audit results shall be provided to GS, which
results shall be treated as GLAXO confidential information, pursuant to the
Confidential Disclosure Agreement, dated January 24, 2003 and entered into
between GLAXO and GS. GS shall be responsible for the cost of all audits
conducted as a result of a GS request; provided, however, if the audit reveals
any items of material non-compliance with applicable cGMP standards which is
found to have caused such Adverse Event, then LGLS shall be responsible for the
payment of all costs of such audit.
30. A new Section 7.11 shall be inserted, along with a new Schedule 10.3
attached hereto, which shall state as follows:
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

11

--------------------------------------------------------------------------------

 

     FDA Guaranty. LGLS has provided to GS a guaranty, attached hereto as
Schedule 10.3, that the Products supplied to GS shall not be adulterated or
misbranded as of the date of shipment or delivery so as to thereby not be in
compliance with the Federal Food, Drug, and Cosmetic Act.
31. The phrase “Notwithstanding Section 8.1 hereinabove” should be inserted at
the beginning of Section 8.2.
32. Sections 8.3, 8.4 and 8.5 shall be deleted and revised as follows:
     8.3 Infringement or Misappropriation of Intellectual Property Rights. If
either Party learns of an infringement or threatened infringement of the LGLS
Patents or GLAXO Patents, or of a misappropriation of LGLS Know-How, GLAXO
Know-How or GS Know-How, in any state or country of the Territory in which
exists a colorable cause of action for infringement, including patent
infringement or provisional rights, or for misappropriation of trade secrets, it
the Party first learning of or discovering the alleged infringement or
misappropriation shall promptly notify the other Party in writing and shall
provide the other Party with all information reasonably available to the
notifying Party evidencing such infringement or threatened infringement, or of
such misappropriation. Upon such notice, the parties shall in good faith consult
in an effort to determine whether a reasonably prudent owner or licensee of
intellectual property would institute litigation to enforce the rights at issue
in light of all relevant business, economic, and legal factors (including the
projected cost of litigation, the likelihood of success on the merits, the
probable amount of any damage award, the prospects for satisfaction of any
judgment against the alleged infringer or other potential defendant, the
possibility of counterclaims against LGLS or GS, the diversion of LGLS’s or GS’s
human and economic resources, the impact of any possible adverse outcome on LGLS
or GS and the effect any publicity might have on LGLS’s or GS’s respective
reputations and goodwill).
     If GS has standing, GS shall have the right, but not the obligation, to
bring, defend and maintain any appropriate suit or action, or commence
settlement negotiations with an alleged infringer, or other potential defendant,
for abatement of the infringement or threatened infringement of the LGLS or
GLAXO Patents, or of the misappropriation of LGLS Know-How, GLAXO Know-How or GS
Know-How, in any state or country of the Territory, at GS’s sole expense. If GS
lacks such standing and requests LGLS to join GS as a party in such suit or
action in order for GS to bring such an action, LGLS shall execute all papers
and perform such other acts as may be reasonably requested by GS, at GS’s
expense. LGLS shall have the right to participate in any such suit or action
using independent counsel, at its sole expense. Any amount recovered by GS as a
result of such suit or action shall first be applied to reimburse each of the
Parties, pro rata, for any costs or expenses incurred in bringing, defending and
maintaining any such action. The balance (the “Net Recovery”) shall be for the
sole benefit of GS. The Net Recovery shall be considered “Net Sales” with
respect to the calendar quarter in which payment to GS was received, and
royalties shall accordingly be paid on the amount of the Net Recovery
exclusively at the rate(s) specified in Section 10.3, below. The Net Recovery
shall be considered “Net Sales” for purposes of calculating annual Net Sales in
accordance with Milestones 3 and 4 in Section 10.2, below.

12

--------------------------------------------------------------------------------

 

     If GS fails to initiate suit or action, or commence settlement negotiations
with an alleged infringer, or other potential defendant, within 90 days after
first notice of infringement or threatened infringement of the LGLS Patents or
the GLAXO Patents, or of a misappropriation of LGLS Know-How, GLAXO Know-How or
GS Know-How or if having initiated such suit or action it thereafter diligently
fails to prosecute such suit or action, LGLS shall have the right, but not the
obligation, to bring, defend and maintain any appropriate suit or action for
abatement of the infringement or threatened infringement, or of a
misappropriation of LGLS Know-How, GLAXO Know-How or GS Know-How, at LGLS’s sole
expense. If LGLS requests GS to join LGLS as a party in such suit or action, GS
shall execute all papers and perform such other acts as may be reasonably
requested by LGLS, at LGLS’s expense. GS shall have the right to participate in
any such suit or action using independent counsel, at its sole expense. Any
amount recovered by LGLS as a result of such suit or action shall first be
applied to reimburse each of the Parties, pro rata, for any costs or expenses
incurred in bringing, defending and maintaining any such action. The balance
shall be divided equally between the Parties. The amount of any recovery, net of
the amounts necessary to reimburse the Parties as provided above shall be
considered “Net Sales” for purposes of calculating annual Net Sales in
accordance with Milestones 3 and 4 in Section 10.2, below. If such recovery is
apportioned by the court such that portions thereof are attributed to infringing
activity in different calendar years, or if such apportionment of the recovery
can otherwise be readily ascertained, then such apportionment shall govern as to
the calendar year(s) in which Net Sales shall be deemed to have occurred for
purposes of such Milestones. Otherwise, the amount of such recovery shall be
apportioned equally over the number of calendar years in which infringement was
found to have occurred (or in the event of a settlement, over the number of
calendar years in which it was alleged to have occurred).
     8.4 Third Party Claims. In the event a Third Party asserts a cause of
action concerning alleged infringement of the Third Party’s patent by a Party,
or in the event a LGLS Patent or GLAXO Patent is the subject of a legal action
by a Third Party seeking declaratory relief, or is subject to an interference,
inter partes reexamination or an opposition proceeding instituted by a Third
Party, the Parties shall confer and determine whether to defend and how best to
control the defense of any such Third Party action. If the Parties disagree
whether a defense should be undertaken, then the party desiring to defend the
action or proceeding, if such party has standing, may proceed with such defense,
but shall be under no obligation to do so, and shall pay its own expenses. In
the event the Parties agree that the Third Party action should be defended, such
defense shall be controlled by GS with respect to the Territory and by LGLS with
respect to outside of the Territory. In each such case, the other Party, if it
has standing, shall have the right, at its own expense, to participate in such
defense, and to be represented in any such Third Party action by counsel of its
choice at its sole discretion. With respect to any such Third Party action, the
Party entitled to control defense shall also have the right to control
settlement of such Third Party action; provided, however, that no settlement
shall be entered into without the written consent of the other Party, which
consent shall not be withheld unreasonably. In any event, the Party first
obtaining knowledge of such Third Party action shall immediately provide the
other Party written notice of such and the related facts in reasonable detail,
and the Party involved in defending any such Third Party action or proceeding,
shall keep the other Party reasonably informed, in writing, of the progress of
any such proceeding.

13

--------------------------------------------------------------------------------

 

     8.5 Ownership. Subject to Section 9.2, below, each Party shall have and
retain sole and exclusive title to all inventions, discoveries and know-how
which are made, conceived, reduced to practice or generated solely by its
employees or agents in the course of or as a result of this Agreement. Each
Party shall own an equal undivided interest in all such inventions, discoveries
and know-how made, conceived, reduced to practice or generated jointly by the
employees or agents of one Party and the employees or agents of the other Party.
Notwithstanding the foregoing, inventorship of patentable inventions shall be in
accordance with applicable patent law, and ownership of such patentable
inventions shall be determined consistent with applicable law concerning
inventorship and inventors’ obligation to assign.
          8.5.1 Patent Filings for Joint Inventions. The Parties as joint owners
of any joint invention shall jointly pay for the prosecution and maintenance of
all Patents directed thereto. All information disclosed to either Party under
this Section 8.5.1 shall be deemed to be Confidential Information of the
disclosing Party. In the event that a Party elects not to file or discontinues
the prosecution or maintenance of any Patents directed to a joint invention,
then the other Party may, at its expense, choose to file or continue with the
cooperation of the Party choosing not to proceed. A non-electing Party shall
assign the Patents on joint inventions to the other electing Party, subject to a
non-exclusive, royalty-free and irrevocable license to the non-electing Party
under the Patent for the life of the Patent, unless it is determined that such
an assignment could endanger the patent estate of the electing Party.
          8.5.2 Further Assurances. Each party has or shall obtain appropriate
written agreements from all of its respective employees and agents, without
limitation and executed at or as of the commencement of employment or agency,
which agreements shall require that all discoveries and inventions conceived or
reduced to practice by any individual as a result of the employment or agency
shall be promptly reported, fully disclosed, and assigned to the Party employing
or otherwise hiring that individual. In the event a patent application is filed
directed to the subject matter of the invention, any such assignment shall be
promptly recorded in the appropriate patent office(s).
33. A new Section 8.6 shall be inserted which states the following:
     8.6 Covenants. In connection with any proceeding subject to Sections 8.3 or
8.4, neither Party shall enter into any agreement, settlement, or otherwise take
any action that results in or constitutes an admission regarding (i) wrongdoing
on the part of the other Party, or (ii) the validity, enforceability or absence
of infringement of any intellectual property owned by the other Party, without
the prior written consent of the affected Party. The Parties shall cooperate in
good faith with each other in connection with any such claim, suit or proceeding
and shall keep each other reasonably informed, in writing, of all material
developments in connection with any such claim, suit or proceeding.
34. Sections l0.3 and 10.4 shall be deleted and revised as follows:
     10.3 Royalty Payments. In addition to the foregoing license fee and
milestone payments, commencing on the second anniversary of the first commercial
sale of Product in the Territory, GS shall, subject to Sections 4.3 and 10.4 pay
to LGLS royalties on Net Sales in each calendar year at the following rates:

14

--------------------------------------------------------------------------------

 

          Annual Net Sales   Royalty Rate
on the first $100 million
  [***] percent
over $100 million to $150 million
  [***] percent
over $150 million to $200 million
  [***] percent
over $200 million
  [***] percent

The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at
a rate of [***] percent of Net Sales for the use of the GLAXO Patents, the GLAXO
Know-how and the Trademarks (the “GLAXO Royalty”). During the first two years
following first commercial sale of Product in the Territory, GS shall be solely
responsible only for payment of the GLAXO Royalty, and all amounts so due shall
be paid in accordance with Sections 10.7-10.11 below. Thereafter (i) GS shall
pay royalties to LGLS at the royalty rate(s) set forth above, and (ii) LGLS
shall be solely responsible for payment of the GLAXO Royalty and shall indemnify
GS and hold GS harmless from and against any claims by GLAXO as a result of such
use by GS of the GLAXO Patents.
     10.4 Term of Royalty Obligations. GS’s obligation to make royalty payments
pursuant to Section 10.3 shall commence as provided in Section 10.3 and shall
continue until the later of: (i) the expiration of the last to expire of the
LGLS Patents and GLAXO Patents claiming or covering such Product in such
country, and (ii) 10 years after first commercial sale of such Product in such
country. Following the expiration of GS’s royalty obligations, GS shall retain a
non-exclusive, royalty-free right to use, sell and offer for sale Product in the
Territory, using LGLS Know-how and GLAXO Know-how licensed to GS as of the
Effective Date and the exclusive right to use the Trademarks for such purposes.
GS shall continue to pay to LGLS a royalty in return for such right to use the
Trademark, as provided in Section 11.4, below.
35. A new Section 13.7.5 shall be inserted, which states the following:
     Obsolete Materials. Upon the end of the Initial Period, GS shall pay for
Obsolete Materials in the possession of LGLS in accordance with the terms of
Section 5.4.4 of this Agreement. Upon the request of GS, LGLS shall deliver such
Obsolete Materials to GS and shall transfer the title to such Obsolete Materials
to GS, at GS’s expense. For the removal of doubt, this Section 13.7.5 applies to
Obsolete Materials upon the end of the Initial Period and Section 5.4.4 applies
to Obsolete Materials during the Initial Period.
36. Section 13.9 shall be amended to include the following provisions, which
shall survive upon expiration or termination of the License: Sections 7.8 and
7.9.
37. Section 14.4 shall be deleted and revised to state as follows:
     Insurance.
     14.4.1. One week prior to the first delivery of Final Product and for a
period of [***] after the expiration or termination of this Agreement, each
Party shall obtain, and thereafter
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

15

--------------------------------------------------------------------------------

 

maintain, at its sole cost and expense, product liability insurance in amounts
which are reasonable and customary in the U.S. pharmaceutical industry for
companies of comparable size and activities in a country or countries in the
Territory in which Regulatory Approval for sale of a Product is obtained,
provided that such reasonable and customary product liability insurance is
available in such particular country or countries in the territory. Such product
liability insurance shall insure against all liability arising as a result of
activities completed or permitted under this Agreement (including, without
limitation, liability for personal injury, physical injury, and property
damage). The Parties expressly agree that, for the period commencing as of the
Effective Date and ending as of the first anniversary of the Effective Date, the
reasonable and customary amount of product liability insurance shall be
construed to be as follows: primary coverage in the amount of [***]. The Parties
further agree that these amounts of coverage shall be re-evaluated on an annual
basis within thirty (30) days prior to the anniversary of the Effective Date,
and that this Section 14.4.1 shall be amended accordingly as necessary. During
the Initial Period, GLAXO shall be named as an additional insured on all
policies arising under this Section 14.4.1.
     14.4.2 GS further agrees that it shall obtain and maintain during the
Initial Period general liability insurance in the total coverage amounts of
[***], which shall insure against bodily injury, property damage, personal
injury, and advertising injury claims, which are covered under the policy. LGLS
agrees that it shall obtain and maintain during the term of this Agreement
general liability insurance in the minimum primary coverage amount of [***],
which shall insure against bodily injury, property damage, personal injury, and
advertising injury claims, which are covered under the policy. The Parties
further agree that these amounts of coverage shall be re-evaluated on an annual
basis within thirty (30) days prior to the anniversary of the Effective Date,
and that this Section 14.4.2 shall be amended accordingly as necessary. During
the Initial Period, GLAXO shall be named as an additional insured on all
policies arising under this Section 14.4.2.
     14.4.3 Each Party shall provide written proof of the existence of such
insurance to the other Party promptly upon request.
38. In Section 16.2, add the phrase “, acts of terrorism” after the word “war”.
     Except as is expressly provided herein, the License, along with any and all
prior amendments thereto, shall remain in full force and effect.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

16

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate
originals by the proper officers as of the Amendment Effective Date.

                  GENESOFT PHARMACEUTICALS, INC.       LG LIFE SCIENCES, LTD.
INC.
 
               
By:
  /s/ David B. Singer       By:   /s/ Heung Joon Yang
 
               
 
               
Its:
  Chairman and CEO       Its:   President and CEO
 
               

17

--------------------------------------------------------------------------------

 

Schedule 10.2
Quality Agreement
OBJECTIVE OF THE AGREEMENT
This agreement covers the manufacture and control procedures for API production
made by LG Life Sciences (LGLS) for Genesoft Pharmaceuticals Inc. (Genesoft).
[***]

         
[***]
  [***]   [***]
[***]
  [***]   [***]
 
  [***]    
[***]
  [***]   [***]
 
  [***]    
 
  [***]    
 
  [***]    
 
  [***]    
 
  [***]    
[***]
  [***]   [***]
 
  [***]    
 
  [***]   [***]
 
  [***]   [***]
[***]
  [***]   [***]
 
  [***]   [***]
 
  [***]   [***]

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

18

--------------------------------------------------------------------------------

 

         
[***]
  [***]   [***]
[***]
  [***]   [***]
 
  [***]    
 
  [***]    
[***]
  [***]   [***]
 
  [***]   [***]
 
  [***]    
 
  [***]    
 
  [***]   [***]
 
  [***]    
 
  [***]    
[***]
  [***]   [***]
[***]
  [***]   [***]
 
  [***]    
[***]
  [***]    
[***]
  [***]    
[***]
  [***]   [***]
[***]
  [***]   [***]

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

19

--------------------------------------------------------------------------------

 

The following table defines the Quality & Technical representatives from both
LGLS and Genesoft:

      LGLS Representative   Genesoft Representative
Name: Mr. Yong-Jae Lee
  Mr. Lewis Michaels
Title: QA Team Head, General Manager
  Genesoft Pharmaceuticals, Inc.
LG Life Sciences, Ltd.
  7300 Shoreline Court
Address: 601 Yongjei-dong, Iksan City
  South San Francisco, CA 94080
Chunbuk-do 570-350, Korea
  Tel: (650) 837-1802
Tel: 82-(0)63-830-4270 (office)
  Email: lmichaels@genesoft.com
82-(0)19-484-1618 (mobile) Fax:
   
82-(0)63-830-4204
   
e-mail: yjleeb@lgls.co.kr
   

20

--------------------------------------------------------------------------------

 

Schedule 10.3
Guaranty
     The article comprising each shipment or other delivery hereafter made by LG
LIFE SCIENCES, LTD. (“LGLS”), a corporation organized and existing under the
laws of the Republic of Korea, having its principal place of business at LG Twin
Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721, Republic of Korea, to, or
in the order of, GENESOFT PHARMACEUTICALS, INC. (“GS”), a Delaware corporation
having its principal place of business at 7300 Shoreline Court, South San
Francisco, CA, USA 94080, is hereby guaranteed, as of the date of such shipment
or delivery, to be, on such date, not adulterated or misbranded within the
meaning of the Federal Food, Drug, and Cosmetic Act (the “Act”), as amended, and
not an article which may not, under the provisions of Section 505 or of the Act,
be introduced into interstate commerce.
     This Guaranty shall be governed, construed, and interpreted under the laws
of the State of California, USA, without regard to conflict of laws principles,
and shall not be assigned by either party except upon the prior written consent
of the other party or upon the merger or acquisition of all or part of the
assets of GS. This Guaranty shall be binding and inure to the benefit of the
successors and permitted assigns of the Parties, and any assignment not in
accordance with this Guaranty shall be void.
     This Guaranty is signed and executed on this the 27th day of February, 2003
(the “Effective Date”) and shall remain in effect until the final expiration
date of the last of the unexpired Final Product, which is supplied or delivered
to GS by LG, pursuant to the Supply Agreement between LGLS and SB PHARMCO PUERTO
RICO, INC., a corporation organized and existing under the laws of the
Commonwealth of Puerto Rico, having its principal office at Road 172, KM 9.1/Bo.
Certenejas, Cidra, Puerto Rico 00739, dated as of February 26, 2003.

                  By:   /s/ Soon-Jae Park       Printed Name: Soon-Jae Park,
Ph.D.     Title: Vice President     Address:  LG LIFE SCIENCES, LTD.
LG Twin Tower
20 yoido-dong, Youngdungpo
Seoul, 150-721, Republic of Korea     

21

--------------------------------------------------------------------------------

 

AMENDMENT NO. 4 TO LICENSE & OPTION AGREEMENT
     THIS AMENDMENT NO. 4 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 4”)
is made and entered into this 31st day of March, 2005 (the “Amendment No. 4
Effective Date”) by and between Oscient Pharmaceuticals Corporation (formerly
Genome Therapeutics Corporation) (“OSCIENT”), a Massachusetts corporation,
having a principal place of business at 1000 Winter Street, Suite 2200, Waltham,
MA 02451, and LG Life Sciences, LTD (“LGLS”), a corporation organized under the
laws of the Republic of Korea, having a principal place of business at LG Twin
Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721, Republic of Korea. LGLS
and OSCIENT may be referred to herein individually as a “Party” and collectively
as the “Parties”.
W I T N E S S E T H
     WHEREAS, LGLS and GeneSoft Pharmaceuticals, Inc. entered into a certain
License and Option Agreement dated October 22, 2002 and amended said License and
Option Agreement by Amendment No. 1 dated November 21, 2002, Amendment No. 2
dated December 6, 2002 and Amendment No. 3 dated October 16, 2003 (as amended,
the “License”);
     WHEREAS, GeneSoft merged into GeneSoft Pharmaceuticals, LLC (then Guardian
Holdings, LLC (“Guardian”)) on February 6, 2004 and the benefits of and
obligations under the License were assigned to Guardian and then, Guardian
assigned all of its right, title and interest in, to and under the License to
OSCIENT;
     WHEREAS, the Parties desire to amend the License.
     NOW THEREFORE, in consideration of the premises, and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. A new Section 4.3 (c) shall be added:
4.3 Co-Promotion.
(c) LGLS’s option under subsection (a) above with respect to the United States
shall terminate and no longer be exercisable upon annual Net Sales in the United
States reaching $[***].
2. Section 5.2 (iii) shall be deleted in its entirety and replaced with the
following:
5.2 Supply Price.
     (iii) The supply price for API provided by LGLS to OSCIENT during the
Remaining Period, shall be equal to [***] percent of LGLS’s Fully Burdened Cost
of Manufacture for API supplied thereunder, which shall in no event [***] $[***]
per kg [***] $[***] per kg. In addition, (i) if total purchases by OSCIENT plus
any other purchasers of bulk API is greater than [***] kg in any calendar year,
the $[***] supply price shall be reduced by $[***] per kg for each additional
[***] kg of API purchased in excess of [***] kg in such calendar year by OSCIENT
plus any other purchasers, and (ii) the bulk supply price (including the [***]
price) shall be renegotiated in good faith in the event that OSCIENT purchases
more
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

than [***] kg of API in any twelve (12) month period. In the event that there is
an interruption in LGLS’s supply of API for any reason, which continues uncured
for more than [***] days, then OSCIENT shall have the right to procure an
alternative source of supply for the duration of the interruption (“Second
Source Supplier”). Notwithstanding the foregoing, OSCIENT shall only have the
right to procure a Second Source Supplier in the event that the interruption
arises with respect to a supply order quantity, which is less than or equal to
[***] percent of the quantity anticipated by OSCIENT in the most recently
updated forecast, immediately preceding the submission of the supply order. LGLS
shall have the opportunity to resume its supply of API upon the elimination or
resolution of the events causing the interruption; provided that, however, LGLS
shall not resume its role as the exclusive supplier until OSCIENT is able to
negotiate a termination of its purchase obligations with the Second Source
Supplier. LGLS shall be responsible for any expenses incurred in excess of the
price set forth herein, including any expenses related to the termination of any
agreement with the Second Source Supplier; provided, however, that LGLS shall
not be responsible for such excess expenses to the extent that such interruption
is due to the negligence or malfeasance of OSCIENT.
3. Section 10.2 shall be deleted in its entirety and replaced with the
following:
10.2 Milestone Payments. Within 30 days after the achievement of each milestone
set forth below, OSCIENT shall owe a non-refundable milestone payment to LGLS in
the amount set forth below. Each milestone payment shall be due only once,
notwithstanding the number of Products actually developed or commercialized by
OSCIENT hereunder. Milestone Payments 2, 3 and 4, when earned by LGLS, shall be
payable in two installments, the first of which shall be payable on the first
day of July or the first day of January (which comes first following the date on
which the milestone was earned) and the second installment due six months
thereafter. All other milestone payments shall be due 30 days after the relevant
milestone event.

          Milestone Event   Payment
1. Upon the signing of this Amendment No. 4.
  $ 2 million  
 
       
2. Upon annual Net Sales in the United States reaching $[***].
  $ [***]  
 
       
3. Upon both: (i) approval for the first Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $[***].
  $ [***]  
 
       
4. Upon both: (i) approval for a second Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $380 million.
  $ [***]  

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-2-

--------------------------------------------------------------------------------

 

          Milestone Event   Payment
5. Upon approval of the Product for an Initial Indication in the United Kingdom.
  $ [***]  
 
       
6. Upon approval of the Product for an Initial Indication in the first of Italy,
Germany, France, or Spain.
  $ [***]  

As used in this section 10.2, “IV formulation” shall mean a formulation of
Product for intravenous administration.
4. Section 10.3 shall be deleted in its entirety and replaced with the
following:
10.3 Royalty Payments. In addition to the foregoing license fee and milestone
payments, commencing on the second anniversary of the first commercial sale of
Product in the Territory, OSCIENT shall, subject to Sections 4.3 and 10.4, pay
to LGLS royalties on Net Sales in each calendar year at the following rates:

          Annual Net Sales   Royalty Rate
On the first $100 million
  [***] percent
Over $100 million to $150 million
  [***] percent
Over $150 million to $200 million
  [***] percent
Over $200 million to $300 million
  [***] percent
Over $300 million
  [***] percent

The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at
a rate of [***] percent of Net Sales for the use of the GLAXO Patents, the GLAXO
Know-how and the Trademarks (the “GLAXO Royalty”). During the first two years
following first commercial sale of Product in the Territory, OSCIENT shall be
solely responsible only for payment of the GLAXO Royalty, and all amounts so due
shall be paid in accordance with Sections 10.7 through 10.11 below. Thereafter
(i) OSCIENT shall pay royalties to LGLS at the royalty rate(s) set forth above,
and (ii) LGLS shall be solely responsible for payment of the GLAXO Royalty and
shall indemnify OSCIENT and hold OSCIENT harmless from and against any claims by
GLAXO as a result of such use by OSCIENT of the GLAXO Patents.
     Except as is expressly provided herein the License shall remain in full
force and effect.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-3-

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed
by their duly authorized officers on the Execution Date.

                  OSCIENT PHARMACEUTICALS CORPORATION       LG LIFE SCIENCES
LTD.
 
               
By:
  /s/ Steven M. Rauscher       By:   /s/ Heung Joon Yang
 
               
Name:
  Steven M. Rauscher       Name:   Heung Joon Yang, Ph.D.
Title:
  Chief Executive Officer & President       Title:   Chief Executive Officer &
President
 
               
Date:
  3/31/05       Date:   31/3/05

-4-

--------------------------------------------------------------------------------

 

AMENDMENT No. 5 TO LICENSE & OPTION AGREEMENT
     THIS AMENDMENT No. 5 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 5”)
is made and entered into this February 3, 2006 (the “Amendment No. 5 Effective
Date”) by and between Oscient Pharmaceuticals Corporation (“OSCIENT”), a
Massachusetts corporation, having a principal place of business at 1000 Winter
Street, Suite 2200, Waltham, MA 02451, and LG Life Sciences, LTD (“LGLS”), a
corporation organized under the laws of the Republic of Korea, having a
principal place of business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu,
Seoul, 150-721, Republic of Korea. LGLS and OSCIENT may be referred to herein
individually as a “Party” and collectively as the “Parties”.
W I T N E S S E T H
     WHEREAS, LGLS and Genesoft Pharmaceuticals, Inc. (“Genesoft”) entered into
a certain License and Option Agreement dated October 22, 2002 and amended said
License and Option Agreement by Amendment No. 1 dated November 21, 2002,
Amendment No. 2 dated December 6, 2002, Amendment No. 3 dated October 16, 2003
and Amendment No. 4 dated March 31, 2005 (as amended, the “License”);
     WHEREAS, Genesoft merged into Genesoft Pharmaceuticals, LLC (then Guardian
Holdings, LLC (“Guardian”)) on February 6, 2004 and the benefits of and
obligations under the License were assigned to Guardian, and then, Guardian
assigned all of its right, title and interest in, to and under the License to
OSCIENT;
     WHEREAS, the Parties desire to amend the License to, among other things,
amend the supply price paid by Oscient and to amend the royalty rate with
respect to Product sales in Mexico and Canada; and
     WHEREAS, the terms used herein with capital initial letters and not
otherwise defined shall have the same meanings as set forth in License.
     NOW THEREFORE, in consideration of the premises, and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. A new Section 4.3 (d) shall be inserted as follows:
4.3 Co-Promotion.
     (d) (i) Upon OSCIENT entering into a strategic relationship with a Third
Party which grants such Third Party a sublicense to commercialize Product (a
“Partnership”) in Mexico within forty five (45) days from the Amendment No.5
Effective Date, LGLS’ option under subsection 4.3(a) above with respect to
Mexico shall terminate and no longer be exercisable; provided that, the Parties
agree that such 45-day period may be extended by mutual agreement of the
Parties.
     (ii) Upon OSCIENT entering into a Partnership in Canada within one hundred
twenty (120) days from the Amendment No. 5 Effective Date, LGLS’ option under
subsection 4.3(a) above with respect to Canada shall terminate and no longer be
exercisable; provided that, the Parties agree that such 120-day period may be
extended by mutual agreement of the Parties.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

2. Section 5.1(a)(ii) shall be deleted in its entirety and replaced with the
following:
5.1 General.
     (a)(ii) Following the expiration or termination of the Initial Period and
until the expiration or termination of the License (the “Remaining Period”),
LGLS shall supply to OSCIENT, and OSCIENT shall exclusively purchase from LGLS,
all of OSCIENT’s requirements of API in bulk form according to the API
Specifications; provided that, notwithstanding anything herein to the contrary,
Oscient’s obligation to exclusively purchase bulk API from LGLS for Final
Product or API to be supplied in Mexico or Canada shall expire on the last to
expire of the LGLS Patents and GLAXO Patents claiming or covering such Product
in Mexico or Canada, as the case may be; provided that, OSCIENT agrees that it
shall exclusively purchase from LGLS all requirements of API in bulk for Mexico
and/or Canada, as the case may be, so long as OSCIENT continues to supply API or
Final Product in Mexico or Canada pursuant to a Partnership.
3. Section 5.2 (iii) shall be deleted in its entirety and replaced with the
following:
5.2 Supply Price.
     (iii) The supply price for API provided by LGLS to OSCIENT during the
Remaining Period, shall be equal to [***] percent of LGLS’s Fully Burdened Cost
of Manufacture for API supplied thereunder, which shall in no event [***] $[***]
per kg [***] $[***] per kg. In addition, if total purchases by OSCIENT plus any
other purchasers of bulk API is greater than [***] kg in any calendar year, the
$[***] supply price shall be reduced by $[***] per kg for each additional [***]
kg of API purchased in excess of [***] kg in such calendar year by OSCIENT plus
any other purchasers; provided however, that in the event OSCIENT purchases more
than [***] kg of API in any calendar year (the first such calendar year, the
“Threshold Year”), OSCIENT shall pay LGLS $[***] per kg for all API purchased
during such calendar year. Within thirty (30) days after the end of the
Threshold Year, LGLS shall reimburse OSCIENT the difference between (a) the
actual amount paid by OSCIENT for API purchased during such year and (b) $[***]
per kg times the number of kg purchased for such year. After the Threshold Year,
OSCIENT shall continue to pay $[***] per kg unless OSCIENT purchases less than
[***] kg of API during any calendar year. In the event OSCIENT purchases less
than [***] kg of API during such calendar year, OSCIENT shall pay LGLS the
difference between (x) $[***] times the number of kg purchased and (y) the
amount paid to LGLS for API purchased during such calendar year (i.e. $[***]
times the number of kg purchased) within thirty (30) days after the end of such
calendar year. In the event that there is an interruption in LGLS’s supply of
API for any reason, which continues uncured for more than [***] days, then
OSCIENT shall have the right to procure an alternative source of supply for the
duration of the interruption (“Second Source Supplier”). Notwithstanding the
foregoing, OSCIENT shall only have the right to procure a Second Source Supplier
in the event that the interruption arises with respect to a supply order
quantity, which is less than or equal to [***] percent of the quantity
anticipated by OSCIENT in the most recently updated forecast, immediately
preceding the submission of the supply order. LGLS shall have the opportunity to
resume its supply of API upon the elimination or resolution of the events
causing the interruption; provided that, however, LGLS shall not resume its role
as the exclusive supplier until OSCIENT is able to negotiate a termination of
its purchase obligations with the Second Source Supplier; and provided further
that OSCIENT shall use commercially reasonable efforts to enter into an
agreement with a Second Source Supplier
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

that allows for such termination of OSCIENT’s purchase obligations within [***]
months of notice to the Second Source Supplier (provided that, Oscient shall not
enter into an agreement with a Second Source Supplier that requires more than
[***] months notice to terminate an agreement without LGLS’ prior consent, such
consent not to be unreasonably withheld or delayed). LGLS shall be responsible
for any expenses incurred in excess of the price set forth herein; provided,
however, that LGLS shall not be responsible for such excess expenses to the
extent that such interruption is due to the negligence or malfeasance of
OSCIENT.
4. The first sentence of Section 5.5.5 shall be amended to read as follows:
“Upon the commencement of the Remaining Period, OSCIENT shall provide to LGLS a
non-binding forecast of the quantities of API to be manufactured during the
forthcoming [***]-year period for each country in the Territory, including,
without limitation, Mexico and Canada.”
All other parts of Section 5.5.5 shall remain unchanged.
5. Section 9.3 shall be deleted in its entirety and replaced with the following:
9.3 Sub-licensing. OSCIENT may sub-license the license granted to it hereunder
on prior notice to LGLS. Upon prior notice to OSCIENT, LGLS may sub-license the
license granted to it with respect to GS Know-how (including, without
limitation, data and information related to the 5-Day CAP trial or other
additional indications for the Product developed by OSCIENT) to Third Parties;
provided that, LGLS may not sub-license its rights to such GS Know-how to any
Third Party intending to commercialize the Product in any country in the
Territory or, without OSCIENT’s prior consent, any country listed on Exhibit A
attached hereto.
6. Section 10.2 shall be deleted in its entirety and replaced with the
following:
10.2 Milestone Payments. Within 30 days after the achievement of each milestone
set forth below, OSCIENT shall owe a non-refundable milestone payment to LGLS in
the amount set forth below. Each milestone payment shall be due only once,
notwithstanding the number of Products actually developed or commercialized by
OSCIENT hereunder. Milestone Payments 1, 2 and 3, when earned by LGLS, shall be
payable in two installments, the first of which shall be payable on the first
day of July or the first day of January (which comes first following the date on
which the milestone was earned) and the second installment due six months
thereafter. All other milestone payments shall be due 30 days after the relevant
milestone event unless otherwise indicated.

          Milestone Event   Payment
1. Upon annual Net Sales in the United States reaching $[***].
  $ [***]  
 
       
2. Upon both: (i) approval for the first Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $[***].
  $ [***]  

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

          Milestone Event   Payment
3. Upon both: (i) approval for a second Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $380 million.
  $ [***]  
 
       
4. Upon approval of the Product for an Initial Indication in the United Kingdom.
  $ [***]  
 
       
5. Upon approval of the Product for an Initial Indication in the first of Italy,
Germany, France, or Spain.
  $ [***]  
 
       
6. Upon signing of each Partnership in Mexico.
  $ [***]  
 
       
7. Upon signing of each Partnership in Canada.
  $ [***]  
 
       
8. Upon approval of the Product in Mexico.
  $ [***]  
 
       
9. Upon approval of the Product in Canada, except for any indication approved
prior to the Amendment # 5. Effective Date.
  $ [***]  

As used in this Section 10.2, “IV formulation” shall mean a formulation of
Product for intravenous administration.
7. Section 10.3 shall be deleted in its entirety and replaced with the
following:
10.3 Royalty Payments. In addition to the foregoing license fee and milestone
payments, commencing on the second anniversary of the first commercial sale of
Product in the United States of America,
     (i) OSCIENT shall, subject to Sections 4.3 and 10.4, pay to LGLS royalties
on Net Sales in the Territory, except for (a) any Net Sales in Mexico if OSCIENT
enters into a Partnership in Mexico with a Third Party and (b) any Net Sales in
Canada if OSCIENT enters into a Partnership in Canada with a Third Party, for
each calendar year at the following rates:

          Annual Net Sales   Royalty Rate
On the first $100 million
  [***] percent
Over $100 million to $150 million
  [***] percent
Over $150 million to $200 million
  [***] percent
Over $200 million to $300 million
  [***] percent
Over $300 million
  [***] percent

     (ii) OSCIENT shall, subject to Sections 4.3 and 10.4 and in lieu of the
royalty obligations set forth in Section 10.3(i) above with respect to Net Sales
in Mexico and Canada, pay to LGLS (a) a royalty of [***] % on Net Sales in
Mexico for each calendar year if Oscient enters into a Partnership
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

in Mexico within forty-five (45) days of the Amendment No. 5 Effective Date, and
(b) a royalty of [***] % on Net Sales in Canada for each calendar year if
Oscient enters into a Partnership in Canada within one-hundred twenty (120) days
of the Amendment No. 5 Effective Date; provided, however, that if the
Partnership entered into in Mexico or Canada, as the case may be, terminates,
then from and after such termination, the royalties payable in respect of Net
Sales in Mexico or Canada, as the case may be, shall be paid in accordance with
clause (i) of this Section 10.3.
The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at
a rate of [***] percent of Net Sales for the use of the GLAXO Patents, the GLAXO
Know-how and the Trademarks (the “GLAXO Royalty”). During the first two years
following first commercial sale of Product in the Territory, OSCIENT shall be
solely responsible only for payment of the GLAXO Royalty, and all amounts so due
shall be paid in accordance with Sections 10.7 through 10.11 below. Thereafter
(a) OSCIENT shall pay royalties to LGLS at the royalty rates set forth above,
and (b) LGLS shall be solely responsible for payment of the GLAXO Royalty and
shall indemnify OSCIENT and hold OSCIENT harmless from and against any claims by
GLAXO as a result of such use by OSCIENT of the GLAXO Patents.
8. Section 10.4 shall be deleted in its entirety and replaced with the
following:
10.4 Term of Royalty Obligations. OSCIENT’s obligation to make royalty payments
pursuant to 10.3 shall commence as provided in Section 10.3 and shall continue
until the later of: (i) the expiration of the last to expire of the LGLS Patents
and GLAXO Patents claiming or covering such Product in such country, and
(ii) 10 years after first commercial sale of such Product in such country;
provided however, that, OSCIENT’s obligation to make royalty payments pursuant
to 10.3 for Net Sales in Mexico and Canada shall continue until the later of:
(I) the expiration of the last to expire of the LGLS Patents and GLAXO Patents
claiming or covering such Product in Mexico or Canada, as the case may be, and
(II) the period of data exclusivity in Mexico or Canada, as the case may be.
Following the expiration of OSCIENT’s royalty obligations, OSCIENT shall retain
a non-exclusive, royalty-free right to use, sell and offer for sale Product in
the Territory, using LGLS Know-how and GLAXO Know-how licensed to OSCIENT as of
the Effective Date and the exclusive right to use the Trademarks for such
purposes. OSCIENT shall continue to pay LGLS a royalty in return for such right
to use the Trademark, as provided in Section 11.4, below.
9. Section 10.8(b) shall be amended to add to the end of the paragraph the
following sentence:
     On and after the Threshold Year, this Section 10.8(b) shall be of no force
and effect.
10. (i) Sections 1 (as to Section 4.3(d)(i) of the License), 2 (as to
Section 5.1(a)(ii) of the License with respect to supply of Product in Mexico),
6 (as to milestone Nos. 6 and 8 only), 7 (as to Sections 10.3(i)(a) and
10.3(ii)(a) of the License), and 8 (as to Section 10.4(I) & (II) of the License
(with respect to Mexico)) of this Amendment No. 5 shall become null and void
within forty five (45) days of the Amendment 5 Effective Date unless (i) OSCIENT
enters into a Partnership in Mexico within forty five (45) days of the Amendment
5 Effective Date, or (ii) the Parties mutually agree to extend such 45-day
period.
     (ii) Sections 1 (as to Section 4.3(d)(ii) of the License), 2 (as to
Section 5.1(a)(ii) of the License with respect to supply of Product in Canada),
6 (as to milestone Nos. 7 and 9 only), 7 (as to Sections 10.3(i)(b) and
10.3(ii)(b) of the License), and 8 (as to Section 10.4(I) & (II) of the License
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

(with respect to Canada)) of this Amendment No. 5 shall become null and void
within one hundred twenty (120) days of the Amendment 5 Effective Date unless
(i) OSCIENT enters into a Partnership in Canada within one hundred twenty
(120) days of the Amendment 5 Effective Date, or (ii) the Parties mutually agree
to extend such 120-day period.
11. Notwithstanding the foregoing or any other provision of this Amendment
No. 5, Section 3 (dealing with Section 5.2 Supply Price of the License),
Section 5 (dealing with Section 9.3 Sub- licensing of the License) and Section 9
(dealing with Section 10.8(b) of the License) of this Amendment No. 5 shall be
and remain in full force and effect as of the Amendment No. 5 Effective Date.
12. Except as is expressly provided herein the License shall remain in full
force and effect.
     IN WITNESS WHEREOF, the Parties have caused this Amendment No. 5 to be
executed by their duly authorized officers on the Amendment No. 5 Effective
Date.

                  OSCIENT PHARMACEUTICALS CORPORATION       LG LIFE SCIENCES
LTD.
 
               
By:
  /s/ Steven M. Rauscher       By:   /s/ In-Chull Kim
 
               
Name:
  Steven M. Rauscher       Name:   In-Chull Kim
Title:
  Chief Executive Officer & President       Title:   Chief Executive Officer &
President
 
               
Date:
          Date:    

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

EXHIBIT A
Poland
Czech Republic
Slovakia
Slovenia
Hungary
Estonia
Latvia
Lithuania
Liechtenstein
Malta
Cypress
Romania
Bulgaria
Croatia
Serbia and Montenegro
Bosnia and Herzegovina
Macedonia
Albania

 

--------------------------------------------------------------------------------

 

AMENDMENT NO. 6 TO LICENSE & OPTION AGREEMENT
     THIS AMENDMENT NO. 6 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 6”)
is made and entered into this February 3, 2006 (the “Amendment No 6 Effective
Date”) by and between Oscient Pharmaceuticals Corporation (“OSCIENT”), a
Massachusetts corporation, having a principal place of business at 1000 Winter
Street, Suite 2200, Waltham, MA 02451, and LG Life Sciences, LTD (“LGLS”), a
corporation organized under the laws of the Republic of Korea, having a
principal place of business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu,
Seoul, 150-721, Republic of Korea. LGLS and OSCIENT may be referred to herein
individually as a “Party” and collectively as the “Parties”.
W I T N E S S E T H
     WHEREAS, LGLS and Genesoft Pharmaceuticals, Inc. (“Genesoft”) entered into
a certain License and Option Agreement dated October 22, 2002 and amended said
License and Option Agreement by Amendment No. 1 dated November 21, 2002,
Amendment No. 2 dated December 6, 2002, Amendment No. 3 dated October 16, 2003,
Amendment No. 4 dated March 31, 2005, and Amendment No. 5 dated February 3, 2006
(as amended, the “License”);
     WHEREAS, Genesoft merged into Genesoft Pharmaceuticals, LLC (then Guardian
Holdings, LLC (“Guardian”)) on February 6, 2004 and the benefits of and
obligations under the License were assigned to Guardian, and then, Guardian
assigned all of its right, title and interest in, to and under the License to
OSCIENT; and
     WHEREAS, the terms used herein with capital initial letters and not
otherwise defined shall have the same meanings as set forth in License.
     NOW THEREFORE, in consideration of the premises, and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. Section 9.3 shall be amended to add to the end of the paragraph the
following:
In consideration of the right to grant sublicenses granted by LGLS to OSCIENT in
this Section 9.3, OSCIENT agrees to the following:
     (a) within [***] of establishing the date of any Potential Collaboration
Meeting (defined herein) with any Third Party, but in no event later than [***]
prior to such Potential Collaboration Meeting, OSCIENT shall provide to LGLS
written notice of such Potential Collaboration Meeting; provided that if
providing LGLS with such notice no later than [***] prior to such Potential
Collaboration Meeting would delay a Potential Collaboration Meeting because a
Potential Collaborator requests a meeting in less than [***] time, OSCIENT shall
provide LGLS with as [***]. For purposes of this Agreement, the term “Potential
Collaboration Meeting” shall mean any meeting, teleconference or the like
between OSCIENT (and/or any
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

1

--------------------------------------------------------------------------------

 

agent of OSCIENT) and any Third Party (each a “Potential Collaborator”) (and/or
any agent of such Potential Collaborator) for the purpose of discussing,
negotiating or otherwise communicating about any proposed U.S. sublicense by
OSCIENT to such Potential Collaborator under this Section 9.3, or any U.S.
co-promotion or U.S. co-marketing of the Product;
     (b) OSCIENT agrees that LGLS shall have the right to designate two persons,
who may be officers, employees or other agents of LGLS, to attend and observe
such Potential Collaboration Meetings. OSCIENT further agrees to timely provide
LGLS written meeting minutes of any such Potential Collaboration Meetings as
well as copies of OSCIENT presentations and presentations by the Potential
Collaborators that are provided to OSCIENT by no later than [***] thereafter,
whether or not LGLS designates any such persons to attend and observe any such
Potential Collaboration Meeting;
     (c) LGLS and any agent engaged by LGLS for purposes of advising LGLS in
respect of any such proposed sublicense to such Potential Collaborator and any
co-promotion or co-marketing arrangements relating thereto shall agree to keep
confidential any and all information relating thereto; and
     (d) nothing in this Section 9.3 shall in any way diminish or adversely
affect the co-promotion rights provided to LGLS under Section 4.3.
Except as is expressly provided herein the License shall remain in full force
and effect.
[Remainder of page left intentionally blank]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

2

--------------------------------------------------------------------------------

 

     IN WITNESS WHEREOF, the Parties have caused this Amendment No. 6 to be
executed by their duly authorized officers on the Amendment No. 6 Effective
Date.

                  OSCIENT PHARMACEUTICALS CORPORATION       LG LIFE SCIENCES
LTD.
 
               
By:
  /s/ Steven M. Rauscher       By:   /s/ In-Chull Kim
 
               
Name:
  Steven M. Rauscher       Name:   In-Chull Kim
Title:
  Chief Executive Officer & President       Title:   Chief Executive Officer &
President
 
               
Date:
          Date:    

3

--------------------------------------------------------------------------------

 

AMENDMENT NO. 7 TO LICENSE & OPTION AGREEMENT
     THIS AMENDMENT NO. 7 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 7”)
is made and entered into this 27th day of December, 2006 (the “Amendment No. 7
Effective Date”) by and between Oscient Pharmaceuticals Corporation (“OSCIENT”),
a Massachusetts corporation, having a principal place of business at 1000 Winter
Street, Suite 2200, Waltham, Massachusetts 02451, and LG Life Sciences, LTD
(“LGLS”), a corporation organized under the laws of the Republic of Korea,
having a principal place of business at LG Twin Tower, 20 yoido-dong,
Youngdungpo-gu, Seoul, 150-721, Republic of Korea. LGLS and OSCIENT may be
referred to herein individually as a “Party” and collectively as the “Parties”.
W I T N E S S E T H
     WHEREAS, LGLS and GeneSoft Pharmaceuticals, Inc. entered into a certain
License and Option Agreement dated October 22, 2002 and amended said License and
Option Agreement by Amendment No. 1 dated November 21, 2002, Amendment No. 2
dated December 6, 2002, Amendment No. 3 dated October 16, 2003, Amendment No. 4
dated March 31, 2005, Amendment No. 5 dated February 3, 2006, and Amendment
No. 6 dated February 3, 2006 (as amended, the “License”);
     WHEREAS, Genesoft merged into Genesoft Pharmaceuticals, LLC (then Guardian
Holdings, LLC (“Guardian”)) on February 6, 2004 and the benefits of and
obligations under the License were assigned to Guardian, and then, Guardian
assigned all of its right, title and interest in, to and under the License to
OSCIENT;
     WHEREAS, OSCIENT is about to enter into a Partnership agreement with
Menarini (as defined below) for Menarini’s marketing of the Product in the
European Territory (as defined below) immediately after the execution of this
Amendment No. 7 based on and in accordance with the License; and the Parties
desire to amend the License to, among other things, provide certain terms and
conditions necessary for such Partnership deal between OSCIENT and Menarini and
amend the supply price, royalty rate and milestones related to sales of the
Product; and
     WHEREAS, the terms used herein with capital initial letters and not
otherwise defined shall have the same meanings as set forth in the License.
     NOW THEREFORE, in consideration of the premises, and other good and
valuable consideration, the sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. Section 1.36 shall be deleted in its entirety and replaced with the
following:
1.36 “Territory” means the United States of America, Canada, Mexico, France,
Germany, the United Kingdom, Luxembourg, Ireland, Italy, Spain, Portugal,
Belgium, the Netherlands, Austria, Greece, Sweden, Denmark, Finland, Norway,
Iceland, Switzerland, Andorra, Monaco, San Marino, Vatican City, Poland, Czech
Republic, Slovakia, Slovenia, Hungary, Estonia, Latvia, Lithuania,
Liechtenstein, Malta, Cyprus, Romania, Bulgaria, Croatia, Serbia and Montenegro,
Bosnia and Herzegovina, Albania and the Former Yugoslav Republic of Macedonia.
2. A new Section 1.46 shall be inserted to define “Centralized Procedure” as
follows:
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

 

--------------------------------------------------------------------------------

 

1.46 “Centralized Procedure” shall mean the centralized procedure for obtaining
a Marketing Authorization in the European Union as set forth in Regulation
(EC) 726/2004.
3. A new Section 1.47 shall be inserted to define “European Territory” as
follows:
1.47 “European Territory” means France, Germany, the United Kingdom, Luxembourg,
Ireland, Italy, Spain, Portugal, Belgium, the Netherlands, Austria, Greece,
Sweden, Denmark, Finland, Norway, Iceland, Switzerland, Andorra, Monaco, San
Marino, Vatican City, Poland, Czech Republic, Slovakia, Slovenia, Hungary,
Estonia, Latvia, Lithuania, Liechtenstein, Malta, Cyprus, Romania, Bulgaria,
Croatia, Serbia and Montenegro, Bosnia and Herzegovina, Albania and the Former
Yugoslav Republic of Macedonia.
4. A new Section 1.48 shall be inserted to define “Major Countries” as follows:
1.48 “Major Countries” shall mean each of France, Germany, Italy, Spain and the
United Kingdom.
5. A new Section 1.49 shall be inserted to define “Marketing Authorization” as
follows:
1.49 “Marketing Authorization” shall mean an authorization issued by the
European Medicines Agency, or any other national, regional, state or local
regulatory agency in the European Territory with the relevant regulatory
authority, necessary to market and sell the Product in the European Territory or
in any country in the European Territory.
6. A new Section 1.50 shall be inserted to define “Menarini” as follows:
1.50 “Menarini” means Menarini International Operations Luxembourg SA at Avenue
de la Gare, 1, L-1611 Luxembourg GD and any of its Affiliates.
7. Section 2.5 shall be deleted in its entirety and replaced with the following:
2.5 Costs of Development. All Development expenses shall be borne by OSCIENT;
provided that, LGLS shall reimburse OSCIENT for 50% of all amounts paid to
Menarini by OSCIENT for all reasonable and verifiable regulatory development
expenses incurred by Menarini in the European Territory; provided that in no
event such reimbursement payments by LGLS shall exceed $[***] in the aggregate.
With respect to any such regulatory development expenses to be reimbursed by
LGLS, OSCIENT shall provide LGLS with a copy of the statement prepared by
Menarini setting forth in detail such development expenses incurred by Menarini
in the relevant quarter and proof of payment of such expenses by OSCIENT, such
as receipt or payment slip. LGLS shall reimburse OSCIENT as provided for in this
Section 2.5 within thirty (30) days of its receipt of all such statements and
proofs. OSCIENT shall cause Menarini to keep complete and accurate books and
financial records pertaining to such costs and expenses of regulatory
development. LGLS shall have the right, at its discretion, to annually audit all
such books and records of OSCIENT and Menarini upon advance notice to OSCIENT,
and OSCIENT shall duly cooperate with LGLS. OSCIENT shall also cause Menarini to
duly cooperate with LGLS with respect to such audit.
8. A new Section 4.3(d)(iii) shall be inserted as follows:
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-2-

--------------------------------------------------------------------------------

 

4.3 Co-Promotion.
     (d) (iii) Upon Oscient entering into a Partnership in the European
Territory with Menarini, [***].
9. Section 5.1(a)(ii) shall be deleted in its entirety and replaced with the
following:
5.1 General.
     (a) (ii) Following the expiration or termination of the Initial Period and
until the expiration or termination of the License (the “Remaining Period”),
LGLS shall supply to OSCIENT, and OSCIENT shall exclusively purchase from LGLS,
all of OSCIENT’s requirements of API; provided that OSCIENT’s obligation to
exclusively purchase API to be supplied in Mexico, Canada or the European
Territory shall expire on the last to expire of the LGLS Patents and GLAXO
Patents claiming or covering such Product in Mexico, Canada or the European
Territory, as the case may be. Notwithstanding anything herein to the contrary,
OSCIENT agrees that it shall exclusively purchase from LGLS all its requirements
of API for Mexico, Canada, and/or the European Territory, as the case may be, so
long as and to the extent that OSCIENT continues to supply API or Final Product
in Mexico, Canada or the European Territory irrespective of any expiry of LGLS
Patents and GLAXO Patents.
     LGLS shall not sell and shall procure that its Affiliates, sublicensees and
distributors shall not sell, Final Product or API to any Third Party for use or
resale in the European Territory so long as and to the extent that OSCIENT
exclusively purchases from LGLS all its requirements of API and OSCIENT’s
sublicensees and distributors exclusively purchases from OSCIENT all their
requirements of API.
10. A new Section 5.2(iv) shall be inserted as follows:
5.2 Supply Price.
     (iv) Notwithstanding anything to the contrary in Section 5.2(iii), the API
supply price to OSCIENT for use by Menarini or its Affiliates or subcontractors
in Finished Product marketed, sold and distributed in the European Territory
shall be $[***] per kg irrespective of the volume of API purchased by OSCIENT
after the grant of Marketing Authorization in at least one country in the
European Territory is obtained. Prior to obtaining the Marketing Authorization
in at least one country in the European Territory, the API supply price to
OSCIENT for use by Menarini or its Affiliates shall be (A) prior to January 1,
2008, the same as the supply price to OSCIENT for the US, and (B) on or after
January 1, 2008, $[***] per kg up to an aggregate of [***] kg with any
additional amounts to be purchased at the then current supply price to OSCIENT
for the US.
11. A new Section 5.6.4 (i) shall be inserted as follows:
     (i) OSCIENT acknowledges and agrees that all API for use by Menarini shall
be manufactured by LGLS. OSCIENT shall ensure that all such API shall be
delivered to Menarini directly. OSCIENT shall forward to LGLS all purchase
orders for API placed by Menarini at least 90 days prior to the date upon which
LGLS is requested to ship such API. OSCIENT shall use best efforts to ensure
that all API delivered to Menarini shall be used in the European Territory only
and that such API shall not be shipped, distributed or otherwise be used in any
way whatsoever and howsoever outside the European Territory.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-3-

--------------------------------------------------------------------------------

 

12. Section 10.2 shall be deleted in its entirety and replaced with the
following:
10.2 Milestone Payments.
     (i) Following the achievement of each milestone set forth below, OSCIENT
shall owe a non-refundable milestone payment to LGLS in the amount and at the
times set forth below. Each milestone payment shall be due only once,
notwithstanding the number of Products actually developed or commercialized by
OSCIENT hereunder. Milestone Payments 1, 2 and 3, when earned by LGLS, shall be
payable in two installments, the first of which shall be payable on the first
day of July or the first day of January (which comes first following the date on
which the milestone was earned) and the second installment due six months
thereafter. All other milestone payments shall be due 30 days after the relevant
milestone event unless otherwise indicated.

          Milestone Event   Payment
1. Upon annual Net Sales in the United States reaching $[***].
  $ [***]  
 
       
2. Upon both: (i) approval for the first Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $[***].
  $ [***]  
 
       
3. Upon both: (i) approval for a second Additional Indication or approval of an
IV formulation of the Product, and (ii) annual Net Sales in the Territory
reaching $380 million.
  $ [***]  
 
       
4. Upon approval of the Product in Canada, except for any indication approved
prior to the Amendment # 5 Effective Date.
  $ [***]  

As used in this Section 10.2, “IV formulation” shall mean a formulation of
Product for intravenous administration.

  (ii)   Within thirty (30) days after receipt of any and all signing or license
fees, milestone payments or royalties or any other forms of payments from
Menarini or within sixty (60) days following the achievement of such events
pursuant the terms of a Partnership agreement with Menarini (excluding, for the
avoidance of doubt, any payment with respect to the supply of API), whichever is
sooner, OSCIENT shall owe and pay a non-refundable payment to LGLS in an amount
equal to [***] ([***]%) of all such payments made by Menarini to OSCIENT (except
for the signing fee of $[***], the milestone payments of $[***]M related to the
receipt of the Marketing Authorization and $[***]M related to the achievement of
annual sales revenues exceeding $100M, which will be paid separately in
accordance with the payment scheme set forth below in this Section 10.2(ii)).
Attached hereto as Exhibit

 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-4-

--------------------------------------------------------------------------------

 

      10.2(ii) is the entire portion of the finally executed Partnership
agreement between OSCIENT and Menarini covering all the signing and license
fees, milestone payments and royalties and all other forms of payments and other
payment terms of the Partnership agreement by and between OSCIENT and Menarini.
        Subject to the preceding paragraph, within thirty (30) days after
receipt of the related payment or within sixty (60) days following the
achievement of the following events pursuant the terms of a Partnership
agreement with Menarini, whichever is sooner, OSCIENT shall pay LGLS:     (a)  
a non-refundable upfront signing fee payment of $[***] upon the signing of a
Partnership agreement with Menarini with respect to the European Territory; and
    (b)   a non-refundable milestone payment of $[***]:

i. in lump sum for obtaining the Marketing Authorization for the Product via the
Centralized Procedure; or
ii. according to the following schedule in case the Marketing Authorization is
obtained on a country-by-country basis (not by Centralized Procedure) in the
Major Countries:

      Milestone   Payment
Upon obtaining the Marketing Authorization in the United Kingdom
  $[***]
Upon obtaining the Marketing Authorization in France
  $[***]
Upon obtaining the Marketing Authorization in Germany
  $[***]
Upon obtaining the Marketing Authorization in Italy
  $[***]
Upon obtaining the Marketing Authorization in Spain
  $[***]

in the event Menarini is able to obtain in at least one country in the Major
Countries the Marketing Authorization meeting the minimum label requirement set
forth in the Partnership agreement between Menarini and OSCIENT (which the
entire portion of the finally executed Partnership agreement between OSCIENT and
Menarini covering such minimum label requirement shall be attached hereto under
Exhibit 10.2(ii)); provided that, the foregoing provision shall not apply and
LGLS shall be entitled to the milestone(s) payment of up to $[***]in accordance
with this Section 10.2(ii)(b) if OSCIENT receives any milestone payments from
Menarini related to the grant of the Marketing Authorization whether or not
Menarini obtains in at least one country in the Major Countries the Marketing
Authorization for CAP and either AECB or ABS, and an approved label for the
Product with the minimum criteria set forth in the Partnership agreement as
stated in subsections (I) and (II) herein; and
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-5-

--------------------------------------------------------------------------------

 

  (c)   a one-time, non-refundable milestone payment of $[***]in lump sum if
Marketing Authorization is obtained in all Major Countries, upon the first
achievement of Net Sales exceeding $100 million in (i) the twelve month period
following the first commercial sale of the Product in any country in the
European Territory or (ii) each successive twelve month period thereafter.

13. Section 10.3 shall deleted in its entirety and replaced with the following:
10.3 Royalty Payments. In addition to the foregoing license fee and milestone
payments, commencing on the second anniversary of the first commercial sale of
the Product in the United States of America,
     (i) OSCIENT shall, subject to Sections 4.3 and 10.4, pay to LGLS royalties
on Net Sales in the Territory, except for (a) any Net Sales in Mexico if OSCIENT
enters into a Partnership in Mexico with a Third Party, (b) any Net Sales in
Canada if OSCIENT enters into a Partnership in Canada with a Third Party, and
(c) any Net Sales in the European Territory if OSCIENT enters into a Partnership
in the European Territory with Menarini, for each calendar year at the following
rates:

      Annual Net Sales   Royalty Rate
On the first $100 million
  [***] percent
Over $100 million to $150 million
  [***] percent
Over $150 million to $200 million
  [***] percent
Over $200 million to $300 million
  [***] percent
Over $300 million
  [***] percent

     (ii) OSCIENT shall, subject to Sections 4.3 and 10.4 and in lieu of the
royalty obligations set forth in Section 10.3(i) above with respect to Net Sales
in Mexico, Canada and the European Territory, pay to LGLS (a) a royalty of [***]
% on Net Sales in Mexico for each calendar year; (b) a royalty of [***] % on Net
Sales in Canada for each calendar year; and (c) a royalty of [***] % on Net
Sales in the European Territory for each calendar year; provided, however, that
if the Partnership entered into in Mexico or Canada or the Partnership entered
into with Menarini in the European Territory, as the case may be, terminates,
then from and after such termination the royalties payable in respect of Net
Sales in Mexico, Canada or the European Territory, as the case may be, shall be
paid in accordance with clause (i) of this Section 10.3.
The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at
a rate of [***] percent of Net Sales for the use of the GLAXO Patents, the GLAXO
Know-how and the Trademarks (the “GLAXO Royalty”). OSCIENT shall pay royalties
to LGLS at the royalty rates set forth above, and LGLS shall be solely
responsible for payment of the GLAXO Royalty and shall indemnify OSCIENT and
hold OSCIENT harmless from and against any claims by GLAXO as a result of such
use by OSCIENT of the GLAXO Patents.
14. Section 10.4 shall be deleted in its entirety and replaced with the
following:
10.4 Term of Royalty Obligations. OSCIENT’s obligation to make royalty payments
pursuant to 10.3 shall commence as provided in Section 10.3 and shall continue
until the later of: (i) the
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-6-

--------------------------------------------------------------------------------

 

expiration of the last to expire of the LGLS Patents and GLAXO Patents claiming
or covering such Product in such country, and (ii) 10 years after first
commercial sale of such Product in such country; provided however, that,
OSCIENT’s obligation to make royalty payments pursuant to 10.3 for Net Sales in
Mexico, Canada or the European Territory shall continue until the later of:
(I) the expiration of the last to expire of the LGLS Patents and GLAXO Patents
claiming or covering such Product in Mexico, Canada or the European Territory,
as the case may be, and (II) the period of data exclusivity in Mexico, Canada or
the European Territory, as the case may be (provided that, for purposes of
clarification, “data exclusivity” in the European Territory shall mean the
period of data and market exclusivity for the Product in the European Territory
provided by Directive 2001/83/EC). Following the expiration of OSCIENT’s royalty
obligations, OSCIENT shall retain a non-exclusive, royalty-free right to use,
sell and offer for sale Product in the Territory, using LGLS Know-how and GLAXO
Know-how licensed to OSCIENT as of the Effective Date and the exclusive right to
use the Trademarks for such purposes. OSCIENT shall continue to pay LGLS a
royalty in return for such right to use the Trademark, as provided in
Section 11.4 below.
15. A new Section 10.8(c) shall be inserted as follows:
(c) OSCIENT shall keep, and shall require its Affiliates to keep, complete and
accurate records of the latest three (3) years of API shipped and/or supplied to
Menarini for sale of Product in the European Territory. For the purpose of
verifying such shipments with regard to OSCIENT’s payment obligations pursuant
to Section 5.2(iv) above, LGLS shall have the right annually, at LGLS’s expense,
to retain an independent certified public accountant selected by LGLS and
reasonably acceptable to OSCIENT, to review such records in the locations(s)
where such records are maintained by OSCIENT and its Affiliates upon reasonable
notice and during regular business hours and under obligations of confidence.
Results of such review shall be made available to both LGLS and OSCIENT.
16. Section 11.4 shall be deleted in its entirety and replaced with the
following:
Expiration of the Agreement. Following the expiration of OSCIENT’s royalty
obligations as provided in Section 10.4 above, and for so long as OSCIENT
continues to use the Trademark in the use or sale of the Product, OSCIENT shall
pay to LGLS a royalty equal to [***] percent of Net Sales; provided that, for
use of the Trademark in the European Territory after the expiration of OSCIENT’s
royalty obligations in the European Territory, OSCIENT shall pay to LGLS a
royalty equal to [***] % percent of Net Sales in the European Territory (the
“Minimum Royalty Amount”) plus [***] % of any amount in excess of the Minimum
Royalty Amount paid by Menarini to OSCIENT for use of the Trademark following
the expiration of OSCIENT’s royalty obligations in the European Territory.
17. Following termination of the License, any sublicense granted by OSCIENT
under the LGLS Patents, LGLS Know-How, GLAXO Patents and GLAXO Know-How
(including pursuant to any Partnership) shall terminate. Following termination
of this Amendment No. 7, any sublicense granted by OSCIENT under the LGLS
Patents, LGLS Know-How, GLAXO Patents and GLAXO Know-How (including pursuant to
any Partnership) for the European Territory shall terminate.
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-7-

--------------------------------------------------------------------------------

 

18. OSCIENT represents and warrants that (i) the summary of financial terms set
forth in Schedule 18 attached hereto represent an accurate description of all of
the financial terms of the Partnership agreement between OSCIENT and Menarini;
and (ii) its Partnership agreement with Menarini shall not in any way adversely
affect or contravene with the terms and conditions of the License and this
Amendment No. 7 or the rights and obligations of LGLS thereof.
Without limiting the foregoing, OSCIENT agrees to provide LGLS the entire
portion of the finally executed Partnership agreement with Menarini covering the
financial terms and the minimum label criteria as set forth in Section 10.2
above within five (5) days from the Amendment No. 7 Effective Date, which such
part of the finally executed Partnership agreement shall be attached hereto as
Exhibit 10.2(ii) immediately thereafter within such five-day period.
19. This Amendment No. 7 shall automatically become null and void and of no
force and effect after ninety (90) days of the Amendment No. 7 Effective Date,
unless (i) OSCIENT enters into a Partnership agreement with Menarini during such
90-day period, or (b) the Parties mutually agree to extend such 90-day period.
20. OSCIENT shall timely inform and update LGLS in writing of the process and
activities related to obtaining the Marketing Authorization by Menarini. OSCIENT
shall also timely inform and update LGLS of any material changes or revisions to
the Partnership agreement between OSCIENT and Menarini, including but not
limited to the financial terms or termination thereof. LGLS may terminate this
Amendment No. 7 upon notice at its sole discretion in case (i) Menarini fails to
obtain the complete Marketing Authorization in at least one country in the
European Territory within three years from the effective date of the Partnership
agreement between OSCIENT and Menarini and/or (ii) the Partnership agreement
between OSCIENT and Menarini is terminated.
[Remainder of page intentionally left blank]

-8-

--------------------------------------------------------------------------------

 

IN WITNESS WHEREOF, the Parties have caused this Amendment No. 7 to be executed
by their duly authorized officers on the Amendment No. 7 Effective Date.

                  OSCIENT PHARMACEUTICALS CORPORATION       LG LIFE SCIENCES,
LTD.
 
               
By:
  /s/ Steven M. Rauscher       By:   /s/ In-Chull Kim
 
               
Name:
  Steven M. Rauscher       Name:   In-Chull Kim, Ph.D.
Title:
  Chief Executive Officer & President       Title:   Chief Executive Officer &
President
 
               
Date:
  January 5, 2007       Date:   Dec. 27th 2006

-9-

--------------------------------------------------------------------------------

 

Schedule 10(ii)
[***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-10-

--------------------------------------------------------------------------------

 

Schedule 18
[***]
 

[***]   Confidential portions of the exhibit have been omitted and filed
separately with the Securities and Exchange Commission.

-11-