Exhibit 10.4
CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
MASTER AGREEMENT AND AMENDMENT
EMISPHERE TECHNOLOGIES, INC.
NOVARTIS PHARMA AG

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
MASTER AGREEMENT AND AMENDMENT
DATE June 4, 2010 (“Execution Date”)
PARTIES

1.   Emisphere Technologies, Inc., a Delaware corporation with offices at 240
Cedar Knolls Road, Suite 200, Cedar Knolls, NJ 07927 USA (“Emisphere”).

2.   Novartis Pharma AG, a company registered in Switzerland with offices at
Lichtstrasse 35, CH-4056 Basel, Switzerland (“Novartis”).

(with each of Novartis and Emisphere referred to herein individually as a
“Party” and collectively as the “Parties”)
BACKGROUND

A.   Emisphere produces or is engaged in development to produce proprietary
synthetic chemical compounds that enable the delivery of therapeutic
macromolecules and other compounds that are not currently deliverable by oral
means or that are otherwise poorly absorbed.

B.   Novartis produces or is engaged in development to produce therapeutic
compounds some of which are not currently deliverable by oral means.

C.   The Parties previously entered into the Oral CT Agreements, the Oral hGH
Agreement and the Oral PTH Agreement (each as defined below and together
“Previous Agreements”).

D.   Emisphere previously issued a Convertible Promissory Note Due December 1,
2009 (“Note”) to Novartis, the Maturity Date of which has been extended in
letters from Novartis to Emisphere dated November 25, 2009 and February 23,
2010.

E.   Emisphere and MHR Institutional Partners IIA LP (“MHR”) are parties to a
Senior Secured Term Loan Agreement and a Pledge and Security Agreement, each
dated as of 26 September 2005, and Emisphere, MHR and certain of MHR’s
Affiliates (as defined in the Pledge and Security Agreement) are parties to an
Investment and Exchange Agreement (“the Investment Agreement”) of the same date
and MHR and certain of its Affiliates are holders of Emisphere’s senior secured
Convertible Promissory Notes issued in accordance with the Investment Agreement
(collectively and together with any related documents, the “MHR Loan
Documents”).

F.   The Parties wish to modify and expand upon the Previous Agreements as set
forth in this Agreement.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

G.   Concurrent with the execution of this Agreement, the Parties and MHR are
also executing an agreement (the “Non-Disturbance Agreement”) and attached
license agreement (the “MHR License Agreement”) (which MHR License Agreement is
not effective under the satisfaction of certain conditions as provided in the
Non-Disturbance Agreement) dated on or around the Execution Date, pursuant to
which MHR consents to this Agreement and agrees not to disturb Novartis’ rights
under this Agreement or the Previous Agreements.

THE PARTIES AGREE
ARTICLE 1 DEFINITIONS AND INTERPRETATION

1.1   Defined Terms

    “[*****]Carrier” means any chemical compound which contains the following
structure:

    [*****]

    [*****].

    “Additional Compound” means any Compound or combination of Compounds
designated by Novartis under Section 3.3, subject to Section 3.2, including any
Compound in combination with [*****] or any other Compound but, in no case
(i) an Emisphere Exclusive Compound or (ii) [*****] or any combination of them
not in combination with another Compound.

    “Affiliate” means, relating to a Person, another Person who directly or
indirectly controls, is controlled by, or is under common control with that
Person. In this definition, “control” means direct or indirect ownership of
fifty percent (50%) or more of the shares of stock entitled to vote for the
election of directors in the case of a corporation, or fifty percent (50%) or
more of the equity interest in the case of any other type of legal entity,
status as a general partner in any partnership, or any other arrangement where
the Person controls or has the right to control the board of directors or
equivalent governing body of a corporation or other entity, or the ability to
set the direction of management or policies of a corporation or other entity.

    “Amendment Effective Date” means the date this Agreement becomes effective
in accordance with Section 10.14.

    “Business Day” means a day which is not a Saturday, Sunday or a day in which
commercial banks located in Basel, Switzerland or New York, USA are authorized
or required by law to remain closed.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

    “Carrier Data” means:

  (a)   all preclinical data (including toxicology data) generated using any
[*****] Carrier alone (and, for clarity, excluding any data generated using
combinations of excipients with active pharmaceutical ingredient or drug
product); and     (b)   all data generated using any [*****] Carrier alone which
constitutes the quality/CMC section of the Common Technical Document (as defined
by the International Conference on Harmonisation of Technical Requirements for
the Registration of Pharmaceuticals for Human Use).

    “Compound” means synthetic, natural or recombinant active pharmaceutical
ingredient, or any of its [*****] or other variants.

    “Confidential Information” has the meaning set out in Section 9.1.

    “Control” in the context of intellectual property, means possession of the
ability to grant the license, sublicense or other access provided for under this
Agreement without breaching any Agreement or other arrangement with a Third
Party.

    “CT”, also referred to as “calcitonin”, means synthetic, natural or
recombinant calcitonin, or any of its active fragments, analogues, salts,
polymorphs, mimetics, derivatives or other variants.

    “CT Product” means a “Product” as defined in the Oral CT License Agreement
as amended by this Agreement.

    “Emisphere Exclusive Compound” means each Compound designated by Emisphere
under Section 3.2, but only for so long as Emisphere is continuing=to pursue the
development and commercialization of such Compound in combination with any
Emisphere carrier (including any [*****] Carrier) as evidenced by Emisphere’s
contemporaneous written documentation.

    “Emisphere Know How” means, to the extent Controlled by Emisphere on the
date of this Agreement or thereafter, all Know How that is necessary for the
development, manufacture, commercialization or other use of a [*****] Carrier or
Product, and inventions relating to [*****] Carrier or Product owned by or
licensed to Emisphere solely or Emisphere and any Third Party jointly, and
including the Emisphere Process and all Know How Controlled by Emisphere
relating to a Product.

    “Emisphere Patents” means, to the extent Controlled by Emisphere on the date
of this Agreement or thereafter, all Patent Rights that claim the development,
manufacture, commercialization or other use of a [*****] Carrier or Product and
inventions relating to [*****] Carrier or Product owned by or licensed to
Emisphere solely or Emisphere and any Third Party jointly.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

    “Emisphere Process” means, to the extent Controlled by Emisphere on the date
of this Agreement or thereafter, the production process for a [*****] Carrier or
Product, consisting of those [*****] procedures, that have been identified,
designed, used, Developed, made or invented by Emisphere or Emisphere and any
Third Party jointly, which can be used to produce a [*****] Carrier or its
various [*****].

    “Emisphere Technology” means the Emisphere Patents and the Emisphere Know
How.

    “Encumbrance” means any claim, charge, equitable interest, hypothecation,
lien, mortgage, pledge, assignment, power of sale, retention of title, right of
pre-emption, right of first refusal or security interest of any kind.

    “Execution Date” has the meaning set forth in the preamble.

    “Feasibility Studies” means such studies as may be reasonably required in
accordance with Novartis’ standard operating procedures to advance a Product
through to the end of Phase I clinical studies, subject to the payment by
Novartis of the applicable milestone payment.

    “Field” means all indications and uses in the treatment or prevention of
human and animal diseases.

    “hGH” means synthetic, natural or recombinant human growth hormone, or its
[*****] other variants.

    “hGH Product” means a “Product” as defined in the Oral hGH Agreement as
amended by this Agreement.

    “Know How” means all proprietary unpatented technical information, data,
ideas, test results, inventions, instructions, processes, knowledge, techniques,
discoveries, trade secrets, formulae, specifications, compositions, designs,
regulatory filings, and biological or other materials (including biological,
chemical, toxicological, physical and analytical, safety, manufacturing and
quality control data and information) and other information (in each case
whether or not patentable) which are now, or are during the Term, owned,
licensed (with the right to sublicense) or otherwise held by a Party or its
Affiliates related to a [*****] Carrier or Product, or the development,
manufacture, commercialization or use of any of the above, and includes:

  (a)   methods of assaying or testing, manufacture processes, formulations, or
compositions incorporating, comprising or relating to any of the above;     (b)
  biological, chemical, pharmacological, biochemical, toxicological,
pharmaceutical, physical, analytical, safety, quality control, manufacturing,
preclinical and clinical data, instructions, processes, formulae, expertise and
information, regulatory filings and copies,

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

    relevant to their development, manufacture, commercialization or use, or
which may be useful in studying, testing, development or production of a [*****]
Carrier or a Product, or intermediates for the synthesis.

    “Licensed IP” means:

  (a)   the Emisphere Technology;     (b)   Emisphere’s interest in any
inventions owned jointly by the Parties; and     (c)   Emisphere’s interest in
any patent rights owned jointly by the Parties.

    “Major Markets” means the United States, Germany, France, Italy, Spain,
Great Britain and Japan.

    “MHR Loan Documents” has the meaning set forth in the recitals.

    “Oral CT Agreements” means the Research Collaboration and Option Agreement
between Emisphere and Novartis dated as of 3 December 1997, the Oral CT License
Agreement and the Amendment to Research Collaboration and Option Agreement
between Emisphere and Novartis dated as of 20 October 2000.

    “Oral CT License Agreement” means the License Agreement between Emisphere
and Novartis dated as of 8 March 2000.

    “Oral hGH Agreement” means the Research Collaboration License Agreement
between Emisphere and Novartis dated as of 22 September 2004, as extended and
amended by the letter agreement between Emisphere and Novartis dated as of 2
November 2005.

    “Oral PTH Agreement” means the Research Collaboration Option and License
Agreement between Emisphere and Novartis dated as of 1 December 2004, which came
into effect by Novartis’s exercise of its option on 7 March 2006.

    “Patent Rights” means all patents and patent applications, including all
divisionals, continuations, substitutions, continuations-in-part,
re-examinations, reissues, additions, renewals, extensions, registrations, and
supplemental protection certificates and the like of any of the foregoing; and
any U.S. or foreign issued patents resulting therefrom.

    “Previous Agreements” means the Oral CT Agreements, the Oral hGH Agreement
and the Oral PTH Agreement.

    “Product” means: (a) a pharmaceutical composition containing an Additional
Compound in combination with a [*****] Carrier, including all [*****] and the
like in combination with a [*****] Carrier, or (b) a [*****].

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

    “PTH” means synthetic, natural or recombinant parathyroid hormone or any of
its [*****] or other variants, including [*****].

    “PTH Product” means a “Product” as defined in the Oral PTH Agreement as
amended by this Agreement.

    “Regulatory Approval” means:

  (a)   in the United States: final approval of a new drug application under the
United States code as published at the 21 CFR §§ 314, allowing marketing of the
relevant Product in interstate commerce in the United States;     (b)   in the
EU: the final approval of the marketing authorization application under Council
Directive 75/319/EEC, as amended, or Council Regulation 2309/93/EEC or the
approval as granted by a relevant national Regulatory Authority, as amended; and
    (c)   for any other country: all authorizations by the appropriate
Governmental Authority necessary for the commercial sale of a Product in that
country including where relevant, approval of labeling, price, reimbursement and
manufacturing.

    “Territory” means all the countries in the world.

    “Third Party” means a person or entity other than Novartis or Emisphere or
an Affiliate of a Party.

1.2   Interpretation

    In this Agreement headings are for convenience only and do not affect
interpretation, and unless the context indicates a contrary intention:

  (a)   if a word or phrase is given a defined meaning, any other part of speech
or grammatical form of that word or phrase has a corresponding meaning;     (b)
  a word in the singular includes the plural (and vice versa), and a word in a
gender includes every other gender;     (c)   a reference to a Party, article,
schedule, attachment or annexure is a reference to a Party, article, schedule,
attachment or annexure to this Agreement;     (d)   an article, schedule,
attachment or annexure to this Agreement forms a part of this Agreement, but if
there is inconsistency between this Agreement and any document referred to, this
Agreement will prevail;     (e)   a reference to a document (including this
Agreement) is to that document as varied, novated, ratified or replaced from
time to time;

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

  (f)   a reference to a statute includes its delegated legislation, and a
reference to a statute or delegated legislation or a provision of either
includes consolidations, amendments, reenactments and replacements; and     (g)
  a reference to “includes” in any form is not a word of limitation.

ARTICLE 2 AMENDMENT OF PREVIOUS AGREEMENTS; CONFIRMATION OF PATENT OWNERSHIP

2.1   Amendment of Previous Agreements

    With effect from the Amendment Effective Date:

  (a)   the Previous Agreements are each amended as set forth on Exhibit A to
this Agreement;     (b)   the Oral CT License Agreement is further amended as
set forth on Exhibit B to this Agreement;     (c)   the Oral hGH Agreement is
further amended as set forth on Exhibit C to this Agreement; and     (d)   the
Oral PTH Agreement is further amended as set forth on Exhibit D to this
Agreement.

2.2   Confirmation of Patent Ownership

  (a)   The Parties acknowledge and agree that:

  (i)   each of the Patent Rights listed on Exhibit E, and any corresponding
Patent Rights in other countries in the Territory, are owned by the Parties
jointly; and     (ii)   each of the Patent Rights listed on Exhibit F, and any
corresponding Patent Rights in other countries in the Territory, are owned by
Novartis solely.

  (b)   Each Party agrees to execute and deliver such additional documents as
may be reasonably required to give effect to the provisions of Section 2.2(a).

ARTICLE 3 FEASIBILITY STUDIES ON ADDITIONAL COMPOUNDS

3.1   Grant of Rights and License for Feasibility Studies for Additional
Compounds

  (a)   Emisphere grants Novartis the right, and the license under the Licensed
IP, to carry out (or have carried out) two (2) Feasibility Studies, each for one
(1) Additional Compound, [*****], which Additional Compounds shall be selected
according to the process set forth in Sections 3.2 and 3.3 below.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

  (b)   All rights and licenses granted under Article 3 are, and will otherwise
be deemed to be, for purpose of Section 365(n) of the US Bankruptcy Code (and
similar laws in other countries in the Territory), licenses of rights to
“intellectual property” as defined under Section 101 of the Code. All Licensed
IP, including patents or patent applications for Licensed IP in every country in
the Territory, are part of the “intellectual property” as defined under
Section 101 of the Code subject to the protections afforded the non terminating
party under Section 365(n) of the Code (and similar Laws in other countries).

3.2   Emisphere Exclusive Compounds.

  (a)   If Emisphere (itself or through any Affiliate, licensee, sublicensee,
subcontractor or collaborator) wishes to develop, manufacture, commercialize or
otherwise use a Compound, or combination of Compounds (other than [*****] or any
designated Additional Compound) which it owns, or has a license or other right
to develop with any [*****] Carrier on an exclusive basis, and wishes to
designate such Compound as an Emisphere Exclusive Compound, it will give written
notice of the designation to Novartis. For clarity, the issuance of, and all
information included in, any such notice (including the identity of any
Emisphere Exclusive Compound) shall be deemed Confidential Information of
Emisphere, and Novartis shall have no right to use or disclose any such
information for any purpose whatsoever and such compounds will become Emisphere
Exclusive Compounds.     (b)   Nothing in this Section 3.2 is intended to grant
Emisphere any license or other right: (i) to any Compound owned or otherwise
Controlled by Novartis; or (ii) under any intellectual property right, owned or
otherwise controlled by Novartis.

3.3   Selection of Additional Compounds

  (a)   If Novartis wishes to exercise its rights under Section 3.1 with respect
to a given Additional Compound, it will give written notice to Emisphere of the
identity of the Additional Compound for which it wishes to exercise such rights
(such notice an “Additional Compound Election Notice”). For clarity, the
issuance of, and all information included in, any such Additional Compound
Election Notice (including the identity of any Additional Compound) shall be
deemed Confidential Information of Novartis, and Emisphere shall have no right
to use or disclose any such information for any purpose whatsoever.     (b)  
Emisphere shall provide notice in writing to Novartis, within thirty (30) days
of receipt of an Additional Compound Election Notice, as to whether or not it
objects to Novartis’ exercise of its rights under Section 3.1 with respect to
the applicable designated Additional Compound. Notwithstanding the foregoing,
the Parties agree that Emisphere may only object to Novartis’ exercise of its
rights under Section 3.1 with respect to the applicable designated Additional
Compound in the event that either (i) Emisphere is unable to grant the license
contemplated in

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      Section 3.5 below with respect to such Additional Compound or (ii) such
Additional Compound comprises or includes an Emisphere Exclusive Compound
[*****] or other variant of an Emisphere Exclusive Compound. For the avoidance
of doubt, Emisphere may designate a compound as an Emisphere Exclusive Compound
any time prior to notice by Novartis under Section 3.3(a); however Emisphere may
also designate a Compound as an Emisphere Exclusive Compound within thirty
(30) days after its receipt of an Additional Compound Election Notice, but, in
that case, only upon the presentation to Novartis of written records indicating
that Emisphere had taken steps to develop, manufacture, commercialize, license,
or otherwise use such Compound prior to its receipt of the applicable Additional
Compound Election Notice from Novartis.

  (c)   Unless Novartis receives notice of a valid objection from Emisphere in
accordance with Section 3.3(b), Novartis shall be free to exercise its rights
under Section 3.1 with respect to the designated Additional Compound.

3.4   Feasibility Studies; Exclusivity

  (a)   Unless and until the Parties execute a separate Research/Feasibility
Agreement, any Feasibility Studies under Section 3.1 shall be carried out in
accordance with the terms and conditions of Exhibit G. In addition, for each
such Feasibility Study, Novartis shall pay Emisphere a one-time milestone
payment of [*****].     (b)   With effect from the date Emisphere receives an
Additional Compound Election Notice which has not been timely rejected by
Emisphere under Section 3.3(b), and for so long as Novartis, or any of its
Affiliates, sublicenses, subcontractors or collaborators is using commercially
reasonable efforts to pursue the development and commercialization of the
applicable [*****] Carrier, Emisphere (itself or through any Affiliate,
sublicense, subcontractor or collaborator) will not anywhere in the Territory
directly or indirectly research, develop, manufacture, commercialize or
otherwise use such Additional Compound or any product which contains such
Additional Compound.     (c)   Following completion of Feasibility Study for
each Additional Compound, Novartis will provide Emisphere with a written report
summarizing the results of such Feasibility Study (each such report, an
“Additional Compound Feasibility Report”). For clarity, the existence of, and
all information included in, such Additional Compound Feasibility Report
(including the identity of any Additional Compound or combination) shall be
deemed Confidential Information of Novartis, and Emisphere shall have no right
to use or disclose any such information for any purpose whatsoever.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

3.5   License Agreements for Additional Compounds

  (a)   Novartis shall have the right, exercisable on an Additional
Compound-by-Additional Compound basis by notice in writing to Emisphere within
ninety (90) days following issuance of the applicable Additional Compound
Feasibility Report under Section 3.3(a), to negotiate a license with respect to
Products incorporating such Additional Compound on the terms and conditions set
forth on Exhibit H and such further terms and conditions as may be negotiated in
good faith between the Parties (each such license, an “Additional Compound
License”). Notwithstanding the foregoing, if, despite reasonable efforts, the
Parties are unable to agree on the terms of such license, then Emisphere shall
be free to negotiate a license, with respect to Emisphere’s intellectual
property, with any third party on terms in the aggregate no less favorable to
Emisphere than the terms last offered by Novartis, for such Additional
Compounds.     (b)   In the event that Novartis selects an Additional Compound
under Section 3.3 in combination with any of [*****], Novartis shall pay
royalties and milestone payments negotiated under the license specified in this
Section 3.5 under the conditions set forth in Exhibit H; and in such event shall
not be required to pay the royalty under the Oral hGH Agreement, Oral PTH
Agreement, or Oral CT Agreements, as applicable. For the avoidance of doubt,
this Section shall not apply to Novartis’ use of [*****] if such compounds are
not part of a combination selected as an Additional Compound under Section 3.3.
    (c)   Emisphere will execute all documents and give all declarations
regarding any Additional Compound License and will reasonably cooperate with
Novartis, to the extent that documents, declarations or cooperation is required
for the filing, recording or registration of any Additional Compound License
with any governmental authority. Novartis will bear Emisphere’s reasonable
out-of-pocket costs arising from Novartis’ request.

ARTICLE 4 CARRIER DATA, INCLUDING TOXICOLOGY STUDIES

4.1   Carrier Data

  (a)   As part of its regulatory activities with respect to Products to which
it has rights under any written agreement between the Parties, Novartis will
compile and maintain with all applicable regulatory authorities a dossier (as
part of the Common Technical Document marketing authorization dossier) that
includes all Carrier Data in its possession.     (b)   As part of its regulatory
activities with respect to any product being developed by Emisphere (itself, or
through any of its Affiliates, licensees (other than Novartis), subcontractors
or collaborators), Emisphere (itself, or through its applicable Affiliate,
licensee, subcontractor or collaborator) will compile and maintain with

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      all applicable regulatory authorities a dossier (as part of the Common
Technical Document marketing authorization dossier) that includes all Carrier
Data in its possession.

4.2   Emisphere Access to Novartis Carrier Data

  (a)   Attached as Exhibit I is a list of all studies included in the Carrier
Data for Novartis applications for Regulatory Approval for the CT Product.    
(b)   Emisphere shall have the right, following the date on which [*****], to
request that Novartis provide it with a copy of any or all of the Carrier Data
listed on Exhibit I. Upon payment to Novartis of the corresponding amount set
forth on Exhibit I for each study for which Emisphere has requested a copy of
the data, and subject to terms and conditions to be agreed between the Parties,
Novartis shall provide Emisphere with a copy of the requested data and the right
to use such data (itself, or through any of its Affiliates, licensees,
subcontractors or collaborators) for purposes of submission to health
authorities with respect to one (1) product incorporating an Emisphere Exclusive
Compound and a [*****] Carrier.     (c)   If Emisphere wishes to use any such
Carrier Data with respect to any further product(s), it shall again request
access to the applicable data, and upon payment to Novartis of the corresponding
amount set forth on Exhibit I for each study for which Emisphere has requested a
copy of the data, and subject to terms and conditions to be agreed between the
Parties, Novartis shall again provide Emisphere with a copy of the requested
data and the right to use such data (itself, or through any of its Affiliates,
licensees, subcontractors or collaborators) for purposes of submission to health
authorities with respect to such additional product incorporating an Emisphere
Exclusive Compound and a [*****] Carrier.     (d)   Emisphere shall provide
written notice to Novartis not less than ten (10) Business Days after it (or any
of its Affiliates, licensees, subcontractors or collaborators) has made any
submission to any regulatory authority which includes any Carrier Data provided
by Novartis hereunder.     (e)   For clarity, nothing in this Section 4.2:
(i) allows Emisphere any right to reference any filing with any regulatory
authority, or any Regulatory Approval, of Novartis or any of its Affiliates or
sublicensees; or (ii) grants Emisphere any right under any patent right of
Novartis or any of its Affiliates or sublicensees.

4.3   Novartis Access to Emisphere Carrier Data

  (a)   On a product-by-product basis, within thirty (30) days after the date on
which Emisphere (itself, or through any of its Affiliates, licensees,
subcontractors or collaborators) has submitted its first application for
Regulatory Approval of any product (other than a Product to which Novartis has
rights under any written

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      agreement between the Parties), Emisphere will provide to Novartis a list
of all studies included in the Carrier Data for such submission, together with
the price for access to data for each such study (such price being equal
[*****]).     (b)   Novartis shall have the right to request that Emisphere
provide it with a copy of any or all of the Carrier Data listed on the
corresponding notice provided under Section 4.3(a). Upon payment to Emisphere of
the corresponding amount set forth on the notice provided under Section 4.3(a)
for each study for which Novartis has requested a copy of the data, and subject
to terms and conditions to be agreed between the Parties, Emisphere shall
provide Novartis with a copy of the requested data and the right to use such
data (itself, or through any of its Affiliates or sublicensees) for purposes of
submission to health authorities with respect to [*****] for which Novartis has
rights under any written agreement between the Parties.     (c)   If Novartis
wishes to use any such Carrier Data with respect to any further Product(s), it
shall again request access to the applicable data, and upon payment to Emisphere
of the corresponding amount set forth on the notice provided under Section
4.3(a) for each study for which Novartis has requested a copy of the data, and
subject to terms and conditions to be agreed between the Parties, Emisphere
shall again provide Novartis with a copy of the requested data and the right to
use such data (itself, or through any of its Affiliates or licensees) for
purposes of submission to health authorities with respect to such additional
Product.     (d)   Novartis shall provide written notice to Emisphere not less
than ten (10) Business Days after it (or any of its Affiliates, licensees,
subcontractors or collaborators) has made any submission to any regulatory
authority which includes any Carrier Data provided by Emisphere hereunder.    
(e)   For clarity, nothing in this Section 4.3 allows Novartis any right to
reference any filing with any regulatory authority, or any Regulatory Approval,
of Emisphere or any of its Affiliates, licensees, subcontractors or
collaborators.

4.4   Toxicology Studies

  (a)   If Emisphere (itself or through any Affiliate, licensee, subcontractor
or collaborator) wishes to perform or have performed any animal toxicology study
using any [*****] Carrier or any product which contains any [*****] Carrier, it
shall provide Novartis with written notice of such intent, which notice shall
also set forth the proposed strategy for any planned toxicology testing and, to
the extent available, the protocol for any proposed animal toxicology studies.  
  (b)   With respect to any notice issued under Section 4.4(a) prior to the date
on which [*****], the Parties will discuss in good faith Emisphere’s strategy
(and, to the extent available, the protocol) for any proposed animal toxicology
studies, it being

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      understood and agreed that Emisphere will not undertake, or permit to be
undertaken by any other Person, any toxicology testing with any [*****] Carrier
without Novartis’ prior written consent, such consent not to be unreasonably
withheld.     (c)   With respect to any notice issued under Section 4.4(a) after
the date on which [*****], within sixty (60) days of receipt of such notice,
Novartis shall provide written notice to Emisphere as to whether Novartis
either:

  (i)   agrees to the proposed animal toxicology study, in which case Emisphere
(itself or through any Affiliate, licensee, subcontractor or collaborator) shall
have the right to perform or have performed the applicable animal toxicology
study in accordance with the protocol provided to Novartis, subject to any
reasonable comments Novartis may have with respect to any such protocol. To the
extent that any protocol is not available at the time of Emisphere’s notice
under Section 4.4(b), Emisphere will submit such protocol to Novartis in advance
of commencing the subject study and Emisphere’s right to perform or have
performed the applicable animal toxicology study shall be subject to any
reasonable comments Novartis may have with respect to such protocol; or     (ii)
  does not agree to the proposed animal toxicology strategy (or one or more of
the studies included therein), in which case: (A) Emisphere may require that
Novartis allow it to obtain access to and use data from one or more studies
listed on Exhibit I for the specific program which was the subject of
Emisphere’s notice; (b) in consideration of such access and use right, Emisphere
will pay Novartis the corresponding amount set forth on Exhibit I; and
(C) Emisphere (itself or through any Affiliate, sublicense, subcontractor or
collaborator) will not anywhere in the Territory directly or indirectly carry
out the applicable animal toxicology strategy or study, as applicable.

      In the event that Emisphere wishes to pursue additional testing of any
[*****] Carrier beyond that described in Exhibit I, the Parties will first
discuss and agree in good faith the strategy and protocol(s) for any such
testing and Emisphere will not undertake, or permit to be undertaken by any
other Person, any toxicology testing with any [*****] Carrier without Novartis’
prior written consent, such consent not to be unreasonably withheld.     (d)  
Emisphere will not undertake, or permit to be undertaken by any other Person,
any toxicology testing with any [*****] Carrier, or any product which contains
any [*****] Carrier, other than in accordance with this Section 4.4.     (e)  
For clarity, nothing in this Section 4.4: (i) allows Emisphere any right to
reference any filing with any regulatory authority, or any Regulatory Approval,
of Novartis or any of its Affiliates or sublicensees; or (ii) grants Emisphere
any right under any patent right of Novartis or any of its Affiliates or
sublicensees.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
ARTICLE 5 AFFILIATES, SUB-LICENSEES AND SUBCONTRACTORS

5.1   Novartis       Novartis may exercise its rights and perform its
obligations under the Agreement itself or through any of its Affiliates and may
subcontract its development, regulatory, manufacturing and commercialization
activities as it deems appropriate subject to the approval of Emisphere not to
be unreasonably withheld.   5.2   Emisphere       Emisphere may exercise its
rights and perform its obligations under the Agreement itself or through any of
its Affiliates and may subcontract its development, regulatory, manufacturing
and commercialization activities as it deems appropriate subject to the approval
of Novartis not to be unreasonably withheld.

ARTICLE 6 RELEASE OF THE NOTE

6.1   Release of the Note       In consideration of the terms and conditions of
this Master Agreement and Amendment (including the provisions of Part B of
Exhibit B), effective on the Amendment Effective Date, Novartis hereby releases
and discharges Emisphere from its obligations under the Note. For the avoidance
of doubt, the release and discharge set forth in this Article 6 will not become
effective unless and until this Agreement becomes effective in accordance with
Section 10.14.

ARTICLE 7 REPRESENTATIONS AND WARRANTIES

7.1   Due Incorporation       Each Party represents and warrants to the other
that it is duly incorporated under the relevant laws of incorporation and each
has full corporate authority to enter into and to perform its obligations under
this Agreement.   7.2   Due Authorization       Each Party represents and
warrants to the other that this Agreement has been fully authorized, executed
and delivered by it; that it has full legal right, power and authority to enter
into and perform this Agreement; that this Agreement constitutes a valid and
binding agreement between the Parties; and that this Agreement does not conflict
with or result in a breach of its existing contractual obligations to a Third
Party.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

7.3   Effectiveness       Each Party represents and warrants that:

  (a)   the execution, delivery and performance of this Agreement by it does not
breach a material law, regulation, orders, judgments or decrees of a court,
governmental authority or other material agreement or arrangement, whether
written or oral, by which it is bound;     (b)   it and its Affiliates are not
engaged in administrative action, litigation or arbitration, or in a dispute or
controversy reasonably likely to lead to litigation, arbitration or other
proceeding, which would materially affect the validity of this Agreement or its
ability to fulfill its obligations under this Agreement;     (c)   the
performance of this Agreement by it does not breach a material law, regulation,
orders, judgments or decrees of a court, governmental authority or other
material agreement or arrangement, whether written or oral, by which it is
bound;     (d)   this Agreement is, and will continue to be, its legal, valid
and binding obligation, enforceable according to the terms of this Agreement
(subject to relevant laws of bankruptcy and moratorium); and     (e)   the
rights granted to the other Party and its Affiliates under this Agreement do not
conflict with rights granted by it to a Third Party.

7.4   Emisphere Representations, Warranties and Covenants

  (a)   Emisphere represents and warrants that:

  (i)   Except for and subject to the MHR Loan Documents, and the
Non-Disturbance Agreement (including the MHR License Agreement attached thereto)
as at the date of this Agreement, Emisphere Controls the entire right, title and
interest in the Licensed IP; and     (ii)   Except for and subject to the MHR
Loan Documents and the Non-Disturbance Agreement (including the MHR License
Agreement attached thereto) as at the date of this Agreement, the Licensed IP is
free and clear of Encumbrances relating to, affecting, or limiting its rights or
the rights of Novartis to Licensed IP under this Agreement or any of the
Previous Agreements.

  (b)   Emisphere covenants and agrees that, for so long as any of the Previous
Agreements remain in effect and Emisphere owns title to the Licensed IP, it will
not voluntarily and consensually grant any security interest, lien or collateral

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      assignment (other than as provided in the MHR Loan Documents) over any or
all of the Licensed IP unless:

  (i)   such security interest, lien or collateral assignment is expressly made
subject to and subordinate to the rights of MHR and Novartis to the Licensed IP
under the Non-Disturbance Agreement (including the MHR License Agreement
attached thereto), this Agreement and the Previous Agreements; and     (ii)  
Emisphere provides Novartis with prior written notice of its intention to grant
such security interest, lien or collateral assignment, and upon written request
by Novartis, requires that the party for whose benefit the security interest,
lien or collateral assignment is made has entered into (or will enter into
concurrently with the granting of such security interest, lien or collateral
assignment) an agreement with Novartis and Emisphere on terms no less favorable
to Novartis than the terms of the Non-Disturbance Agreement (including the MHR
License Agreement attached thereto), provided that such agreement shall
expressly provide that it is subject to and subordinate to the Non-Disturbance
Agreement (including the MHR License Agreement attached thereto). For the
avoidance of doubt, Novartis hereby acknowledge and agree, including for the
benefit of MHR, that nothing in this Section 7.4(b)(ii) shall affect, limit or
change in any way MHR’s rights under the MHR Loan Documents and the
Non-Disturbance Agreement (including the MHR License Agreement attached
thereto).

7.5   DISCLAIMER       EXCEPT AS EXPRESSLY PROVIDED UNDER THIS AGREEMENT, NO
PARTY MAKES EXPRESS OR IMPLIED WARRANTIES, STATUTORY OR OTHERWISE, CONCERNING
THE VALUE, ADEQUACY, FREEDOM FROM INFRINGEMENT OF THIRD PARTY PATENTS, FREEDOM
FROM FAULT OF, OTHER QUALITY, EFFICIENCY, STABILITY, CHARACTERISTICS OR
USEFULNESS OF, OR MERCHANTABILITY, OR FITNESS FOR A PARTICULAR PURPOSE OF, A
PRODUCT. ALL WARRANTIES MADE HEREUNDER ARE EXPRESSLY SUBJECT TO THE SECURITY
INTEREST SET FORTH IN THE MHR LOAN DOCUMENTS, IT BEING ACKNOWLEDGED THAT, AS SET
FORTH IN SECTION 3 OF THE NON-DISTURBANCE AGREEMENT, MHR CONSENTS TO EMISPHERE
ENTERING INTO THIS AGREEMENT SUBJECT TO THE TERMS AND CONDITIONS SET FORTH IN
THE NON-DISTURBANCE AGREEMENT.

ARTICLE 8 DISPUTE RESOLUTION

8.1   Resolution of Disputes       The Parties agree that no dispute,
controversy or claim arising under this Agreement will be the subject of private
litigation between the Parties. Instead, any dispute, controversy

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

    or claim arising under this Agreement will be resolved in accordance with
the process set forth in Article 12 of the Oral hGH Agreement and the provisions
of Article 12 of the Oral hGH Agreement shall apply to this Agreement as if set
forth in full in this Agreement.

ARTICLE 9 CONFIDENTIALITY

9.1   Definition       “Confidential Information” means all Know How and
proprietary information of a financial, commercial, clinical, regulatory or
technical nature, and other information regarding the business operations of a
Party, or relating to development, manufacture, commercialization or other use
of any Product, which has been or is given or made available by a Party to the
other orally, in writing or electronic form, or by observation. Confidential
Information includes information on concepts, materials, discoveries,
inventions, substances, formulations, technology, equipment, data, clinical or
non clinical trials, studies, reports, sources for supply, patent position,
inventions, discoveries, improvements and methods, business or marketing plans
and techniques, manufacturing and other plant designs, and location of
operations.   9.2   Duty       Each Party will;

  (a)   maintain Confidential Information of the other Party in strictest
confidence, and will ensure that its Affiliates, sublicensees, subcontractors,
collaborators, consultants and agents, and their employees maintain in strictest
confidence, and not publish, use or disclose the Confidential Information for a
purpose other than allowed in this Agreement;     (b)   ensure that its and its
Affiliates, sublicensees, subcontractors, collaborators, consultants or agents,
and their employees only receive the Confidential Information of the other Party
under restrictions of confidentiality at least as strict as those contained
within this Agreement;     (c)   use Confidential Information of the other Party
only for a purpose contemplated by this Agreement;     (d)   not publish,
disseminate, or disclose Confidential Information of the other Party, to a
Person not subject to restrictions of confidentiality in respect of the
Confidential Information that is at least as strict as those in this Agreement.

9.3   Exceptions       A Party may disclose only that portion of the
Confidential Information of the other Party that that Party:

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

  (a)   is required to be disclosed under law or court order;     (b)   can
demonstrate by competent evidence that that portion of the Confidential
Information has entered or enters the public domain through no fault of that
Party;     (c)   can demonstrate by competent evidence of contemporaneous
written records that that portion of the Confidential Information was already
known by that Party before receipt from the disclosing Party, or is the result
of Independent Research by that Party without breach of this Agreement; or    
(d)   can demonstrate by competent evidence was received by that Party, without
restriction on disclosure, from a Third Party under no confidentiality
obligation to the other Party.

9.4   Standard of Care       Each Party will use at least the same standard of
care as it uses to protect proprietary or confidential information of its own to
ensure that its employees, agents, consultants and other representatives do not
disclose or make unauthorized use of the Confidential Information, and will be
no less than reasonable care.   9.5   Notice of Breach       Each Party will
notify the other promptly on discovering of an unauthorized disclosure or use of
the Confidential Information.   9.6   Injunctive Relief       The Parties agree
that monetary damages may not be sufficient remedy for breach of this article
and that the Party whose Confidential Information it is will be entitled to seek
equitable relief, including injunction and specific performance, for any breach.
This Article does not limit the rights of that Party to any other remedies it
may have at law, including the recovery of damages for breach of this Article.  
9.7   Survival       This Article will survive for ten (10) years after the
termination or expiry of this Agreement.

ARTICLE 10 GENERAL PROVISIONS

10.1   Publicity

  (a)   On the signing of this Agreement, each Party may issue its own press
release on the nature and scope of this Agreement in a form reasonably approved
in writing

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      in advance by the other Party. The Parties will use commercially
reasonable efforts to agree to both Parties’ proposed press release so that both
Parties’ press releases are available for the Parties’ internal approval
committees at the time this Agreement is presented to them for their approval.  
  (b)   Subject to paragraphs (c) and (d), a Party will only issue a press
release or other public statement or announcement where that press release or
other statement or announcement has been approved in writing in advance by the
other Party. A Party will give the other at least ten (10) Business Days prior
notice of its intended press release, or other public statement or announcement.
    (c)   Novartis or its Affiliates may, without the need for consent from
Emisphere:

  (i)   issue press releases and other public statement or announcement as it
deems appropriate in connection with the development, manufacture
commercialization and other use of Products; and     (ii)   publish or have
published information and results about clinical trials related to any Product.

  (d)   Notwithstanding the foregoing, a Party may make any disclosures required
of it to comply with any duty of disclosure it may have pursuant to laws or to
the rules of any recognized stock exchange. The Parties will use commercially
reasonable efforts to coordinate with each other relating to the timing, form
and content of the required disclosure. A Party will consult with the other
Party on the provisions of this Agreement, including schedules and attachments,
to be redacted in any filings made by a Party with the Securities and Exchange
Commission (or other regulatory body) or as otherwise required by law. If
requested by the other Party, the Party subject to the disclosure obligation
will use commercially reasonable efforts to obtain an order protecting to the
maximum extent possible the confidentiality of the provisions of this Agreement
as reasonably requested by the other Party. If the Parties are unable to agree
on the form or content of any required disclosure, the disclosure will be
limited to the minimum reasonably required as determined by the disclosing Party
in consultation with its attorney.

10.2   Amendment       This Agreement may be altered or supplemented only by a
written agreement signed by the authorized representatives of each Party.   10.3
  Assignment

  (a)   Neither this Agreement nor the rights or obligations under this
Agreement may be assigned or otherwise transferred by Emisphere to a Party which
is not an Affiliate of Emisphere without the prior written consent of Novartis,
which shall not be

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      unreasonably withheld; provided that Emisphere may assign this Agreement
and its rights and obligations under this Agreement without Novartis’ consent in
connection with the transfer or sale of all or substantially all of Emisphere’s
business to a Third Party, whether by merger, sale of stock, sale of assets or
otherwise. A purported assignment in contravention of this paragraph (a) will be
null and void and of no effect at the option of Novartis. An assignment will not
release a Party from responsibility for the performance of accrued obligations
of that Party under this Agreement before the assignment. This Agreement will be
binding on and enforceable against the successor to or allowed assignee of
Emisphere.     (b)   Novartis may assign this Agreement without the consent of
Emisphere but will consult with Emisphere before assignment except where the
assignment is:

  (i)   to a Party which is an Affiliate of Novartis; or     (ii)   in
connection with the transfer or sale of or including Novartis’ business relating
to the Agreement to a Third Party, whether by merger, sale of stock, sale of
assets or otherwise.

      Novartis will give Emisphere written notice within five (5) Business Days
of any assignment.     (c)   If an Affiliate to which a Party has assigned this
Agreement ceases to be an Affiliate of that Party, the Affiliate will assign
back to that Party all the rights and obligations before it ceases to be an
Affiliate.     (d)   An assignment will not release a Party from responsibility
for the performance of accrued obligations of that Party under this Agreement
before assignment. This Agreement will be binding on and enforceable against the
successor to or allowed assignee of a Party.

10.4   Entire Agreement       With effect from the Amendment Effective Date,
this Agreement, together with the Previous Agreements as amended hereby,
constitutes the entire agreement of the Parties relating to the [*****] Carriers
and supersedes all prior negotiations, correspondence and understandings between
the Parties relating to the subject matter, whether oral or written.   10.5  
Governing Law       This Agreement will be governed by, and construed and
enforced according to the laws of the State of New York without regard to its
conflicts of laws principles.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

10.6   Notices       All notices and other communications under this Agreement
will be in writing, will be effective when received, and will be deemed to have
been received:

  (a)   on the date of delivery, if delivered personally to one of the office
holders of the other Party set out in paragraph (b); or     (b)   on the second
business day after the business day of deposit with Federal Express or other
similar courier for overnight delivery, freight prepaid, in each the case,
addressed as follows (until the address is changed by notice duly given):      
  To Emisphere:
Emisphere Technologies, Inc.
240 Cedar Knolls Road, Suite 200
Cedar Knolls, NJ 07927
USA
Attention: President and CEO
Fax: + 1 973 532 8115         With copy to:
Emisphere Technologies, Inc.
240 Cedar Knolls Road, Suite 200
Cedar Knolls, NJ 07927
USA
Attention: General Counsel
Fax: + 1 973 532 8115         To Novartis:
Novartis Pharma AG
Forum 1
Novartis Campus
CH-4056 Basel
Switzerland
Attention: Global Head of Business Development & Licensing
Fax: + 41 61 324 2100         With copy to:
Novartis Pharma AG
Lichtstrasse 35
CH-4056 Basel
Switzerland
Attention: General Counsel Pharma Legal
Fax: + 41 61 324 2100

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

10.7   Counterparts       This Agreement may be executed in two or more
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.   10.8   Independent
Contractors       The Parties are independent contractors under this Agreement.
Nothing in this Agreement is intended or is to be construed so as to constitute
Emisphere and Novartis as agents, partners, joint ventures or other enterprise
relating to this Agreement. A Party does not have any express or implied right
or authority to assume or create any obligations on behalf of or in the name of
the other Party or to bind the other Party to any other contract, agreement, or
undertaking with any Third Party.   10.9   Severability       If any part of
this Agreement will be held invalid or unenforceable, the remainder of the
Agreement will nevertheless remain in full force and effect provided that the
provisions will allow the transaction contemplated by this Agreement to take
place in substantially the same manner as originally contemplated by the
Parties.   10.10   Waiver       A waiver must be in writing signed by the Party
waiving its right. A waiver of any term, provision or condition of this
Agreement by conduct or otherwise in one or more instances will not be deemed to
be or construed as a further or continuing waiver of any the term, provision or
condition, or of any other term, provision or condition of this Agreement.  
10.11   Third Party Beneficiaries       This Agreement is not made for the
benefit of any party other than those executing it.   10.12   Expenses      
Each Party will bear its own out of pocket costs incurred in performing its
obligations and exercising its rights under this Agreement, unless expressly
agreed otherwise in this Agreement.   10.13   Further Assurances       Each
Party agrees to sign, acknowledge and deliver further documents, and to do all
other reasonable acts, as may be necessary or appropriate in order to carry out
the purposes and intent of this Agreement.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

10.14   Amendment Effective Date       Other than the provisions of this
Section, Articles 8 and 9, and Sections 10.1 10.2, 10.5, 10.7, 10.10, 10.12 and
10.13, the rights and obligations of the Parties under this Agreement shall not
become effective unless and until the later of: (i) the execution of this
Agreement by both Emisphere and Novartis; and (ii) both the execution of the
Non-Disturbance Agreement by MHR, Emisphere and Novartis and the execution of
the MHR License Agreement by MHR and Novartis (the date upon which such later
condition is satisfied being the “Amendment Effective Date” of this Agreement).
Upon the occurrence of the Amendment Effective Date, all provisions of this
Agreement shall become effective automatically without the need for further
action by the Parties.

[Next Page is Signature Page]

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
SIGNED BY THE PARTIES’ AUTHORIZED REPRESENTATIVES
EMISPHERE TECHNOLOGIES, INC.

                  By:           Name:           Title:           NOVARTIS PHARMA
AG
      By:           Name:           Title:           Date:                 By:  
        Name:           Title:           Date:      

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT A
AMENDMENTS TO ALL PREVIOUS AGREEMENTS
Each of the Previous Agreements is hereby amended as follows:

(A)   CARRIERS

  (I)   The following new definition is inserted into each of the Oral CT
License Agreement, the Oral hGH Agreement and the Oral PTH Agreement:        
“[*****] Carrier” means any chemical compound which contains the following
structure features:         [*****]         [*****].     (II)   [*****]    
(III)   The definitions “Back-Up Carrier,” “Commercial Carrier,” “Lead Carrier”
and “Programme Carriers” are hereby deleted from the Oral hGH Agreement, and all
references therein to “Back-Up Carrier,” “Commercial Carrier,” “Lead Carrier”
and “Programme Carriers” shall be amended to references to “[*****] Carrier.”  
  (IV)   The definitions “Back-Up Carrier,” “Commercial Carrier,” “Lead Carrier”
and “Programme Carriers” are hereby deleted from the Oral PTH Agreement, and all
references therein to “Back-Up Carrier,” “Commercial Carrier,” “Lead Carrier”
and “Programme Carriers” shall be amended to references to “[*****] Carrier.”

(B)   PRODUCTS       In each of the Oral CT License Agreement, the Oral hGH
Agreement and the Oral PTH Agreement:

  (I)   the definition of “Product” is deleted and replaced with the following:

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      “Product” means a pharmaceutical composition containing the Compound
(alone or in combination with one or more other Licensed Compounds) in
combination with a [*****] Carrier, and all [*****] and the like of a Compound
(alone or in combination with one or more other Licensed Compounds) in
combination with a [*****] Carrier.

    and

  (II)   the following definition is inserted:         “Licensed Compounds”
means one or more Compound as defined in any of the Oral HGH Agreement, Oral PTH
Agreement, or Oral CT License Agreement, each as defined in the Master Agreement
and Amendment between the Parties dated June 4, 2010 (“Master Agreement”).

(C)   LICENSE GRANTS

  (I)   The first sentence of Section 2.1 of the Oral CT License Agreement is
amended to read:         “an exclusive license in the Territory to develop, have
developed, make, have made, use and sell Products (and to develop, have
developed, make and have made [*****] Carriers for use in Products) under the
Emisphere Technology and Emisphere Program Technology.”     (II)   The final
passage of Section 2.1 of the Oral hGH Agreement is amended to read:        
“... to Develop or have Developed, Commercialize, have Commercialized, make,
have made use or have used Products (and to develop, have developed, make and
have made [*****] Carriers for use in Products) (the “License”).”     (III)  
The final passage of the first sentence of Section 2.1 of the Oral PTH Agreement
is amended to read:         “... to Develop or have Developed, Commercialize,
have Commercialized, make, have made use or have used Products (and to develop,
have developed, make and have made [*****] Carriers for use in Products) (the
“License”).”

(D)   MANUFACTURING       Each of:

  (I)   Articles 4 and 6 of the Oral CT License Agreement;

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

  (II)   Article 5 of the Oral hGH Agreement; and     (III)   Article 5 of the
Oral PTH Agreement,

    is deleted in its entirety and replaced with the following (where “X” shall
be the number of the replaced Article in the applicable agreement):

  “X.   MANUFACTURING     X.1   Manufacture and Supply of Product.        
Novartis shall have the right to manufacture (or have manufactured as set forth
below) any [*****] Carrier during Development and Commercialization of any
Product. The Compound, [*****] Carriers and Product will be manufactured by
Novartis or a third party manufacturer of Novartis’ choice, except that
Emisphere may, at its discretion, prevent Novartis from selecting a third party
manufacturer to manufacture the final form of the [*****] Carrier with which
Emisphere has an existing contractual relationship for the manufacture of the
final form of the [*****] Carrier (for clarity, excluding any supplier of raw
materials or intermediates). Any chemical or formulation components required by
Novartis for its own manufacture of the Product, [*****] Carriers or Compound
for the purposes of this Agreement shall be procured by Novartis at its own
expense. Novartis shall ensure that supplies of the Product(s) are produced as
diligently as any of its products of similar commercial importance. Novartis
shall be responsible for the packaging, labeling, distribution and sale of the
Product. The manufacture and distribution of supplies of Product for use in
clinical studies or as samples in a country shall be carried out in the same
manner.     X.2   Back-Up Site for Manufacture and Supply of Product.     (a)  
Emisphere shall have the right, itself or through a third party sub-contractor
reasonably acceptable to Novartis, to be qualified as a secondary source for
[*****] Carriers to be used in the Product, including by obtaining all necessary
regulatory approvals to supply [*****] Carriers to be used in the Product. If
requested by Emisphere, Novartis shall use commercially reasonable efforts to
provide such technology transfer as is customary in the pharmaceutical industry
in support of Emisphere’s (or its designee’s) qualification as a secondary
source for [*****] Carriers to be used in the Product. Any such technology
transfer shall be provided at Emisphere’s cost and expense, including [*****].
If requested by Emisphere, Novartis will also include information regarding
Emisphere’s (or its designee’s) manufacture of [*****] Carriers for use in
Products in Novartis’ applications for regulatory approval for the Products.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

  (b)   Novartis reserves the right to audit the facility of Emisphere and/or
any third party sub-contractor of Emisphere, including, in each case, its
processes, records, and other facets of the operation once per year (or more
often as necessary in the event of quality issues, regulations, deficiencies
identified in a previous audit or other reasonable causes) to assure that all
applicable relevant regulatory authority or similar government regulations have
been met. Emisphere shall permit duly authorized representatives of Novartis to
audit all research, development and manufacturing areas and operations as they
apply to [*****] Carriers for Novartis at reasonable times with a prior
appointment. These audits will be conducted to assure compliance with all
pertinent acts, regulations and guidelines promulgated by the relevant
regulatory authority. Such audits will be permitted during normal business hours
and will be performed with a minimum of disruption. Novartis shall furnish to
Emisphere summaries of all reports prepared as a result of these audits.
Novartis agrees to notify Emisphere within thirty (30) days of any concerns it
may have regarding the [*****] Carrier(s). Novartis will also have the right to
audit Emisphere’s financial manufacturing records in accordance with the
financial audit provisions of this Agreement.     (c)   In the event that
Novartis wishes to source [*****] Carriers for use in the Product from
Emisphere, it will provide written notice to Emisphere and the Parties will
negotiate in good faith the terms and conditions upon which Emisphere will
manufacture and supply such [*****] Carriers, itself or through a third party
sub-contractor reasonably acceptable to Novartis, it being understood and agreed
that, if either: (i) Emisphere is unable or unwilling to product the [*****]
Carriers to the same standards and consistency as Novartis; or (ii) the Parties
are unable to agree such terms and conditions within three (3) months of
Novartis’ notice to Emisphere, Novartis shall have the right to nominate and
qualify an alternate secondary source of such [*****] Carriers.

(E)   MILESTONES AND ROYALTIES

  (I)   The definition of Net Sales in each of the Previous Agreements is
amended by adding the following paragraph to the end of the definition:        
“In the event the Product comprises the Compound in combination with one or more
other Licensed Compounds (other than Additional Compounds as that term is
defined in the Master Agreement) (such Product, a “Combination Product”), the
Net Sales of the Combination Product, for the purposes of determining royalty
payments due under this Agreement (as opposed to the agreement governing Product
containing the other Licensed Compound(s)), shall be determined by multiplying
the [*****]. In the event that such average sale price cannot be determined for
both the Product and such other product(s), Net Sales for purposes

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

      of determining royalty payments shall be agreed by the Parties based on
the relative value contributed by each component, such agreement not to be
unreasonably withheld. For clarity, royalties shall also be payable on sales of
the applicable Combination Product, based on the same average sales process or
relative values, as applicable, under the applicable written agreement between
the Parties related to the other Licensed Compounds included in the Combination
Product. For clarity, royalties for combination products including any
Additional Compound (as that term is defined in the Master Agreement) in
combination with the Compound shall be determined in the applicable license to
be negotiated under the Master Agreement.”

    and

  (II)   each of Section 8.2 of the Oral CT License Agreement, Section 6.1(d) of
the Oral hGH Agreement and Section 6.1(d) of the Oral PTH Agreement shall be
amended by adding the following new paragraph to the end of the applicable
Section:         “Notwithstanding the foregoing, if the applicable Product is a
Combination Product, then the milestones payable with respect to such
Combination Product shall be agreed upon in good faith between the Parties. For
the avoidance of doubt, such milestones shall be payable only once and any
payment of any such milestone under this Agreement shall also satisfy any
obligation to make the corresponding milestone payment under the applicable
written agreement between the Parties related to the other Licensed Compounds
included in the Combination Product.”

(F)   MISCELLANEOUS       The following new definition is inserted into each of
each of the Oral CT License Agreement, the Oral hGH Agreement and the Oral PTH
Agreement:

      “Amendment Effective Date” has the meaning set forth in the Master
Agreement and Amendment between the Parties dated as of June 4, 2010.”

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT B
FURTHER AMENDMENTS TO ORAL CT LICENSE AGREEMENT
The Oral CT License Agreement is hereby further amended as follows:

(A)   FURTHER DEVELOPMENT

Article 5 is deleted in its entirety and replaced with the following:
“5. RESEARCH AND DEVELOPMENT
Notwithstanding any other provision of this Agreement, with effect from the
Amendment Effective Date, Novartis will be responsible for conducting, at its
sole expense, all further research, preclinical, clinical and other development
of the Products (and the [*****] Carriers used therein).”

(B)   MILESTONES AND ROYALTIES

Section 8.2 is deleted in its entirety and replaced with the following:
“In consideration of the granting of a license for the Emisphere Technology and
Program Technology to Novartis, Novartis will make royalty payments to Emisphere
on aggregate Net Sales of all Products in the Territory by Novartis, its
Affiliates and sub-licensees at the applicable rates set forth below:

          Aggregate Annual Net Sales of Products throughout the Territory      
in a Calendar Year by Novartis, its Affiliates and Sublicensees   Royalty Rate  
Portion of annual Net Sales of Products which is [*****]
    [*****]  
 
       
Portion of annual Net Sales of Products which is [*****]
    [*****]  
 
       
Portion of annual Net Sales of Products which is [*****]
    [*****]  
 
       
Portion of annual Net Sales of Products which is [*****]
    [*****]  

Provided that, the royalty rate for the portion of annual Net Sales of Products
which is [*****] shall be equal to [*****] until such time as the difference
between (X) the

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
aggregate amount of royalties that Novartis would have paid to Emisphere on such
portion of annual Net Sales of Products if it had been paying royalties at a
rate equal to [*****], and (Y) the aggregate amount of royalties that Novartis
has paid to Emisphere on such portion of annual Net Sales of Products (applying
such [*****] rate), is equal to [*****].
For clarity, no milestone payments shall be payable by Novartis with respect to
any Product, and Emisphere hereby releases Novartis from any and all claims it
may have now or at any time in the future for any payment of milestones with
respect to any Product. ”

(C)   PROSECUTION OF EMISPHERE PATENTS

Section 10.2 is amended by adding a new sub-Section 10.2.3 as follows:
“Without limiting Section 10.2.2 above, in the event that Emisphere fails to
make any filing or payment related to the preparing, filing, prosecuting or
maintaining of any Emisphere Patent or Emisphere Program Patent, Novartis shall
have the right, exercisable in its sole discretion and expense, to file or
continue the prosecution or maintenance of such Emisphere Patent or Emisphere
Program Patent in Emisphere’s name; provided, however, that Novartis shall
(1) be entitled to deduct from any royalty payments due to Emisphere hereunder
[*****] and (2) keep Emisphere informed of the prosecution of such patents and
provide Emisphere with the right to [*****] prior to the relevant filing date.”

(D)   CONFIDENTIALITY

Article 11 is amended by adding a new Section 11.4 as follows:
“Each party acknowledges that damages resulting from disclosure of the
confidential information would be an inadequate remedy and that, notwithstanding
the provisions of Clause 17.1(a), in the event of any such disclosure or any
indication of an intent to disclose such information, a party (or its
Affiliates) owning such information shall be entitled to seek, by way of private
litigation, injunctive relief or other equitable relief in addition to any and
all remedies available at law or in equity.”

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

(E)   DISPUTE RESOLUTION

Sections 17.1 and 17.2 are replaced by the following:
“17.1 Resolution of Disputes
(a) The Parties agree that except as specified in Clauses 17.2(f), 17.2(i) and
11.4 in no event shall any dispute, controversy or claim arising under this
Agreement be the subject of private litigation between the Parties.
(b) Disputes, controversies and claims related to matters within the powers and
authority of the Steering Committee shall be resolved by the Parties in
accordance with the procedures set forth in Clause 1.2 of the Option Agreement.
To the extent that a dispute, controversy or claim is related to compliance with
the terms of this Agreement, or the validity, breach, termination or
interpretation of this Agreement, such dispute, controversy or claim shall be
resolved in accordance with Clause 17.1(c).
(c) Each Party shall have the right to refer any dispute, controversy or claim
related to compliance with the terms of this Agreement, or the validity, breach,
termination or interpretation of this Agreement, to the senior management within
each Party for resolution. The senior management shall have thirty (30) days in
which to meet in good faith to resolve the dispute, controversy or claim. In the
event that the senior management of both Parties are unable to resolve the
matter within such thirty (30) days, the dispute, controversy or claim, shall be
promptly submitted to the to the Chief Executive Officer of Emisphere or its
designee and the Global Head of Pharma Development of Novartis or its designee
(together, the “Senior Officers”) for resolution. In the event the Senior
Officers are unable to resolve the dispute, controversy or claim within fifteen
(15) days, such dispute, controversy or claim shall be resolved through binding
arbitration pursuant to Clause 17.2.
17.2 Arbitration
(a) In the event that the Senior Officers are unable to resolve any dispute,
controversy or claim between the Parties referred to them pursuant to Clause
17.1(c) arising out of or in connection with compliance with this Agreement, or
the validity, breach, termination or interpretation of this Agreement, the
dispute, controversy or claim (other than a dispute, controversy or claim
relating to patent scope, validity or infringement) shall, at the request of
either Party be finally settled by binding arbitration in accordance with the
then current Rules of Arbitration of the International Chamber of Commerce.
(b) The arbitration panel shall consist of three (3) arbitrators, each of whom
must have legal or business experience in pharmaceutical licensing matters. The
arbitrators are to be selected as follows: Novartis shall nominate one (1) such
qualified arbitrator;

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
Emisphere shall nominate one (1) such qualified arbitrator; and the two
arbitrators so nominated shall nominate a third such qualified arbitrator, who
shall be the presiding arbitrator, in each case subject to confirmation by the
International Court of Arbitration of the International Chamber of Commerce (the
“ICC Court”). In the event either Novartis or Emisphere shall have failed to
nominate a qualified arbitrator as provided above within fifteen (15) days after
the other Party shall have nominated its arbitrator, or the two arbitrators so
nominated shall fail to agree on a third arbitrator as provided above within
thirty (30) days, the presiding arbitrator shall be appointed by the ICC Court.
(c) The place of arbitration shall be New York and the language of the
arbitration shall be English.
(d) Except as otherwise provided in this Agreement, the arbitration procedure
set forth in this Article 12.2 shall be the sole and exclusive means of settling
or resolving any dispute referred to in this Clause 17.2.
(e) Within sixty (60) days after the third and presiding arbitrator has been
confirmed by the ICC Court, the Parties shall exchange all documents in their
respective possession that are relevant to the issues in dispute and not
protected from disclosure by attorney-client privilege or other immunity. Each
Party shall also be permitted to take sworn oral deposition of individuals, such
depositions to be scheduled by mutual agreement and concluded within forty-five
(45) days after the exchange of documents described above. At least fifteen
(15) days prior to the first scheduled hearing date, the Parties shall identify
the witnesses that they intend to present at the arbitration hearing and the
documentation on which they intend to rely. The Parties shall use their
commercially reasonable efforts to conclude the arbitration hearings within ten
(10) months following the confirmation of the third and presiding arbitrator.
The arbitrators shall issue their decision (including grounds and reasoning) in
writing no later than sixty (60) days following the conclusion of the last
arbitration hearing.
(f) The award of the arbitrators shall be final and binding on the Parties and
may be presented by either of the Parties for enforcement in any court of
competent jurisdiction, and the Parties hereby consent to the jurisdiction of
such court solely for purposes of enforcement of this arbitration agreement and
any order or award entered therein.
(g) Each Party shall bear its own attorney’s fees, costs, and disbursements
arising out of the arbitration, and shall pay an equal share of the fees and
costs of the arbitrators; provided, however, the arbitrators shall be authorized
to determine whether a Party is the prevailing party, and if so, to award to
that prevailing Party reimbursement for its reasonable attorneys’ fees, costs
and disbursements and/or the fees and costs of the arbitrators.

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
(h) Provided the Agreement has not terminated, the Parties covenant to continue
the performance under the Agreement in accordance with the terms thereof,
pending the final resolution of the dispute.
(i) Notwithstanding the foregoing, either Party shall have the right to pursue
an action in a court of competent jurisdiction to obtain injunctive or other
equitable remedy.
17.3 Governing Law. This Agreement shall be governed by, construed and enforced
in accordance with the laws of the State of New York without regard to the
conflicts of laws principles thereof.”

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT C
FURTHER AMENDMENTS TO ORAL HGH AGREEMENT

(A)   PROGRAMME

Sections 3.1, 3.2. 3.3 and 3.4 are deleted in their entirety.

(B)   FURTHER DEVELOPMENT

Sections 4.1, 4.3 and 4.4 are deleted in their entirety and Section 4.1 is
replaced with the following:
“4.1. Research and Development. Notwithstanding any other provision of this
Agreement, with effect from the Amendment Effective Date, Novartis will be
responsible for conducting, at its sole expense, all further research,
preclinical, clinical and other development of the Products (and the [*****]
Carriers used therein).”

(C)   PROSECUTION OF EMISPHERE PATENTS

Section 8.2(c) is amended by adding the following to the end of the Section:
“Without limiting the foregoing, in the event that Emisphere fails to make any
filing or payment related to the preparing, filing, prosecuting or maintaining
of any Emisphere Patent Right, Novartis shall have the right, exercisable in its
sole discretion and expense, to file or continue the prosecution or maintenance
of such Emisphere Patent Right in Emisphere’s name; provided, however, that
Novartis shall (1) be entitled to deduct from any royalty payments due to
Emisphere hereunder [*****] and (2) keep Emisphere informed of the prosecution
of such patents and provide Emisphere with the right to comment on any proposed
substantive filing prior at least two (2) weeks prior to the relevant filing
date.”

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT D
FURTHER AMENDMENTS TO ORAL PTH AGREEMENT

(A)   FURTHER DEVELOPMENT

The first sentence of Section 3.1 is deleted and replaced with the following:
“Notwithstanding any other provision of this Agreement, with effect from the
Amendment Effective Date, Novartis will be responsible for conducting, at its
sole expense, all further research, preclinical, clinical and other development
of the Products (and the [*****] Carriers used therein).”

(B)   CARRIERS

Section 3.2 is deleted in its entirety.

(C)   PROSECUTION OF EMISPHERE PATENTS

Section 8.2(c) is amended by adding the following to the end of the Section:
“Without limiting the foregoing, in the event that Emisphere fails to make any
filing or payment related to the preparing, filing, prosecuting or maintaining
of any Emisphere Patent Right, Novartis shall have the right, exercisable in its
sole discretion and expense, to file or continue the prosecution or maintenance
of such Emisphere Patent Right in Emisphere’s name; provided, however, that
Novartis shall (1) be entitled to deduct from any royalty payments due to
Emisphere hereunder [*****] and (2) keep Emisphere informed of the prosecution
of such patents and provide Emisphere with the right to comment on any proposed
substantive filing prior at least two (2) weeks prior to the relevant filing
date.”

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT E
JOINT PATENTS
Disodium Salt Patents and Patent Applications

          Country   Application No.   Patent No.
AT
  [*****]   [*****]
 
       
AU
  [*****]    
 
       
AU
  [*****]   [*****]
 
       
AU
  [*****]   [*****]
 
       
CA
  [*****]    
 
       
CA
  [*****]    
 
       
CH
  [*****]   [*****]
 
       
DE
  [*****]   [*****]
 
       
EP
  [*****]   [*****]
 
       
EP
  [*****]    
 
       
ES
  [*****]   [*****]
 
       
FR
  [*****]   [*****]
 
       
GB
  [*****]   [*****]
 
       
HK
  [*****]   [*****]
 
       
IE
  [*****]   [*****]

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
IL
  [*****]   [*****]
 
       
IL
  [*****]    
 
       
IL
  [*****]    
 
       
IT
  [*****]   [*****]
 
       
JP
  [*****]    
 
       
JP
  [*****]    
 
       
NL
  [*****]   [*****]
 
       
NZ
  [*****]    
 
       
NZ
  [*****]   [*****]
 
       
NZ
  [*****]   [*****]
 
       
SE
  [*****]   [*****]
 
       
WO
  [*****]    
 
       
ZA
  [*****]    
 
       
ZA
  [*****]   [*****]
 
       
ZA
  [*****]   [*****]
 
       
VE
  [*****]    
 
       
CL
  [*****]   [*****]
 
       
PE
  [*****]    

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
TH
  [*****]    
 
       
UY
  [*****]    
 
       
TW
  [*****]   [*****]
 
       
AR
  [*****]    
 
       
AR
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]   [*****]
 
       
US
  [*****]   [*****]
 
       
US
  [*****]    

 

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
Micronized Delivery Agent Patents and Patent Applications — Emisphere Filed
Applications

          Country   Application No.   Patent No.
EP
  [*****]    
 
       
HK
  [*****]    
 
       
JP
  [*****]    
 
       
WO
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    

Micronized Delivery Agent Patents and Patent Applications — Novartis Filed
Applications

          Country   Application No.   Patent No.
US
  [*****]    
 
       
US
  [*****]    
 
       
WO
  [*****]    
 
       
EP
  [*****]   [*****]
 
       
AT
  [*****]   [*****]
 
       
AU
  [*****]   [*****]

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
BE
  [*****]   [*****]
 
       
BR
  [*****]    
 
       
CA
  [*****]    
 
       
CH
  [*****]   [*****]
 
       
CN
  [*****]    
 
       
DE
  [*****]   [*****]
 
       
ES
  [*****]   [*****]
 
       
FR
  [*****]   [*****]
 
       
GB
  [*****]   [*****]
 
       
HK
  [*****]   [*****]
 
       
IN
  [*****]    
 
       
IN
  [*****]    
 
       
IT
  [*****]   [*****]
 
       
JP
  [*****]    
 
       
MX
  [*****]   [*****]
 
       
NL
  [*****]   [*****]
 
       
PL
  [*****]   [*****]
 
       
PT
  [*****]   [*****]

 

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CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
TR
  [*****]   [*****]

 

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
[*****] Polymorph Patents and Patent Applications

          Country   Application No.   Patent No.
US
  [*****]    
 
       
US
  [*****]    
 
       
CL
  [*****]    
 
       
TH
  [*****]    
 
       
AR
  [*****]    
 
       
AU
  [*****]    
 
       
BR
  [*****]    
 
       
CA
  [*****]    
 
       
CN
  [*****]    
 
       
EP
  [*****]    
 
       
GC
  [*****]    
 
       
IL
  [*****]    
 
       
IN
  [*****]    
 
       
JP
  [*****]    
 
       
KE
  [*****]    
 
       
KR
  [*****]    
 
       
MX
  [*****]    

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
NZ
  [*****]    
 
       
PE
  [*****]    
 
       
PK
  [*****]    
 
       
RU
  [*****]    
 
       
SG
  [*****]    
 
       
TW
  [*****]    
 
       
VE
  [*****]    
 
       
WO
  [*****]    
 
       
ZA
  [*****]   [*****]
 
       
GT
  [*****]    
 
       
JO
  [*****]    
 
       
LB
  [*****]   [*****]
 
       
MT
  [*****]   [*****]

 

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT F
NOVARTIS PATENTS
pTH/Calcitonin Patent Applications — Emisphere Filed Applications

          Country   Application No.   Patent No.
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
US
  [*****]    

pTH/Calcitonin Patent Applications — Novartis Filed Applications

          Country   Application No.   Patent No.
AT
  [*****]   [*****]
 
       
AU
  [*****]   [*****]
 
       
AU
  [*****]   [*****]
 
       
BE
  [*****]   [*****]
 
       
BR
  [*****]    
 
       
CA
  [*****]    
 
       
CH
  [*****]   [*****]
 
       
CN
  [*****]    
 
       

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
CZ
  [*****]    
 
       
DE
  [*****]   [*****]
 
       
EC
  [*****]    
 
       
EP
  [*****]   [*****]
 
       
ES
  [*****]   [*****]
 
       
FR
  [*****]   [*****]
 
       
GB
  [*****]   [*****]
 
       
GR
  [*****]   [*****]
 
       
HU
  [*****]    
 
       
ID
  [*****]   [*****]
 
       
IL
  [*****]    
 
       
IN
  [*****]    
 
       
IT
  [*****]   [*****]
 
       
JP
  [*****]    
 
       
JP
  [*****]    
 
       
KR
  [*****]    
 
       
KR
  [*****]    
 
       
MX
  [*****]    

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
NL
  [*****]   [*****]
 
       
NO
  [*****]    
 
       
NZ
  [*****]   [*****]
 
       
PH
  [*****]   [*****]
 
       
PL
  [*****]    
 
       
PT
  [*****]   [*****]
 
       
RU
  [*****]   [*****]
 
       
SG
  [*****]   [*****]
 
       
SK
  [*****]    
 
       
TR
  [*****]   [*****]
 
       
US
  [*****]    
 
       
US
  [*****]    
 
       
WO
  [*****]    
 
       
VN
  [*****]   [*****]
 
       
ZA
  [*****]   [*****]

hGH Formulation — Emisphere Filed Applications

          Country   Application No.   Patent No.
US
  [*****]    

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

          Country   Application No.   Patent No.
US
  [*****]    

hGH Formulation — Novartis Filed Applications

          Country   Application No.   Patent No.
AU
  [*****]    
 
       
BR
  [*****]    
 
       
CA
  [*****]    
 
       
CN
  [*****]    
 
       
EP
  [*****]    
 
       
IN
  [*****]    
 
       
JP
  [*****]    
 
       
KR
  [*****]    
 
       
MX
  [*****]    
 
       
RU
  [*****]    
 
       
US
  [*****]    
 
       
WO
  [*****]    

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT G

FORM OF RESEARCH /FEASIBILITY AGREEMENT

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT H

TERMS FOR LICENSES FOR ADDITIONAL COMPOUNDS
GENERAL TERMS

     
License
  Emisphere grants Novartis an exclusive license (with the ability to
sublicense, subcontract or collaborate without Emisphere’s prior consent) to
apply Licensed IP to develop, make, commercialize and otherwise use:
 
   
 
  (a) [*****] Carriers with such Additional Compound to form Products; and
 
   
 
  (b) Products,
 
   
 
  (and to have any of the above done), in the Field in the Territory, it being
understood and agreed that any such license shall also include the right to
Develop, make, Commercialize and otherwise use [*****] Carriers in the course of
exercising such license.
 
   
Rights and Obligations
  Novartis may exercise its rights and perform its obligations itself or through
any of its affiliates and may subcontract its development, regulatory,
manufacturing and commercialization activities as it deems appropriate subject
to the approval of Emisphere not to be unreasonably withheld.
 
   
 
  Emisphere may exercise its rights and perform its obligations itself or
through any of its affiliates and may subcontract its manufacturing activities
as it deems appropriate subject to the approval of Novartis not to be
unreasonably withheld.
 
   
Development
  Novartis will be responsible for conducting, at its sole expense, all further
research, preclinical, clinical and other development of the Products (and the
[*****] Carrier used therein).
 
   
Regulatory
  Novartis will be responsible for conducting, at its sole expense, all further
regulatory activities with respect to Products (including any [*****] Carrier
used therein).
 
   
Reports and
  Subject to Third Party confidentiality obligations, each party shall:
Communications
  (a) provide the other party with regular, quarterly updates of its
development, regulatory, and commercialization programs and plans concerning
[*****] Carrier and [*****] Carrier with products or Products; and (b) promptly
inform the other party of any material changes in any such program or plan.
 
   
Commercialization
  Novartis will be responsible for worldwide commercialization of the Products,
including all marketing and sales activities.
 
   
Manufacturing
  Novartis will be responsible for the manufacture and supply of all of its
requirements for the [*****] Carrier and the Products. Novartis will include
Emisphere and/or its designee(s) as a back-up manufacturer of [*****] Carrier in
all Drug Master Files and such other similar regulatory filings. The manufacture
of [*****] Carrier will meet the quality specifications in Novartis’ applicable
NDA.
 
   
Intellectual Property
  All inventions related to any [*****] Carrier alone which are generated by
Novartis alone or Emisphere and Novartis jointly under the license agreement
will be jointly-owned by Novartis and Emisphere, and Emisphere’s interest in any
such inventions will be subject to the licenses to Novartis as set forth above
and royalty and milestone provisions set forth below.

 

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

     
 
  Emisphere will grant power of attorney to Novartis to allow it to prosecute,
maintain and enforce all Emisphere licensed patents in the event that Emisphere
fails to do so. The license agreement shall include a process for cooperation,
coordination, and resolution of IP developments and issues.
 
   
 
  Each party shall use commercially reasonable efforts to provide Know-How to
the other party. Novartis shall also use commercially reasonable efforts to
provide technology support to Emisphere or its designated manufacturer to
manufacture [*****] Carrier at an agreed upon FTE cost rate.
 
   
FINANCIAL PROVISIONS
 
   
Milestone Payments
  Milestone payments shall be paid by Novartis to Emisphere at the achievement
of the following milestones with respect to each Product comprising [*****]
Carrier in combination with the applicable Additional Compound:
 
   
 
  Clinical Milestones
 
   
 
  [*****]
 
   
 
  [*****]
 
   
 
  Regulatory Approval Milestones
 
   
 
  [*****]
 
   
 
  [*****]
 
   
 
  [*****]
 
   
 
  [*****]
 
   
 
  The amount of such payments shall be agreed upon in good faith by the parties
in discussions to be completed no later than [*****].
 
   
Royalties
  Royalty payments with respect to any Product incorporating an Additional
Compound shall be agreed upon in good faith by the parties in discussions to be
initiated by Novartis no later than [*****].
 
   
 
  All royalties will be net of expenses incurred by Novartis in prosecuting its
rights under the license agreement in the event of the application of applicable
bankruptcy laws due to Emisphere’s bankruptcy.
 
   
Royalty Step-Down
  In any country in which there is a third party product containing a [*****]
Carrier and the same Compound, the royalties payable by Novartis shall be equal
to [*****] of the royalties set forth above on the net sales of such Product in
such country for the remainder of the royalty term (as set forth below).
 
   
Third Party License
Fees
  Provisions consistent with provisions in Previous Agreements.
 
   
Royalty Term
  Royalties will be payable on a Product-by-Product and country-by-country basis
until the later of (a) the expiration of the last to expire valid claim of an
existing patent of the Emisphere Technology claiming the [*****] Carrier or
Product or the use for which it is being sold in such country and (b) [*****]
from the first

 

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

     
 
  commercial sale of the Product. Following the royalty term on a
country-by-country basis, the licenses granted to Novartis with respect to the
Product shall become fully paid-up, royalty-free, transferable, perpetual and
irrevocable licenses.
 
   
TERM AND TERMINATION
 
   
Term
  The term of the license agreement will commence upon execution and continue,
on a Product-by-Product basis, until the expiration of the royalty obligations
of Novartis with respect to the applicable Product, unless earlier terminated as
permitted by the license agreement.
 
   
Termination
  The license agreement will include customary rights of termination and
provisions dealing with the effects of any such termination. Jointly owned
intellectual property shall remain jointly owned following termination.
 
   
MISCELLANEOUS
   
 
   
Governing Law
  New York

 

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.
EXHIBIT I
TOXICOLOGY STUDIES

                  Study no.   Study title     Amount of payment for use   Acute
toxicity studies
007012
    [*****]       [*****]  
007013
    [*****]       [*****]  
007014
    [*****]       [*****]  
007015
    [*****]       [*****]   Repeated dose toxicity studies
987119
    [*****]       [*****]  
987146
    [*****]       [*****]  
987120
    [*****]       [*****]  
997166
    [*****]       [*****]  
017045
    [*****]       [*****]   Carcinogenicity studies
0170090
    [*****]       [*****]  
0370005
    [*****]       [*****]   Safety pharmacology studies
994114
    [*****]       [*****]  
994115
    [*****]       [*****]  

 

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

 

CONFIDENTIAL TREATMENT REQUESTED: Certain portions of this document have been
omitted pursuant to a request for confidential treatment and, where applicable,
have been marked with an asterisk (“[*****]”) to denote where omissions have
been made. The confidential material has been filed separately with the
Securities and Exchange Commission.

                  Study no.   Study title     Amount of payment for use  
0419085
    [*****]       [*****]   Other toxicity studies
0570300
    [*****]       [*****]