Exhibit 10.5

 

***Text Omitted and Filed Separately with the Securities and Exchange
Commission.

Confidential Treatment Requested Under

17 C.F.R. Sections 200.80(b)(4) and 240.24b-2

 

EXECUTION COPY

 

SUPPLY AGREEMENT

 

THIS SUPPLY AGREEMENT (the “Agreement”) is entered into on March 29, 2012 (the
“Effective Date”) between Optimer Luxembourg 2 S.à r.l., a company organized
under the laws of Luxembourg (“Optimer”), having a principal place of business
at 6C, rue Gabriel Lippmann, L-5365 Munsbach, Luxembourg, and Astellas Pharma
Inc., a company organized under the laws of Japan (“Partner”), having a
principal place of business at 2-3-11 Nihonbashi-Honcho, Chuo-ku, Tokyo,
103-8411, Japan.

 

RECITALS

 

WHEREAS, Optimer U.S.A. (as defined below) has developed fidaxomicin for the
treatment of Clostridium difficile infection and owns or controls certain
patents, know-how and other intellectual property relating to fidaxomicin;

 

WHEREAS, Partner is engaged in the research, development and commercialization
of pharmaceutical products;

 

WHEREAS, Partner and Optimer U.S.A. are entering into a Collaboration and
License Agreement on even date herewith (as may be amended, the “License
Agreement”) under which Partner is receiving a license to develop and
commercialize Products in the Territory; and

 

WHEREAS, Optimer desires to supply Product to Partner in connection with the
License Agreement and on the terms and conditions set forth herein.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing premises and the mutual
covenants contained herein and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the Parties agree as
follows:

 

1.                                      DEFINITIONS

 

1.1          “Actual Discount” shall mean, with respect to a given Fiscal Half
Year, the amount equal to (a) […***…] (b) […***…], which amount may be a
negative number.

 

1.2          “Actual Transfer Price” shall have the meaning set forth in
Section 4.1(a)(i)(2).

 

1.3          “Additional Product” shall mean any pharmaceutical product
containing or comprising a Compound as the sole active pharmaceutical
ingredient, […***…], to

 

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which Partner has a license under the License Agreement, other than the Existing
Product, but not combination products or non-oral formulations.

 

1.4          “Affiliate” of a Party shall mean any entity that, directly or
indirectly, through one or more intermediaries, controls, is controlled by, or
is under common control with such Party, as the case may be, but for only so
long as such control exists.  As used in this Section 1.4, “control” shall mean
(a) to possess, directly or indirectly, the power to direct the management or
policies of an entity, whether through ownership of voting securities, by
contract relating to voting rights or corporate governance; or (b) direct or
indirect beneficial ownership of more than fifty percent (50%) (or such lesser
percentage which is the maximum allowed to be owned by a foreign corporation in
a particular jurisdiction) of the voting share capital or other equity interest
in such entity.

 

1.5          “APEL” shall mean Astellas Pharma Europe Limited, an Affiliate of
Partner.

 

1.6          “[…***…]” shall have the meaning set forth in […***…].

 

1.7          “API” shall mean the active pharmaceutical ingredient of the
Existing Product.

 

1.8          “Applicable Laws” shall mean the applicable provisions of any and
all national, supranational, regional, state and local laws, treaties, statutes,
rules, regulations, administrative codes, guidance, ordinances, judgments,
decrees, directives, injunctions, orders, permits (including Regulatory
Approvals) of or from any court, arbitrator, Regulatory Authority or
governmental agency or authority having jurisdiction over or related to the
subject item.

 

1.9          “Assignment Agreement” shall have the meaning set forth in
Section 2.4.

 

1.10        “Audit Disagreement” shall have the meaning provided in
Section 4.3(e).

 

1.11        “Buffer Stock” shall have the meaning provided in Section 7.5(a).

 

1.12        “Bulk Product” shall mean the Existing Product in tablet form
without being packaged in a blister or bottle.

 

1.13        “Business Day” shall mean a day other than a Saturday or Sunday or
any public holiday in the United States or Japan.  For the avoidance of doubt,
references in this Agreement to “days” shall mean calendar days.

 

1.14        “Calendar Quarter” shall mean a period of three (3) consecutive
months during a Calendar Year beginning on and including January 1st, April 1st,
July 1st or October 1st.

 

1.15        “Calendar Year” shall mean a period of twelve (12) consecutive
months beginning on and including January 1st.

 

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1.16        “CDI” shall mean Clostridium difficile infection or Clostridium
difficile-associated diarrhea (CDAD) in humans.

 

1.17        “Certificate of Analysis” shall have the meaning provided in
Section 6.1(d).

 

1.18        “cGMP” shall mean all applicable current good manufacturing
practices as adopted by the applicable Regulatory Authority in the Territory and
in the country where such Manufacture takes place, including standards relating
to Manufacturing practices for active pharmaceutical ingredients, intermediates,
bulk products or finished pharmaceutical products.

 

1.19        “COGS Plus” shall mean […***…] of Cost of Goods.

 

1.20        “Compound” shall mean […***…] or any salt, hydrate, solvate,
polymorph, stereo-isomer, ester, chelate, clathrate, acid, base, epimer,
enantiomer, crystalline form, metabolite or prodrug or any other non-covalent
derivative or crystalline form thereof.

 

1.21        “Confidential Information” shall have the meaning provided in
Section 10.1.

 

1.22        “Confidentiality Agreement” shall mean that certain agreement dated
October 26, 2011 between Optimer U.S.A. and Partner.

 

1.23        “Control” (including any variations such as “Controlled” and
“Controlling”) shall mean with respect to any Information, patent or other
intellectual property rights, possession by a Party of the ability (whether by
ownership or license, other than pursuant to this Agreement) to grant the
applicable license under this Agreement, without violating the terms of an
agreement with a Third Party.

 

1.24        “Cost of Goods” shall mean all out-of-pocket costs incurred by
Optimer for Supplied Products, including (i) all payments made to Third Parties
for products and services purchased from such Third Parties, including payments
for API, and if applicable, tableting, bottling or other formulation of API, and
packaging in blister and bottle packaged form, and (ii) all sales and excise
taxes imposed thereon, customs duties and charges levied by government
authorities, and costs for shipping, storage and insurance with respect to
Supplied Products.

 

1.25        “Develop” shall mean to develop (including clinical, non-clinical
and chemistry, manufacturing and controls (CMC) development), analyze, test and
conduct preclinical, clinical and all other regulatory trials for a Compound or
Product, as well as any and all activities pertaining to new indications,
pharmacokinetic studies and all related activities including work on new
formulations, new methods of treatment and CMC activities including new
manufacturing methods.  “Developing” and “Development” shall have correlative
meanings.

 

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1.26        “Disclosing Party” shall have the meaning provided in Section 10.1.

 

1.27        “Discount Percentage” shall mean […***…], as such percentage may be
adjusted in accordance with Section 4.1(b)(iii).

 

1.28        “Discount Term” shall mean, on a Product-by-Product basis, the
period of time commencing on the […***…] of Launch Quantities of Products from
Optimer under this Agreement until the […***…] during which Generic Entry
occurs.

 

1.29        “Excluded Claim” shall have the meaning provided in Section 13.3(f).

 

1.30        “Existing Product” shall mean that certain pharmaceutical product
Controlled by Optimer as of the Effective Date that is formulated as a tablet
for oral administration and contains two hundred (200) milligrams of Compound as
the sole active pharmaceutical ingredient.

 

1.31        “FDA” shall mean the United States Food and Drug Administration, or
any successor agency or agencies thereto having the administrative authority to
regulate the marketing of human pharmaceutical products in the United States.

 

1.32        “Field” shall mean the diagnosis, prevention and treatment of any
disease or condition in humans, including CDI.

 

1.33        “First Commercial Sale” shall mean, on a Product-by-Product basis,
the first bona fide, arm’s length sale of a Product in the Territory following
receipt of Regulatory Approval of such Product in the Territory.  Sales of a
Product for registration samples, compassionate use sales, named patient use and
inter-company transfers to Affiliates of a Party will not constitute a First
Commercial Sale.

 

1.34        “Fiscal Half Year” shall mean a period of six (6) consecutive months
beginning on and including April 1st or October 1st, provided, that the first
Fiscal Half Year shall be the period beginning on the Effective Date and ending
on March 31st.

 

1.35        “Generic Entry” shall mean that a Generic Product is sold in the
Territory and sales of the Generic Product are greater than […***…] of total
sales by volume of all sales of such Product (including such Generic Product) in
the Territory in a Calendar Quarter.

 

1.36        “Generic Product” shall mean any product that is introduced in the
Territory by an entity other than Partner or its Affiliate or Sublicensee which
contains […***…] as contained in a Product sold by Partner or its Sublicensee
[…***…].

 

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1.37        “Indemnitee” shall have the meaning provided in Section 12.3.

 

1.38        “Indemnitor” shall have the meaning provided in Section 12.3.

 

1.39        “Information” shall mean information, ideas, inventions,
discoveries, concepts, formulas, practices, procedures, processes, methods,
knowledge, know-how, trade secrets, technology, inventories, machines,
techniques, development, designs, drawings, computer programs, skill,
experience, documents, apparatus, results, clinical and regulatory strategies,
documentation, information and submissions pertaining to, or made in association
with, filings with any Regulatory Authority, data, including pharmacological,
toxicological and clinical data, analytical and quality control data,
manufacturing data and descriptions, patent and legal data, market data,
financial data or descriptions, devices, assays, chemical formulations,
specifications, material, compositions of matter, product samples and other
samples, physical, chemical and biological materials and compounds, and the
like, in written, electronic or other form, now known or hereafter developed,
whether or not patentable.

 

1.40        “Joint Patents” shall mean all Patents that claim Inventions that
are jointly invented (as determined by US patent law) by employees or
independent contractors of Optimer U.S.A. and Partner or their respective
Affiliates. For purposes of this Section 1.39, “Inventions” shall mean any
discovery or invention, whether or not patentable, made by a party to the
License Agreement or its Affiliates or its or their respective employees, agents
or independent contractors during the course of Development, Manufacturing,
regulatory or commercial activities in the Territory with respect to Compounds
or Products in the Field in the Territory (and, if Partner or its Affiliates or
their respective employees, agents or independent contractors performs any such
activities pursuant to this Agreement outside the Territory, either alone or
jointly with Optimer U.S.A. or its Affiliates or their respective employees,
agents or independent contractors, any discovery or invention made during such
activities), in each case pursuant to the License Agreement during the term of
the License Agreement and solely to the extent such discovery or invention
relates to Compounds or Products in the Field, together with all intellectual
property rights relating thereto.

 

1.41        “Latent Defect” means a defect that causes Supplied Product to fail
to conform to the warranties set forth in Section 9.1, which defect is not
discoverable upon reasonable physical inspection and testing performed pursuant
to Section 6.2 but is discovered at a later time (e.g., in the course or as a
result of long-term stability studies).

 

1.42        “Launch Quantities” shall have the meaning provided in Section 3.1.

 

1.43        “Licensed Patents” shall mean (a) all Patents that Optimer U.S.A. or
any Optimer Current Affiliate (as defined in the License Agreement) Controls as
of the Effective Date or during the term of the License Agreement, which Patents
are necessary or useful to Develop,

 

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keep, use, sell, offer for sale, dispose of, offer to dispose of and import
Products (including any Compound contained therein), and (b) if API is Supplied
Product, all Patents that Optimer U.S.A. or any Optimer Current Affiliate
Controls as of the Effective Date or during the term of the License Agreement,
which Patents are necessary or useful to tablet or otherwise formulate API into
Products and blister, bottle (if applicable) and package API into Products, in
each case (a) and (b) in the Field in the Territory including, but not limited
to, those Patents listed on EXHIBIT A of the License Agreement.

 

1.44        “Losses” shall have the meaning provided in Section 12.1.

 

1.45        “MAA” shall mean a marketing authorization application or equivalent
application, and all amendments and supplements thereto, filed with the
applicable Regulatory Authority in the Territory.

 

1.46        “MAA Approval” shall mean, with respect to each country in or
outside the Territory for a particular Product, approval by the applicable
Regulatory Authority in such country (which, in the Territory, shall be the
MHLW) of the MAA for such Product filed in such country.  It is understood that,
as used herein, MAA Approval does not include pricing or reimbursement approval.

 

1.47        “Manufacture” shall mean all activities related to the manufacturing
of a pharmaceutical product, or any ingredient thereof, including manufacturing
Supplied Product or supplies for Development, manufacturing of Supplied Product
for commercial sale, in-process and semi-finished product testing, release of
Supplied Product or any component or ingredient thereof, quality assurance
activities related to manufacturing and release of Supplied Product, ongoing
stability tests and regulatory activities related to any of the foregoing. 
“Manufactured” or “Manufacturing” shall have correlative meaning.

 

1.48        “Manufacturing Process” shall have the meaning provided in
Section 7.4.

 

1.49        “Manufacturing Services Agreement” shall have the meaning set forth
in Section 2.4.

 

1.50        “MHLW” shall mean the Ministry of Health, Labour and Welfare, or any
successor agency thereto having the administrative authority to regulate the
marketing of human pharmaceutical products or biological therapeutic products in
the Territory.

 

1.51        “Net Sales” shall mean, with respect to any Product, the gross
amounts invoiced for sales or other dispositions of such Product by or on behalf
of Partner or its Sublicensees, as applicable, to Third Parties (other than
Sublicensees) less the following deductions to the extent included in the gross
invoiced sales price for such Product or otherwise directly paid or incurred by
Partner or its Sublicensees, as applicable, with respect to the sale or other
disposition of such Product:

 

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(a)           normal and customary trade and quantity discounts actually allowed
and properly taken directly with respect to sales of such Product (provided that
such discounts are not applied disproportionately to such Product when compared
to the other products of Partner or its Sublicensee, as applicable);

 

(b)           credits or allowances given or made for rejection of or return of
previously sold Products or for retroactive price reductions and billing errors;

 

(c)           rebates and chargeback payments granted to managed health care
organizations, pharmacy benefit managers (or equivalents thereof), national,
state/provincial, local, and other governments, their agencies and purchasers
and reimbursers, or to trade customers;

 

(d)           costs of freight, insurance, and other transportation charges
directly related to the distribution of such Product;

 

(e)           taxes, duties or other governmental charges (including any tax
such as a value added or similar tax, other than any taxes based on income)
levied on or measured by the billing amount for such Product, as adjusted for
rebates and refunds; and

 

(f)            an allowance of up to […***…] for bad debts consistently applied
in accordance with GAAP.

 

Upon any sale or other disposition of any Product that should be included within
Net Sales for any consideration other than exclusively monetary consideration on
bona fide arm’s-length terms, then for purposes of calculating Net Sales under
this Agreement, such Product shall be deemed to be sold exclusively for money at
the average sales price during the applicable reporting period generally
achieved for such Product in the country in which such sale or other disposition
occurred when such Product is sold alone and not with other products.

 

In no event will any particular amount, identified above, be deducted more than
once in calculating Net Sales.  Sales of a Product between Partner and its
Sublicensees for resale shall be excluded from the computation of Net Sales, but
the subsequent resale of such Product to a Third Party shall be included within
the computation of Net Sales.  Any free-of-charge disposal or use of a Product
for development, regulatory or marketing purposes, such as clinical trials,
compassionate use or indigent patient programs, shall not be deemed a sale or
disposition for purposes of calculating Net Sales. If any Product is sold as a
Bundled Product for a single invoiced amount (a “Combination Sale”), the Net
Sales amount for the Product sold in such a Combination Sale shall be that
portion of the gross amount invoiced for such Combination Sale (less all
permitted deductions) determined as follows:

 

Except as provided below, the Net Sales amount for a Combination Sale shall
equal the gross amount invoiced for the Combination Sale, reduced by the
permitted deductions (the “Net Combination Sale Amount”), multiplied by the
fraction A/(A+B), where:

 

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[…***…].

 

In the event that the Compound Component included in a Bundled Product is sold
as a separate product in the Territory, but the Other Component included in such
Bundled Product is not sold separately in the Territory, the calculation of Net
Sales resulting from such Combination Sale shall be determined by multiplying
the Net Combination Sale Amount by the fraction A/C where:

 

[…***…].

 

In the event that the Compound Component included in a Bundled Product is not
sold as a separate product in the Territory, but the Other Component included in
such Bundled Product is sold separately in the Territory, the calculation of Net
Sales resulting from such Combination Sale shall be determined by multiplying
the Net Combination Sale Amount by the fraction (C-D)/C, where:

 

[…***…].

 

Where the calculation of Net Sales resulting from a Combination Sale in the
Territory cannot be determined by any of the foregoing methods, the calculation
of Net Sales for such Combination Sale shall be that portion of the Net
Combination Sale Amount reasonably determined in good faith by mutual agreement
of the Parties as properly reflecting the relative value of the Compound
Component included in the Bundled Product and the value of the Other
Component(s) included in the Bundled Product.

 

1.52        “NHI” shall mean the Japanese National Health Insurance pricing
system.

 

1.53        “NHI Price” shall mean, with respect to a Supplied Product in a
given Fiscal Half Year, the price per tablet (or bottle or such other unit of
the Product, as applicable) approved by the Regulatory Authority in the
Territory to obtain reimbursement for the Product that incorporates or is
comprised of such Supplied Product, as in effect on the last Business Day prior

 

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to the beginning of such Fiscal Half Year during which such shipment of Supplied
Product is delivered.

 

1.54        “Objection Notice” shall have the meaning provided in
Section 6.2(c).

 

1.55        “Optimer Indemnitee” shall have the meaning provided in
Section 12.1.

 

1.56        “Optimer U.S.A.” shall mean Optimer Pharmaceuticals, Inc.

 

1.57        “PAR” shall mean Par Pharmaceutical, Inc.

 

1.58        “PAR Agreement” shall mean that certain Prospective Buy-Back
Agreement, dated January 19, 2007, by and between Optimer U.S.A. and PAR, as
amended in accordance with its terms.

 

1.59        “PAR Tripartite Agreement” shall have the meaning provided in the
License Agreement.

 

1.60        “Partner Indemnitee” shall have the meaning provided in
Section 12.2.

 

1.61        “Party” shall mean Optimer or Partner individually, and “Parties”
shall mean Optimer and Partner collectively.

 

1.62        “Phase I Clinical Trial” shall mean a clinical trial of a Product in
humans that would provide for first testing of a Product in humans and would
satisfy the requirements of 21 C.F.R. §312.21(a) or analogous regulatory
requirements in the Territory.

 

1.63        “Phase II Clinical Trial” shall mean a clinical trial of a Product
in human patients in the Territory that would satisfy the requirements of 21
C.F.R. §312.21(b) or analogous regulatory requirements in the Territory, and is
intended to explore one or more doses, dose response, or duration of effect, and
to generate at least initial evidence of clinical activity and safety, for a
Product in the Field in the target patient population.

 

1.64        “Phase III Clinical Trial” shall mean a pivotal clinical trial of a
Product conducted in human patients designed to ascertain efficacy and safety of
such Product for the purpose of submitting an application for Regulatory
Approval to the competent Regulatory Authority in the Field in the Territory.

 

1.65        “Product” shall mean any pharmaceutical product containing or
comprising a Compound as the sole active pharmaceutical ingredient, in oral
[…***…] formulation only. For clarification, Products containing or comprising
different dosages of the same formulation of a Compound (for example, the
Existing Product and […***…] and/or Products containing or comprising different
formulations of the same dosage of a Compound (for example, the Existing Product
and […***…])

 

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shall be different Products.

 

1.66        “Product Specifications” shall mean the specifications for Supplied
Product mutually agreed by the Parties no later than […***…] after the Effective
Date or, for Supplied Product for use in Phase I Clinical Trials, mutually
agreed by the Parties promptly after the Effective Date as set forth in
Section 2.3(d)(i), and any specifications mutually agreed to by the Parties
established in connection with Supplied Product and changes to such
specifications made at the request of a Regulatory Authority in the Territory or
by mutual agreement of the Parties from time to time.  In the event Additional
Product(s) become subject to this Agreement as agreed by the Parties, the
Product Specifications shall be revised to include the specifications mutually
agreed to by the Parties with respect to such Additional Product(s).

 

1.67        “Provisional Discount” shall mean, with respect to any shipment of
Supplied Product, the amount equal to (a) […***…] (b) […***…], which amount may
be a negative number.

 

1.68        “Provisional Sales” shall mean, with respect to any shipment of
Supplied Products, the quantity of Supplied Products provisionally allocated for
sales or other dispositions for value, determined as follows:

 

(a)           if the Supplied Product is API, (A/B) x C where A is […***…] B is
[…***…] C is […***…] to take into account expected losses during Manufacture or
free-of-charge disposal or use of a Product for Development, regulatory or
marketing purposes, such as clinical trials, compassionate use or indigent
patient programs; or for holding in inventory pending sale or other disposition
for value; or

 

(b)           if the Supplied Product is Bulk Product, D x E, where D is […***…]
and E is […***…] to take into account expected losses during Manufacture or
free-of-charge disposal or use of a Product for Development, regulatory or
marketing purposes, such as clinical trials, compassionate use or indigent
patient programs; or for holding in inventory pending sale or other disposition
for value; or

 

(c)           if the Supplied Product is neither API nor Bulk Product, such
other estimated units of such Supplied Product as agreed in writing by the
Parties in good faith, consistent with the above provisions.

 

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1.69                        “Provisional Transfer Price” shall have the meaning
set forth in Section 4.1(a)(i)(1).

 

1.70                        “Quality Agreement” shall have the meaning provided
in Section 6.3.

 

1.71                        “Raw Materials” shall have the meaning provided in
Section 7.1.

 

1.72                        “Receiving Party” shall have the meaning provided in
Section 10.1.

 

1.73                        “Regulatory Approval” shall mean any and all
approvals (including price and reimbursement approvals, if required), licenses,
registrations, or authorizations of Regulatory Authorities in any country that
are necessary for the manufacture, use, storage, import, transport and/or sale
of a Product in the Field in such country.

 

1.74                        “Regulatory Authority” shall mean any national,
regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity whose review and/or approval is necessary
for the manufacture, packaging, use, storage, import, export, distribution,
promotion, marketing, offer for sale and sale of a Product in the Field in the
Territory.  If governmental approval is required for pricing or reimbursement
for a Product to be reimbursed by national health insurance (or its local
equivalent), “Regulatory Authority” shall also include any national, regional,
state or local regulatory agency, department, bureau, commission, council or
other governmental entity whose review and/or approval of pricing or
reimbursement is required.

 

1.75                        “Sales Report” shall have the meaning set out in the
License Agreement.

 

1.76                        “SEC” shall have the meaning provided in
Section 10.5(a).

 

1.77                        “Sublicensee” shall mean an Affiliate of Partner or
a Third Party to whom Partner grants a right (a) to Develop, keep, use, sell,
offer for sale, dispose of, offer to dispose of or import a Product in the Field
in the Territory, or (b) to the extent a license under the Licensed Technology
is necessary in order for Partner to tablet or otherwise formulate API into
Products or to blister, bottle (if applicable) or package API into Products, to
tablet, have tableted or otherwise formulate or have formulated API into
Products, or to blister, bottle (if applicable) or package API into Products in
the Field in the Territory, in each case beyond the mere right to purchase a
Product from Partner or its Affiliates, and “Sublicense” shall mean an agreement
or arrangement between Partner and a Sublicensee granting such rights.

 

1.78                        “Supplied Product” shall mean (a) API, (b) if agreed
by the Parties pursuant to Section 2.3(b), Bulk Product, (c) API or such other
form of Product as is agreed by the Parties pursuant to Section 2.3(d) for any
Development activities of Partner or its Sublicensees permitted under the
License Agreement, and placebo for such Development activities, (d) […***…], or
(e) if agreed by the Parties, any Additional Product […***…], in the form agreed
to by the

 

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Parties.  […***…].

 

1.79                        “Term” shall have the meanings provided in
Section 11.1.

 

1.80                        “Territory” shall mean Japan.

 

1.81                        “Third Party” shall mean any entity other than
Optimer or Partner or an Affiliate of Optimer or Partner.

 

1.82                        “Third Party Claims” shall have the meaning provided
in Section 12.1.

 

1.83                        “Transfer Price” shall have the meaning provided in
Section 4.1(a).

 

1.84                        “Valid Claim” shall mean (a) an unexpired claim of
an issued patent within the Licensed Patents or Joint Patents which has not been
found to be unpatentable, invalid or unenforceable by a court or other authority
in the subject country, from which decision no appeal is taken or can be taken;
or (b) a claim of a pending patent application; provided, however, that if a
claim of a pending patent application shall not have issued within […***…] after
the earliest filing date from which such claim takes priority, such claim shall
not constitute a Valid Claim for the purposes of this Agreement after such
[…***…] deadline unless and until a patent issues with such claim, and […***…];
provided further, that, for clarity, […***…].

 

2.                                      SUPPLY OF SUPPLIED PRODUCTS.

 

2.1                               Supply by Optimer.  Optimer will Manufacture
or have Manufactured and supply or have supplied to Partner such quantities of
Supplied Products as requested by Partner to cover total commercial requirements
of Partner and its Sublicensees for Supplied Products in the Territory,
including Supplied Products requested by Partner for promotional activities.  In
addition, Optimer will provide or have provided Supplied Products to Partner for
any Development activities permitted under the License Agreement.  Optimer will
be the exclusive supplier to Partner and its Sublicensees of Supplied Products
during the Term. Partner agrees that in no event shall Partner or its
Sublicensees Manufacture or have Manufactured Supplied Products, or purchase
Supplied Products from any party other than Optimer, except that if API is
Supplied Product, Partner or its Sublicensees may tablet or otherwise formulate
API into Products and blister, bottle (if applicable) and package API into
Products, as permitted under this

 

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Agreement and the License Agreement.  Optimer shall require its Third Party
manufacturer(s) of Supplied Products to comply in all material respects with the
requirements set forth in this Agreement and the Quality Agreement, including
the establishment and deployment of regular and as-needed inspections of the
facilities of such Third Party manufacturer(s) by Partner and the execution of
regular and as-needed audits of such Third Party manufacturer(s).  Optimer shall
not amend its agreements with Third Party manufacturer(s) of Supplied Products
to the extent they apply to the Territory in a manner inconsistent with this
Agreement and the Quality Agreement nor terminate them to the extent they apply
to the Territory without prior written consent of Partner, not to be
unreasonably withheld.

 

2.2                               Partner Responsibilities.  Partner shall have
the right and responsibility, at its expense, for all activities required to
make finished Products ready for sale to the market in the Territory.  Without
limiting the foregoing, Partner shall be responsible, at its expense, for
(a) all labeling and other written, printed or graphic content (i) affixed to
the applicable Products or any container or wrapper utilized with Products, or
(ii) accompanying the applicable Products, including package inserts, and
(b) all primary containers for Products, including bottles, cartons, shipping
cases or any other like matter used in packaging or accompanying the Products.

 

2.3                               Form of Supplied Product.

 

(a)                                 API.  Unless otherwise agreed by the
Parties, Optimer shall supply API as Supplied Product and Partner shall tablet
or otherwise formulate API into Products and blister, bottle (if applicable) and
package API into Products.  Partner shall be responsible, at its own expense,
for developing and obtaining approval of Regulatory Authorities for
Manufacturing activities relating to tableting or otherwise formulating API into
Products and blistering, bottling (if applicable) and packaging API into
Products in the Territory done by Partner or any of its Affiliates or any Third
Party on their behalf.

 

(b)                                 Bulk Products.

 

(i)                                    The Parties may agree that Optimer will
supply Bulk Products, rather than API, as Supplied Products.

 

(ii)                                Partner shall, at Partner’s cost, manage and
generate the protocols and reports arising out of any transport studies relating
to Bulk Products in the Territory, and shall keep Optimer updated with regard
thereto, including by providing such protocols and reports to Optimer promptly
following generation thereof.

 

(c)                                          Packaging.  Subject to
Section 2.3(d)(i), Partner shall be responsible, at its own expense, for
developing and obtaining approval of Regulatory Authorities for packaging of
Products in the Territory, whether such Products have been tableted by Partner
or supplied as Bulk Products by Optimer. Partner intends to carry out primary
and secondary packaging activities in the Territory but if this proves to be
impractical, then Partner may decide that such packaging shall be carried out by
Optimer’s Third Party packager outside the Territory. In this

 

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event Partner shall contract directly with such Third Party packager, and
Optimer shall assist Partner in any negotiations with such packager. If, in the
course of supplying packaged Product to both Optimer and Partner, such Third
Party packager has limited available production capacity at a particular time
such that it cannot fulfill both Partner’s and Optimer’s (including its
Affiliates’ and other licensees’) requirements for packaged Products then
Optimer and Partner shall jointly instruct such Third Party packager to allocate
its available production capacity for the production of packaged Bulk Product in
a manner proportional to the actual requirements of Optimer and its Affiliates
and other licensees and Partner for such products at that time.

 

(d)                                 Products for Use in Development Activities. 
Optimer shall supply Supplied Products for use in any Development activities of
Partner or its Sublicensees permitted under the License Agreement, as follows:

 

(i)                                    For Phase I Clinical Trials of the
Existing Product in the Field in the Territory, Optimer shall supply as Supplied
Products for use in such Phase I Clinical Trials (A) API which Partner shall
tablet, bottle (if applicable) or otherwise formulate into Products and blister,
bottle (if applicable) and package into Products, or (B) if agreed by the
Parties, Bulk Product or the finished packaged Product and placebo in the
formulation and dosages required for such Phase I Clinical Trials in accordance
with Applicable Laws and the Development Plan, and in each case (A) or (B) the
Parties shall (x) discuss and agree the process and timing of the transfer of
any Licensed Know-How (as defined in the License Agreement) which is necessary
for Partner to tablet, have tableted or otherwise formulate or have formulated
such Supplied Products and blister, bottle (if applicable) and package such
Supplied Products for use in such Phase I Clinical Trials and (y) agree to the
Product Specifications for such Supplied Products promptly after the Effective
Date. If requested by Partner within […***…] after the Effective Date:

 

(1)                                 within […***…] of the Effective Date (such
efforts to be initiated within […***…] of the Effective Date), Optimer shall
provide Partner all testing methods and protocols in Optimer’s Control relevant
to the Manufacture and release of such Supplied Products (it being understood
that this does not include methods and other Information for the Manufacture of
API), together with reasonable quantities of all relevant materials (including
the standard for analysis) to carry out such tests; and

 

(2)                                 within […***…] of the Effective Date,
Optimer shall ship to Partner […***…] of API (all of which shall come from the
same batch of API) with a remaining shelf life of at least […***…]; and

 

(ii)                                For Phase II Clinical Trials and Phase III
Clinical Trials of Products in the Field in the Territory, Optimer shall supply
as Supplied Products for use in such clinical trials (A) API which Partner shall
tablet, bottle (if applicable) or otherwise formulate into Products and blister,
bottle (if applicable) and package into Products, or (B) if agreed by the
Parties, Bulk Product or the finished packaged Product and placebo in the
formulation and

 

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dosages required for such Phase II Clinical Trials or Phase III Clinical Trials,
as applicable, in accordance with Applicable Laws and the Development Plan.

 

(e)                                  Purchase Orders.  Subject to any modified
purchase order timelines agreed by the Parties pursuant to Section 2.3(d) in
respect of supply of Supplied Products for clinical trials, Partner shall
purchase all Supplied Products for use in any Development activities by
submitting purchase orders in accordance with Section 3.3, except that, with
respect to purchase orders for Supplied Products, such purchase orders must be
submitted at least […***…] in advance for API, and at least […***…] in advance
for Bulk Product or other forms of Supplied Products, of the desired shipment
date specified in such purchase order.

 

2.4                               Manufacturing Services Agreement and
Assignment Agreement.  Partner acknowledges that Optimer and Optimer U.S.A. are
parties to that certain Manufacturing Services Agreement, dated March 29, 2012
(as amended, the “Manufacturing Services Agreement”) pursuant to which Optimer
has engaged Optimer U.S.A. to perform certain Manufacturing services, and to
that certain Assignment Agreement, dated March 29, 2012 (as amended, the
“Assignment Agreement”) pursuant to which Optimer U.S.A. has assigned to Optimer
certain rights and obligations under Third Party Manufacturing agreements
relating to the Manufacture and supply of Supplied Products.  Optimer agrees
that it will not amend, modify or supplement the Manufacturing Services
Agreement or the Assignment Agreement, in each case in a manner that would
adversely affect the rights and/or obligations of Astellas under this Agreement,
without the prior written consent of Astellas.  In addition, Optimer agrees that
it will not terminate, or consent to Optimer U.S.A.’s termination of, the
Manufacturing Services Agreement or the Assignment Agreement, without the prior
written consent of Astellas, which consent shall not be unreasonably withheld or
delayed.  In the event of any breach by Optimer U.S.A. of the Manufacturing
Services Agreement or the Assignment Agreement that is reasonably likely to
adversely affect Partner’s rights under this Agreement, Optimer shall promptly
notify Partner, and Optimer shall, if requested by Partner in writing, enforce
Optimer’s rights under the Manufacturing Services Agreement or Assignment
Agreement, as applicable, including by, if necessary, bringing proceedings
against Optimer U.S.A.

 

2.5                               Limited Right to […***…] upon Failure by
Optimer to Supply.  In the event that, at any time prior to […***…] after First
Commercial Sale, Optimer fails to supply in accordance with this Agreement any
Supplied Products ordered by Partner for a period of at least […***…] after the
date that such Supplied Product should have been delivered in accordance with
this Agreement (and Optimer does not cure such failure within such […***…]
period), as an alternative to termination of this Agreement by Partner, Partner
has the limited right to […***…]; provided that the purchase price for supply of
such Supplied Products […***…] for supply to Partner for the Territory shall be
calculated in accordance with this Agreement and shall be paid to Optimer,
[…***…].  The Parties agree that

 

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such limited right to […***…] shall only continue so long as Optimer is unable
to comply with its obligations to supply Supplied Products to Partner in
accordance with this Agreement and that such limited right shall be
automatically suspended upon Optimer recommencing supply of Supplied Products in
accordance with this Agreement.

 

3.                                      FORECASTS AND PURCHASE ORDERS.

 

3.1                               Commercial Launch.  Partner shall notify
Optimer approximately […***…] in advance of the anticipated First Commercial
Sale of any Product.  Such notification shall include a preliminary estimate of
the quantity of Supplied Product needed for the commercial launch.  Partner may
change the estimated date of the First Commercial Sale and the estimated
quantity of Supplied Product needed for such commercial launch at any time by
notifying Optimer; provided, however, that Partner will provide Optimer with an
estimate of the minimum amount of Supplied Product that will be necessary for
commercial launch at least […***…] prior to such launch (the “Launch
Quantities”).

 

3.2                               Rolling Forecasts.  In the first week of each
month, starting […***…] before the anticipated First Commercial Sale of any
Product, Partner shall provide Optimer with a written […***…] rolling forecast
of its anticipated requirements for Supplied Product in the Territory; provided,
that anticipated requirements for Supplied Products for the […***…] in each such
forecast may be set forth on a quarterly rather than monthly basis (each a
“Forecast”).  Each Forecast is a non-binding estimate and shall not obligate
Partner to purchase the volume of Supplied Product set forth in it; provided,
however, that the volume of API forecasted for the first […***…] and the volume
of other Supplied Products (including Bulk Products) forecasted for the first
[…***…] of each Forecast shall be binding upon Partner.  Optimer shall not be
obligated to Manufacture or supply Partner with quantities of a given Supplied
Product in excess of […***…] percent ([…***…]%) of the most recent […***…]
estimate of such Supplied Product (whether it is API, Bulk Product or another
Supplied Product) provided to Optimer in a Forecast with respect to such
Supplied Product but agrees to use commercially reasonable efforts to do so.

 

3.3                               Purchase Orders.  Partner shall order Product
by submitting written purchase orders, in such form as the Parties shall agree
from time to time, to Optimer specifying the quantities of Supplied Product
ordered, the desired shipment date for such Supplied Product and any special
shipping instructions.  Partner shall order Supplied Product in lots of a
defined number of units/lot pursuant to each purchase order as reasonably
specified by Optimer.  Partner shall submit each purchase order to Optimer at
least […***…] in advance of the desired shipment date specified in such purchase
order.  Optimer shall use commercially reasonable efforts to make each shipment
of Supplied Product in the quantity and on the shipment date specified for it on
Partner’s purchase order, via the mode(s) of transportation and to the party and
destination specified on such purchase order.  Any purchase orders for Supplied
Product submitted by Partner to Optimer shall reference this Agreement and shall
be governed exclusively by the terms contained herein.  The Parties hereby agree
that the terms and

 

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conditions of this Agreement shall supersede any term or condition in any order,
confirmation or other document furnished by Partner or Optimer that is in any
way inconsistent with these terms and conditions.

 

3.4                               Quantity of Orders; Batches.  The Parties
agree that Forecasts and orders of Supplied Products that are in the form of
Bulk Products will be expressed by multiples of whole batches of Supplied
Product.  In the event that Supplied Products are Bulk Product, based on current
theoretical yields, it is estimated that each batch of Supplied Product that is
Bulk Product shall contain approximately […***…], based upon current production
yield estimates.  Forecasts and orders of Supplied Products that are API will be
expressed in quantities that are required by Partner, subject to a minimum order
quantity of […***…] and provided that each such Forecast and order shall be
expressed in multiples of […***…] unless otherwise agreed in writing by Optimer
prior to an order.  Partner acknowledges and agrees that, in any shipment,
Supplied Products that are API may be from multiple batches of Supplied
Products; provided, that, (a) Optimer shall use all reasonable efforts to
minimize the number of batches from which API is taken for any shipment and
(b) for API ordered for use in Development activities, if Partner notifies
Optimer in such order that such API shall be used in Development activities,
then the API shipped for such order shall be from one batch.

 

4.              PRICE.

 

4.1                               Price.

 

(a)                                 Transfer Price.  Partner will pay Optimer a
transfer price for Supplied Products as set forth below (the “Transfer Price”):

 

(i)                                    The Transfer Price for Supplied Products
purchased during the Discount Term for Products shall be calculated as follows
(with references to Products in this Section 4.1 and in defined terms used
herein referring to Products that incorporate or are comprised of such Supplied
Products):

 

(1)                                 Partner shall pay to Optimer a provisional
Transfer Price for Supplied Products (the “Provisional Transfer Price”) equal to
(A) — (B), but in no event less than (C), where:

 

(A) = the product of the NHI Price multiplied by [...***...] multiplied by the
Provisional Sales;

 

(B) = Provisional Discount; and

 

(C) = […***…].

 

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(2)                                 Within thirty (30) days following the end of
each Fiscal Half Year, Partner shall calculate the actual Transfer Price for
Supplied Products (the “Actual Transfer Price”), which shall be equal to (X) —
(Y), where:

 

(X) = Net Sales during such Fiscal Half Year; and

 

(Y) = Actual Discount.

 

(3)                                 The Parties acknowledge that Supplied
Products may be ordered, shipped and/or invoiced at the Provisional Transfer
Price in one Fiscal Half Year but Products incorporated into or comprising such
Supplied Products may be sold by Partner or its Sublicensee in the next Fiscal
Half Year or thereafter.

 

(ii)                                The Transfer Price for Supplied Products
purchased before or after the Discount Term, on a Product-by-Product basis,
shall equal COGS Plus.

 

(b)                                 Deduction from Transfer Price and Adjustment
to Discount Percentage.

 

(i)                                    In the event the rights to the Licensed
OPT-80 Data (as defined in the PAR Agreement) cease to be licensed to Optimer by
PAR under the PAR Agreement for any reason and Partner obtains a license with
respect to such OPT-80 Data directly from PAR pursuant to the PAR Tripartite
Agreement, then Partner may deduct from the Transfer Price for the applicable
Supplied Products or from royalties owed to Optimer U.S.A. under the License
Agreement, but not both, the amount actually paid by Partner to PAR under the
PAR Tripartite Agreement for such license with respect to such OPT-80 Data up to
the amount that Optimer would have been obligated to pay to PAR under the PAR
Agreement with respect to such payment; provided that in no event shall such
deduction reduce such Transfer Price to an amount less than Cost of Goods.

 

(ii)                                On a Product-by-Product basis, in the event
Partner or its Affiliate is required to pay to a Third Party royalties or
amounts payable in lieu of royalties (including without limitation any lump sum
payments) in order to obtain a license under Dominating Patent Rights with
respect to a Product in the Territory then Partner may […***…] of the amounts
actually paid to such Third Party in consideration for such license under
Dominating Patent Rights from the Transfer Price for the applicable Supplied
Products payable pursuant to Section 4.1(a)(i) (but not Section 4.1(a)(ii)) or
any royalty payments owing to Optimer U.S.A. under the License Agreement, but
not both; provided that (x) in no event shall such deduction reduce the
Provisional Transfer Price or the Actual Transfer Price to an amount less than
COGS Plus […***…] of the amount by which the Provisional Transfer Price or
Actual Transfer Price, as applicable, exceeds COGS Plus, and (y) in no event
shall such deduction reduce the royalties due to Optimer U.S.A. in any Calendar
Quarter with respect to such Product to […***…] of the amount that would
otherwise be due to Optimer U.S.A. under Section 6.3(a) of the License Agreement
(such limitation in (y), the “Floor”).  If the

 

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[…***…] then Partner […***…].  As used herein, “Dominating Patent Rights” shall
mean issued Patents of Third Parties, including without limitation issued
Patents of Third Parties which form the basis of infringement actions under
Section 9.5 of the License Agreement, without a license to which Patents the
use, marketing, sale, offer for sale, packaging, promotion, import, export or
other commercialization of the applicable Product in the Territory would
infringe such Patents. For clarity, the deduction described in this
Section 4.1(b)(ii) and in Section 6.3(d) of the License Agreement may only be
applied once.

 

(iii)                            In respect of any Product, if on the date that
is the later to occur of: (A) the expiration of the last-to-expire Valid Claim
within the Licensed Patents or Joint Patents that claims such Product or
Compound contained therein or a method of manufacture or use of such Product or
Compound, and (B) […***…] after the First Commercial Sale, the Discount Term has
not expired, then the Discount Percentage shall be […***…].

 

(iv)                             If, following expiration of the Discount Term
for a Product, all sales of Generic Products in the Territory cease as a result
of patent infringement proceedings in respect of the Licensed Patents or Joint
Patents brought by either Party in accordance with Section 9.5 of the License
Agreement, then the Discount Term shall revive and amounts payable pursuant to
Sections 4.1(a)(i)(1) and 4.1(a)(i)(2) shall become payable until any subsequent
Generic Entry. Such revival shall only be effective once.

 

(c)                                  Examples.  Examples of calculations of the
Transfer Price of Supplied Products are set forth in EXHIBIT A.

 

4.2                               Invoices; Method of Payments.

 

(a)                                 Optimer shall invoice Partner the Transfer
Price for Supplied Products supplied under Section 4.1(a)(ii) and the
Provisional Transfer Price for all other Supplied Products at the time of
shipment of such Supplied Products.  For each Fiscal Half Year, Partner shall
calculate the Actual Transfer Price, and (1) in the event that the Actual
Transfer Price calculated for such Fiscal Half Year is higher than the
Provisional Transfer Price paid for Supplied Products supplied in such Fiscal
Half Year, the Partner shall pay Optimer the difference within […***…] after the
end of the applicable Fiscal Half Year, and (2) in the event that the Actual
Transfer Price calculated for such Fiscal Half Year is lower than the
Provisional Transfer Price paid for Supplied Products supplied in such Fiscal
Half Year, Optimer shall credit the difference against future payments due from
Partner to Optimer under this Article 4 except that in the event of termination
of this Agreement in which case Optimer shall pay the difference to Partner
within […***…] of such termination.

 

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(b)                                 All amounts used in calculating the
Provisional Transfer Price and the Actual Transfer Price shall be denominated in
U.S. Dollars.  All payments due hereunder to Optimer shall be paid to Optimer in
U.S. Dollars not later than […***…] following the date of receipt of the
applicable invoice but not earlier than the date of shipment, unless such
shipment of Supplied Product is rejected in accordance with the provisions of
Section 6.2.  All payments under this Agreement shall be made by bank wire
transfer in immediately available funds to a Swiss account designated in writing
by Optimer or by other mutually acceptable means.  Payments hereunder will be
considered to be made as of the day on which they are received by Optimer’s
designated bank.  When conversion from any currency other than United States
Dollars is required to calculate the Provisional Transfer Price, the Actual
Transfer Price or any payment due hereunder, such conversion shall be at an
exchange rate equal to the trailing three (3)-month average of the daily end of
day rate in New York per the Bloomberg News Service.

 

(c)                                  In the event that any payment due under
this Agreement is not made when due, the payment shall accrue interest from the
date due at a rate per annum equal to one percent (1%) above the U.S. Prime Rate
(as set forth in the Wall Street Journal, Eastern U.S. Edition) for the date on
which payment was due, calculated daily on the basis of a 365-day year, or
similar reputable data source; provided that, in no event shall such rate exceed
the maximum legal annual interest rate.  The payment of such interest shall not
limit Optimer from exercising any other rights it may have as a consequence of
the lateness of any payment.

 

(d)         Optimer will pay any and all withholding taxes levied on account of
any payments made to it under this Agreement as required based on a
determination of the applicable taxing authority.  All payments to be made by a
Party under this Agreement will be made without any deduction or withholding for
or on account of taxes.  If any authority requires Partner to withhold taxes
from any payment made to Optimer under this Agreement, then (i) in respect of
payments already made by Partner to Optimer prior to notification of such
requirement, Optimer shall repay Partner any such withholding tax and penalties
that Partner is required to pay to any authority within thirty (30) days of
Optimer receiving proof of such payment from Partner and (ii) following
notification of such requirement Partner will (1) deduct such withholding taxes
from each payment made to Optimer, (2) timely pay the withholding taxes to the
proper taxing authority, and (3) send proof of payment to Optimer and certify
its receipt by the taxing authority within thirty (30) days following such
payment.  Partner shall fully cooperate in processing any required filings on
behalf of Optimer with the tax authorities in the Territory in order to obtain a
refund of any withholding taxes paid.  For clarity, this Section 4.2(d) shall
not apply to GST, VAT, or any other tax on any payment made to Optimer other
than withholding taxes required based on a determination by the applicable
taxing authority.

 

4.3                               Records.

 

(a)                                 During the Term, and for a period of three
(3) years thereafter, Optimer shall, and shall ensure that its Affiliates shall,
keep at either its normal place of business, or at an off-site storage facility,
detailed, accurate and up to date: (i) records and books of account

 

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sufficient to confirm the calculation of the Cost of Goods; and (ii) information
and data contained in any invoices provided to Partner in connection with this
Agreement.

 

(b)                                 On no less than sixty (60) days’ prior
written notice from Partner, Optimer shall make all such records, books of
account, information and data concerning the Cost of Goods available for
inspection during normal business hours by an independent, certified public
accountant selected by Partner and reasonably acceptable to Optimer, which
acceptance will not be unreasonably withheld or delayed, for the purpose of
general review or audit; provided that Partner may not request such inspection
more than once in any calendar year.  As a condition to such inspection, the
independent public accountant selected shall execute a written agreement,
reasonably satisfactory in form and substance to Optimer, to maintain in
confidence all information obtained during the course of any such examination
and all reasonable documents will be disclosed to the accountant under these
confidential terms.  Additionally no accountant may be employed on a contingency
basis.

 

(c)                                  Partner shall be solely responsible for its
costs in making any such review and audit, unless Partner identifies a
discrepancy in the calculation of the Cost of Goods paid by Partner to Optimer
under this Agreement in any calendar year from those properly payable for that
calendar year of ten percent (10%) or greater, in which event Optimer shall be
solely responsible for the cost of such review and audit and refund Partner any
overpayment.  All information disclosed by Optimer or its Affiliates pursuant to
this Section 4.3 shall be deemed Confidential Information of Optimer.

 

(d)                                 In the event the auditor determines
Optimer’s statement was inaccurate, any overpayment to Optimer by Partner shall
be promptly refunded to Partner or credited toward any unpaid invoice by Optimer
to Partner, and any underpayment by Partner shall be promptly paid to Optimer.

 

(e)                                  If there is a dispute between the Parties
related to GAAP compliance following any audit performed pursuant to
Section 4.3, either Party may refer the issue (an “Audit Disagreement”) to an
independent certified public accountant for resolution. In the event an Audit
Disagreement is submitted for resolution by either Party, the Parties shall
comply with the following procedures:

 

(i)                                    The Party submitting the Audit
Disagreement for resolution shall provide written notice to the other Party that
it is invoking the procedures of this Section.

 

(ii)                                Within thirty (30) days of the giving such
notice, the Parties shall jointly select a recognized international accounting
firm to act as an independent expert to resolve such Audit Disagreement.

 

(iii)                            The Audit Disagreement submitted for resolution
shall be described by the Parties to the independent expert, which description
may be in written or oral form, within ten (10) days of the selection of such
independent expert.

 

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(iv)                             The independent expert shall render a decision
on the matter as soon as practicable.

 

(v)                                 The decision of the independent expert shall
be final and binding and shall not be subject to Section 13 hereof, unless such
Audit Disagreement involves alleged fraud, breach of this Agreement or
construction or interpretation of any of the terms and conditions hereof.

 

(vi)                             All fees and expenses of the independent
expert, including any Third Party support staff or other costs incurred with
respect to carrying out the procedures specified at the direction of the
independent expert in connection with such Audit Disagreement, shall be borne by
the Party against whom such expert rules.

 

5.              SHIPMENT AND DELIVERY.

 

5.1                               Delivery Terms.  Optimer will ship Supplied
Products to Partner in such quantities and on such monthly shipment dates as are
specified in purchase orders.  The Launch Quantities shall be shipped to Partner
at least […***…] before the anticipated First Commercial Sale provided that
Partner submits a binding forecast/purchase order for Launch Quantities no less
than […***…] before the anticipated First Commercial Sale.  Deliveries shall be
made […***…] (Incoterms 2010) Optimer’s or its Third Party manufacturer’s
designated facility.  All shipments of the Supplied Products to Partner shall be
made via such carrier(s) as Partner may direct.  Title and risk of loss shall
pass to Partner upon delivery to the carrier.  Freight charges shall be billed
ship collect to Partner.  For clarity, Partner shall be the importer of record
for all Supplied Products supplied under this Agreement, and shall be solely
responsible, at its expense, for all required documentation and communications
with the applicable customs office in connection therewith.  Partner shall
disclose to Optimer all documentation submitted to the applicable customs office
in connection with its import of Supplied Products including, without
limitation, any calculations relating to value of Supplied Products required to
be disclosed to the customs office in connection therewith, and to cooperate
with Optimer in connection therewith.

 

5.2                               Shelf Life.  Supplied Products which are API
will have a remaining shelf life of […***…] from the date of shipment to
Partner. Supplied Products which are Bulk Products will have a remaining shelf
life of at least […***…] from the date of shipment to Partner.  The Parties will
discuss steps to enable extension of the shelf life of Bulk Products from
[…***…] to […***…], and upon approval by the applicable Regulatory Authorities,
the Parties would agree to extend the period set forth in the preceding sentence
from […***…] from the date of shipment to […***…] from the date of shipment. 
For clarity, the provisions set forth in this Section 5.2 shall not apply to any
Supplied Products other than Supplied Products that are Bulk Products or API.

 

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6.              QUALITY ASSURANCE; ACCEPTANCE.

 

6.1                               Specifications; Testing.

 

(a)                                 Batch Testing.  Optimer will have standard
analytical testing performed on each Manufactured batch of Supplied Product to
be shipped to Partner to verify that it meets the Product Specifications,
according to the procedure described in the corresponding documentation and that
the Supplied Product was Manufactured in accordance with Applicable Laws.

 

(b)                                 Certificate of Compliance.  In connection
with shipment of any batch of Supplied Product, Optimer shall provide Partner
with a document certifying with respect to a particular batch (identified by
batch number) that such batch was Manufactured in accordance with applicable
cGMP, all other Applicable Laws and the Product Specifications.

 

(c)                                  Quality Control Problem.  In addition, in
the event Partner or Optimer identifies a quality problem with respect to any
batch of Supplied Product, then, if requested by Partner in writing, Optimer
shall authorize Partner to consult at Optimer’s (and, if requested by Partner
and subject to Optimer prior written consent, not to be unreasonably withheld,
its Third Party Manufacturer’s, so long as such consultation is permitted under
the applicable agreement with such Third Party Manufacturer) facilities the full
batch records corresponding to the applicable batch; provided, that if Partner
requests to consult at Optimer’s Third Party Manufacturer’s facilities the full
batch records corresponding to the applicable batch, such consent shall not be
unreasonably withheld, so long as the applicable agreement between Optimer and
such Third Party Manufacturer permits such consultation.

 

(d)                                 Certificate of Analysis.  In connection with
shipment of any batch of Supplied Product, Optimer shall provide Partner with a
certificate of analysis (the “Certificate of Analysis”).  Such Certificate of
Analysis shall certify with respect to each shipment (i) the quantity of the
shipment; provided, that the quantity of any Bulk Product shall be provided at
scale count accuracy only; and (ii) that Supplied Product delivered conforms to
the Product Specifications, as well as any further information required by the
relevant regulatory authorities that Partner may have previously notified
Optimer is necessary.  Partner shall be under no obligation to accept any
shipment of Supplied Product without an accompanying Certificate of Analysis.

 

(e)                                  Technology Transfer of Analytical Methods. 
Optimer (either itself or through its Affiliate, Optimer U.S.A.) shall
coordinate the transfer of analytical methods for analysis and testing of
Supplied Products to Partner in accordance with Applicable Laws in the
Territory. Optimer (either itself or through its Affiliate, Optimer U.S.A.)
shall use commercially reasonable efforts to complete such transfer […***…]
before the date of the first shipment of any particular Supplied Product to
Partner.  Partner shall reimburse Optimer (including, if applicable, its
Affiliates) for reasonable out of pocket expenses it incurs in connection with
such technology transfer within thirty (30) days of invoice provided such
expenses have been

 

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previously agreed by Partner in writing, such agreement not to be unreasonably
withheld or delayed.

 

6.2                               Acceptance and Rejection.

 

(a)                                 Supplied Product Testing.  Partner, at its
expense, shall perform such samplings and tests that are designed, in accordance
with the methods of analysis and the Product Specifications, to determine
whether the batch of Supplied Product shipped to Partner meets the Product
Specifications.  Partner may reject any shipment (or portion thereof) of
Supplied Product if the Supplied Product fails to conform to any warranty set
forth in Section 9.1 of this Agreement based on Partner’s test results by
providing to Optimer written notice of such rejection and the reasons therefor
within thirty (30) days of delivery of such Supplied Product; otherwise, Partner
shall be deemed to have accepted such shipment of Supplied Product; provided,
however, that in the case of Supplied Product having any Latent Defect, Partner
shall notify Optimer promptly once it discovers the possibility that a Supplied
Product may have a Latent Defect and subsequently may reject such Supplied
Product by giving written notice to Optimer of Partner’s rejection of such
Supplied Product within thirty (30) days after such discovery of such Latent
Defect.

 

(b)                                 Replacement of Supplied Product and Dispute
Procedure.  If Optimer notifies Partner in writing, within thirty (30) days of
Optimer’s receipt of notice that Partner is rejecting the Supplied Product, that
Optimer disagrees with Partner’s test results (an “Objection Notice”), the
following procedures shall apply.  Partner and Optimer will review Partner’s
test results and attempt to reach agreement as to whether or not the Supplied
Product fails to conform to any warranty set forth in Section 9.1 of this
Agreement.  If Partner and Optimer fail within ten (10) days after delivery of
the Objection Notice to agree as to whether the Supplied Product is defective,
representative samples of the batch of Supplied Product in question shall be
submitted to a mutually-acceptable independent laboratory or consultant for
analysis or review.  The results of such evaluation shall be binding upon the
Parties.  The Parties shall share equally the cost of such evaluation, including
the assay transfer cost, except that the Party that is determined to have been
incorrect in its determination of whether the Supplied Product should be
rejected shall assume the responsibility for, and pay, the costs of any such
evaluation and reimburse the other for any amounts previously paid to the
independent laboratory or consultant in connection with that determination.

 

(c)                                  Cost of Replacement of Rejected Product. 
If any shipment of Supplied Product is rejected by Partner, Partner’s duty to
pay all amounts payable to Optimer in respect of the rejected Supplied Product
shall be suspended unless and until there is a determination by the independent
laboratory or consultant in support of Optimer’s Objection Notice in accordance
with Section 6.2(b).  If only a portion of a shipment is rejected, Partner’s
duty to pay the amount allocable to the defective portion only shall be
suspended.

 

(d)                                 Return of Rejected Product.  If a shipment
or partial shipment is rejected by Partner pursuant to the provisions of this
Section 6.2 and there is not a determination by the

 

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independent laboratory or consultant in support of Optimer’s Objection Notice in
accordance with Section 6.2(c), Partner shall return to Optimer at Optimer’s
request and expense (or, at the election of Optimer, destroy at Optimer’s cost
and provide evidence of such destruction to Optimer) any such rejected Supplied
Product (provided that if the Supplied Product has been packaged by or on behalf
of Partner at the time of rejection Partner shall not be obliged to remove any
packaging prior to its return).  Optimer shall (i) credit the original invoice
in respect of the rejected Supplied Product, and (ii) adjust the invoice to
Partner for any Supplied Product that was not rejected, payment of which is due
in accordance with the terms of the original invoice.

 

(e)                                  Supply of Replacement Product.  During the
pendency of any rejection discussions Optimer shall use commercially reasonable
efforts to supply Partner with additional Supplied Product which Partner shall
purchase on the same terms as the Supplied Product that is the subject of the
rejection discussions.

 

6.3                               Quality Agreement.  Within ninety (90) days
from the Effective Date (or such longer period as agreed by the Parties but in
any event at least three (3) months prior to the first shipment of Supplied
Product to Partner), the Parties will enter into an agreement that details the
quality assurance obligations of each Party (the “Quality Agreement”); provided,
however, that the Product Specification for Supplied Product for use in Phase I
Clinical Trials shall be discussed and agreed upon by the Parties promptly after
the Effective Date as set forth in Section 2.3(d)(i).  The Product
Specifications shall be incorporated into the Quality Agreement.  In the event
of a conflict between the terms of the Quality Agreement and the terms of this
Agreement, the provisions of this Agreement shall govern; provided, however,
that the Quality Agreement shall govern in respect of quality issues.

 

7.              MANUFACTURE OF SUPPLIED PRODUCT.

 

7.1                               Raw Materials.  Optimer shall be responsible
for obtaining, and shall store at no cost to Partner, any raw materials,
components, other ingredients and materials for blister packaging, in each case
to the extent applicable, required for the Manufacture of Supplied Products
(“Raw Materials”), in reasonable quantities consistent with Partner’s Forecasts
and purchase orders.

 

7.2                               Manufacture of Supplied Product.  Optimer will
Manufacture Supplied Products in accordance with the Product Specifications,
cGMPs and Applicable Laws.  The Parties shall notify each other within five
(5) Business Days of any new instructions or specifications required by
Regulatory Authorities with jurisdiction over the Manufacture, import, export,
use or sale of Supplied Products.  The Parties shall confer with each other with
respect to any response regarding such instruction or specification and the best
means to comply with such requirements and the Parties will share equally the
costs for implementing such changes.

 

7.3                               Packaging.  Optimer shall package Supplied
Product to be supplied in accordance with the standard operating procedures to
be used by Optimer in manufacturing the Supplied

 

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Product under this Agreement in accordance with the Product Specifications and
Applicable Laws.

 

7.4                               Changes to the Product Specifications or to
the Manufacturing Process.  A Party proposing (a) a change to the Product
Specifications or the Raw Materials, equipment (other than changes for
maintenance, repair, and like-for-like replacement) or process used to
Manufacture the Supplied Product, or (b) a change to the procedures used to
Manufacture the Supplied Product that would require approval of the applicable
Regulatory Authority in the Territory (collectively, the “Manufacturing
Process”) shall provide written notice to the other Party.  If the proposed
change is required by a Regulatory Authority, then such notice shall include
disclosure of the Regulatory Authority request and relevant correspondence.  Any
changes to the Product Specifications or to the Manufacturing Process shall be
in compliance with all Regulatory Approvals for the Supplied Product in the
Territory.  Optimer shall notify Partner of any proposed change to the Product
Specifications or to the Manufacturing Process.  If Partner does not notify
Optimer of an objection within ten (10) Business Days of receipt of Optimer’s
notice and, as far as Optimer is aware having made due enquiry, such change
would not require approval or notification of the applicable Regulatory
Authority in the Territory, then Optimer may proceed with the change without the
prior written approval of Partner. If Partner notifies Optimer within such ten
(10) Business Days period that such change would require approval or
notification of the applicable Regulatory Authority in the Territory then
Optimer shall not make such change without the prior written consent of
Partner.  In respect of any changes which would not require approval or
notification of the applicable Regulatory Authority in the Territory, if Partner
notifies  Optimer of an objection to such change within ten (10) Business Days
of Optimer’s notice, the Parties will discuss the change in good-faith for up to
an additional ten (10) Business Days (or longer, if agreed by the Parties) in
the interest of reaching a mutually agreeable resolution; provided, that if
agreement is not reached on such change (and that change does not require
notification or approval of the applicable Regulatory Authority in the
Territory) then Optimer may proceed with such change following such discussions.
If the change is proposed by Partner or is required by a Regulatory Authority in
the Territory (but not outside the Territory), then Partner shall bear any
expenses of implementing such change.  If the change is proposed by Optimer or
is required by a Regulatory Authority outside the Territory (but not in the
Territory), then Optimer shall bear any expenses of implementing such change. 
If the change is required by a Regulatory Authority or Applicable Laws both in
and outside the Territory, then the Parties shall share any expenses of
implementing such change equally.  The Parties agree that the notification and
approval procedures with respect to changes to the Product Specifications and
the Manufacturing Process set forth in this Section 7.4 will take effect
commencing on MAA Approval of the applicable Supplied Product. For clarity,
Optimer shall have the right to change equipment for maintenance, repair, and
like-for-like replacement without notice to or consent of Partner.

 

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7.5                               Buffer Stock.

 

(a)                                 Requirement of Optimer Buffer Stock. 
Optimer or its Affiliates shall have available a buffer stock of API (the
“Buffer Stock”) in the following amounts at the following times:

 

(i)                                    Beginning on the date that is […***…]
prior to the anticipated date of the First Commercial Sale until […***…] after
First Commercial Sale: […***…] of Buffer Stock based upon the quantities of
Supplied Product forecast to be ordered by Partner in the most recent applicable
months of the Forecast; and

 

(ii)                                At any time after […***…] after First
Commercial Sale: […***…] of Buffer Stock based upon the quantities of Supplied
Product ordered by Partner in the previous […***…] period.

 

(b)                                 Optimer (either itself or through its
Affiliates) shall store such Buffer Stock at one or more locations separate from
the site of its Third Party manufacturer of API.

 

(c)                                  Inventory.  Partner shall carry and cause
its Sublicensees to carry reasonable quantity of inventory of Supplied Product,
at their own expense.

 

7.6                               Discussion Regarding Second Source.  The
Parties will assess the desirability of identifying a second source for supply
of Supplied Product and discuss whether to qualify a second source of Supplied
Product, taking into account pricing, regulatory and other relevant issues.

 

7.7                               Supplied Product Shortfall.  Optimer shall use
commercially reasonable efforts to avoid shortfalls in supply of Supplied
Products based on the Forecasts provided by Partner.  Subject to Section 14.2,
in the event Optimer is unable to supply to Partner, in whole or in part,
Supplied Products requested for any reason (except to the extent caused by
Partner), then Optimer shall promptly notify Partner, in writing, of such
shortage, or potential shortage, or inability to timely supply Supplied Product
and, if possible, the date when Optimer will again be able to supply Supplied
Product.  Optimer will use commercially reasonable efforts to remedy any
shortfall of Supplied Product as soon as practicable and Optimer will allocate
its available production capacity for the production of Supplied Product in a
manner proportional to the utilization of all customers (including Optimer and
its Affiliates and other licensees) of such capacity in the prior […***…] period
and will allocate such Supplied Product on a proportional basis with respect to
remaining shelf-life as well.  In no event shall the delay in any of the
Development activity due to supply shortage by Optimer amount to a breach of the
License Agreement by Partner.

 

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8.                                      REGULATORY.

 

8.1                               Regulatory Compliance.  Optimer shall comply
with all regulatory requirements with respect to Supplied Product imposed by
Applicable Laws upon Optimer as the Manufacturer of the Supplied Product. 
Optimer shall, on a timely basis, provide Partner with such information in
Optimer’s possession as the Manufacturer of Supplied Product.  Optimer shall
also provide, upon request by Partner, information concerning its production
processes and quality control procedures with respect to the Supplied Product.

 

8.2                               cGMP Compliance and QA Audits.  Upon no less
than sixty (60) days’ advance written notice to Optimer, Partner shall have the
right to have representatives visit Optimer’s (but not, for clarity, its Third
Party Manufacturer’s) Manufacturing facilities during normal business hours to
discuss any related issues with Optimer’s (but not, for clarity, its Third Party
Manufacturer’s) Manufacturing and management personnel and to review and inspect
(a) Optimer’s Manufacturing and storage facilities, (b) the quality control
procedures, and/or (c) any records and reports pertinent to the Manufacture,
disposition or transport of Supplied Product as may be necessary to evidence
Optimer’s compliance with all applicable Regulatory Approvals for the
Manufacture of Supplied Product, including compliance with cGMP.  Such visits
shall occur no more than once per year, except in the case of audits by Partner
that are required by Applicable Laws, and except that additional visit(s) may
occur in the event of significant deviations, quality problems or recalls
requiring resolution by the Parties.  Partner shall also have the right to be
present at audits and inspections conducted by Optimer of its Third Party
Manufacturer(s) if permitted under the applicable agreement between Optimer and
its Third Party Manufacturer(s); provided, that if such agreement contains
limits on the number of individuals or entities that may be present during such
audit or inspection, Optimer shall use its reasonable discretion in determining
which individuals or entities may participate in such audit or inspection (which
may or may not include Affiliates, employees, licensees or independent
consultants of Partner); provided further, that Optimer shall use reasonable
efforts to ensure that a representative of APEL or Partner shall participate in
such audit or inspection, and if Partner or APEL has the right to so
participate, Partner and APEL shall decide which of Partner or APEL shall
participate in such audit or inspection.  For clarity, in no event shall both
Partner and APEL have the right to participate in any audit or inspection under
this Section 8.2 unless otherwise agreed in writing by Optimer and, if
applicable, the Third Party Manufacturer. Optimer shall notify Partner within
ten (10) days after receiving a written notice of such audits and inspections.
Partner representatives will be advised of the confidentiality obligations of
Partner under this Agreement and will follow such security, safety and facility
access procedures as are reasonably designated by Optimer and its Third Party
manufacturer(s), as applicable.

 

8.3                               Recall of Supplied Product.  For any Supplied
Product, in the event that: (a) any Regulatory Authority in the Territory issues
a request, directive or order that Supplied Product be recalled or retrieved;
(b) a court of competent jurisdiction orders that Supplied Product be recalled
or retrieved; or (c) Partner reasonably determines, after reasonable, good faith
discussion with Optimer to the extent that time allows, that Supplied Product
should be recalled or retrieved, Partner shall promptly notify Optimer of such
event (to the extent time allows) and

 

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shall conduct such activity and take appropriate corrective actions, and Optimer
shall provide such assistance to Partner as is reasonably necessary to carry out
such activities.  All reasonable costs and expenses of such recall and
corrective actions shall be equitably allocated between the Parties taking into
account the relative fault of Partner and the relative fault of Optimer.

 

8.4                               Compliance with Laws.  Optimer shall comply
with all Applicable Laws in performing its obligations under this Agreement. 
Optimer represents and warrants to Partner that it has and will maintain during
the Term all government permits, including, health, safety and environmental
permits, necessary for the conduct of the actions and procedures that it
undertakes pursuant to the Agreement.

 

8.5                               Documentation.  Optimer shall keep complete,
accurate and authentic accounts, notes, data and records of the work performed
under this Agreement (including batch records) and shall maintain complete and
adequate records pertaining to the methods and facilities used for the
Manufacture, processing, testing, packing, labeling, holding and distribution of
a Supplied Product in accordance with Applicable Laws so that such Supplied
Product may be used in humans.

 

8.6                               Samples.  Optimer shall retain samples of
Supplied Product for a period of […***…] (or, if longer, the minimum period
required by Applicable Law) after Partner’s acceptance of such batch.

 

9.              REPRESENTATIONS AND WARRANTIES.

 

9.1                               Supplied Product Warranty.  Optimer represents
and warrants that Supplied Product delivered hereunder will (a) be Manufactured
by Optimer in accordance with all applicable Regulatory Approvals, cGMPs and
other Applicable Laws, (b) conform to the Product Specifications at the time of
delivery, (c) if the Supplied Product is API, have a remaining shelf life of no
less than […***…] from date of shipment to Partner, (d) if the Supplied Product
is Bulk Product, have a remaining shelf life of no less than […***…] from date
of shipment to Partner, (d) not be adulterated or misbranded under Applicable
Laws, (e) at the time of shipment, be free and clear of any lien or encumbrance,
and (f) be supplied in accordance with the Quality Agreement.

 

9.2                               No Debarred or Disqualified Persons.  Optimer
represents and warrants that it shall not employ, contract with, or retain any
person directly or indirectly to perform any services under this Agreement if
such a person (a) is under investigation by the FDA or any other Regulatory
Authority for debarment or is presently debarred by the FDA pursuant to 21
U.S.C. § 335a or its successor provisions, or (b) has a disqualification hearing
pending or has been disqualified by the FDA pursuant to 21 C.F.R. § 312.70 or
its successor provisions or by any other Regulatory Authority pursuant to
comparable Applicable Laws.  In addition, Optimer represents and warrants that
neither it nor its Current Affiliates have engaged in any conduct or activity
which could lead to any of the above-mentioned disqualification or debarment
actions.  If, during the Term, Optimer or any person employed or retained by it
to perform under this

 

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Agreement (i) comes under investigation by the FDA or other Regulatory Authority
for a debarment action or disqualification, (ii) is debarred or disqualified, or
(iii) engages in any conduct or activity that could lead to any of the
above-mentioned disqualification or debarment actions, Optimer shall immediately
notify Partner of same and cease employing, contracting with, or retaining any
such person to perform any services under this Agreement.

 

9.3                               Mutual Representations and Warranties.  Each
Party represents and warrants to the other that:  (a) it is duly organized and
validly existing under the laws of its jurisdiction of incorporation or
formation, and has full corporate or other power and authority to enter into
this Agreement and to carry out the provisions hereof; (b) it is duly authorized
to execute and deliver this Agreement and to perform its obligations hereunder,
and the person or persons executing this Agreement on its behalf has been duly
authorized to do so by all requisite corporate or partnership action; and
(c) this Agreement is legally binding upon it, enforceable in accordance with
its terms, and does not conflict with any agreement, instrument or
understanding, oral or written, to which it is a party or by which it may be
bound, nor violate any applicable law or regulation of any court, governmental
body or administrative or other agency having jurisdiction over it.

 

9.4                               Disclaimer.  EXCEPT AS EXPRESSLY SET FORTH IN
SECTIONS 8.4, 9.1, 9.2 AND 9.3 OF THIS AGREEMENT, NEITHER PARTY MAKES ANY
REPRESENTATIONS OR EXTENDS ANY WARRANTIES OF ANY KIND IN THIS AGREEMENT, EITHER
EXPRESS OR IMPLIED, AND EACH PARTY EXPRESSLY DISCLAIMS ALL IMPLIED WARRANTIES OF
MERCHANTABILITY AND OF FITNESS FOR A PARTICULAR PURPOSE OR USE,
NON-INFRINGEMENT, VALIDITY AND ENFORCEABILITY OF PATENTS, OR THE PROSPECTS OR
LIKELIHOOD OF DEVELOPMENT OR COMMERCIAL SUCCESS OF THE PRODUCTS.

 

9.5                               Limitation of Liability.  EXCEPT FOR
(A) LOSSES CAUSED BY A PARTY’S BREACH OF SECTION 10, OR (B) LOSSES CAUSED BY A
PARTY’S GROSS NEGLIGENCE, WILLFUL MISCONDUCT OR FRAUD OR FRAUDULENT
MISREPRESENTATION ((A) AND (B), THE “EXCEPTION CONDITIONS”) NEITHER PARTY SHALL
BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL,
CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT. 
Notwithstanding anything contained in any other provision of this Agreement,
except for the Exception Conditions, Optimer’s aggregate liability for the Term
to Partner and its Affiliates and their respective employees, directors,
officers, shareholders and agents, for any Losses arising under, in connection
with or otherwise in relation to this Agreement shall not exceed […***…] and
shall not exceed […***…]; provided, however, that the foregoing shall not limit
Optimer’s indemnification obligations set forth in this Section 12 with

 

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respect to bodily injury (including death).  For clarification, payments to be
made under Section 4 shall not be considered special, incidental, consequential
or punitive damages.

 

10.                               CONFIDENTIALITY

 

10.1                        Confidential Information.  Except to the extent
expressly authorized by this Agreement or otherwise agreed in writing by the
Parties, the Parties agree that the receiving Party (the “Receiving Party”)
shall keep confidential and shall not publish or otherwise disclose or use for
any purpose other than as provided for in this Agreement (or any other written
agreement between the Parties or their Affiliates concerning the subject matter
of this Agreement) any information and materials furnished to it or its
Affiliates by the other Party (the “Disclosing Party”) or its Affiliates
pursuant to this Agreement or any other written agreement between the Parties or
their Affiliates concerning the subject matter of this Agreement, in any form
(written, oral, photographic, electronic, magnetic, or otherwise), including,
but not limited to, all information concerning any Compound and/or Product and
any other technical or business information of whatever nature (collectively,
“Confidential Information”).  Each Party may use such Confidential Information
only to the extent required to accomplish the purposes of this Agreement or any
other written agreement between the Parties or their Affiliates concerning the
subject matter of this Agreement.  Each Party will use at least the same
standard of care as it uses to protect proprietary or confidential information
of its own (but in no event less than reasonable care) to ensure that its
employees, agents, consultants and other representatives do not disclose or make
any unauthorized use of the Confidential Information.  Each Party will promptly
notify the other upon discovery of any unauthorized use or disclosure of the
Confidential Information.

 

10.2                        Exceptions.  Notwithstanding Section 10.1 above, the
obligations of confidentiality and non-use shall not apply to information that
the Receiving Party can prove by competent written evidence: (a) is now, or
hereafter becomes, through no act or failure to act on the part of the Receiving
Party or any of its Affiliates, generally known or available; (b) is known by
the Receiving Party or any of its Affiliates, other than under an obligation of
confidentiality to the Disclosing Party, at the time of receiving such
information; (c) is hereafter furnished to the Receiving Party or any of its
Affiliates by a Third Party, which Third Party did not receive such information
directly or indirectly from the Disclosing Party under an obligation of
confidence; (d) is independently discovered or developed by the Receiving Party
or any of its Affiliates without the use of Confidential Information belonging
to the Disclosing Party; or (e) is the subject of a written permission to
disclose provided by the Disclosing Party.

 

10.3                        Permitted Disclosures.  Notwithstanding the
provisions of Section 10.1, the Receiving Party may disclose Confidential
Information of the Disclosing Party as expressly permitted by this Agreement or
if and to the extent such disclosure is reasonably necessary in the following
instances:

 

(a)                                 complying with applicable court orders or
governmental regulations;

 

(b)                                 prosecuting or defending litigation as
permitted by this Agreement;

 

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(c)                                  disclosure to PAR under terms of
confidentiality to the extent necessary to fulfill obligations under the PAR
Agreement;

 

(d)                                 disclosure to Affiliates, sublicensees and
potential sublicensees (in the case of Partner), contractors, employees and
consultants, in each case who need to know such information for the Manufacture
of Supplied Products in accordance with this Agreement, on the condition that
any such Third Parties agree to be bound by confidentiality and non-use
obligations that are no less stringent than those confidentiality and non-use
provisions contained in this Agreement; and

 

(e)                                  disclosure to Third Parties in connection
with due diligence or similar investigations by such Third Parties, and
disclosure to potential Third Party investors in confidential financing
documents, provided, in each case, that any such Third Party agrees to be bound
by confidentiality and non-use obligations that are no less stringent than those
confidentiality and non-use provisions contained in this Agreement.

 

Notwithstanding the foregoing, in the event a Party is required to make a
disclosure of the other Party’s Confidential Information pursuant to
Section 10.3(a), it will, except where impracticable, give reasonable advance
notice to the other Party of such disclosure and use efforts to secure
confidential treatment of such information at least as diligent as such Party
would use to protect its own confidential information, but in no event less than
reasonable efforts.  In any event, the Parties agree to take all reasonable
action to avoid disclosure of Confidential Information hereunder.

 

10.4                        Confidentiality of this Agreement and its Terms. 
Except as otherwise provided in this Section 10, each Party agrees not to
disclose to any Third Party the existence of this Agreement or the terms of this
Agreement without the prior written consent of the other Party hereto, except
that each Party may disclose the terms of this Agreement that are not otherwise
made public as contemplated by Section 10.5 or as permitted under Section 10.3.

 

10.5                        Public Announcements.

 

(a)                                 As soon as practicable following the date
hereof, the Parties shall each issue a mutually agreed to press release
announcing the existence of this Agreement and the License Agreement in the form
attached as EXHIBIT C to the License Agreement.  Except as required by
Applicable Law (including disclosure requirements of the U.S. Securities and
Exchange Commission (“SEC”) or any stock exchange on which securities issued by
a Party or its Affiliates are traded), neither Party shall make any other public
announcement concerning this Agreement or the subject matter hereof without the
prior written consent of the other, which shall not be unreasonably withheld or
delayed; provided that each Party may make any public statement in response to
questions by the press, analysts, investors or those attending industry
conferences or financial analyst calls, or issue press releases, so long as any
such public statement or press release is not inconsistent with prior public
disclosures or public statements approved by the other Party pursuant to this
Section 10.5 and which do not reveal non-public

 

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information about the other Party.  In the event of a required public
announcement, to the extent practicable under the circumstances, the Party
making such announcement shall provide the other Party with a copy of the
proposed text of such announcement sufficiently in advance of the scheduled
release to afford such other Party a reasonable opportunity to review and
comment upon the proposed text.

 

(b)                                 The Parties will coordinate in advance with
each other in connection with the filing of this Agreement (including redaction
of certain provisions of this Agreement) with the SEC or any stock exchange on
which securities issued by a Party or its Affiliate are traded, and each Party
will use reasonable efforts to seek confidential treatment for the terms
proposed to be redacted; provided that each Party will ultimately retain control
over what information to disclose to the SEC or any stock exchange, as the case
may be, and provided further that the Parties will use their reasonable efforts
to file redacted versions with any governing bodies which are consistent with
redacted versions previously filed with any other governing bodies.  Other than
such obligation, neither Party (or its Affiliates) will be obligated to consult
with or obtain approval from the other Party with respect to any filings to the
SEC or any stock exchange.

 

(c)                                  Except as expressly permitted in this
Agreement or as required by Applicable Law, neither Party may use the other
Party’s trademarks, service marks or trade names, or otherwise refer to or
identify that other Party in marketing or promotional materials, press releases,
statements to news media or other public announcements, without the other
Party’s prior written consent, which that other Party may grant or withhold in
its sole discretion.

 

10.6                        Equitable Relief.  Given the nature and value of the
Confidential Information and the competitive damage and irreparable harm that
would result to a Party upon unauthorized disclosure, use or transfer of its
Confidential Information to any Third Party, the Parties agree that monetary
damages may not be a sufficient remedy for any breach of this Section 10.  If
the Receiving Party becomes aware of any breach or threatened breach of this
Section 10 by a Third Party to whom the Receiving Party disclosed the Disclosing
Party’s Confidential Information, the Receiving Party promptly shall notify the
Disclosing Party and cooperate with the Disclosing Party to regain possession of
its Confidential Information and prevent any further breach. In addition to all
other remedies, a Party shall be entitled to seek specific performance and
injunctive and other equitable relief as a remedy for any breach or threatened
breach of this Section 10 without furnishing proof of actual damages.

 

11.                               TERM AND TERMINATION

 

11.1                        Term.  The term of this Agreement (the “Term”) shall
commence on the Effective Date and continue until terminated pursuant to
Section 11.2.

 

11.2                        Termination.

 

(a)                                 Mutual Agreement.  The Parties may terminate
this Agreement in its entirety by mutual written agreement of the Parties.

 

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(b)                                 Material Breach.  A Party shall have the
right to terminate this Agreement in its entirety upon written notice to the
other Party if such other Party is in material breach of this Agreement and has
not cured such breach within ninety (90) days (thirty (30) days with respect to
any payment breach) after notice from the terminating Party requesting cure of
the breach.  Any such termination shall become effective at the end of such
ninety (90) day (thirty (30) day with respect to any payment breach) period
unless the breaching Party has cured any such breach or default prior to the end
of such period.

 

(c)                                  Bankruptcy.  A Party shall have the right
to terminate this Agreement upon written notice to the other Party upon the
bankruptcy, dissolution or winding up of such other Party, or the making or
seeking to make or arrange an assignment for the benefit of creditors of such
other Party, or the initiation of proceedings in voluntary or involuntary
bankruptcy, or the appointment of a receiver or trustee of such other Party’s
property that is not discharged within ninety (90) days.

 

(d)                                 Termination After Discount Term.  Each Party
shall have the right to terminate this Agreement (i) as to a particular Product
upon eighteen (18) months prior written notice to the other Party following
expiration of the Discount Term for such Product; or (ii) in its entirety upon
eighteen (18) months prior written notice to the other Party following
expiration of all Discount Terms of all Products.

 

11.3                        Effect of Termination; Surviving Obligations.

 

(a)                                 Effect of Termination.  Upon termination of
this Agreement all rights and obligations of the Parties under this Agreement
shall terminate.

 

(b)                                 Return of Confidential Information.  Within
thirty (30) days following the termination of this Agreement, each Party shall
deliver to the other Party any and all Confidential Information of such Party
then in its possession, except for one (1) copy which may be kept in such
Party’s ( or its counsel’s) office for archival purposes and except to the
extent a Party retains the right to use such Confidential Information pursuant
to any license granted under the License Agreement which survives termination of
the License Agreement, as applicable.

 

(c)                                  Surviving Obligations.  Termination of this
Agreement shall not relieve the Parties of any obligation accruing prior to such
termination.  Except as set forth below or elsewhere in this Agreement,
including Section 11.3(a), the obligations and rights of the Parties under the
following provisions of this Agreement shall survive termination of this
Agreement:

 

Section 1 — Definitions

Section 4.3 — Records

Section 10 — Confidentiality

Section 11.3 — Effect of Termination; Surviving Obligations

Section 11.4 — Exercise of Right to Terminate

Section 11.5 — Damages; Relief

 

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Section 12 — Indemnification

Section 13 — Dispute Resolution

Section 14 — General Provisions

 

11.4                        Exercise of Right to Terminate.  The rightful use by
either Party hereto of a termination right provided for under this Agreement
shall not give rise to the payment of damages or any other form of compensation
or relief to the other Party with respect thereto.

 

11.5                        Damages; Relief.  Subject to Section 11.4 above,
termination of this Agreement shall not preclude either Party from claiming any
other damages, compensation or relief that it may be entitled to upon such
termination.

 

12.                               INDEMNIFICATION

 

12.1                        Indemnification of Optimer.  Partner shall indemnify
and hold harmless each of Optimer and its Affiliates and their respective
directors, officers, shareholders, employees, agents, servants, successors and
assigns of any of the foregoing (the “Optimer Indemnitees”), from and against
any and all losses, liabilities, damages, penalties, fines, costs and expenses
(including reasonable attorneys’ fees and other expenses of litigation)
(“Losses”) incurred by any Optimer Indemnitee resulting from any claims,
actions, suits or proceedings brought by a Third Party (“Third Party Claims”) to
the extent arising from, or occurring as a result of:  (a) gross negligence or
willful misconduct in connection with Partner’s performance of its obligations
or exercise of its rights under this Agreement; or (b) any material breach of
any representations, warranties or covenants by Partner under this Agreement;
except to the extent such Third Party Claims fall within the scope of the
indemnification obligations of Optimer set forth in Section 12.2.

 

12.2                        Indemnification of Partner.  Optimer shall indemnify
and hold harmless each of Partner and its Affiliates and the directors, officers
and employees of such entities, and the successors and assigns of any of the
foregoing (the “Partner Indemnitees”), from and against any and all Losses
incurred by any Partner Indemnitee resulting from any Third Party Claims to the
extent arising from, or occurring as a result of: (a) gross negligence or
willful misconduct in connection with Optimer’s performance of its obligations
or exercise of its rights under this Agreement; or (b) any material breach of
any representations, warranties or covenants by Optimer under this Agreement
other than those set forth in Section 9.1, except to the extent such Third Party
Claims fall within the scope of the indemnification obligations of Partner set
forth in Section 12.1.

 

12.3                        Procedure.  A party that intends to claim
indemnification under this Section 12 (the “Indemnitee”) shall promptly notify
the indemnifying party (the “Indemnitor”) in writing of any Third Party Claim,
in respect of which the Indemnitee intends to claim such indemnification, and
the Indemnitor shall have sole control of the defense and/or settlement thereof.
The Indemnitee may participate at its expense in the Indemnitor’s defense of and
settlement negotiations for any Third Party Claim with counsel of the
Indemnitee’s own selection. The

 

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indemnity arrangement in this Section 12 shall not apply to amounts paid in
settlement of any action with respect to a Third Party Claim, if such settlement
is effected without the consent of the Indemnitor, which consent shall not be
withheld or delayed unreasonably.  The failure to deliver written notice to the
Indemnitor within a reasonable time after the commencement of any action with
respect to a Third Party Claim shall only relieve the Indemnitor of its
indemnification obligations under this Section 12 if and to the extent the
Indemnitor is actually prejudiced thereby.  The Indemnitee shall cooperate fully
with the Indemnitor and its legal representatives in the investigation of any
action with respect to a Third Party Claim covered by this indemnification.

 

13.                               DISPUTE RESOLUTION

 

13.1                        Objective.  The Parties recognize that disputes as
to matters arising under or relating to this Agreement or either Party’s rights
and/or obligations hereunder may arise from time to time.  It is the objective
of the Parties to establish procedures to facilitate the resolution of such
disputes in an expedient manner by mutual cooperation and without resort to
litigation.  To accomplish this objective, the Parties agree to follow the
procedures set forth in this Section 13 to resolve any such dispute if and when
it arises.

 

13.2                        Resolution by Executives.  If an unresolved dispute
as to matters arising under or relating to this Agreement or either Party’s
rights and/or obligations hereunder arises (other than any dispute to be
resolved as provided in Section 6.2), either Party may refer such dispute to the
Chief Executive Officer of Optimer and the President and Chief Executive Officer
or its designee of Partner, who shall meet in person or by telephone within
thirty (30) days after such referral to attempt in good faith to resolve such
dispute.  If such matter cannot be resolved by discussion of such officers
within such thirty (30)-day period (as may be extended by mutual written
agreement), such dispute shall be resolved in accordance with Section 13.3. The
Parties acknowledge that these discussions between the Parties to resolve
disputes are settlement discussions under applicable rules of evidence and
without prejudice to either Party’s legal position.

 

13.3                        Arbitration.

 

(a)                                 If the Parties do not resolve a dispute as
provided in Section 13.2, and a Party wishes to pursue the matter, each such
dispute that is not an “Excluded Claim” shall be resolved by binding arbitration
administered by the International Centre for Dispute Resolution (ICDR) in
accordance with its International Arbitration Rules as then in effect, and
judgment on the arbitration award may be entered in any court having
jurisdiction thereof.  The decision rendered in any such arbitration will be
final and not appealable.  If either Party intends to commence binding
arbitration of such dispute, such Party will provide written notice to the other
Party informing the other Party of such intention and the issues to be
resolved.  Within thirty (30) days after the receipt of such notice, the other
Party may by written notice to the Party initiating binding arbitration, add
additional issues to be resolved.

 

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(b)                                 The arbitration shall be conducted by a
panel of three (3) persons, none of whom shall be a current or former employee
or director, or a then-current stockholder, of either Party, their respective
Affiliates or any Sublicensee.  Within thirty (30) days after receipt of the
original notice of binding arbitration (the “Notice Date”), each Party shall
select one (1) person to act as arbitrator and the two (2) Party-selected
arbitrators shall select a third arbitrator within ten (10) Business Days of
their appointment.  If the arbitrators selected by the Parties are unable or
fail to agree upon the third arbitrator, the third arbitrator shall be appointed
by the ICDR.  The place of arbitration shall be New York, New York, and all
proceedings and communications shall be in English.

 

(c)                                  It is the intention of the Parties that
discovery, although permitted as described herein, will be limited except in
exceptional circumstances.  The arbitrators will permit such limited discovery
necessary for an understanding of any legitimate issue raised in the
arbitration, including the production of documents.  No later than thirty (30)
days after selection of the third arbitrator, the Parties and their
representatives shall hold a preliminary meeting with the arbitrators, to
mutually agree upon and thereafter follow procedures seeking to assure that the
arbitration will be concluded within six (6) months from such meeting.  Failing
any such mutual agreement, the arbitrators will design and the Parties shall
follow procedures to such effect.

 

(d)                                 Either Party may apply to the arbitrators
for interim injunctive relief until the arbitration award is rendered or the
controversy is otherwise resolved.  Either Party also may, without waiving any
remedy under this Agreement, seek from any court having jurisdiction any
injunctive or provisional relief necessary to protect the rights or property of
that Party pending the arbitration award.  The arbitrators shall have no
authority to award punitive or any other non-compensatory damages, except as may
be permitted by Section 9.5.  The arbitrators shall have the power to order that
all or part of the legal or other costs incurred by a Party in connection with
the arbitration be paid by the other Party. Each Party shall bear an equal share
of the arbitrators’ and any administrative fees of arbitration..  In addition,
in the event the arbitrators award damages to Partner pursuant to this
Section 13 and Optimer is then, or becomes at any point, bankrupt or insolvent,
the amount of such damages shall be applied as a credit to royalty payments
otherwise owed to Optimer under Section 6.

 

(e)                                  Except to the extent necessary to confirm
or enforce an award or as may be required by Applicable Law, neither a Party nor
an arbitrator may disclose the existence, content, or results of an arbitration
without the prior written consent of both Parties.  In no event shall an
arbitration be initiated after the date when commencement of a legal or
equitable proceeding based on the dispute, controversy or claim would be barred
by the applicable New York statute of limitations.

 

(f)                                   As used in this Section, the term
“Excluded Claim” shall mean (i) a dispute, controversy or claim that concerns
(1) the validity, enforceability or infringement of a patent, trademark or
copyright or (2) any antitrust, anti-monopoly or competition law or regulation,
whether or not statutory; or (ii) a claim for specific performance or injunctive
or other equitable relief as a remedy for a breach or threatened breach of
Section 10.

 

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14.                               GENERAL PROVISIONS

 

14.1                        Governing Law.  This Agreement and all questions
regarding its existence, validity, interpretation, breach or performance of this
Agreement and any dispute or claim arising out of or in connection with it
(whether contractual or non-contractual in nature such as claims in tort, from
breach of statute or regulation or otherwise), shall be governed by, and
construed and enforced in accordance with, the laws of the State of New York,
United States, without reference to its conflicts of law principles to the
extent those principles would require applying another jurisdiction’s laws
(without limiting the Parties’ rights and obligations under Section 13).  The
United Nations Conventions on Contracts for the International Sale of Goods
shall not be applicable to this Agreement. Subject to Section 13, the Parties
may commence an action, suit or proceeding arising out of or in connection with
this Agreement in, and hereby consent to the non-exclusive jurisdiction of, the
federal and state courts located in the County and State of New York.

 

14.2                        Force Majeure.  Neither Party shall be held liable
to the other Party nor be deemed to have defaulted under or breached this
Agreement for failure or delay in performing any obligation under this Agreement
(other than failure to make payment when due) when such failure or delay is
caused by or results from causes beyond the reasonable control of the affected
Party including embargoes, war, acts of war (whether war be declared or not),
insurrections, riots, civil commotions, fire, floods, or other acts of God, or
acts, omissions or delays in acting by any governmental authority or the other
Party.  The affected Party shall notify the other Party of such force majeure
circumstances as soon as reasonably practical, and shall promptly undertake all
reasonable efforts necessary to cure such force majeure circumstances.  Such
excuse from liability shall be effective only to the extent and duration of the
event(s) causing the failure or delay in performance and provided that the Party
has not caused such event(s) to occur.

 

14.3                        Assignment.  Except as expressly provided in this
Section 14.3 or Section 14.4, neither this Agreement nor any rights or
obligations hereunder may be assigned or otherwise transferred by either Party
without the prior written consent of the other Party, which consent shall not be
unreasonably withheld; provided, however, that either Party may assign this
Agreement and its rights and obligations hereunder without the other Party’s
consent:

 

(a)                                 in connection with the transfer or sale of
all or substantially all of the business of the assigning Party relating to
Products to a Third Party, whether by merger, sale of stock, sale of assets or
otherwise; or

 

(b)                                 to an Affiliate, provided that the assigning
Party shall remain liable and responsible to the non-assigning Party hereto for
the performance and observance of all such duties and obligations by such
Affiliate.

 

This Agreement shall be binding upon successors and permitted assigns of the
Parties.  Any assignment not in accordance with this Section 14.3 or
Section 14.4 will be null and void.

 

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14.4                        Optimer Third Party Manufacturer.  The Parties
acknowledge and agree that Optimer plans to use a Third Party manufacturer to
Manufacture and supply Supplied Products under this Agreement and that the terms
“Optimer shall” or “Optimer will” or the like, shall be deemed to be followed by
the words “or Optimer’s designated Third Party manufacturer will” or “or
“Optimer’s designated Third Party manufacturer shall” or “Optimer shall require
that its designated Third Party manufacturer shall” or the like, with respect to
Optimer’s Manufacturing and supply obligations herein. Optimer shall consult
Partner on the terms of any agreements with any Third Party manufacturers
relating to Products that will be or may be supplied under this Agreement that
are being negotiated by Optimer at the Effective Date or negotiated afterwards
and take Partner’s reasonable comments and suggestions into account.  In
addition, Optimer shall have the right to transfer its obligations to
Manufacture and supply Supplied Products under this Agreement to any Current
Affiliate (as defined in the License Agreement) of Optimer but only with the
prior written consent of Partner, not to be unreasonably withheld or delayed;
provided that Partner may not withhold its consent to Optimer’s transfer its
obligations to Manufacture and supply Supplied Products under this Agreement to
any Current Affiliate if such Current Affiliate and Optimer U.S.A. are subject
to contractual obligations to Partner relating to supply of Supplied Products
that are at least as protective of Partner as the contractual obligations of
Optimer and Optimer U.S.A. to Partner relating to Supplied Products as of the
Effective Date.

 

14.5                        Severability.  If any one or more of the provisions
contained in this Agreement is held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby, unless
the absence of the invalidated provision(s) adversely affects the substantive
rights of the Parties.  The Parties shall in such an instance use their best
efforts to replace the invalid, illegal or unenforceable provision(s) with
valid, legal and enforceable provision(s) which, insofar as practical, implement
the purposes of this Agreement.

 

14.6                        Notices.  All notices which are required or
permitted hereunder shall be in writing and sufficient if delivered personally,
sent by facsimile (and promptly confirmed by personal delivery, registered or
certified mail or overnight courier), sent by nationally-recognized overnight
courier or sent by registered or certified mail, postage prepaid, return receipt
requested, addressed as follows:

 

If to Optimer, addressed to:

 

Optimer Luxembourg 2 S.à r.l.

 

6C, rue Gabriel Lippmann

 

L-5365 Munsbach, Luxembourg

 

Attention: Olivier Dorier

 

Fax: +352 26 25 88 79

 

 

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If to Partner, addressed to:

 

Astellas Pharma, Inc.

 

2-3-11 Nihonbashi-Honcho

 

Chuo-ku, Tokyo, 103-8411

 

Japan

 

Attention: Kazunori Okimura, Vice President, Legal

 

Fax: +81-3-3244-5811

 

 

or to such other address as the Party to whom notice is to be given may have
furnished to the other Party in writing in accordance herewith.  Any such notice
shall be deemed to have been given: (a) when delivered if personally delivered
or sent by facsimile on a Business Day; (b) on the Business Day after dispatch
if sent by nationally recognized overnight courier; and/or (c) on the third
Business Day following the date of mailing if sent by mail.

 

14.7                        Entire Agreement; Amendments.  This Agreement,
together with the exhibit hereto, contains the entire understanding of the
Parties with respect to the subject matter hereof and thereof and supersede and
cancel all previous express or implied agreements and understandings,
negotiations, writings and commitments, either oral or written, in respect to
the subject matter hereof and thereof, including the Confidentiality Agreement. 
This Agreement may be amended, or any term hereof modified, only by a written
instrument duly executed by authorized representatives of both Parties hereto,
but “written instrument” does not include (a) the text of e-mails or similar
electronic transmissions, or (b) the terms of any (i) shrink-wrap, click-wrap,
browse-wrap or similar agreement between the Parties or (ii) website owned,
operated or controlled by a Party.

 

14.8                        Headings.  The captions to the several Sections
hereof are not a part of this Agreement, but are merely for convenience to
assist in locating and reading the several Sections hereof.

 

14.9                        Independent Contractors.  It is expressly agreed
that Optimer and Partner shall be independent contractors and that the
relationship between the two Parties shall not constitute a partnership, joint
venture or agency.  Neither Optimer nor Partner shall have the authority to make
any statements, representations or commitments of any kind, or to take any
action, which shall be binding on the other Party, without the prior written
consent of the other Party.

 

14.10                 Waiver.  The waiver by either Party hereto of any right
hereunder, or the failure of the other Party to perform, or a breach by the
other Party, shall not be deemed a waiver of any other right hereunder or of any
other breach or failure by such other Party whether of a similar nature or
otherwise.

 

14.11                 Cumulative Remedies.  No remedy referred to in this
Agreement is intended to be exclusive, but each shall be cumulative and in
addition to any other remedy referred to in this Agreement or otherwise
available under law.

 

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14.12                 Waiver of Rule of Construction.  Each Party has had the
opportunity to consult with counsel in connection with the review, drafting and
negotiation of this Agreement.  Accordingly, the rule of construction that any
ambiguity in this Agreement shall be construed against the drafting Party shall
not apply.

 

14.13                 Interpretation.  All references in this Agreement to a
Section or Exhibit shall refer to a Section or Exhibit in or to this Agreement,
unless otherwise stated.  Any reference to any federal, national, state, local,
or foreign statute or law shall be deemed also to refer to all rules and
regulations promulgated thereunder, unless the context requires otherwise.  The
word “including” and similar words means including without limitation.  The
words “herein,” “hereof” and “hereunder” and other words of similar import refer
to this Agreement as a whole and not to any particular Section or other
subdivision.  All references to days, months, quarters or years are references
to calendar days, calendar months, calendar quarters, or calendar years, unless
stated otherwise.  References to the singular include the plural.

 

14.14                 No Third Party Beneficiaries.  This Agreement is neither
expressly or impliedly made for the benefit of any Party other than Optimer and
Partner, except as otherwise provided in this Agreement with respect to Optimer
Indemnitees under Section 12.1 and Partner Indemnitees under Section 12.2. This
Agreement may be terminated, varied or amended in accordance with its terms or
with the agreement of Partner and Optimer without the consent of the Optimer
Indemnitees and/or Partner Indemnitees.

 

14.15                 English Language.  This Agreement is in the English
language, and the English language shall control their interpretation.  In
addition, all notices required or permitted to be given under this Agreement,
and all written, electronic, oral or other communications between the Parties
regarding this Agreement, shall be in the English language.

 

14.16                 Counterparts.  This Agreement may be executed in multiple
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

 

[Remainder of this page intentionally left blank]

 

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IN WITNESS WHEREOF, the Parties hereto have executed this Supply Agreement as of
the Effective Date.

 

ASTELLAS PHARMA INC.

OPTIMER LUXEMBOURG 2 S.À R.L.

 

 

 

 

 

 

 

 

By:

/s/ Yoshihiko Hatanaka

 

By:

/s/ Olivier Dorier

Name:

Yoshihiko Hatanaka

Name:

Olivier Dorier

Title:

President & CEO

Title:

Manager

 

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EXHIBIT A

EXAMPLE TRANSFER PRICE CALCULATIONS

 

[…***…]

 

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***Confidential Treatment Requested

 

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