Pursuant to Item 601(b)(10)(iv) of Regulation S-K, confidential information
(indicated by [***]) has been omitted from Exhibit 10.1 because it (i) is not
material and (ii) would likely cause competitive harm to the Registrant if
publicly disclosed.
EX-10.1
LICENSE AGREEMENT
This License Agreement (this "Agreement") effective as of the 25th day of April,
2008 ("Effective Date"), is between PARI Pharma GmbH, a German corporation with
a principal place of business at Moosstrasse 3, D-82319 Starnberg, Germany
("PARI") and Transave, Inc., a Delaware corporation with registered offices at
11 Deer Park Drive, Suite 117, Monmouth Jct., NJ 08852, United States of America
(“Transave”). Each of PARI and Transave shall be referred to as a “Party,” and
collectively the “Parties.”
RECITALS
WHEREAS, Transave has acquired, developed and produced certain technology and
formulation rights commonly referred to as Arikace™, a proprietary amikacin
antibiotic based on Transave’s proprietary sustained release liposomal
technology for inhalation, for the treatment and prevention of Pseudomonas
aeruginosa infection in patients with cystic fibrosis and bronchiectasis;
WHEREAS, PARI is in the business of developing and commercializing drug
nebulizer devices and drug formulation methodologies, and PARI has developed a
drug nebulizer device;
WHEREAS, PARI and Transave have entered into a Clinical Supply Agreement
effective the 4th day of April 2007 (the “Clinical Supply Agreement”);
WHEREAS, Pari GmbH and Transave entered into a Feasibility Study Agreement dated
the 10th day of January 2007, which was assigned and transferred to PARI on the
27th of March 2007 (“Feasibility Agreement”);
WHEREAS, PARI and Transave executed a Statement of Work No. 3 for the
Feasibility Agreement on the 26th day of October 2007 (“Feasibility Statement of
Work No. 3”);
WHEREAS, Transave desires to use a PARI drug nebulizer device for aerosolizing
Arikace for pulmonary delivery, and PARI desires to optimize its drug nebulizer
device for aerosolizing Transave’s Arikace for pulmonary delivery; and
WHEREAS, PARI desires to perform evaluation, research and development activities
with Transave related to PARI’s nebulizer device technology, and Transave
desires to pay PARI for such activities and to obtain a license to certain PARI
intellectual property rights in connection with the development and
commercialization of Arikace with an optimized PARI nebulizer device, all on the
terms and conditions set forth herein.

AGREEMENT
In consideration of the recitals set forth above, the mutual covenants, terms
and conditions set forth below, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, PARI and Transave agree
as follows:

Article 1 - Definitions
As used in this Agreement, the following terms shall have the following meanings
while other terms may be defined parenthetically throughout this Agreement:
1.1 “Affiliate(s)” of a Party means any person or entity that directly or
indirectly owns or controls, is owned or controlled by or is under common
control with such Party, in each case, only for so long as such control exists.
As used in this definition only, "control" of an entity means beneficial
ownership, directly or indirectly, of fifty percent (50%) or more of the
outstanding voting shares or securities or the ability otherwise to elect or
appoint a majority of the board of directors or other managing authority of such
entity.
1.2 [***]
1.3 “Applicable Laws and Standards” means (a) all laws, ordinances, rules,
directives and regulations applicable to the Products, the Project or this
Agreement, including without limitation applicable local laws and regulations in
each country in the Transave Territory, (b) applicable regulations and
guidelines of the FDA and other Regulatory Authorities and the ICH guidelines;
(c) as applicable to the particular activities performed, Good Manufacturing
Practices, Good Laboratory Practices and Good Clinical Practices promulgated by
the FDA

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and other Regulatory Authorities or the ICH; and (d) all applicable industry and
trade standards, including the applicable standards of the International
Organization for Standardization (ISO).
1.4 “Arikace” means Transave’s proprietary amikacin antibiotic (including the 70
mg/ml formulation) based on Transave’s proprietary sustained release liposomal
technology for inhalation.
1.5 “Billable-hour” means an hour of activities performed by or on behalf of
PARI, but excluding: non-work time and time spent on traveling, training,
information technology support or laboratory technical support, administrative
or facilities support, time entry, finance, legal, human resources or purely
clerical activities, or other support functions not directly requested by
Transave.
1.6 “Commercially Reasonable Efforts” means those commercially reasonable
efforts customarily used by companies in the biopharmaceutical industry (with
respect to Transave) and the biomedical device industry (with respect to PARI)
for carrying out in a sustained manner a particular task or obligation, and at
least equivalent to those level of efforts applied by a Party for its other
priority products.
1.7 “Competing Nebulizer” shall mean any Nebulizer which has the performance
specification feature set forth below for a single treatment, including any
Device or eFlow but excluding the [***], [***] and the [***] devices:

[***]
[***]
1.8 “Confidential Information” shall have the meaning given to it in Section
11.1.
1.9 “Control” means, with respect to an item of information or intellectual
property rights, possession by such Party of the power and authority, whether
arising by ownership, license, or other authorization, to disclose such item as
required by this Agreement, and/or to grant and authorize licenses or
sublicenses under such items that are within the scope granted to the other
Party under this Agreement.
1.10 “Covered” means with respect to a product that (a) such product or its
manufacture, use, sale, offer for sale, importation or exportation would
infringe a Valid Claim of a Patent Right within the Intellectual Property, in
the country of such manufacture, use, sale, offer for sale, importation or
exportation, or (b) such product incorporates or is made using material Know-how
within such Intellectual Property.
1.11 “Data” means all data, data sets, test data, pre-clinical and clinical
trial data, analyses, reports, regulatory filings and approvals and the
information therein or associated therewith (including drug master files and
device master files, supporting data, regulatory correspondence and meeting
minutes) and rights to reference the same, in each case:
(a) that are generated by either Party in the course of performance pursuant to
a Work Plan or under this Agreement (“Project Data”);
(b) that are owned or controlled by PARI prior to the Effective Date, or
generated by PARI during the term of this Agreement outside of performing the
Work Plans, and are necessary or useful for the efforts of Transave, its
Affiliates or Sublicensees in obtaining Marketing Approval for the Device
(“Existing PARI Data”); or
(c) that are owned or controlled by Transave prior to the Effective Date, or
generated by Transave during the term of this Agreement, and are necessary or
useful for the efforts of PARI in performing the Work Plan(s) or in obtaining
Marketing Approval for the Device but excluding any Data related to the Project
Intellectual Property (“Existing Transave Data”).
1.12 “Device” means the eFlow (including the following components: control unit
with screen, nebulizer handset with aerosol head, nebulizer connection cord and
power supply) that is based on the Present Device, that is to be optimized or
developed for use with the Drug Product, and that otherwise at least meets the
Specifications, as defined below and recited in Exhibit 1.38 for a single
treatment, but specifically excluded from the foregoing are the [***], [***] and
[***] devices. The Parties acknowledge and agree that until the Device is
finalized in accordance with this Agreement, the Present Device shall be used by
the Parties hereunder for research, development and testing efforts related to
this Agreement.
1.13 “Device Accessories” means those types of accessories sold by PARI as of
the Effective Date or during the term of this Agreement for use with Devices,
which are not specific to the drug substance being delivered by such Devices,
including e.g. power adapters, carrying cases, face masks, and any replacement
parts associated with the foregoing.

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1.14 “Drug Product” means an Arikace pharmaceutical preparation that is
formulated for delivery via pulmonary administration exclusively for use with
the Device in the Transave Field.
1.15 “eFlow” shall mean the Nebulizer proprietary to PARI or its Affiliates that
is based on perforated vibrating membrane technology and includes the mixing
chamber and valve system associated with the device that is currently sold under
the tradename EFLOW®.
1.16 [***]
1.17 “Expired”, “Expiration” or “Expiry” means expired, lapsed, been canceled or
become abandoned and has not been finally found to be invalid (or not valid) or
unenforceable by an unreversable or unappealable (or for which no appeal has
been timely filed) final decision or judgment of a court or other authority or
agency of competent jurisdiction.
1.18 “Exploit” or “Exploitation” means to formulate, research, test, develop,
seek regulatory approval for, make, have made, use, sell, have sold, offer for
sale, market, promote, import, export, display, distribute or otherwise
commercialize or dispose of.
1.19 “FDA” means the United States Food and Drug Administration or any successor
to that agency.
1.20 “First Commercial Sale” means the first commercial sale of a Drug Product
subject to royalties under Article 6, by or under authority of Transave, its
Affiliates and/or their Sublicensees in a country in the Transave Territory,
after Marketing Approval in such country has been obtained.
1.21 “GAAP” means generally accepted accounting principles in the United States
or Germany, or the International Accounting Standard, consistently applied by a
Party throughout its enterprise.
1.22 “Good Manufacturing Practices,” or “GMP” means all good manufacturing
practices as promulgated by the Regulatory Authority of the country where the
Device is being sold, in the form of laws or regulations or guidance documents,
for the manufacturing of pharmaceutical products, including in the United States
as promulgated by the FDA 21 CFR §§ 210-211, and medical devices, including 21
CFR § 820 - Quality System Regulation.
1.23 “GMP Manufacturing” means all processes and activities typically engaged in
by a person or entity in the pharmaceutical or medical device industry for the
GMP manufacture of a product or component thereof, including procuring raw
materials, manufacturing, quality control and assurance testing, GMP record
keeping, packaging and labeling.
1.24 “Improvement” means any improvements, modifications, discoveries,
inventions, developments, enhancements, derivative works, including the
technology, Know-how and other intellectual property rights associated
therewith, whether or not patentable or registrable or otherwise protectable, in
each case with respect to the Device or any other eFlow.
1.25 “Initiation” of a clinical trial means the first dosing of the first human
patient in such trial.

1.26 “Intellectual Property” means (a) any of the following, whether existing
now or in the future anywhere in the world: patents, inventor’s certificates,
registrations and applications therefor, including any provisionals, additions,
divisionals, continuations, substitutions, continuations-in-part, together with
re-examinations, reissues, renewals or extensions thereof and all foreign
counterparts of any of the foregoing (collectively, “Patent Rights”), and (b)
all Data, ideas, pharmaceutical, chemical and biological materials, products and
compositions, tests, assays, techniques, methods, procedures, technical and
non-technical data and other information relating to any of the foregoing,
drawings, plans, designs, diagrams, sketches, specifications or other documents
containing such information or materials, and business processes, price data and
information, marketing data and information, sales data and information,
marketing plans and market research (collectively, “Know-how”). It is
understood, however, that Know-how does not include information that falls
within exceptions of the definition of “Confidential Information” set forth in
Section 11.1 of this Agreement. Intellectual Property includes all enforcement
rights.
1.27 “MAA” means a fully completed marketing authorization application (filed
with the FDA, if in the United States or to the counterpart of the FDA if
outside the United States), including all supporting documentation and data
required for such application to be accepted for substantive review, filed with
a Regulatory Authority to

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seek Marketing Approval for a particular indication in a particular country. It
is understood that MAA does not include applications for pricing or
reimbursement approval.
1.28 “Major EU Countries” means Germany, France, UK, Italy and Spain.
1.29 “Marketing Approval” means all approvals, registrations or authorizations
of any governmental entity that are necessary for the manufacturing, use,
storage, import, transport and sale of products in a regulatory jurisdiction.
1.30 “Most Recent Qualified Financing” means, as of any given date, the most
recent preferred stock financing of Transave which establishes an arms-length
valuation for the shares of preferred stock issued in such financing and
pursuant to which purchasers have purchased, or have committed to purchase,
preferred stock of Transave with an aggregate purchase price of at least [***].
As of the date of this Agreement, the Most Recent Qualified Financing is the
sale of Series D Convertible Preferred Stock of Transave pursuant to that
certain Series D Convertible Preferred Stock Purchase Agreement, dated as of
December 14, 2007 (as amended), by and among Transave and the Purchasers named
therein.
1.31 “Nebulizer” shall mean any nebulizer or other device that delivers a
formulation in the form of droplets to the airways, including the Device, any
Competing Nebulizer and eFlow. For the avoidance of doubt, the term “Nebulizer”
shall not include any device that delivers a formulation solely or primarily via
a nasal route of administration.
1.32 “Net Sales” means the gross amounts received by Transave, its Affiliates
and its permitted Sublicensees for their sales of Drug Product for use with a
Device to third parties less the following deductions: (a) trade, wholesale,
quantity, cash or other discounts, refunds, returns, rebates, credits and
allowances to the extent actually taken; (b) import, export, excise, sales or
use taxes, value added taxes, and other taxes, tariffs and duties imposed on
such sales and actually paid by Transave, its Affiliates or permitted
Sublicensees, as applicable; (c) out-bound packaging, handling, transportation,
freight and freight insurance to the extent actually paid; (d) rebates,
allowances or credits mandated by any government; (e) reimbursements, credits or
chargebacks actually granted, allowed or incurred in the ordinary course of
business (including any credits, volume rebates, charge-back and prime vendor
rebates, reimbursements or similar payments granted or given to wholesalers and
other distributors, buying groups, health care insurance carriers, pharmacy
benefit management companies, health maintenance organizations or other
institutions or health care organizations); and (f) payments or rebates paid in
connection with sales to any governmental authority in respect of any state or
federal Medicare, Medicaid or similar programs. All calculations shall be made
in accordance with GAAP.

1.33 “Optimization” means certain technical revisions of the Present Device.
1.34 “Optimization Project” means the project currently being performed
according to the Feasibility Statement of Work No. 3, a copy of which is
attached to Exhibit 2.2.
1.35 “PARI Intellectual Property” means all Intellectual Property owned or
Controlled by PARI and its Affiliates, as of the Effective Date or during the
term of this Agreement, including that which (a) relates to its formulation
technology, including PARI’s liposomal technology (but excluding with respect to
Arikace), the Device or the manufacture or use of the Device, or (b) are
necessary or useful for either Party to perform the Project, or (c) are
necessary or useful for Transave, its Affiliates or Sublicensees to
commercialize the Device with the Drug Product in the Transave Field. For
clarity, PARI Intellectual Property includes without limitation all Existing
PARI Data, existing PARI Know-how, Project Intellectual Property, all Patent
Rights listed on Exhibit 1.35 and all Improvements (subject to Section 2.5.2).
1.36 “Phase II Trial” means a clinical trial of a drug product in human
patients, the primary endpoints of which are to define the optimal dose and
clinical end points that will be used during a Phase III Trial.
1.37 “Phase III Trial” means a clinical trial of a drug product conducted in an
expanded patient population at multiple sites, which is statistically powered
and designed to definitively establish safety and efficacy with respect to a
particular indication of one or more particular doses in the patients being
studied and to provide the statistical and clinical basis for Regulatory
Approval of such drug product.
1.38 “Present Device” means the present configuration no. 40L of eFlow, having
the performance characteristics ascribed to such configuration in Exhibit 1.38.
1.39 “Products” means the individual Drug Product and/or the Device for use with
the Drug Product.

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1.40 “Project” means all activities to be performed by PARI, individually or
jointly with Transave or third parties, that are set forth in a specific Work
Plan.
1.41 “Project Director” means a development executive appointed by each Party to
serve as such Party’s principal coordinator and liaison for the Project. Except
in the case of an emergency, each Party agrees to provide thirty (30) days
written notice to the other Party prior to replacing its Project Director. The
initial Project Directors shall be: [***] for PARI and [***] for Transave.
1.42 “Project Intellectual Property” means all Intellectual Property that is
invented or created in the course of performance of a Work Plan under this
Agreement, including without limitation any Intellectual Property directed to
the Nebulizer apparatus, components or methods of manufacture thereof,
regardless of who develops it. For clarity, the Project Intellectual Property
excludes the Project Data, the Existing PARI Data, Existing Transave Data, and
any Know-how owned or Controlled by PARI or Transave prior to the Effective Date
and any Intellectual Property solely relating to Arikace.

1.43 “Project Rate” with respect to activities under a Work Plan means [***].
1.44 “Qualified Stock” means the series of preferred stock issued by Transave in
the Most Recent Qualified Financing. As of the date of this Agreement, the
Qualified Stock is Transave’s Series D Convertible Preferred Stock.
1.45 “Qualified Stock Price” means the price per share paid by the purchasers of
Qualified Stock in the Most Recent Qualified Financing (as equitably adjusted
for any stock dividend, stock split, combination, reorganization,
recapitalization, reclassification or similar event with respect to such
Qualified Stock). As of the date of this Agreement, the Qualified Stock Price is
$0.2001 per share.
1.46 “Recall” means a recall, withdrawal, or field correction of any product for
any reason, or a dissemination of information regarding such product due to a
change in the labeling of such product.
1.47 “Regulatory Authority” means any national (e.g., the FDA), supra-national
(e.g., the European Commission, the Council of the European Union, or the EMEA),
or other governmental entity in the Territory involved in regulation of or the
granting of Marketing Approval for the Products or the development, manufacture,
use or commercialization thereof.
1.48 “Royalty Term” means, on a country-by-country basis, the period commencing
on the date of First Commercial Sale of Drug Product and continuing until the
later of (a) Expiration of the last Valid Claim covering the particular Device
in the particular country in which such Product is sold or (b) [***] after First
Commercial Sale of the Drug Product in such country in the Transave Territory.
1.49 “Sale of Business Transaction” means the sale or transfer by Transave,
directly or indirectly, of all of its rights in the Drug Product to a third
party, excluding Affiliates of Transave, during the term of this Agreement. A
change of “control” in Transave shall be deemed a Sale of Business Transaction.
For the purpose of this definition, an individual corporation or other entity
shall be deemed to “control” another corporation if it owns, directly or
indirectly, more than fifty percent (50%) of the voting shares, or has the power
to elect more than half the directors, of such corporation.
1.50 “Secondary Indication(s)” means the pulmonary administration of Drug
Product for the treatment or prophylaxis of one or more of the following: [***]
or [***], provided, however, that [***], and the treatment of such indications
with [***], [***] and/or the [***] devices shall be excluded from the definition
of Secondary Indications.
1.51 “Specifications” means the specifications, performance characteristics,
parameters and requirements for the Device or other deliverables set forth in a
Work Plan or user requirement specifications agreed to in writing between the
Parties. The initial Specifications for the Present Device and the currently
anticipated target Device are set forth in Exhibit 1.38. Transave shall amend
Exhibit 1.38 to (i) amend existing parameters or add additional parameters to,
the original Specifications for the Device as necessary or desirable based on
results of the clinical data, or (ii) add an additional set of Specifications
for a Device for a Secondary Indication. Amendments shall be made by Transave
and submitted in writing to PARI for approval, which shall not be unreasonably
withheld. After approval by PARI, each amendment shall become part of this
Agreement and incorporated herein. Each amendment shall be substantially in the
format of Exhibit 1.38 and sequentially labeled (Exhibit 1.38A, Exhibit 1.38B,
etc.), and shall indicate if it supersedes any of the previous Exhibits 1.38.

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1.52 “Sublicensee” means any person or entity who receives a sublicense from
Transave under Section 4.1 of this Agreement to Exploit the Device with the Drug
Product to a non-Affiliate Third Party.
1.53 “Third Party License Agreement” [***].
1.54 “Transave Field” means the pulmonary administration of Drug Product for the
treatment or prophylaxis of cystic fibrosis (CF) and/or bronchiectasis. In
addition, upon request or election by Transave, the “Transave Field” shall
further include one or more of the Secondary Indications, subject to and in
accordance with the provisions of Section 2.6.
1.55 “Transave Intellectual Property” means all Intellectual Property owned or
Controlled by Transave and its Affiliates, as of the Effective Date or during
the term of this Agreement, including that which (a) relates to its liposomal
formulation technology, (b) is reasonably necessary or useful for either Party
to perform the Project but excluding all Improvements, or (c) that solely
relates to the Drug Product and is invented or created in the course of
performance of a Work Plan or under this Agreement. For clarity, Transave
Intellectual Property includes without limitation all Existing Transave Data,
existing Transave Know-How and the Project Data (subject to the restrictions set
forth in Section 3.2(b)).
1.56 “Transave Territory” means the entire world.
1.57 “Valid Claim” means a claim in an issued patent within the PARI
Intellectual Property, including the Project Intellectual Property, which has
not Expired.
1.58 “Work Plan” means the activities, deliverables, timelines, Specifications
and budget for the Project, established by the Parties pursuant to Section 2.2.

Article 2 - Development Project
2.1 Scope of the Project. Subject to the terms and conditions of this Agreement,
the Parties shall collaborate, in accordance with one or more Work Plan(s), for
Optimization of the Device for use with the Drug Product.
2.2 Work Plans. The initial Work Plan is set forth in Exhibit 2.2, which may be
amended by Transave based on the results of the Optimization Project with the
consent of PARI, such consent not to be unreasonably withheld. Additional Work
Plans may be added, sequentially numbered as Exhibit 2.2A, 2.2B, etc., and
attached to this Agreement. Transave may request additional services to be
performed by PARI or request changes to any existing Work Plan(s), all in
accordance with this Section 2.2.
(a) Upon any such request by Transave which shall specify deliverables and
Specifications, PARI shall promptly prepare and submit to Transave a draft Work
Plan or an amendment based on such request, setting forth in reasonable detail
the services to be performed, the time and FTEs required for such services,
timelines for the performance and completion of such services, and a budget for
any out-of-pocket costs required to be expended. It is understood that PARI may
also propose additional Work Plans or amendments on its initiative, and shall
submit a draft thereof to Transave in the same form for approval by Transave.

(b) The Parties shall negotiate in good faith the final version of any
additional Work Plan or amendment to a Work Plan, any of which shall be
effective only after mutual agreement by the Parties thereon in writing. In the
event of any conflict between a Work Plan and the terms and conditions of this
Agreement, this Agreement shall control.
(c) PARI shall use Arikace or Drug Product provided to PARI solely for the
purpose of Optimization of the Device pursuant to a Work Plan and shall not use
Arikace or Drug Product for any other purpose. PARI shall not formulate, modify
or reverse engineer the Drug Product or Arikace.
(d) Transave and its permitted Sublicensees shall use the Device solely with the
Drug Product in accordance with the terms of this Agreement and shall not modify
or reverse engineer the Device.
2.3 Management.
2.3.1 Joint Steering Committee. Promptly after the Effective Date, Transave and
PARI shall establish a joint steering committee (the “Joint Steering Committee”
or “JSC”), comprising three members chosen by each Party, to oversee, review and
coordinate the activities of the Parties under this Agreement, including the
performance of the Project and the development, manufacture and
commercialization of the Product. The JSC shall be responsible for: (a)
overseeing the activities of the Parties under this Agreement; (b) resolving

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disputes and disagreements under this Agreement; and (c) undertaking or
approving such other matters as are specifically provided for the JSC under this
Agreement. JSC will be responsible for developing a full charter for the Joint
Steering Committee, and obtain written approvals from the CEO (as defined below)
of the Parties. JSC meetings that must take place in person shall alternate
between the place of business of each Party, unless otherwise agreed to by the
Parties. Written minutes of all meetings will be provided within ten (10)
business days of the meeting/teleconference to the members of the JSC.
2.3.2 Decision Making. Decisions of the Joint Steering Committee shall be made
by unanimous vote of the members present in person or by other means (e.g.,
teleconference) at any meeting, with at least one representative from each Party
participating in such vote. In the event that the JSC is unable to reach
unanimity with respect to a particular matter, then either Party may, by written
notice to the other, have such matter referred to the President or Chief
Executive Officer (“CEO”) of each of the Parties, who shall discuss and attempt
to resolve such matters to the Parties’ mutual satisfaction within thirty (30)
days thereafter. If the Parties are unable to resolve such dispute in accordance
with this Section 2.3.2, Article 14 of this Agreement shall apply.
2.3.3 Reserved Rights. Notwithstanding the foregoing, however, in the event
either Party reasonably determines that a final decision of the JSC pursuant to
Section 2.3 will result in a hazardous or unsafe Device or Drug Product, or
infringement of a third party’s patent rights, then that first Party shall
provide the JSC with information supporting its belief. Upon delivery of such
information, and discussion with the second Party at the JSC, the first Party
shall have the right to refrain from implementing such decision in its
performance of this Agreement, provided that if the second Party in good faith
disagrees with the basis of such determination, the Parties shall resolve the
disagreement in accordance with Section 2.3.2. Notwithstanding the foregoing,
nothing in this Article 2 shall be deemed to require either Party to take any
action that it believes is unlawful.

2.3.4 Limited Authority. The decisions of the JSC, whether under this Section
2.3 or under any other section of this Agreement, shall not have the power to
amend or contradict the terms of this Agreement or the agreed upon Work Plans,
nor substitute for either Party’s ability to exercise any right, nor excuse the
performance of any obligation, set forth in this Agreement.
2.4 Conduct of the Project. Subject to the terms and conditions of this
Agreement, each Party shall use Commercially Reasonable Efforts to perform the
activities assigned to it under a Work Plan in accordance with the
Specifications, timelines and budgets set forth therein, under the supervision
of the JSC. Each Party shall keep the JSC informed as to its progress under a
Work Plan.
2.5 Improvements. Notwithstanding anything to the contrary in this Agreement, if
PARI develops an incremental Improvement, then PARI shall incorporate such
Improvement into the Device, without further consideration, if (i) it is not
contractually prohibited from doing so by the agreement under which such
Improvement was developed, (ii) PARI generally incorporates such Improvement
into an eFlow for use in CF, Bronchiectasis or such Secondary Indication (but in
this instance only, without reference to the Drug Product contained in the
definition of Secondary Indication in Section 1.50) that has been included in
the Transave Field pursuant to Section 2.6, and (iii) it is consistent with the
Specifications and the applicable regulatory requirements. If an Improvement is
not an incremental Improvement (e.g., a major Improvement or a new 510(k) is or
will be filed), then PARI shall, to the extent it has the right to do so, offer
Transave an opportunity to review such Improvement for a period of sixty (60)
days from receipt of a description of such Improvement and a plan for
development of such Improvement and possible incorporation into the Device in
order for Transave to determine whether it wishes to have such Improvement
incorporated into the Device and thereby be incorporated into the license
granted pursuant to Section 4.1. If Transave determines (by giving written
notice to PARI) within such sixty (60) day period that it desires to benefit
from the Improvement and include the Improvement in the Device, such Improvement
shall be automatically included in PARI Intellectual Property. If Transave does
not give written notice to PARI within the sixty (60) day period of its desire
to benefit from the Improvement, Transave shall be deemed to have rejected the
Improvement and PARI shall have no obligation to include the Improvement in the
Device. Notwithstanding anything to the contrary in this Agreement, if PARI
develops an Improvement and desires to obtain patent protection for such
Improvement, PARI shall be free to obtain such protection and may take all steps
necessary, appropriate or advisable thereto, provided that Transave's rights
under this Agreement shall not be restricted or limited in any way.
2.6 Designation of Secondary Indication. During the Term, if Transave desires to
add one or more Secondary Indications to the Transave Field it will notify PARI
thereof in writing. Also, if at any time during the Term of this Agreement, PARI
negotiates with a third party to license PARI Intellectual Property in one or
more Secondary Indications, PARI agrees that, prior to entering into a binding
definitive licensing agreement, whether

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oral or written, whether in the form of an agreement, term sheet, letter of
intent or other format, with such third party, PARI shall provide notice to
Transave of such negotiations and shall offer to Transave the option to add such
Secondary Indication(s) to the Transave Field; provided, however, that PARI
shall not be obligated to offer such Secondary Indication to Transave if
Transave has already entered into a binding definitive licensing agreement,
whether oral or written, whether in the form of an agreement, term sheet, letter
of intent or other format, for another Nebulizer with a third party for such
Secondary Indication. Transave shall have thirty (30) days from the date of
receipt of notice to exercise this option by sending a written notice thereof to
PARI.

Notwithstanding the foregoing, PARI shall be permitted to conduct development
activities on its own or with a third party with respect to the Secondary
Indications, including feasibility studies and the notice obligation and right
of first refusal of Transave shall not apply thereto. If Transave desires to add
a Secondary Indication either pursuant to the first sentence of this paragraph
or by exercising its option, the Parties shall negotiate in good faith
commercially reasonable and mutually acceptable diligence requirements,
non-compete provisions, termination rights and such other terms and conditions
as the Parties may identify for the applicable Secondary Indication(s), [***]
2.7 [***]. At any time, the Parties may agree to discuss a potential license
agreement related to [***] for use with Arikace.
2.8 Project Fees. Transave shall compensate PARI for its performance of the Work
Plans at the Project Rate [***] (“Project Fees”). The Project Fees shall be
invoiced to and paid by Transave in accordance with Section 9.1 below. Except
for the compensation and reimbursement set forth in this Section 2.8, each Party
shall perform all of its activities under the Work Plans at its own cost.
2.9 Reports. PARI’s obligations to provide reports will be as specified in
individual Work Plans. In addition to any meetings, working groups or reviews
required under the Work Plan, PARI shall provide Transave with reasonable access
to the Project Director, from time to time throughout the term of the applicable
Work Plan. Such access shall be at Transave's reasonable request, during regular
business hours and mutually convenient times, and may include (without
limitation) teleconferences, email, face-to-face meetings or other visits to
PARI's facility.
2.10 Subcontractors. PARI shall not subcontract its performance of the Project
to another entity without Transave’s prior written approval, which approval
shall not be unreasonably withheld, delayed or conditioned. In any case, PARI
shall remain completely responsible for all acts and omissions of its
subcontractors for any Project activities that are subcontracted.

Article 3 - Intellectual Property
3.1 Existing Intellectual Property Ownership and Limited License Grant.
(a) Transave shall exclusively own the Transave Intellectual Property and any
improvements, enhancements or modifications in and to the foregoing conceived or
developed by either Party pursuant to this Agreement. Except for the license
expressly granted in 3.1(b), no other license in the Transave Intellectual
Property is granted to PARI by implication, estoppel or otherwise. PARI shall
exclusively own the PARI Intellectual Property and any improvements,
enhancements or modifications in and to any of the foregoing conceived or
developed by either Party pursuant to this Agreement, including all
Improvements. Except for the licenses expressly granted in this Agreement, no
other license in the PARI Intellectual Property is granted to TRANSAVE by
implication, estoppel or otherwise.

(b) Subject to the terms and conditions of this Agreement, Transave hereby
grants PARI a royalty-free, non-exclusive, non-transferable (except to its
Affiliates and as expressly provided herein) license under the Transave
Intellectual Property solely to perform PARI’s obligations and responsibilities
under the Work Plans and this Agreement. PARI hereby grants to Transave, until
initiation of the Royalty Term, a royalty-free, non-exclusive license under the
PARI Intellectual Property and PARI Project Intellectual Property solely to
perform Transave’s activities, under this Agreement including the development of
Drug Products, provided, however that all Improvements shall be exclusively
owned by PARI and Transave shall not file any patent application that
incorporates the PARI Intellectual Property and/or the Project Intellectual
Property.
3.2 Project Intellectual Property Ownership and Project Data Ownership.
(a) PARI shall exclusively own the Project Intellectual Property. Transave
agrees to assign and hereby assigns to PARI all right, title and interest in and
to Project Intellectual Property.

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(b) Subject to Section 3.3 below, Transave shall exclusively own all Project
Data; provided, however, that Transave (i) shall not use any Project Data with,
or share, transfer or license to PARI Competitor pursuant to Section 4.1.3 below
and (ii) Transave shall not file any patent application or amendment that
incorporates the PARI Intellectual Property and/or the Project Intellectual
Property in the claims thereof. Transave shall give PARI reasonably sufficient
advance notice and opportunity to review any patent applications, prior to
filing, that first incorporate any particular PARI Intellectual Property or
Project Intellectual Property. If, within fifteen (15) days after receipt, PARI
notifies TRANSAVE in writing that TRANSAVE's patent application contains PARI
Intellectual Property or Project Intellectual Property that is patentable but
for which PARI has not previously filed for patent protection, then TRANSAVE
agrees to delay filing of its application for an additional thirty (30) days, to
permit PARI to prepare and file a patent application to protect such PARI
Intellectual Property or Project Intellectual Property. In the event Transave
nevertheless files a patent application that claims the PARI Intellectual
Property or any Project Intellectual Property, then PARI shall receive a
non-exclusive, perpetual, world-wide, fully paid-up, sublicensable,
unrestricted, irrevocable right and license to research, formulate, develop,
seek regulatory approval for, make, have made, use, sell, have sold, offer for
sale, market, promote, import, export, display, make derivative works of, copy,
distribute, perform, license, sublicense or otherwise commercialize, exploit or
dispose of the PARI Intellectual Property or any Project Intellectual Property
to the extent claimed in such patent application and/or patent. In the event
that Transave uses Project Data (that have been generated based on the
utilization of the Device) to file a patent application, then PARI shall have a
non-exclusive, perpetual, world-wide, fully paid-up, licensable, unrestricted
right and license (outside of the Transave Field) (1) to practice under any
apparatus claim that claims a Device, Nebulizer that is proprietary to PARI, or
component thereof, and any method of manufacture claim that claims a method of
manufacturing a Device, Nebulizer that is proprietary to PARI, or component
thereof, in any such patent that is based on such Project Data , and (2) to
practice under any method of use claim that is a method of using a Device,
Nebulizer that is proprietary to PARI, or component thereof, in any such patent
that is based on such Project Data to the extent necessary to avoid any
liability on PARI’s part for infringement of such method of use claims.
Notwithstanding anything to the contrary in the foregoing, PARI shall not obtain
any rights under this Section 3.2(b) to Exploit any Transave proprietary drug
product or formulation thereof.

3.3 Default on Project Fees. Subject to Article 14, in the event of a default in
the payment of any undisputed Project Fees under this Agreement, which default
is not cured within thirty (30) days after Transave receives written notice
thereof by PARI referencing this Section 3.3, specifying in detail the amount of
Project Fees alleged to be unpaid and a calculation thereof, and providing all
relevant supporting documentation evidencing such calculation, then Transave
shall not have the right to use such specific Project Intellectual Property and
Project Data that was conceived or developed by PARI that was not paid for in
accordance with the Work Plan by Transave. In such event, however, it is
understood that Transave shall retain the right to use and Exploit other Project
Intellectual Property and Project Data that Transave has fully paid for in
accordance with the Work Plan and this Article 3.
3.4 Scientific Records. PARI shall maintain laboratory notebooks and all
technical, scientific, accounting and other records in sufficient detail and
which shall reflect work done, results achieved, intellectual property
developed, including all data in the form required by Applicable Laws and
Standards, which shall be kept for three (3) years after completion or
termination of the respective Work Plan or any longer period mandated by
Applicable Laws and Standards. However, records supporting the relevant PARI
Patent Rights and the Project Intellectual Property shall be kept for the longer
of a period of fifteen (15) years after First Commercial Sale of Drug Product in
any country in the Transave Territory or 20 years from the date of filing of any
intellectual property related to this project or a longer period mandated by
Applicable Laws and Standards.
3.5 Patent Protection. Except as set forth in Section 3.6 with respect to the
Joint Patents, PARI has the sole discretion and responsibility, at its expense,
to prepare, file, prosecute, maintain, defend, and enforce any patent
applications and patents, as applicable, to PARI Intellectual Property and
Project Intellectual Property. TRANSAVE has the sole discretion and
responsibility at its expense, to prepare, file, prosecute, maintain, defend,
and enforce any patent applications and patents, as applicable, to TRANSAVE
Intellectual Property. In any case and pursuant to this Section 3.5, TRANSAVE
shall not, without PARI’s prior written consent, to be withheld in its sole
discretion, prepare, file, prosecute, maintain, defend, or enforce any patent
applications and patents, as applicable, relating to the Device or any other
eFlow or otherwise incorporate PARI Intellectual Property and/or the Project
Intellectual Property, including but not limited to eFlow, or PARI’s proprietary
TouchSpray® Technology. In any case and pursuant to this Section 3.5, PARI shall
not, without Transave’s prior written consent, to be withheld in its sole

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discretion, prepare, file, prosecute, maintain, defend, or enforce any patent
applications and patents, as applicable, relating to the Drug Product.
3.6 Joint Patents. PARI and Transave are currently discussing the potential of
filing a joint patent application (the “Joint Patent”). The Parties hereby agree
that no Joint Patent application shall be filed without (i) the consent of the
other Party and (ii) the Parties having entered into an Addendum to this
Agreement outlining the respective rights and obligations, including provisions
regarding ownership, rights of use, restrictions of use, prosecution,
enforcement and defense, with respect to the Joint Patent.
Article 4 - Commercial License
4.1 Commercial License
4.1.1 Exclusive Grant in Transave Field. During the Royalty Term, PARI hereby
grants Transave a royalty-bearing exclusive right and license in the Transave
Territory, (with the right to grant and authorize sublicenses, except with
respect to [***] which PARI shall sublicense at Transave’s request according to
Section 4.1.4, provided (x) such Sublicensees agree to be bound by the terms of
this Agreement, (y) Transave shall nonetheless remain liable to PARI for any
breach by a Sublicensee of this Agreement and (z) such Sublicensee is not a PARI
Competitor pursuant to Section 4.1.3 below), under PARI Intellectual Property
and Project Intellectual Property to Exploit (subject to Section 4.1.1 below)
the Device for use with the Drug Product in the Transave Field; provided,
however, that Improvements are governed by Section 2.5.2. For clarity, the
license of this Section 4.1.1 shall be exclusive, except with respect to the
[***], in the Transave Field even as to PARI, and PARI shall not practice
itself, nor grant to a third party, any rights with respect to PARI Intellectual
Property or Project Intellectual Property for use in the Transave Field in the
Transave Territory, except with respect to the [***]. Upon expiration of the
Royalty Term, the foregoing license shall be rendered non-exclusive, fully
paid-up and royalty-free, on a country-by-country basis; provided, however, that
upon Transave’s written request, such license shall remain exclusive, on a
country-by-country basis, subject to Transave’s continued payment of royalties
for such country as set forth in Section 6.1 of this Agreement.

4.1.2 Manufacturing Rights. Transave covenants that it shall not, and it shall
cause its Affiliates and permitted Sublicensees not to, exercise rights to
manufacture the Device for use with the Drug Product, the Device, the Device
Accessories or any components of any of the foregoing under the license of this
Section 4.1 except pursuant to a fully executed Commercial Supply Agreement as
set forth in Section 8.9 of this Agreement.
4.1.3 Restriction of Certain Sublicenses. Transave shall not grant to a PARI
Competitor a sublicense under the PARI Intellectual Property without PARI’s
prior written consent. For such purposes a “PARI Competitor” shall mean an
entity identified in Exhibit 4.1 hereto.
4.1.4 Sublicense of [***]. Transave acknowledges that a portion of the PARI
Intellectual Property includes PARI's rights under the Third Party License
Agreement. In the event Transave transfers or sublicenses the license granted in
this Section to a third party, such rights shall be excluded from such transfer
or sub-license. However, in the event that Transave transfers or sublicenses to
a third party any of the license rights granted in this Section 4.1, upon
Transave’s request, PARI shall directly grant to such third party a sublicense
of PARI’s rights under the Third Party License Agreement for no additional
consideration, other than that already due to PARI under this Agreement with
respect to any transfer or sublicense of rights granted to Transave in this
Section 4.1. Such transfer or sublicense shall be subject to the terms and
conditions of this Agreement.
4.2 Exclusivity of Efforts. The Parties acknowledge and agree that nothing
contained in this Section 4.2 shall limit PARI from researching, developing,
manufacturing, or commercializing medical devices (including existing devices)
as stand alone devices outside of the Transave Field other than the Device
(subject to PARI’s obligations under Section 2.6).
(a) Non-Compete. Subject to Section 4.2(b) below and the AKITA Rights, during
the Term of this Agreement, PARI agrees that it and its Affiliates shall not
compete with Transave (x) in CF and/or Bronchiectasis with a Competing Nebulizer
in the Transave Field, within the Transave Territory, or (y) otherwise engage in
the research, development, manufacture and/or commercialization of amikacin for
pulmonary administration using a Competing Nebulizer. In addition, during the
term of this Agreement, PARI agrees that it and its Affiliates shall not compete
with Transave or otherwise engage in the research, development, manufacture
and/or commercialization of any liposomal formulation of tobramycin,
ciprofloxacin and levofloxacin for pulmonary

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administration, provided, however, that the foregoing restrictions in this
sentence shall not apply with respect to (i) the right of any third party
licensee (but only to the extent such right is existing and in effect as of the
Effective Date) to research, develop, manufacture and/or commercialize any
liposomal formulation of tobramycin, ciprofloxacin and levofloxacin for
pulmonary administration pursuant to any licensing agreements entered into by
PARI or its Affiliates prior to the date of this Agreement, and (ii) the right
of PARI and its Affiliates to enter into additional agreements that would be
necessary or useful to exploit, but do not expand, existing rights under such
licensing agreements referred to in (i), such as testing agreements, and
clinical and commercial supply agreements, with any such third party licensee
related to the research, development and manufacture and/or commercialization of
products generated pursuant to those respective licensing agreements,; except
the foregoing restrictions in this sentence shall apply, notwithstanding (i) or
(ii), with respect to any research, development, manufacture and/or
commercialization of any such liposomal formulations for pulmonary
administration using a Nebulizer that includes any developments or optimizations
generated under Feasibility Statement of Work No. 3. Notwithstanding the
foregoing, the Parties acknowledge and agree that PARI is able to supply medical
device product information to customers and sell medical devices other than
Competing Nebulizers to customers and patients indicated to deliver amikacin for
any indication (including clinical development and clinical research), including
CF and Bronchiectasis, and that such uses shall not conflict with the
prohibitions of this Section 4.2(a).

(b) Transave Diligence. PARI’s obligations under Section 4.2(a) shall be
conditioned upon Transave complying with its diligence obligations as set forth
in Sections 7.1 and 7.2.
(c) During the term of this Agreement, Transave agrees that it and its
Affiliates shall not compete with PARI or otherwise engage in the research,
development manufacture and/or commercialization of any liposomal formulation of
cyclosporin.
4.3 Rights in Bankruptcy. All rights and licenses granted under or pursuant to
any section of this Agreement are, and shall be deemed to be, for purposes of
Section 365(n) of the Bankruptcy Code, 11 U.S.C. § 101 et seq., licenses of
rights to “intellectual property” as defined under Section 101(35A) of the
Bankruptcy Code. The parties shall retain and may fully exercise all of their
respective rights and elections under the Bankruptcy Code.
Article 5 - Upfront License Fee and Milestones
5.1 Upfront License Fee. After execution of this Agreement and within thirty
(30) days after receipt of written notice of PARI’s election under Section
5.3(a), Transave shall pay PARI (a) [***] either in cash, or the equivalent in
Qualified Stock, or a
combination of cash and Qualified Stock, at PARI’s option as provided in section
5.3(a) below, plus (b) the equivalent of [***] in Qualified Stock, as an upfront
license fee.
5.2 Milestones. In further consideration of the rights and license granted by
PARI under this Agreement, Transave agrees to make the following milestone
payments to PARI, upon the first achievement of the corresponding events set
forth below by or under authority of Transave, within thirty (30) days after
Transave’s receipt of written notice of PARI’s election under Section 5.3(b)
below. For avoidance of doubt, each Milestone Payment is payable only once.

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MILESTONE EVENT
MILESTONE
PAYMENT
1. Receipt of any positive trial report from the first Phase IIb Trial that are
sufficient to support the advancement of Drug Product development with the
Device into the first Phase III Trial
[***] either in cash, Qualified Stock or a combination of cash and Qualified
Stock; plus
[***] in Qualified Stock
2. Initiation of the first Phase III Trial of Drug Product with the Device
[***] either in cash, Qualified Stock or a combination of cash and Qualified
Stock
3. First Acceptance of MAA (or equivalent) submission in the US for such Drug
Product with the Device
[***] either in cash, Qualified Stock or a combination of cash and Qualified
Stock
4. First receipt of Marketing Approvals in the United States for both (i) such
Drug Product and (ii) the Device
[***] either in cash, Qualified Stock or a combination of cash and Qualified
Stock
5. First receipt of Marketing Approvals in the first of the Major EU Countries
for both (i) such Drug Product and (ii) the Device, in the same Major EU Country
[***] either in cash, Qualified Stock or a combination of cash and Qualified
Stock
Total
[***]

5.3 Equity Issuances. Subject to the limitations set forth in Sections 5.3(d)
and 5.3(e) below, PARI may elect, as set forth below, to receive any or all of
the payments set forth in Sections 5.1 and 5.2 above in the form of Qualified
Stock in lieu of cash, as set forth below in this Section 5.3.
(a) Upfront License Fee. Within thirty (30) days of the execution of this
Agreement and provided PARI has received the information set forth in paragraphs
(b)(iii) and (iv) below, PARI shall notify Transave in writing whether or not it
elects to receive Qualified Stock in lieu of the upfront license fee payment of
[***] set forth in Section 5.1(a) above. If PARI fails to make its election
within such thirty (30) days and provided PARI has received the information set
forth in paragraphs (b)(iii) and (iv) below, then Transave may, in its sole
discretion, make such payment in cash, Qualified Stock or a combination of cash
and Qualified Stock, in the manner set forth in Section 5.3(c) below.

(b) Milestone Payments. Promptly following the occurrence of each of the
Milestone Events specified in Section 5.2 above, Transave shall provide to PARI
(i) written notification that such milestone event has occurred; (ii) to the
extent not previously provided, a summary of the terms of the Qualified Stock
that PARI may elect to receive in connection therewith; (iii) to the extent not
previously provided, copies of any voting agreement or co-sale agreement to
which other holders of such Qualified Stock are parties, as well as any other
document restricting the transferability of such shares of Qualified Stock; and
(iv) such financial or other information reasonably requested by PARI. For the
avoidance of doubt, all materials and other information provided to PARI
pursuant to this Section 5.3 shall be deemed to be Confidential Information
subject to Article 11 of this Agreement. PARI shall, within thirty (30) days
after Transave’s delivery of the foregoing information, notify Transave in
writing whether or not it elects to receive Qualified Stock in lieu of the cash
milestone payment applicable to such milestone event. If PARI fails to make its
election within such thirty (30) days, then Transave may, in its sole
discretion, make such payment in cash or Qualified Stock, in the manner set
forth in Section 5.3(c) below.

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(c) Calculation of Number of Shares of Qualified Stock. [***]
(d) Conditions to Issuance of Equity. In the event that Transave issues
Qualified Stock to PARI hereunder, the share certificate(s) evidencing such
Qualified Stock shall be endorsed with customary securities legends, and the
issuance of such Qualified Stock shall be subject to applicable federal and
state securities laws and the restrictions and other terms of Transave’s bylaws
and other organizational documents. In addition, PARI must as a condition
precedent to the receipt of such Qualified Stock: (i) if requested by Transave,
agree to become bound by any voting agreement, co-sale agreement or other
transfer restrictions applicable to the other holders of such Qualified Stock
and (ii) make such additional representations and warranties at the time of the
issuance of such Qualified Stock as may be reasonably requested by Transave to
ensure compliance with applicable federal and state securities laws. In the
event Transave has completed an initial public offering of its capital stock
prior to the occurrence of a Milestone Event for which PARI would be entitled to
elect to receive Qualified Stock in lieu of a cash milestone payment, or
Transave otherwise reasonably concludes that it is unable to comply with
applicable federal and state securities laws in connection with any particular
issuance of Qualified Stock to PARI pursuant to this Section 5.3, Transave shall
have no obligation to issue such Qualified Stock, but if such Qualified Stock is
not issued, Transave shall pay PARI the amount of [***] (for the upfront license
fee set forth in Section 5.1), [***] (for Milestone Event 1 set forth in Section
5.2), [***] (for Milestone Events 2 and 5 set forth in Section 5.2), [***] (for
Milestone Event 3 set forth in Section 5.2) or [***] (for Milestone Event 4 set
forth in Section 5.2), as applicable, upon the occurrence of the obligation to
pay the upfront license fee or milestone payment specified in Section 5.1or in
Subsections 1 through 5 of Section 5.2 above, as applicable, within thirty (30)
days of Transave reasonably concluding that it is unable to issue such Qualified
Stock. For the avoidance of doubt, Transave’s obligation to issue Qualified
Stock under this Section 5.3 shall not apply to an initial public offering of
Transave’s capital stock, and shall only apply with respect to the Qualified
Stock issued in the Most Recent Qualified Financing but not to any warrants,
promissory notes or other securities which may be issued concurrently to the
investors in such Most Recent Qualified Financing.

(e) Effect of Sale of Business Transaction. In connection with any Sale of
Business Transaction which closes prior to any particular issuance to PARI of
Qualified Stock, the successor in interest to Transave shall have the option
(but not the obligation) to assume Transave’s obligation to issue Qualified
Stock pursuant to this Section 5.3 by issuing capital stock of the successor in
interest at the applicable conversion ratio for the Qualified Stock in such Sale
of Business Transaction, subject to PARI having (x) received documents and
information with respect to the capital stock of such successor in interest
substantially similar to the documents and information set forth in Sections
5.3(b)(ii), 5.3(b)(iii) and 5.3(b)(iv) above and (y) agreed in writing within
thirty (30) days of receipt of all such documents and information that it elects
to receive capital stock of the successor in interest as the method of payment.
If such successor in interest does not elect to assume such obligation or PARI
has not elected to receive capital stock of such successor in interest, then
such successor in interest shall immediately pay PARI the amount of [***] (for
the upfront license fee set forth in Section 5.1), [***] (for Milestone Event 1
set forth in Section 5.2), [***] (for Milestone Events 2 and 5 set forth in
Section 5.2), [***] (for Milestone Event 3 set forth in Section 5.2) or [***]
(for Milestone Event 4 set forth in Section 5.2), as applicable, upon the
occurrence of the obligation to pay the upfront license fee or milestone payment
specified in Section 5.1 or in Subsections 1 through 5 of Section 5.2 above, as
applicable, and PARI shall have no right to capital stock or equity of Transave
or such successor in interest thereafter.
Article 6 - Royalties
6.1 Royalties for Drug Products. In further consideration of the rights and
license granted by PARI under this Agreement, during the Royalty Term, subject
to the terms and conditions of this Agreement, Transave agrees to pay PARI a
royalty equal to [***] of the Net Sales of Drug
Product sold by Transave, its Affiliates or Sublicensees. Such royalties shall
be paid in accordance with Section 9.2 below.
6.2 Combination Products. In the event (i) a Drug Product is sold in combination
with the Device or other components for a single price, or (ii) a Drug Product
is sold in combination with services or other products, amounts invoiced for
such combination sales for purposes of calculating Net Sales of the Drug Product
in such combination shall be reasonably allocated between such amounts
attributable to the Drug Product and amounts attributable to the Device, other
components, services or other products (“Non-Royalty Components”), by or

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under authority of Transave. Such allocation shall be based on the relative
value(s) of the Drug Product and of the Non-Royalty Components, and if the
Parties are unable to agree on such allocation, the allocation shall be
determined in accordance with Article 14.
6.3 Annual Minimum Royalties. During the Royalty Term, Transave shall pay to
PARI an Annual Minimum Royalty in US dollars in accordance with Section 9.3
below; provided, however, that, in the event Transave has permanently
discontinued to Exploit the Drug Product for CF in accordance with Section
7.1(a), then the Annual Minimum Royalty shall no longer be applicable for the
Drug Product for CF but the obligation to pay Annual Minimum Royalties for the
Drug Product for Bronchiectasis shall remain in effect.

(a) Determining the Annual Minimum Royalty.
(i) The “Annual Minimum Royalty” shall be determined by the following table.
Year of Sales
Annual Minimum Royalty
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]
[***]

(b) Failure to pay Annual Minimum Royalty. In the event Transave does not pay
the Minimum Royalty Payment due under Section 6.3(a) above when due, PARI shall
have the right to (i) render non-exclusive the license set forth in Section
4.1.1 upon written notice to Transave and failure to cure within sixty (60)
days, and the non-compete obligations set forth in Section 4.2(a) shall
immediately cease and (ii) terminate immediately the license set forth in
section 4.1.1 for CF or Bronchiectasis, as applicable, if the Minimum Royalty
Payment (plus all interest due pursuant to Section 9.5) plus an amount equal to
[***] of the then applicable Minimum Royalty Payment has not been paid within
six (6) months of the initial due date of the Minimum Royalty Payment; provided,
however, that if all such payments have been made by Transave to PARI within
such six (6) months period, then the license shall become exclusive again and
the non-compete obligations set forth in Section 4.2(a) shall be reinstated
immediately, as of the date of payment. The royalty rates set forth in this
Article 6 shall remain unchanged due to the license of Section 4.1.1 becoming
non-exclusive.
6.4 Infringement or Misappropriation of Third Party Rights. In the event of an
actual or threatened infringement action pertaining to the Device, which causes,
or could reasonably be expected to cause, Transave’s use of the Device to be
disrupted, PARI shall, at its option and on a country by country basis, (i)
provide Transave with access to components or entire nebulizers which are
functionally equivalent to the infringing elements of the Device while still
meeting the Specifications, without additional charge (“Option 1”); (ii) modify
the infringing portions of the Device to avoid the infringement while still
meeting the Specifications (“Option 2”); or (iii) obtain a license for Transave
to continue use of the Device for the Term of this Agreement, and pay for any
additional fee required for a license with the Third Party Controlling the
Intellectual Property which is infringed or misappropriated by the Device
(“Option 3”). In the event PARI reasonably believes it to be Necessary (defined
below) to proceed with obtaining a license for Transave as described above in
Option 3, then PARI shall contribute up to a maximum amount of [***] in the
aggregate of all Royalties paid by Transave to PARI pursuant to this Agreement
towards the cost of such license. If at any time the anticipated costs for PARI
to comply with Option 3 exceeds [***] in the aggregate of all Royalties paid by
Transave to PARI pursuant to this Agreement, then PARI shall so notify Transave
and Transave shall pay such additional amounts in order for PARI to secure such
Necessary license. “Necessary” shall mean a determination by PARI after good
faith consultation with Transave that a license would be prudent given the
potential to resolve any claims or potential claims of Intellectual Property
infringement or misappropriation.

Article 7 - Development, Regulatory and Commercialization Roles and
Responsibilities

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7.1 Transave Development and Commercialization Diligence for CF.
(a) Transave agrees to use Commercially Reasonable Efforts to pursue the
clinical development of and to obtain Marketing Approval for CF for the Drug
Product intended for use with the Device in one (1) or more countries (and at
least in the United States), and after obtaining such Marketing Approval, to use
Commercially Reasonable Efforts to market and sell the Drug Product with the
Device in all countries in which it has been approved, except that Transave may,
in its sole discretion, permanently discontinue: development, seeking regulatory
approval, or commercialization based on: safety issues, negative and/or
unfavorable clinical trial results, lack of commercial viability, strength of
competitors prohibiting an effective marketing of the Drug Product in the
marketplace, or weak financial forecasts; provided, however, that in such event
Transave shall immediately notify PARI in writing of such decision and in such
case CF shall no longer be included in the Transave Field and PARI’s obligations
under Section 4.2(a) shall no longer apply as to CF. Until such first Marketing
Approval, provided that the license of Section 4.1.1 remains exclusive
hereunder, Transave shall provide PARI, at least semi-annually through the JSC,
with detailed reports of the progress of its development of Drug Products for
use with the Device and plans for its development and commercialization thereof
in the upcoming year. The JSC shall discuss such reports and plans and Transave
shall duly consider any comments thereon provided by PARI, provided that the
Parties agree that Transave shall retain sole control of its development efforts
hereunder and its plans therefor. For clarity, it is understood that the
obligation to use Commercially Reasonable Efforts as set forth in this Section
7.1 shall apply to any Affiliates and/or permitted Sublicensees who are
responsible for development of Drug Products for use with the Device, and
Transave shall share reports and plans from such Affiliates and/or permitted
Sublicensees with PARI at least annually through the JSC in the same manner as
for reports and plans of its own development. This Section 7.1 shall also apply
to any permitted successors and assigns of Transave under this Agreement.
Transave’s breach of this Section 7.1(a) shall be deemed a material breach of
this Agreement.
(b) The Parties agree that Transave will use Commercially Reasonable Efforts to
meet the following milestones with respect to CF:
Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1:first Phase III Trial for CF begins
[***]
2. Diligence Milestone 2: first submission of an MAA application for CF in the
Transave Territory
[***]

To the extent Transave does not meet a milestone listed above within the stated
time period or the dates listed below, other than any failure resulting directly
from a breach of this Agreement by PARI, then, subject to the provisions of
Section 7.3, PARI shall have the option, in its sole discretion, to take the
applicable action set forth below. Such option must be exercised by written
notice to Transave (the "Diligence Termination Notice"), and shall become
effective on the thirtieth (30th) day following the date of the Diligence
Termination Notice. PARI shall have the option to:
(i) with respect to Diligence Milestone 1 above, terminate its obligation not to
compete with Transave in CF as set forth in Section 4.2 of this Agreement only.
In the event Transave has still not achieved Diligence Milestone 1 by [***],
then the license granted by PARI to Transave under this Agreement shall be
rendered non-exclusive with regard to CF only. In the event Transave still has
not achieved Diligence Milestone 1 by [***], then PARI shall have the option to
terminate the licenses granted by PARI to Transave under this Agreement with
regard to CF only by providing written notice to Transave thereof;

(ii) with respect to Diligence Milestone 2 above, terminate its obligation not
to compete with Transave in CF as set forth in Section 4.2 of this Agreement
only. In the event Transave has still not achieved Diligence Milestone 2 by
[***], then the licenses granted by PARI to Transave hereunder shall be rendered
non-exclusive with regard to CF only. In the event Transave still has not
achieved Diligence Milestone 2 by [***], then

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PARI shall have the option to terminate the license granted by PARI to Transave
under this Agreement with regard to CF only by providing written notice to
Transave thereof;
7.2 Transave Development and Commercialization Diligence for Bronchiectasis.
(a) The Parties agree that Transave will use Commercially Reasonable Efforts to
meet the following milestone with respect to Bronchiectasis:
Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: Last patient to complete the Phase II Trial for
Bronchiectasis
[***]
2. Other Diligence Milestones: see below

Within one hundred eighty (180) days following the final results of the Phase II
Trial for Bronchiectasis, the Parties, acting in good faith, will negotiate
additional milestones that meet reasonable industry standards. If no additional
milestones are agreed to within such time period, and the lack of milestones is
not mutually agreed by both parties, then at PARI’s option, PARI may by
providing prompt written notice to Transave, (i) make the license granted to
Transave under this Agreement non-exclusive and PARI’s non-compete obligations
set forth in Section 4.2 shall terminate or (ii) terminate the license granted
to Transave under this Agreement, in each case solely with respect to
Bronchiectasis.
If Transave fails to meet a milestone within the applicable time period, other
than any failure resulting from a breach of this Agreement by PARI, then,
subject to the provisions of Section 7.3, PARI shall have the option to render
Transave's license hereunder non-exclusive solely with respect to Bronchiectasis
and to terminate its obligation not to compete with Transave in Bronchiectasis
as set forth in Section 4.2 of this Agreement. Such option must be exercised by
sending the Diligence Termination Notice to Transave, and shall become effective
on the thirtieth (30th) day following the date of the Diligence Termination
Notice. If such milestone is still not met within twelve (12) months of the
applicable time period, other than any failure resulting from a breach of this
Agreement by PARI, then, subject to the provisions of Section 7.3, PARI shall
have the option to terminate the license granted to Transave under this
Agreement with respect to Bronchiectasis only by providing written notice
thereof to Transave.
(b) For the avoidance of doubt, subject to the provisions of Section 7.2(a),
nothing in this Agreement shall impart any obligation on Transave to pursue the
indication of Bronchiectasis, and Transave’s activity or lack of activity with
respect to Bronchiectasis shall not affect in any way Transave’s rights in and
to CF or any Secondary Indication.

7.3 Updated Milestones. In the event Transave is unable to achieve the
milestones set forth in Sections 7.1(b) and/or 7.2(a), as applicable, because of
a breach of PARI of this Agreement, or in the case the Phase II or the Phase III
Trial has to be repeated or there are documented clinical holds or delays caused
by requests of the Regulatory Authorities preventing Transave from proceeding,
then the due dates set forth above for such Milestones shall be reasonably
adjusted to account for such factors pursuant to mutual agreement of the
Parties.
7.4 Manufacture of Drug Product and Device. As between the Parties, (i) Transave
shall have the exclusive right to manufacture (or have manufactured) Drug
Product for any and all purposes (including without limitation, for use with the
Device, for clinical and for commercial use); and (ii) PARI shall have the
exclusive right to manufacture Devices for use with the Drug Product, for
clinical and for commercial use, except as otherwise may be provided in the
Commercial Supply Agreement.
7.5 Supply of Devices for Clinical Trials. PARI shall supply Transave or its
designee with all Devices, and Device Accessories, to the extent applicable,
required for the conduct of clinical trials. Devices shall meet the
Specifications. The manufacturing and supply of such Devices by PARI shall
comply with Article 8 below.
(a) Price. The price charged by PARI for such Devices and related parts shall be
equal to the prices set forth on Exhibit 7.5(a) for clinical supply of the
Devices.
(b) Initial Forecast. An initial forecast of the Devices, including delivery
dates, anticipated to be required by Transave for clinical trials is set forth
in Exhibit 7.5(b). Such forecast shall not be binding on either

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Party, unless and until such quantities and dates are confirmed in written
purchase orders issued by Transave and accepted by PARI or set forth in a Work
Plan executed by the Parties. Transave agrees to provide PARI a lead time of at
least two (2) months.
(c) Accessories. The provisions of this Section 7.5 apply equally to Device
Accessories.
7.6 Regulatory Matters.
(a) General. As between the Parties, (i) Transave shall be responsible for, and
shall control all filings and interactions with Regulatory Authorities with
respect to the Drug Products, and Transave shall control all clinical and
regulatory strategy for the Drug Products; and (ii) PARI shall be responsible
for, and shall control all filings and interactions with Regulatory Authorities
with respect to the Device, and PARI shall control all clinical and regulatory
strategy for the Device. Any MAAs, Marketing Approvals, INDs, or other
regulatory submissions, filings, approvals and documentation (collectively,
“Regulatory Filings”) shall be submitted solely in the name of, and exclusively
owned by, (x) Transave or its designee with respect to the Drug Product and (y)
PARI or its designee with respect to the Device. Each Party agrees to cooperate
with, and provide reasonable assistance to the other Party, in the preparation
of such Regulatory Filings, at the other Party’s expense.
(b) Approvals for Device for Clinical Trials. PARI represents, warrants and
covenants that, with respect to the Present Device, it has been granted a 510(k)
marketing clearance in the US and a CE mark in the European Union. Attached
hereto as Exhibit 7.6(b) is a list of all countries in which PARI has obtained
or is seeking Marketing Approval for the Present Device and PARI shall keep
Transave informed of any change in status. Transave shall give reasonable weight
to this list when choosing countries in which to conduct future clinical trials.
If Transave chooses to conduct a clinical trial in a country in which the
current status of approval is not adequate to allow Transave to conduct a
clinical trial, then PARI hereby agrees to reasonably cooperate with Transave,
at Transave’s expense, in order to obtain the applicable regulatory approvals in
such country to allow Transave to use the Device for clinical trials in such
country.

(c) Regulatory Inspections and Requests. Transave and PARI shall cooperate in
good faith with respect to the conduct of any inspections required by any
Regulatory Authority of a Party’s site and facilities related to Transave’s
clinical trials regarding Devices. Each Party shall promptly provide to the
other Party a summary of any inspectional observations, inspection reports
issued by a Regulatory Authority, or responses to a Regulatory Authority’s
inspectional observations or report related to such clinical trial. PARI agrees
to promptly and timely respond to all requests from Regulatory Authorities and
to promptly notify Transave about such requests.
7.7 Adverse Event Reporting. Unexpected serious adverse events that are made
known to either party and that are considered to be related to the Drug Product
or the Device, shall be reported to the other Party on an expedited basis, and
at least within forty-eight (48) hours from the notification of an institutional
review board (IRB), Regulatory Authority or participating investigators and in
any case not longer than five (5) business days after the event was made known.
An unexpected adverse experience is defined as any adverse drug experience, the
specificity or severity of which is not consistent with the current Investigator
Brochure for a clinical trial, or, if an Investigator Brochure is not required
or available, the specificity or severity of which is not consistent with the
risk information described in the general investigational plan or elsewhere in
the current application, as amended. Unexpected, as used in this definition,
refers to an adverse drug experience that has not been previously observed
(e.g., included in the Investigator Brochure) rather than from the perspective
of such experience not being anticipated from the pharmacological properties of
the pharmaceutical product. In the case of a clinical trial, an unexpected
serious adverse event would, for example, be as assessed by the investigator and
or the sponsor or authorized person without breaking the blind and would qualify
for expedited reporting. An unexpected serious adverse event shall be reported
by Transave to the appropriate institutional review board, Regulatory Authority,
investigator and PARI.
7.8 Recalls.
(a) Each Party shall promptly notify the other Party in writing if any
Regulatory Authority or other governmental agency having jurisdiction requests
or orders it to conduct a Recall of any Device, or if PARI determines to
undertake a Recall of any Device voluntarily. Prior to the beginning of any such
Recall, the Parties agree to discuss the Recall process. Promptly after being
notified of such Recall, but in no event later than may be required to permit
PARI to meet applicable Regulatory Requirements, Transave shall provide PARI
with reasonable assistance in connection with such Recall as requested by PARI.

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(b) If PARI is required or determines to effect any such Recall, then PARI shall
solely manage such Recall and be responsible for (i) the cost of notifying end
users; (ii) costs associated with the collection and shipment from end users of
the Devices subject to such recall; and (iii) costs of replacing such Devices
including the cost of shipping the replacement Devices to the affected end
users.
(c) Transave shall promptly notify PARI in writing if any Regulatory Authority
or other governmental agency having jurisdiction requests or orders it to
conduct a Recall of the Drug Product, or if it determines to undertake a Recall
of the Drug Product voluntarily. Prior to the beginning of any such Recall, the
Parties agree to discuss the Recall process. Transave shall solely manage such
Recall and be responsible for (i) the cost of notifying end users; (ii) costs
associated with the collection and shipment from end users of the Drug product
subject to such Recall; and (iii) costs of replacing the Drug Product, including
the cost of shipping the replacement Drug Product to the affected end users.

Article 8 - Supply of Devices by PARI for Clinical Use
8.1 Delivery. PARI agrees to deliver those quantities of Devices and Device
Accessories thereof ordered by Transave for clinical trials, FCA (Incoterms
2000) PARI’s facilities in Germany, by the delivery dates set forth in a
purchase order in accordance with reasonable shipping instructions provided by
Transave. The purchase order shall specify the quantity of Device to be
supplied, the supply schedule and the study sites, distributors or other site(s)
to which delivery shall be made. PARI shall arrange for shipping and insurance,
to be paid by Transave, and carry out all customs formalities necessary to
export the shipment. The Devices shall be shipped, at Transave’s expense,
packaged in containers in accordance with the Specifications or as otherwise
agreed by the Parties in writing, to Transave or its local country designee, or
study site(s) as specified by Transave at the time of ordering the Devices,
provided, however, that it will not be required to deliver Devices to more than
one (1) centralized location in any given country (except for the United
States), unless otherwise agreed by PARI. PARI shall cooperate with Transave,
and provide Transave with all necessary documentation and assistance (to the
extent PARI has experience as to the importation of Devices into such country),
at Transave’s expense, with respect to importation of the Devices into any
country of the Transave Territory.
8.2 Payment. PARI shall submit an invoice to Transave upon shipment of Devices
ordered hereunder, reflecting the price therefor as set forth in Exhibit 7.5(a).
All invoices shall state the aggregate and unit price for such Devices in a
given shipment, plus any insurance, taxes or other costs incident to the
purchase or shipment initially paid by PARI but to be borne by Transave
hereunder. Other than amounts disputed in good faith, Transave shall pay PARI
such invoiced amounts that are due hereunder within (30) days from the date of
shipment.
8.3 Acceptance.
(a) At the same time it delivers Devices to Transave under Section 8.1, PARI
shall deliver to Transave the following documentation: (a) the order number of
the delivered Devices and Device Accessories; (b) with respect to the United
States only, a Certificate of Conformance, and with respect to the European
Union only, a Quality Certificate; and (c) any documentation that PARI
customarily includes in shipments of such Device and/or Device Accessories.
Transave may, but shall not be obligated to, inspect and test Devices delivered
by PARI hereunder. If on such inspection Transave discovers that any Device
shipped hereunder fails to conform with the Specifications or otherwise fails to
conform to the requirements of this Agreement, Transave may provide written
notice to PARI specifying in reasonable detail the manner in which such Device
fails to meet the foregoing requirements, and shall promptly send to PARI a
representative sample of the nonconforming Device. Transave or its designee
shall retain the rejected Devices pending PARI’s analysis thereof and the
resolution of any disagreement regarding the nonconformance of such Devices.
(b) At its sole cost and expense, PARI shall replace Devices appropriately
rejected in accordance with this Section 8.3 by Transave or its designees.

(c) Subject to this Section 8.3 above and 8.4, Devices shall be deemed accepted
if no notice to the contrary is received by PARI within thirty (30) days of
receipt of such Devices by Transave. It is understood that the warranties given
by PARI in Section 8.5 shall survive any failure to reject under this Section
8.3.
8.4 Latent Defects. As soon as either Party becomes aware of any defect in
Devices delivered by PARI that are not discoverable upon a reasonable inspection
or incoming quality assurance testing as set forth in the Specifications, it
shall immediately notify the other Party in writing, and the applicable
provisions of Section 8.5

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shall apply. Notwithstanding the foregoing, in the event that Transave fails to
reject a Device within thirty (30) days after it actually becomes aware of any
latent defect therein (including, without limitation, by way of written notice
from PARI), Transave shall be deemed to have accepted such Device and Section
8.5 shall not apply to such Product with respect to that latent defect only.
8.5 Replacement. If any Device fails to work in the patient’s possession,
Transave shall provide a replacement directly to patient, and PARI shall provide
a replacement to Transave within thirty (30) days of notice by Transave, and all
replacements covered by PARI's warranty shall be provided at PARI's sole cost
and expense subject to PARI’s right to dispute such replacement as set forth
hereafter. In the event that PARI in good faith does not agree with Transave
that any Devices returned by Transave are in fact nonconforming, then within ten
(10) business days after receipt of such Devices, PARI shall notify Transave in
writing of such disagreement. The Parties shall thereafter attempt in good faith
to settle such disagreement by negotiation and consultation between themselves.
If the Parties are unable to resolve such disagreement within thirty (30) days
of Transave’s receipt of PARI’s notification thereof, then either Party may
within thirty (30) days thereafter (the “Final Dispute Resolution Period”)
submit the question of nonconformance to an independent third party consultant
reasonably acceptable to both Parties. The resolution of the question of
nonconformance by such consultant shall be final and binding on both Parties. If
such consultant determines that the disputed Devices are nonconforming, PARI
shall be responsible for all costs associated with the consultant’s services and
Transave shall have no payment obligations with respect to such Devices. If such
consultant determines that the disputed Devices conform with the applicable
requirements therefor, Transave shall be responsible for all costs associated
with the consultant’s services and for payment for such Devices.
8.6 Warranties. PARI represents and warrants that the Devices supplied for
clinical trials hereunder (a) shall comply with the Specifications as of the
time of first use; (b) shall have no material defects in workmanship upon
delivery; and (c) shall, upon shipment to Transave, be free and clear of all
security interests, liens and other encumbrances of any kind or character. These
warranties, and PARI's obligations hereunder, will survive inspection, test,
acceptance and use of the Device.
8.7 Conflicting Terms and Conditions. The supply of Devices by PARI to Transave
for clinical trial purposes shall be solely in accordance with the terms and
conditions of this Agreement. ANY TERMS OR CONDITIONS OF ANY PURCHASE ORDER OR
ACKNOWLEDGMENT OR INVOICE GIVEN OR RECEIVED, WHICH ARE ADDITIONAL TO OR
INCONSISTENT WITH THIS AGREEMENT SHALL HAVE NO EFFECT, AND SUCH TERMS AND
CONDITIONS ARE HEREBY EXCLUDED AND REJECTED BY EACH PARTY.
8.8 Restrictions of Use.
(a) Transave will use the Device in compliance with all Applicable Laws and
Standards valid in the country Transave intends to conduct clinical trials
utilizing the Device, including, for example, those relating to research
involving the use of humans or animals and will not engage in any such clinical
trials without first obtaining necessary approval from its relevant ethics
committee(s) such as, but not limited to, the Institutional Review Board. The
Device shall not be used by Transave directly or indirectly for: (i) any purpose
other than the clinical trials, or (ii) any profit-making or commercial purpose.

(b) Transave shall retain control of the Device and shall not distribute or
release the Device to any person or entity other than Transave’s or the clinical
trial site’s employees, consultants or contractors (“Transave Representatives”)
and individuals who will be participating in the clinical trials who have a need
to access the Device in connection with use of the Device for the clinical
trials and who have been advised of Transave’s obligations with respect to such
Device. Transave shall not allow Transave Representatives to take or send the
Device to any other location other than that specified below, unless Transave
first obtains PARI’s written permission. Transave shall be liable for the use of
the Device by Transaction Representatives in violation of this Section 8.8(b).
(c) The Device is to be used in accordance with the terms and conditions of this
agreement only by Transave’s clinical trial sites as listed in the applicable
Work Order by Transave and by Transave Representatives or patients participating
in the clinical trials under Transave’s control.
(d) Transave shall conduct the clinical trials pursuant to a written protocol
(the “Study Protocol”). Transave shall provide a synopsis of the Study Protocol
to PARI at least thirty (30) days prior to the start of the clinical trial.
Following the completion of the clinical trials studies, Transave shall make
Commercially

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Reasonable efforts to retrieve the Devices at Transave’s expense and the Devices
shall be stored for a limited time as determined by Transave at the clinical
trial site and/or Transave’s contractors’ site. Upon Transave’s notice to PARI
that the Devices have been retrieved, PARI may arrange for return of the Devices
directly with the contractors and/or clinical trial site. PARI shall be solely
responsible for the return and/or shipments of the Devices provided that
Transave shall pay the reasonable direct shipping costs incurred by PARI in
connection therewith.
(e) Transave shall not subject to analysis or have subjected to analysis Devices
and/or components constituting Devices received from PARI for the purpose of
reverse engineering or in a manner that would reveal material composition or
internal design or operation of such sample and/or component or its method of
manufacture. Device shall at all times remain the sole and exclusive property of
PARI.
8.9 Commercial Supply. PARI agrees to deliver, either directly to customers or
through a distributor, or to Transave, at Transave’s option, on a country by
country basis, those quantities of Devices and Device Accessories for commercial
use in accordance with the terms set forth in Exhibit 8.9. The Parties shall
negotiate in good faith and enter into, in a timely manner, a Commercial Supply
Agreement incorporating those terms.
Article 9 - Payment Procedures
9.1 Invoicing. PARI shall submit invoices to Transave for the Project Fees owed
by Transave for activities under a Work Plan performed by PARI as set forth in
the applicable Work Plan. Transave shall pay the undisputed invoiced amounts
that are due under this Agreement within thirty (30) calendar days of the date
of shipment.

9.2 Royalties. Beginning with the First Commercial Sale of a Drug Product and
thereafter during the Royalty Term, Transave shall provide PARI with quarterly
written royalty reports applicable to royalty payments due to PARI under this
Agreement, within sixty (60) days after the last day of each calendar quarter.
Each report shall include a summary of the Net Sales, on a country-by-country
basis, of the Drug Product that are subject to royalties hereunder during such
calendar quarter and a calculation of the royalties due thereon. Simultaneously
with the delivery of each such report, Transave shall pay to PARI the total
royalties, if any, due to PARI under Article 6 for the period of such report.
9.3 Annual Minimum Royalty. For the first four (4) calendar quarter period
(“Year of Sales”) beginning 180 days after the First Commercial Sale of a Drug
Product for use with the Device by Transave, its Affiliates and/or Sublicensees,
and for each successive Year of Sales thereafter during the Royalty Term, at the
time of its last payment of royalties for the last calendar quarter in such Year
of Sales under Section 9.2 above, Transave shall pay PARI the difference, if
any, between the royalties actually paid in such Year of Sales and the Annual
Minimum Royalty (the “Minimum Royalty Payment”). [***]
9.4 Method of Payment to PARI. All payments due to PARI under this Agreement
shall be made by wire transfer to the bank account designated by PARI. Payments
shall be made in US dollars for: Royalties on Net Sales within the US and on
Annual Minimum Royalties. Payments shall be made in Euros for: Royalties on Net
Sales outside of the US, Milestones and Project Fees. If any currency conversion
shall be required in connection with the payment of royalties under Article 6,
such conversion shall be made by using the averaged buying and selling exchange
rate for such conversion, quoted for current transactions reported in The Wall
Street Journal, on the last business day of the calendar quarter immediately
prior to such payment.
9.5 Late Payment. [***]
9.6 Transave Books and Records. Transave shall keep full, true and accurate
books and records in accordance with GAAP, which account for the Net Sales of
the Drug Product for use with the Device and the royalties due thereon to PARI.
PARI, at its own expense, shall have the right during normal business hours on
thirty (30) calendar days' prior written notice to Transave and not more than
twice in any calendar year to have a nationally recognized independent public
accounting firm selected by PARI (and reasonably acceptable to Transave) examine
such books and records for the purpose of verifying the royalty payments due to
PARI under this Agreement. Such accounting firm shall execute and deliver to
Transave a standard confidentiality agreement and shall not disclose to PARI any
information relating to Transave's business, except whether Transave's royalty
payments are correct or incorrect, and if incorrect, the specific details
concerning any discrepancies and the amounts of the royalties due hereunder
pursuant to Section 6.1 of this Agreement. If such examination reveals a
discrepancy, Transave shall promptly pay to PARI any additional royalty owed to
PARI. In addition, if the discrepancy is greater than [***] in PARI’s favor,
Transave shall also promptly reimburse PARI for the fees and costs of the
independent public accounting firm.

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9.7 PARI Books and Records. PARI shall keep full, true and accurate books and
records in accordance with GAAP, which account for the activities under a Work
Plan performed by PARI and the Project Fees due to PARI thereon. Transave, at
its own expense, shall have the right during normal business hours on thirty
(30) calendar days' prior written notice to PARI and not more than twice in any
calendar year to have a nationally recognized independent public accounting firm
selected by Transave (and reasonably acceptable to PARI) examine such books and
records of PARI for the purpose of verifying the Project Fees invoiced to
Transave over the preceding twelve (12) month period. Such accounting firm shall
execute and deliver to PARI a standard confidentiality agreement and shall not
disclose to Transave any information relating to PARI's business, except whether
PARI's invoices are correct or incorrect, and if incorrect, the specific details
concerning any discrepancies and the amounts of the Project Fees due hereunder.
If such examination reveals a discrepancy, PARI shall promptly pay to Transave
any additional amount owed to Transave. In addition, if the discrepancy is
greater than [***] in Transave’s favor, PARI shall also promptly reimburse
Transave for the fees and costs of the independent public accounting firm.
Article 10 - Prosecution, Marking, Enforcement and Defense
10.1 Patent Prosecution. During the term of this Agreement, PARI shall promptly
notify Transave in writing of the filing or issuance of any patent applications
or patents within the PARI Intellectual Property licensed to Transave pursuant
to this Agreement that include subject matter related to the Project, or the
Device.
10.2 Patent Marking. Each Party agrees to mark all Products in accordance with
the applicable statutes or regulations in the country or countries of
manufacture and sale thereof. For such purposes, each Party shall provide the
other Party with written notice of all of its patent numbers applicable to the
Products.
10.3 Patent Enforcement.
(a) Enforcement. Subject to the provisions of Section 3.6 and this Section 10.3,
in the event that Transave or PARI reasonably believes that any Patent Rights
within the PARI Intellectual Property are being infringed or misappropriated in
the Transave Field by a third party, such Party shall promptly notify the other
Party. Transave shall have the initial right (but not the obligation) to bring
and/or control any enforcement action directed to the Drug Product, and PARI
shall have the initial right (but not the obligation) to bring and/or control
any enforcement action directed to the Device, including specific design
elements of the hardware apparatus or the software of the Device.
(b) Backup Right to Enforce. In the event PARI does not initiate such an
enforcement action within one hundred and eighty (180) days after a request by
Transave to initiate an enforcement action against an alleged infringement, or
notifies Transave at any time that it does not desire to enforce or defend such
Patent Rights with respect to such alleged infringement, then Transave shall
have the right (but not the obligation) to enforce or defend against such
alleged infringement, provided that any settlement of such infringement shall be
subject to the approval of both Parties.

(c) Cooperation. The Party controlling the enforcement action shall keep the
other Party reasonably informed of the progress thereof, and the other Party
shall have the right to participate with counsel of its own choice at its own
expense, and shall reasonably cooperate with the Party initiating the
enforcement action (including joining as a party plaintiff to the extent
necessary and requested by the other Party) at the expense of the Party
requesting such cooperation.
(d) Allocation of Recoveries. Unless otherwise agreed, all amounts recovered in
an enforcement action, after reimbursing each Party for its costs and expenses
incurred therein, shall be shared between the Parties by the proportion and up
to the extent of any damages established in such enforcement action, including
but not limited to lost profits or royalties. The balance, if any, shall be
retained by the Party that initiated the enforcement action.
10.4 Defense of Third Party Infringement Claims. If the development,
manufacture, sale, offer for sale, importation, exportation or use of the Drug
Product or the Device results in a claim alleging patent infringement against
either Party (or its respective Affiliates or permitted Sublicensees), such
Party shall promptly notify the other Party hereto in writing. Subject to
Sections 3.5, 13.1 and 13.2, (i) Transave shall have the exclusive right to
defend and control the defense of any infringement claim pertaining to primarily
the Drug Product, and (ii)

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PARI shall have the exclusive right to defend and control the defense of any
infringement claim pertaining to primarily the Devices and/or any component of
the foregoing, each Party using counsel of its own choice as applicable;
provided, however, that the other Party shall be kept informed of all material
developments in connection with any such claim.
Article 11 - Confidentiality
11.1 Non-use and Non-disclosure Obligations. Each of PARI and Transave shall use
any Confidential Information received by it from the other Party solely in
connection with performance of their respective obligations, rights and other
permitted activities under, and other purposes of, this Agreement and shall not
disclose such Confidential Information to any Third Party, without the prior
written consent of the other Party. Notwithstanding the foregoing and anything
to the contrary in this Agreement, Transave shall not share with or provide to
any PARI Competitor any of the PARI Confidential Information. These obligations
shall survive the termination of this Agreement for a period of ten (10) years.
For purposes of this Agreement, “Confidential Information” means the
confidential or proprietary scientific, regulatory, clinical, technical or
business information, materials and technologies of a Party disclosed or learned
under this Agreement, including the Work Plans and any information exchanged
prior to the Effective Date, whether in written, oral, electronic, photographic,
magnetic or other form. For clarity, the Data and Intellectual Property owned by
a Party pursuant to this Agreement shall be deemed the Confidential Information
of such Party. Confidential Information shall exclude any information that:
11.1.1
is known by the receiving Party without restriction at the time of receipt and
not through a prior disclosure by the disclosing Party;

11.1.2
is at the time of disclosure or thereafter becomes published or otherwise part
of the public domain through no breach of this Agreement by the receiving Party;

11.1.3
is subsequently disclosed to the receiving Party without restriction by a third
party having the right to make such a disclosure; or

11.1.4
is developed by the receiving Party independently of Confidential Information
received by it from the disclosing Party hereunder.

11.2 Required Disclosure. In order to provide the disclosing Party an
opportunity to seek a protective order or the like with respect to certain
Confidential Information, the receiving Party may disclose Confidential
Information to the extent that it is required by law or order of any
governmental authority or agency, including the Securities and Exchange
Commission, to be disclosed by a Party; provided that the receiving Party, using
good faith efforts, shall apply for confidential treatment of such Confidential
Information, shall provide the other Party a copy of the confidential treatment
request far enough in advance, if possible, of its filing to give the other
Party a meaningful opportunity to comment thereon, and shall incorporate in such
confidential treatment request any reasonable comments of the other Party, in
each case to the fullest extent permitted under applicable laws, rules or
regulations.
11.3 Permitted Disclosure. Notwithstanding Section 11.1, Confidential
Information provided under this Agreement may be disclosed to employees, agents,
consultants, or suppliers of the receiving Party or professional advisors (or
permitted Sublicensees, in the case of Transave), but only to the extent
permitted or required to accomplish the purposes of, or to perform its
obligations, rights and other permitted activities under, this Agreement;
provided that such employees, agents, consultants, professional advisors,
permitted Sublicensees or suppliers shall also agree to appropriate and
comparable confidentiality and non-use provisions. Notwithstanding the foregoing
and anything to the contrary in this Agreement, Transave shall not share with or
provide to any PARI Competitor any of the PARI Confidential Information. The
receiving Party shall be responsible for any breaches of this Agreement by its
employees, agents, consultants, or suppliers. In addition, a Party may disclose
Confidential Information provided under this Agreement by the other Party to any
governmental authority in order to prosecute or maintain any Intellectual
Property or any Regulatory Authority to obtain approval to market a Product, but
such disclosure may be made only to the extent necessary to pursue such
prosecution or maintenance or to obtain such approval, all to the extent
permitted or required to accomplish the purposes of this Agreement.
11.4 Return. Upon the termination of this Agreement, all Confidential
Information of the disclosing Party in the receiving Party’s possession will be
returned to the disclosing Party (or destroyed by the receiving Party, with
written confirmation of such destruction), and the receiving Party will make no
further use thereof. Notwithstanding

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

the foregoing, the receiving Party may retain one copy of the Confidential
Information of the disclosing Party solely for archival purposes to ensure
compliance with the provisions of this Article 11 or with the requirements of
Regulatory Authorities.
11.5 Publicity
(a) Press Releases. Neither Party shall use the other Party’s name in any press
release, publicity, advertising nor other official form of public disclosure
without such other Party’s prior written consent, which consent shall not be
unreasonably withheld, delayed or conditioned. Notwithstanding the foregoing,
Transave shall have the right to issue a press release or make other public
disclosures announcing milestones or other significant progress pertaining to
its development and/or commercialization of Drug Products and the Device,
provided that if issued without the prior written consent of PARI, such press
releases shall not disclose any Confidential Information of PARI hereunder and
shall at all times be consistent with the last two sentences of this Section
11.5(a). In addition, once any subject matter has been publicly disclosed in
accordance with this Section 11.5, no further consent from either Party will be
needed for further disclosures of such subject matter. Notwithstanding the
above, in all press releases, public statements, publicity, advertising or other
public disclosure pertaining to the development of the Drug Product and the
Device, Transave shall always give appropriate attribution to PARI’s role(s) in
the Project contemplated herein. Notwithstanding the foregoing, all press
releases and similar disclosures issued by Transave shall always contain the
language set forth on Exhibit 11.5 attached hereto, as such Exhibit may be
amended from time to time by PARI.

(b) Terms of this Agreement. Neither Party shall disclose the terms of this
Agreement to any third party, without the prior written consent of the other
Party, which consent shall not be unreasonably withheld, except as required by
any law or regulation or in connection with any financing transaction, or bona
fide (good faith) due diligence inquiry, subject to such parties agreeing to
comparable confidentiality and non-use provisions as set forth in this Article
11 and Transave being responsible for any breaches by such third party(ies).
Notwithstanding the foregoing, the disclosure of any terms of this Agreement to
a PARI Competitor shall require the prior written consent of PARI, to be granted
in its sole discretion.
(c) Publications. Transave shall consult with PARI prior to submission of any
manuscript for publication or making any public presentation, including speeches
and conference posters, pertaining to the activities conducted under a Work
Plan. Such consultation shall include providing a copy of the proposed
manuscript or presentation reasonably in advance of the proposed date of
submission of such manuscript to a publisher or the proposed date of
presentation, giving due consideration to PARI’s comments as to such publication
or presentation, and as requested by PARI removing any Confidential Information
of PARI therefrom. Notwithstanding the above, in all press releases, public
statements, publicity, advertising or other public disclosure pertaining to the
development of the Drug Product and/or the Device, Transave shall always give
appropriate attribution to PARI’s role(s) in the Project contemplated herein.
PARI shall not publish or make any presentations regarding any Drug Product,
Transave Intellectual Property, Transave Confidential Information or the
activities conducted under a Work Plan except with the prior written consent of
Transave. Transave shall not publish or make any presentations that incorporate
PARI Intellectual Property, Project Intellectual Property, PARI Confidential
Information or the activities conducted under a Work Plan except with the prior
written consent of PARI.
(d) Required Disclosures. Notwithstanding Section 11.5(a) through (c) above,
either Party may make such disclosures relating to this Agreement, the terms and
conditions hereof or the activities hereunder, as such Party deems to be
required by law or in any filings with governmental entities or national
securities exchanges, provided that such Party shall use good faith efforts to
apply for confidential treatment of this Agreement and redact such portions of
this Agreement as reasonably requested by the non-disclosing Party, in each case
to the fullest extent permitted under applicable laws, rules or regulations.
Article 12 - Representations and Warranties
12.1 PARI Representations and Warranties. PARI represents, warrants and
covenants that, other than as set forth on Exhibit 12.1 attached hereto:
(a) PARI is a corporation duly organized, existing and in good standing under
the laws of Germany, with full right, power and authority to enter into and
perform this Agreement;
(b) the execution, delivery and performance of this Agreement does not conflict
with, violate or breach any agreement to which PARI is a party, any court order
to which PARI is a party or subject to or PARI's organizational documents;

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

(c) this Agreement has been duly executed and delivered by PARI and is a legal,
valid and binding obligation enforceable against PARI in accordance with its
terms subject to applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium and other laws relating to or affecting creditors' rights generally
and equitable principles;
(d) as of the Effective Date: (i) PARI owns or has the right to license to
Transave all of the PARI Intellectual Property, and the PARI Intellectual
Property includes all Patent Rights and Know-How in which PARI has a right or
license that may be applicable to the Device in the Transave Field; (ii) PARI
has the right to grant the licenses and rights set forth in this Agreement; and
(iii) to the best of PARI's knowledge, patents within the PARI Intellectual
Property are valid and enforceable, and are not known to be infringed by any
third party in the Transave Territory;
(e) as of the Effective Date, to the best knowledge of PARI, PARI has not
intentionally withheld from Transave any material information related to the
Device; to the best knowledge of PARI, the information relating to the Device
provided by PARI to Transave does not contain any misstatement of a material
fact nor omit to state any material fact required to make such information as of
the date of submission to Transave not materially misleading;
(f) PARI shall perform its activities under a Work Plan in a competent and
professional manner, in accordance with a Work Plan, Applicable Laws and
Standards and any reasonable instructions provided by Transave to PARI; and
(g) to PARI’s knowledge as of the Effective Date, the Device does not infringe,
misappropriate or otherwise violate any patent or other Intellectual Property
Rights of any Third Party.
12.2 Transave Representations and Warranties. Transave represents, warrants and
covenants that:
(a) Transave is a corporation duly organized, existing and in good standing
under the laws of the State of Delaware, with full right, power and authority to
enter into and perform this Agreement;
(b) the execution, delivery and performance of this Agreement does not conflict
with, violate or breach any agreement to which Transave is a party, any court
order to which Transave is a party or subject to, or Transave' certificate of
incorporation or bylaws;
(c) this Agreement has been duly executed and delivered by Transave and is a
binding obligation enforceable against Transave in accordance with its terms
subject to applicable bankruptcy, insolvency, reorganization, arrangement,
moratorium and other laws relating to or affecting creditors' rights generally
and equitable principles;
(d) as of the Effective Date, to the best knowledge of Transave, Transave has
not intentionally withheld from PARI any material information related to the
Drug Product; to the best knowledge of Transave, the information relating to the
Drug Product provided by Transave to PARI does not contain any misstatement of a
material fact nor omit to state any material fact required to make such
information as of the date of submission to PARI not materially misleading;
(e) as of the Effective Date: (i) Transave owns or has the right to license to
PARI all of the Transave Intellectual Property, and the Transave Intellectual
Property includes all Patent Rights and Know-How in which Transave has a right
or license that may be required for PARI to perform its obligations under this
Agreement; (ii) Transave has the right to grant the licenses and rights set
forth in this Agreement; and (iii) to the best of Transave's knowledge, patents
within the Transave Intellectual Property are valid and enforceable, and are not
known to be infringed by any third party in the Transave Territory; and

(f) to Transave’s knowledge as of the Effective Date, the pulmonary
administration of Drug Product through a Nebulizer does not infringe any patent
or other intellectual property rights of any third party.
12.3 Disclaimer. EXCEPT AS OTHERWISE EXPRESSLY SET FORTH IN THIS ARTICLE 12 OR
IN SECTION 8.6 ABOVE, NEITHER PARTY MAKES ANY REPRESENTATIONS OR EXTENDS ANY
WARRANTIES TO THE OTHER PARTY OF ANY KIND, EITHER EXPRESS OR IMPLIED, REGARDING
PATENT RIGHTS, KNOW-HOW OR DATA INCLUDING, BUT NOT LIMITED TO, WARRANTIES OF
MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, NONINFRINGEMENT, NOR
VALIDITY.
12.4 Limitation of Liability. NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY
UNDER ANY CIRCUMSTANCES OR ANY LEGAL OR EQUITABLE THEORY, WHETHER IN CONTRACT,

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

STRICT LIABILITY OR OTHERWISE, FOR ANY INDIRECT, INCIDENTAL, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR DAMAGES FOR LOST PROFITS ARISING OUT OF OR RELATED TO
THIS AGREEMENT, EVEN IF ADVISED OF THE POSSIBILITY OF SUCH DAMAGES. THESE
LIMITATIONS SHALL APPLY NOTWITHSTANDING ANY FAILURE OF ESSENTIAL PURPOSE OR ANY
LIMITED REMEDY.
Article 13 - Indemnification; Insurance
13.1 [***]
13.2 Indemnification of PARI. Transave shall at all times be responsible for,
and shall defend, indemnify and hold PARI, its Affiliates, directors, officers,
employees, agents and representatives harmless from and against any and all
losses, claims, lawsuits, proceedings, expenses, recoveries and damages,
including reasonable legal expenses, costs and attorneys fees, arising out of:
(i) any product liability claim or lawsuit by a third party directly arising
from the Drug Product; (ii) any claim of infringement of any patent rights,
trade secrets rights or other intellectual property rights of a third party
arising from the Drug Product or the manufacture thereof; (iii) Transave’s
material breach of any representation, warranty or covenant given in this
Agreement by Transave; and (iv) any negligent conduct or willful misconduct by
Transave in performance under this Agreement; provided however, that: (a) PARI
gives Transave prompt notice of any such claim or lawsuit; (b) Transave has the
right to compromise, settle or defend such claim or lawsuit; and (c) PARI, at
the expense of Transave, cooperates with Transave in the defense of such claim
or lawsuit. PARI, at its expense, may participate in the defense of any such
claim or lawsuit.

13.3 Insurance. During the term of this Agreement and for a reasonable period of
time thereafter, each Party or its Affiliates, shall maintain appropriate
product liability insurance with respect to any clinical trials, manufacturing,
development, sales, marketing, distribution and promotion activities performed
by it hereunder. Each party shall, upon request of the other party, provide the
requesting party with a certificate of insurance evidencing coverage under the
foregoing policies of insurance, along with any amendments and revisions
thereto. PARI shall be (i) named as an additional insured on any such policies
maintained hereunder by Transave, and (ii) also added by endorsement on such
policies. With respect to the U.S., Transave shall be (i) named as an additional
insured on any such policies maintained hereunder by PARI's Affiliate, PRE
Holding, Inc., and (ii) also added by endorsement on such policies of PRE
Holding, Inc.
Article 14 - Dispute Resolution
PARI and Transave shall endeavor to resolve any claim or controversy arising out
of the threatened breach, breach, enforcement, interpretation, termination or
validity of this Agreement informally by good faith negotiation between the
senior executives, officers or management of PARI and Transave. Either Party may
give the other Party written notice of any claim or controversy not resolved in
the normal course of business (the “Disputing Party Notice”). Within thirty (30)
calendar days after the delivery of the Disputing Party Notice, the receiving
Party shall submit to the other Party a written response (the “Response”). The
Disputing Party Notice and Response shall include a statement of each Party's
position and a summary of the arguments supporting that position. Within sixty
(60) days after the Disputing Party Notice, such designated senior executives,
officers or management of PARI and Transave shall meet at a mutually acceptable
time and place and thereafter as often as they reasonably deem necessary to
attempt to resolve the claim or controversy. All negotiations pursuant to this
Section 14 are confidential and without prejudice and shall be treated as
compromise and settlement negotiations for purposes of applicable rules of
evidence. Any claim or controversy unresolved after application of this Article
14 shall be subject to Section 16.3 of this Agreement.
Article 15 - Term and Termination
15.1 Term. The term of this Agreement is effective as of the Effective Date as
first written above, and except as otherwise terminated in accordance with this
Article 15, shall continue in full force and effect until the expiration of the
final Royalty Term in the last country in which Drug Product is sold.
15.2 Termination by Either Party. Subject to force majeure provisions set forth
in Section 16.10 of this Agreement, each Party shall have the right to terminate
this Agreement upon written notice, (i) in the event the other Party is in
material breach of this Agreement, and does not cure such breach within ninety
(90) days after written notice thereof, specifying in reasonable detail the
breach; provided, however, that for payments due pursuant to this Agreement, the
cure period shall be thirty (30) days after receipt of written notice of such
past due payment; provided, however, that immediately in the event the other
Party initiates a voluntary proceeding under the U.S.

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

Bankruptcy Code, or any equivalent proceeding under the laws of any other
jurisdiction; or in the event such Party becomes the subject of an involuntary
proceeding under the U.S. Bankruptcy Code, or any equivalent proceeding under
the laws of any other jurisdiction, and such proceeding is not dismissed or
stayed within ninety (90) days of its commencement.

15.3 Termination by Transave. Transave shall have the right to terminate this
Agreement upon written notice in the event that (i) Transave receives a negative
review or negative comments from the FDA, EMEA or another Regulatory Authority
which indicates that Transave will be unable to obtain regulatory approval of an
MAA for the Drug Product for use with the Device solely due to the Device not
substantially meeting the Specifications, (ii) PARI is unable (subject to the
force majeure provisions set forth in Section 16.10 of this Agreement) or
unwilling to supply Devices to Transave in connection with clinical trials in
accordance with the provisions of Article 8 that would prevent Transave from
timely completing its Phase II and Phase III Trials, [***]
15.4 Termination by PARI. PARI shall have the right to terminate this Agreement
upon written notice in the event that (i) Transave assigns or otherwise
transfers this Agreement to a third party that does not execute a written
undertaking agreeing to assume all of Transave’s rights and obligations set
forth in this Agreement and otherwise abide by the terms and conditions of this
Agreement, [***] (v) the licenses granted to Transave under this Agreement have
been terminated pursuant to: (x) Section 6.3(b) for both CF and Bronchiectasis;
or (y) Sections 7.1(b) and 7.2(a) and the Parties have not entered into an
additional agreement for a Secondary Indication in accordance with the
provisions of Section 2.6.
15.5 Effects of Expiration or Termination
(a) Accrued Obligations. Expiration or sooner termination of this Agreement
shall not release either Party hereto from any liability which at the time of
such expiration or termination has already accrued to such Party, nor preclude
either Party from pursuing any rights and remedies it may have hereunder or at
law or in equity.
(b) Sublicenses. Upon the termination of this Agreement for any reason, any
sublicenses granted by Transave hereunder shall survive (unless specified
otherwise in the applicable sublicense agreement), provided that, upon request
by PARI, each Sublicensee promptly agrees in writing to be bound by the
applicable terms of this Agreement, and agrees to pay directly to PARI the same
amounts that would have been due to PARI from Transave under this Agreement with
respect to such sublicense, had the Agreement not terminated.
(c) Return of Rights. Except as reasonably necessary for surviving rights or
obligations under this Article 15, (i) all of PARI’s and Transave’s license
rights under Articles 3.1 and 4 shall terminate, and (ii) each of Transave and
PARI shall promptly return all Confidential Information then in possession in
accordance with Section 11.4 of this Agreement.

(d) Survival. Articles 1, 9, 11, 13, 14, 15 and 16, Sections 2.6, 3.2, 3.4, 3.6,
8.2, 8.8, 10.3 for cases initiated before termination, 10.4 (except for the
proviso at the end of the paragraph, which shall not survive), 12.4 and 15.5
shall survive any expiration or termination of this Agreement and Sections 8.4
and 8.6 shall survive the termination of this Agreement for a period of twelve
(12) months. Except as set forth in this Section 15.5, all other Articles and
Sections of this Agreement shall terminate upon termination of this Agreement.
Article 16 - Miscellaneous
16.1 Entire Agreement. This Agreement, which includes the Exhibits attached
hereto, contains the entire agreement between PARI and Transave with respect to
the transactions contemplated by this Agreement and supersedes all prior
agreements, arrangements or understandings with respect thereto.
16.2 Notices. Every notice, election, demand, consent, request, approval,
report, offer, acceptance, certificate, or other communication required or
permitted under this Agreement or by applicable law shall be in writing and
shall be deemed to have been delivered and received (a) when personally
delivered, (b) on the seventh (7th) business day after which sent by registered
or certified mail, postage prepaid, return receipt requested, (c) on the date on
which transmitted by facsimile or other electronic means generating a receipt
evidencing a successful transmission (provided that, on that same date, a copy
of such notice is sent by registered or certified mail, postage prepaid, return
receipt requested), or (d) on the third (3rd) business day after the business
day on which deposited with a regulated public carrier (e.g., Federal Express)
for overnight delivery (receipt verified), freight prepaid,

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

addressed to the Party for whom intended at the mailing address or facsimile
number set forth below, or such other mailing address or facsimile number,
notice of which is given in a manner permitted by this Section 16.2:
If to Transave:
Transave, Inc

11 Deer Park Drive, Suite 117
Monmouth Jct., New Jersey 08852
United States of America
Phone: [***]
Attn: [***]
Fax: [***]
with a copy to:
Gunderson Dettmer Stough, Villeneuve

Franklin & Hachigian, LLP
610 Lincoln Street
Waltham, MA 02451
Phone: [***]
Attn: [***]
Fax: [***]
If to PARI:
PARI Pharma GmbH

Moosstrasse 3, D-82319
Starnberg, Germany
Phone: [***]
Fax: [***]
Attn: [***]
Title: [***]

with a copy to:
McGuireWoods LLP

One James Center
901 East Cary Street
Richmond, Virginia 23219-403
Attn: [***]
Fax: [***]
Any Party may by such notice change the address to which notice or other
communications to it are to be delivered or mailed.
16.3 Choice of Law. This Agreement is construed in accordance with, and its
performance is governed by, the laws of State of New York, excluding its or any
other jurisdiction’s choice of law principles. Any dispute arising hereunder
shall be brought exclusively in the state or federal courts located in the State
of New York in the division of Manhattan. The Parties hereby consent to the
exclusive jurisdiction and venue of such courts and waive any objections to the
jurisdiction and venue thereof. In the event of any conflict between US and
foreign laws, regulations and rules, US laws, regulations and rules shall
govern. The UN Convention on contracts for the International Sale of Goods shall
not apply to this Agreement.
16.4 Assignment. This Agreement shall not be assignable by either Party without
the prior written consent of the other Party, which consent shall not be
unreasonably withheld, delayed or conditioned, except that without consent
either Party may assign or transfer the rights and obligations of this Agreement
to any Affiliate or to any successor to its business that related to the subject
matter of this Agreement (whether by sale of assets or equity, merger,
consolidation or otherwise) provided, however, that such assignment or transfer
by Transave to a PARI Competitor shall require the prior written consent of
PARI, to be granted in its sole discretion. This Agreement shall inure to the
benefit of and be binding upon the Parties hereto and their respective
successors and permitted assigns. Any assignment in contravention of the
foregoing shall be null and void.
16.5 Waivers and Amendments. Any waiver of any term or condition of this
Agreement, or any amendment or supplementation of this Agreement, shall be
effective only if in writing signed by the Parties. A waiver of any breach or
failure to enforce any of the terms or conditions of this Agreement shall not in
any way affect, limit or waive a Party's rights hereunder at any time to enforce
strict compliance thereafter with every term or condition of this Agreement.

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16.6 Severability. Both Parties hereby expressly state that it is the intention
of neither Party to violate any law. If any of the provisions of this Agreement
are held to be void or unenforceable, then such void or unenforceable provisions
shall be replaced by valid and enforceable provisions which will achieve as far
as possible the economic business intentions of the Parties.
16.7 Construction. The article and section headings contained in this Agreement
are for the purpose of convenience and are not intended to define or limit the
contents of such sections. Unless the context of this Agreement clearly requires
otherwise, (a) references to the plural include the singular, the singular the
plural, the part the whole, (b) references to any gender include all genders,
(c) “or” has the inclusive meaning frequently identified with the phrase
“and/or,” (d) “including” has the inclusive meaning frequently identified with
the phrase “including but not limited to” or “including without limitation”, and
(e) references to “hereunder” or “herein” relate to this Agreement.
16.8 Counterparts. This Agreement may be signed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument. This Agreement may be executed in one or
more counterparts, each of which shall be an original, but taken together
constituting one and the same instrument. Execution of a facsimile copy shall
have the same force and effect as execution of an original, and a facsimile
signature shall be deemed an original and valid signature.

16.9 Further Assurances. Upon the reasonable request of either Party, the other
Party shall execute any additional certificates or other documents that may be
reasonably necessary to fully implement this Agreement.
16.10 Force Majeure. No failure or omission by either Party in the performance
of any obligation of this Agreement shall be deemed a breach of this Agreement
or create any liability if the same shall arise from any cause or causes beyond
the reasonable control of such Party including, but not limited to the following
which, for the purposes of this Agreement, shall be regarded as beyond the
control of the Party in question: (a) any act or omission of any government; (b)
any future rule, regulation or order issued by any governmental authority or by
any officer, department, agency, or instrumentality thereof which makes such
performance impossible or commercially unreasonable; or (c) any Act of God;
fire; storm; flood; earthquake; accident; war; terrorism; rebellion;
insurrection; riot; invasion; strike; and lockout.
16.11 Compliance with Applicable Laws and Standards. In conducting any activity
under this Agreement or in connection with the development, manufacture, use,
sale, offer for sale, importation and exportation of the Products, PARI and
Transave shall comply with all Applicable Laws and Standards including, but not
limited to, all import and export regulations of the applicable authorities in
the Transave Territory.
16.12 Relationship of the Parties. In making and performing this Agreement, the
Parties are acting, and intend to be treated, as independent entities and
nothing contained in this Agreement shall be construed or implied to create an
agency, partnership, joint venture, or employer and employee relationship
between or among any of the Parties. Except as otherwise provided herein, no
Party may make any representation, warranty or commitment, whether express or
implied, on behalf of or incur any charges or expenses for or in the name of any
other Party. No Party shall be liable for the act of any other party unless such
act is expressly authorized in writing by such Party.
16.13 Choice of Language. This Agreement, originally written in the English
language, shall be governed by the English language. In the event any dispute
arises with respect to this Agreement, the meanings of all terms and provisions
of this Agreement shall be interpreted in their original English form. The
governing language of all correspondence related to reporting, negotiation,
disputes, arbitration and notice requirements shall be the English language. The
Parties shall bear their own expenses for having text or other communications
translated into the English language.
16.14 Injunctive Relief. Each Party hereto understands and agrees that the
unauthorized use and the threatened use or disclosure of the other Party’s
Intellectual Property, Project Intellectual Property or Confidential Information
may cause irreparable, competitive harm and significant injury. Therefore, in
the event of such unauthorized use or disclosure, in addition to all rights and
remedies available to it at law and in equity, including the collection of
damages, each Party hereto shall be entitled to seek immediate injunctive relief
as is necessary to restrain any continuing or further breach of this Agreement
without sharing or proving any actual damages sustained by such Party and
without requirement of bond.

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IN WITNESS WHEREOF, the Parties hereby have executed this Agreement, as of the
Effective Date.
Transave:
PARI:
TRANSAVE, INC.
PARI PHARMA GMBH

By:
/s/ Tim Whitten
By:
/s/Martin Knoch
Name:
Tim Whitten
Name:
Martin Knoch
Title:
CEO/President
Title:
President
Date:
4/25/08
Date:
4/30/08

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EXHIBIT 1.35
[***]

EXHIBIT 1.38
[***]

EXHIBIT 1.38A
[***]

EXHIBIT 2.2
[***]

EXHIBIT 4.1
[***]

EXHIBIT 7.5(a)
[***]

EXHIBIT 7.5(b)
[***]

EXHIBIT 7.6(a)
[***]

EXHIBIT 8.9
[***]

EXHIBIT 11.5
[***]

EXHIBIT 12.1
[***]

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AMENDMENT NO. 1
TO LICENSE AGREEMENT BETWEEN
TRANSAVE, INC. AND PARI PHARMA GMBH
This first amendment (“Amendment No. 1”) effective the 24th day of June, 2009
(“Effective Date”) is made to the License Agreement dated and effective the 25th
of April 2008 (“Agreement”) between PARI Pharma GmbH, a German corporation with
a principal place of business at Moosstrasse 3, D-82319 Starnberg, Germany
(“PARI”) and Transave, Inc., a Delaware corporation with registered Offices at
11 Deer Park Drive, Suite 117, Monmouth Junction, NJ 08852, United States of
America (“Transave”). PARI and Transave shall be referred to collectively as the
“Parties.”
WHEREAS Transave and PARI desire to add to the Transave Field a Secondary
Indication, Non-tuberculosis Mycobacteria infections, pursuant to Sections 1.50
and 2.6 of the Agreement; and
WHEREAS Transave and PARI desire to amend the Agreement to provide terms for the
added indication.
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual
covenants, terms and conditions set forth below, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree to amend the Agreement as follows:
1.
Section 1,54, line 2, delete “cystic fibrosis (CF) and/or bronchiectasis” and
insert --cystic fibrosis (CF), bronchiectasis and/or Non-tuberculosis
Mycobacteria infections--.

2.
Section 2.5, line 5, delete “CF, Bronchiectasis or such Secondary Indication”
and insert -- CF, Bronchiectasis, Non-tuberculosis Mycobacteria infections or
any other Secondary Indication,

3.
Section 4.1, line 9, change “2.5.2” to -2.5--.

4.
Section 4.2(a),

line 3, delete “CF and/or Bronchiectasis” and insert --CF, Bronchiectasis and/or
Non-tuberculosis Mycobacteria infections--; and
line 26 (last line), delete “CF and Bronchiectasis” and insert --CF,
Bronchiectasis and Non-tuberculosis Mycobacteria infections--.
5.
Section 4.2(b), delete “PARI’s obligations under Section 4.2(a) shall be
conditioned upon Transave complying with its diligence obligations as set forth
in Sections 7.1 and 7.2.” and insert ---PARI’s obligations under Section 4.2(a)
with respect to CF, bronchiectasis and Non-tuberculosis Mycobacteria infections,
respectively, shall be conditioned upon Transave complying with its diligence
obligations as set forth in Sections 7.1, 7.2 and 7.2A, respectively.--.

6.
Section 6.3, first paragraph,

line 3, before “in the event Transave” insert --(a)--; and
line 6, after “in effect” insert --, and (b) in the event Transave has
permanent!), discontinued to Exploit the Drug Product for CF in accordance with
Section 7.1(a) and discontinued to Exploit the Drug Product for Bronchiectasis,
then the Annual Minimum Royalty shall no longer be applicable for the Drug
Product for CF or Bronchiectasis but the obligation to pay Annual Minimum
Royalties for the Drug Product shall apply to Non-tuberculosis Mycobacteria
infections--.
7.
Section 6.3(b), lines 5-6, delete “CF or Bronchiectasis” and insert --CF,
Bronchiectasis or Non-tuberculosis Mycobacteria infections--.

8.
Section 7.2(b), line 4, delete “CF or any Secondary Indication” insert --CF,
Non- tuberculosis Mycobacteria infections or any other Secondary Indication--.

9.
Before Section 7.3, insert a new section 7.2A as follows:

“ 7.2A
Transave Development and Commercialization Diligence for Non-tuberculosis
Mycobacteria Infections.

(a) The Parties agree that Transave will use Commercially Reasonable Efforts to
meet the following milestone with respect to Non-tuberculosis Mycobacteria
infections:
Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: Last patient to complete the Phase II Trial for
Non-tuberculosis Mycobacteria infections
[***]
2. Other Diligence Milestones: see below

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

Within one hundred eighty (180) days following the final results of the Phase II
Trial for Non-tuberculosis Mycobacteria infections, the Parties, acting in good
faith, will negotiate additional milestones that meet reasonable industry
standards. If no additional milestones are agreed to within such time period,
and the lack of milestones is not mutually agreed by both parties, then at
PARI’s option, PARI may by providing prompt written notice to Transave, (1) make
the license granted to Transave under this Agreement non-exclusive and PARI’s
non- compete obligations set forth in Section 4.2 shall terminate or (ii)
terminate the license granted to Transave under this Agreement, in each case
solely with respect to Non-tuberculosis Mycobacteria infections.

If Transave fails to meet a milestone within the applicable time period, other
than any failure resulting from a breach of this Agreement by PARI, then,
subject to the provisions of Section 7.3, PARI shall have the option to render
Transave’s license hereunder non-exclusive solely with respect to
Non-tuberculosis Mycobacteria infections and to terminate its obligation not to
compete with Transave in Non-tuberculosis Mycobacteria infections as set forth
in Section 4.2 of this Agreement. Such option must be exercised by sending the
Diligence Termination Notice to Transave, and shall become effective on the
thirtieth (30th) day following the date of the Diligence Termination Notice. If
such milestone is still not met within twelve (12) months of the applicable time
period, other than any failure resulting from a breach of this Agreement by
PARI, then, subject to the provisions of Section 7.3, PARI shall have the option
to terminate the license granted to Transave under this Agreement with respect
to Non-tuberculosis Mycobacteria infections only by providing written notice
thereof to Transave.
(b) For the avoidance of doubt, subject to the provisions of Section 7.2A(a),
nothing in this Agreement shall impart any obligation on Transave to pursue the
indication of Non-tuberculosis Mycobacteria infections, and Transave’s activity
or lack of activity with respect to Non-tuberculosis Mycobacteria infections
shall not affect in any way Transave’s rights in and to CF, Bronchiectasis or
any other Secondary Indication.
10.
Section 7.3, line 2,: delete “Section 7.1(b) and/or 7.2(a)” and insert --Section
7.1(b), 7.2(a) and/or 7.2A(a)--.

11.
Section 15.4,

line 10, delete “Section 6.3(b) for both CF and Bronchiectasis” and insert --
Section 6.3(b) for CF, Bronchiectasis and Non-tuberculosis Mycobacteria
infections--; and
line 11, after “7.1(b) and 7.2(a)” insert --and 7.2A(a)--.

IN WITNESS WHEREOF, the Parties have executed this Amendment No.1 as of the
Effective
Date indicated above.
TRANSAVE, INC.
PARI PHARMA GMBH
By:
/s/ Tim Whitten
By:
/s/ Martin Knoch
Tim Whitten
Martin Knoch
President and CEO
President
Date:
July 14, 2009
Date:
July 6, 2009

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

ASSIGNMENT AND AMENDMENT NO. 2
TO LICENSE AGREEMENT BETWEEN
TRANSAVE, INC. AND PARI PHARMA GMBH
This assignment and second amendment (“Amendment No, 2”) effective the 22nd day
of December, 2010 (“Effective Date”) to the License Agreement dated and
effective the 25th of April 2008, between PARI Pharma GmbH, a German corporation
with a principal place of business at Moosstrasse 3, D-82319 Starnberg, Germany
(“PARI”) and Transave, Inc., a Delaware corporation (“Transave Inc.”), as
amended by Amendment No. 1 the 24th day of June 2009 (collectively, the
“Agreement”), is entered into between PARI, Transave, LLC, a Delaware limited
liability company and successor to Transave, Inc. (“Transave LLC”) and Insmed
Incorporated, a Virginia corporation with registered Offices at 8720 Stony Point
Parkway, Suite 200, Richmond, VA 23235 (“Insmed”). PARI, Transave, LLC and
Insmed shall be referred to collectively as the “Parties.”
WHEREAS, pursuant to that certain Agreement and Plan of Merger (the “Merger
Agreement”), dated as of December 1, 2010, by and among Insmed, River
Acquisition Co., a Delaware corporation and wholly owned subsidiary of Insmed,
Transave, LLC, a wholly owned subsidiary of Insmed, Transave, Inc. and the
Stockholders’ Agent named therein, Transave, Inc. was merged with and into
Transave, LLC (the “Merger”);
WHEREAS, upon effectiveness of the Merger, the separate corporate existence of
Transave, Inc. ceased and, by virtue of the Merger, Transave, LLC, as the
surviving company, succeeded to all of the rights, Privileges, powers,
franchises, liabilities and obligations of Transave, Inc.;
WHEREAS, the Merger constitutes a Sale of Business Transaction under the
Agreement and Transave, LLC and Insmed are successors in interest to Transave,
Inc., including for the purposes of Section 5.3(e) of the Agreement;
WHEREAS, the Parties desire that all rights and obligations of Transave, Inc.
and Transave, LLC under the License Agreement be assigned to and assumed by
Insmed, pursuant to Section 16.4 of the License Agreement; and
WHEREAS the Parties desire to modify the milestones for CF, Bronchiectasis and
Non-tuberculosis Mycobacteria infections under the Agreement, all as set forth
herein.
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual
covenants, terms and conditions set forth below, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1.
Capitalized terms used but not defined in this Amendment No. 2 will have the
meanings ascribed to them in the Agreement.

2.
The CF Milestone Activity and Milestone Deadline chart set forth in Section
7.1(b) of the Agreement is hereby amended as follows (deletions shown as
strikethrough and insertions shown in underlining):

Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: first Phase III Trial for CF begins
[***]
2. Diligence Milestone 2: first submission of an MAA application for CF in the
Transave Territory
[***]

3.
Section 7.1(b)(i) of the Agreement is hereby amended by replacing the date of
[***] with [***] and the date of [***] with [***]

4.
Section 7.1(b)(ii) of the Agreement is hereby amended by replacing the date of
[***] with [***] and the date of [***] with [***]

5.
The Bronchiectasis Milestone Activity and Milestone Deadline chart set forth in
Section 7.2(a) of the Agreement is hereby amended as follows (deletions shown as
strikethrough and insertions shown in underlining):

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

Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: Last patient to complete the Phase II Trial for
Bronchiectasis
[***]
2. Other Diligence Milestones: see below
2. Diligence Milestone 2: First Phase III Trial for Bronchiectasis begins
[***]
3. Diligence Milestone 3: First submission of an MAA application for
Bronchiectasis in the Transave Territory
[***]

6.
The Non-tuberculosis Mycobacteria Infections Milestone Activity and Milestone
Deadline chart set forth in Section 7.2(a) is hereby amended as follows
(deletions shown as strikethrough and insertions shown in underlining):

Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: Last patient to complete the Phase II or III Trial for
Non-tuberculosis Mycobacteria infections begin
[***]
2. Other Diligence Milestones: see below

7.
Pursuant to Section 16.4 of the Agreement, all rights of Transave, Inc. and
Transave, LLC into and under the Agreement, and all obligations and liabilities
of Transave, Inc. and Transave, LLC thereunder, are hereby assigned to Insmed,
and Insmed hereby accepts such assignment of rights and assumes such obligations
and liabilities, and from and alter the date hereof Insmed shall be substituted
for Transave Inc. as a party to the License Agreement.

8.
The second milestone event and second milestone payment set forth in Section 5.2
of the Agreement is hereby amended as follows (deletions shown as strikethrough
and insertions shown in underlining):

2. Initiation of the first Phase III Trial of Drug Product with the Device
[***]
[***]
either in cash,
Qualified Stock
or a
combination of
cash and
Qualified Stock

9.
As partial consideration for this Amendment No. 2, Insmed agrees to pay PARI a
fee of [***] immediately upon execution hereof.

10.
Upon execution, this Amendment No. 2 shall be made a part of the Agreement and
shall be incorporated therein by reference. Except as provided herein, all other
terms and conditions of the Agreement shall remain in full force and effect.

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

[Signatures an Following Page]

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 2 as of the
Effective Date indicated above.
INSMED INCORPORATION
PARI PHARMA GMBH
By:
/s/ Timothy Whitten
By:
/s/ Martin Knoch
Timothy Whitten
Martin Knoch
President and CEO
President
Date:
12/22/10
Date:
01/03/11

TRANSAVE, LLC
By: Insmed Incorporated, Managing Member
By:
/s/ Timothy Whitten
Timothy Whitten
President and CEO
Date:
12/22/10

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

AMENDMENT NO. 3
TO LICENSE AGREEMENT BETWEEN
TRANSAVE, INC. AND PARI PHARMA GMBH
This third amendment (“Amendment No. 3”) effective the 6th day of March, 2012
(“Effective Date”) to the License Agreement dated and effective the 25thof April
2008, between PARI Pharma GmbH, a German corporation with a principal place of
business at Moosstrasse 3, D-82319 Starnberg, Germany (“PARI”) and Transave,
Inc., a Delaware corporation, as amended by Amendment No. 1 the 24th day of June
2009 and Assignment and Amendment No. 2 the 22nd day of December 2010
(collectively, the “Agreement”), is entered into between PARI and Insmed
Incorporated (successor in interest to Transave, Inc), with registered offices
at 9 Deer Park Drive, Suite C, Monmouth Junction, NJ 08852 (“Insmed”). PARI and
Insmed shall be referred to collectively as the “Parties.”
WHEREAS the Parties desire to modify the milestones for CF, Bronchiectasis and
Non-tuberculosis Mycobacteria infections under the Agreement.
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual
covenants, terms and conditions set forth below, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1.
Capitalized terms used but not defined in this Amendment No. 3 will have the
meaningsascribed to them in the Agreement. Where revisions are made, the
revisions are to be made to the most recent agreed upon language in effect as of
the implementation of the Assignment and Amendment No. 2.

2.
The CF Milestone Activity and Milestone Deadline chart set forth in Section
7.1(b) of the Agreement is hereby amended as follows:

Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: first Phase III Trial for CF begins
[***]
2. Diligence Milestone 2: first submission of an MAA application for CF in the
Transave Territory
[***]

3.
Section 7.1(b)(i) of the Agreement is hereby amended by replacing the date of
[***] with [***] and the date of [***] with [***]

4.
Section 7.1(b)(ii) of the Agreement is hereby amended by replacing the date of
[***] with the date of [***] and the date of [***] with the date of [***]

5.
The Bronchiectasis Milestone Activity and Milestone Deadline chart set forth in
Section 7.2(a) of the Agreement is hereby amended as:

Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: Last patient to complete the Phase II Trial for
Bronchiectasis
[***]
2. Diligence Milestone 2: First Phase III Trial for Bronchiectasis begins
[***]
3. Diligence Milestone 3: First submission of an MAA application for
Bronchiectasis in the Transave Territory
[***]

6.
The Non-tuberculosis Mycobacteria Infections Milestone Activity and Milestone
Deadline chart set forth in Section 7.2(a) is hereby amended as follows:

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

Milestone
Activity
Milestone
Deadline
1. Diligence Milestone 1: Phase II or III Trial for Non-tuberculosis
Mycobacteria infections begins
[***]
2. Other Diligence Milestones: see below

7.
In consideration of PARI’s agreement to the extensions of the various Milestone
Deadlines as set forth above and PARI's continued upholding of exclusivity in
the field of Bronchiectasis, Insmed has the option to pay PARI [***]

8.
Upon execution, this Amendment No. 3 shall be made a part of the Agreement and
shall be incorporated therein by reference. Except as provided herein, all other
terms and conditions of the Agreement shall remain in full force and effect.

IN WITNESS WHEREOF, the Parties have executed this Amendment No. 3 as of the
Effective Date indicated above.
INSMED INCORPORATED
PARI PHARMA GMBH
By:
/s/ Tim Whitten
By:
/s/ Martin Knoch
Tim Whitten
Martin Knoch
President and CEO
President
Date:
March 8, 2012
Date:
March 6, 2012

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

AMENDMENT NO. 4
TO LICENSE AGREEMENT BETWEEN
TRANSAVE, INC. AND PARI PHARMA GMBH
This fourth amendment (“Amendment No. 4”) effective May 21, 2012 (“Amendment No.
4 Effective Date”) to the License Agreement dated and effective the 25th of
April 2008 between PARI Pharma GmbH, a German corporation with a principal place
of business at Moosstrasse 3, D-82319 Starnberg, Germany (“PARI”) and Transave,
Inc., a Delaware corporation, as amended by Amendment No. 1 the 24th day of June
2009, Assignment and Amendment No. 2 the 22nd day of December 2010, and
Amendment No. 3 the 6th day of March 2012 (collectively, the “Agreement”), is
entered into between PARI and Insmed Incorporated (successor in interest to
Transave, Inc.), with registered offices at 9 Deer Park Drive, Suite C, Monmouth
Junction, NJ 08852 (“Insmed”). PARI and Insmed shall be referred to collectively
as the “Parties”.
WHEREAS, during the performance of the Agreement, the Parties have made an
invention that is directed, in part, to methods of delivering aminoglycosides
with a certain nebulization rate, which nebulization rate may be achieved by
using the Device of PARI; and
WHEREAS, the Parties now desire to amend the terms and conditions of the
Agreement to assign such invention to Insmed such that Insmed will have the sole
ownership of such invention.
NOW, THEREFORE, in consideration of the recitals set forth above, the mutual
covenants, terms and conditions set forth below, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Parties agree as follows:
1. Definitions. Capitalized terms used but not defined in this Amendment No. 4
will have the meanings ascribed to them in the Agreement. A new definition is
hereby added to the Agreement:
“Assigned Invention” means solely the invention described in the invention
disclosure attached to Amendment No. 4 as Exhibit A, [***]
2. Assignment of Invention. Notwithstanding anything to the contrary in the
Agreement, Insmed shall solely own all right, title and interest in and to the
Assigned Invention, which shall be deemed Transave Intellectual Property for
purposes of the Agreement and shall be excluded from the definition of Project
Intellectual Property. PARI hereby assigns and transfers to Insmed all of its
right, title and interest in and to the Assigned Invention free and clear of any
encumbrance throughout the world. Upon Insmed’s request and at Insmed’s cost and
expense, PARI shall take, and shall cause its employees and agents to take, all
further acts reasonably required to evidence and effect such assignment and
transfer to Insmed. For clarity, as the sole owner of Project Data, Insmed shall
have the rights, subject to the restrictions set forth in Section 3.2(b) of the
Agreement and this Amendment No. 4, to use Project Data in connection with the
practice of the Assigned Invention and in support of the filing, prosecution and
maintenance of the Assigned Invention Patents (as defined in Paragraph 3 below).

3. Patent Prosecution. As the sole owner of the Assigned Invention, Insmed shall
have the sole right and discretion, at its cost and expense, to prepare, file,
prosecute and maintain patent applications and patents, including provisionals,
additions, divisionals, continuations, substitutions, continuations-in-part,
together with re-examinations, reissues, renewals or extensions thereof and all
foreign counterparts of the forgoing claiming the Assigned Invention anywhere in
the world (the “Assigned Invention Patent(s)”), and shall solely own all
Assigned Invention Patents. Insmed shall not file or amend any claims in
Assigned Invention Patents that [***]. In addition, to the extent that any
changes are made that impact or affect PARI Intellectual Property, the Project
Intellectual Property or otherwise expand coverage beyond the Transave Field or
Non-Compete in Section 4.2 of the Agreement, Insmed shall not file any
divisional, continuation, or continuation-in-part of any Assigned Invention
Patent without PARI’s prior written approval. Upon Insmed’s request and at
Insmed’s cost and expense, PARI shall provide Insmed all reasonable assistance
and cooperation in connection with the prosecution and maintenance of the
Assigned Invention Patents. Insmed shall keep PARI reasonably informed on the
status of Assigned Invention Patents.
4. Joint Ownership of Assigned Invention Patents. Notwithstanding anything to
the contrary contained in the Agreement or this Amendment No. 4, if any Assigned
Invention Patent contains or is amended to contain any claim that claims, in
addition to the Assigned Invention, any embodiment of (i) the Device, (ii) any
part of the Device, (iii) any method to manufacture the Device, or (iv) any
method of using the Device, then Insmed shall

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

and hereby does transfer and assign to PARI one undivided half interest in such
Assigned Invention Patents that include such a claim, so that such Assigned
Invention Patents are jointly owned by Insmed and PARI. This Paragraph 4
survives any termination or expiration of the Agreement.
5. PARI Sole Ownership of Assigned Invention Patent(s). Notwithstanding anything
to the contrary contained in the Agreement or this Amendment No. 4, if any
Assigned Invention Patent contains or is amended to contain any independent
claim that claims any embodiment of (i) the Device, (ii) any part of the Device,
(iii) any method to manufacture the Device, or (iv) any method of using the
Device, but which does not claim the Assigned Invention, then Insmed shall and
hereby does transfer and assign to PARI all right, title and interest in and to
the Assigned Invention Patent that contains said independent claim. This
Paragraph 5 survives any termination or expiration of the Agreement.

6. License to PARI. Insmed hereby grants to PARI a non-exclusive, perpetual,
world-wide, transferable, irrevocable, royalty-free, fully paid-up,
sublicenseable license to practice the Assigned Invention and Assigned Invention
Patents (the “Assigned Invention Licenses”) (i) during the Royalty Term and
thereafter outside the Transave Field; and, in addition, (ii) upon early
termination of the Agreement by PARI due to Section 15.2 or 15.4, inside the
Transave Field to include liposomal aminoglycoside formulations other than
Arikace. PARI shall not, and shall not permit any of its Affiliates to, and
shall use commercially reasonable efforts to prohibit any of its sublicensees
to, (A) practice the Assigned Invention inside the Transave Field, during the
Royalty Term, or (B) practice the Assigned Invention in connection with Arikace
after earlier termination by PARI under Section 15.2 or 15.4. This Paragraph 5
survives any termination or expiration of the Agreement.
7. Section 1.48 shall hereby be replaced in its entirety as follows:
“Royalty Term” means, on a country-by-country basis, the period commencing on
the date of First Commercial Sale of Drug Product and continuing until the later
of (a) Expiration of the (i) last Valid Claim covering the particular Device or
(ii) the Assigned Invention Patents, in each case in the particular country in
which any Product is sold or [***] after the First Commercial Sale of the Drug
Product in such country in the Transave Territory.
6. Termination by PARI. Section 15.4 (ii) of the Agreement shall hereby be
replaced in its entirety as follows:
[***]
7. Miscellaneous. Upon execution, this Amendment No. 4 shall be made part of the
Agreement and shall be incorporated therein by reference. Except as provided
herein, all other terms and conditions of the Agreement shall remain in full
force and effect.
IN WITNESS WHEREOF, the Parties have executed this Amendment No. 4 as of the
Amendment No. 4 Effective Date indicated above.
Insmed Incorporated
PARI Pharma GmbH
By:
/s/ Tim Whitten
By:
/s/ Dr. Martin Knoch
Name:
Tim Whitten
Name:
Dr. Martin Knoch
Title:
President and CEO
Title:
President
Date:
May 12, 2012
Date:
May 12, 2012

INSMED -- Confidential Invention Disclosure
[***]