EXHIBIT 10.43

 
[***]= Certain confidential information contained in this document, marked by
brackets, has been omitted and filed separately with the Securities and Exchange
Commission pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as
amended.
 
Explanatory Note: This Agreement was amended by (i) that certain First Amendment
to Agreement between Takeda Pharmaceutical Company Limited, formerly known as
Takeda Chemical Industries, Ltd., (“Takeda”) and Peninsula Pharmaceuticals, Inc.
dated as of November 4, 2004 (the "2004 Amendment"), and (ii) that certain
Second Amendment to Agreement between Takeda and Cerexa, Inc. dated as of
November 19, 2007 (the "2007 Amendment", and collectively with the 2004
Amendment, the “Amendments”, and each an “Amendment”).  A copy of each Amendment
is being filed with the Securities and Exchange Commission simultaneous with the
filing of this Agreement. Accordingly, this Agreement includes notations to
direct readers to the applicable Amendment with respect to those sections which
were revised by such an Amendment and has been conformed to reflect the deletion
of those sections which were removed by the respective Amendment.
 
AGREEMENT
 
This Agreement is made as of the 30th day of September, 2003 (the “Effective
Date”) by and between Takeda Chemical Industries, Ltd., with its head office at
1-1, Doshomachi 4-chome, Chuo-ku, Osaka 540-8645, Japan (hereinafter called
“TAKEDA”), and Peninsula Pharmaceuticals, Inc., with its head office at 1701
Harbor Bay Parkway, Alameda, CA 94502, USA (hereinafter called “PENINSULA”).
 
WITNESSETH THAT:
 
Whereas, TAKEDA has been developing the Compound (as hereinafter defined) and
owns certain Information (as hereinafter defined), Manufacturing Know-How (as
hereinafter defined) and Patents (as hereinafter defined) which cover the
Compound as well as the Product (as hereinafter defined); and
 
Whereas, PENINSULA desires to obtain a license from TAKEDA to import the
Compound, process the Compound into the Product and develop and sell the Product
in the Territory (as hereinafter defined) under the Information and the Patents;
 
Whereas, TAKEDA is willing to comply with such desire of PENINSULA;
 
Now, Therefore, the parties hereto agree as follows:
 
ARTICLE 1
 
DEFINITIONS
 
The following terms whenever used in this Agreement shall have the following
meanings:
 

 
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1.1           “Lot” shall mean a specific quantity of the Compound that is
intended to have uniform character and quality, within the specified limits set
forth in the Specifications, and is produced as one lot with the intention of
being quality controlled and released as a single lot.
 
1.2           “cGMP” shall mean the current good manufacturing practices
required by the FDA and set forth in the FD&C Act, or FDA regulations, policies
or guidelines in effect at a particular time, for the manufacturing and testing
of pharmaceutical materials, and any other laws or regulations applicable to the
manufacturing and testing of pharmaceutical materials in a country or
jurisdiction in the Territory.
 
1.3           “Compound” shall mean: (i) the water-soluble prodrug
(6R,7R)-7-((Z)-2-(ethoxyimino-2-[5-(phosphonoamino)-1,2,4-thiadiazol-3-yl]acetyl)amino)-3-[4-(1-methyl-4-pyridino)-1,3-thiazol-2-yl]thio-8-oxo-5-thia-1-azabicyclo[4.2.0]oct-2-ene-2-carboxylate
acetic acid solvate and coded by TAKEDA internally as TAK-599, or (ii) the
semisynthesized cephalosporin compound coded by TAKEDA internally as T-91825.
 
1.4           “Confidential Information” shall mean all confidential or
proprietary information relating to the Compound and/or the Product including,
without limitation, research, development, manufacturing, marketing, financial,
personnel, sales, and other business and technical information, compositions,
inventions, discoveries, processes, methods, formulae, procedures, protocols,
techniques, data, plans, the Specifications, and quality control procedures,
whether in oral, written, graphic, or electronic form.  Confidential information
relating to the Compound and/or the Product that was disclosed to PENINSULA by
TAKEDA prior to the Effective Date shall be also deemed TAKEDA’s Confidential
Information hereunder.
 
1.5           “Controlled” shall mean, with respect to any patent, Information,
Manufacturing Know-How or other intellectual property right, that the party owns
or has a license to such patent, Information, Manufacturing Know-How or other
intellectual property right and has the ability, as of the applicable time, to
grant to the other party access, a license, or a sublicense to such patent,
Information, Manufacturing Know-How or other intellectual property right as
provided for in this Agreement without violating an agreement with or rights of
a third party.
 
1.6           “Development Work” shall mean the conduct of pre-clinical and
clinical trials, the compilation of the dossier concerning the Compound and/or
the Product and the conduct of other work necessary or useful for obtaining
Registration by or on behalf of PENINSULA.
 
1.7           “Drug Master File” or “DMF” shall mean a Drug Master File
maintained with the FDA, or a filing with a Regulatory Authority outside the
United States serving a purpose equivalent to that of a Drug Master File in the
United ·States, such that manufacturing information may be filed by a
manufacturer in such country in a manner that remains confidential from the
holder of the remaining portions of the Registration maintained with the FDA and
the equivalent thereof, if any, in jurisdictions outside the United States.
 
1.8           “FDA” shall mean the United States Food and Drug Administration or
any successor thereto having the administrative authority to regulate the
investigation, development, and marketing of human pharmaceutical products in
the United States.
 
1.9           “FD&C Act” means the United States Food, Drug and Cosmetic Act, as
amended, and any regulations promulgated thereunder.
 

 
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1.10           “IND” shall mean an Investigational New Drug Application as
defined in the FD&C Act and applicable regulations promulgated thereunder by the
FDA, or the equivalent application to the equivalent agency in any other country
or jurisdiction in the Territory, the filing of which is necessary to commence
clinical testing of a pharmaceutical product in humans.
 
1.11           “Information” shall mean all data, results and information (other
than the Manufacturing Know-How) relating to the Compound and/or the Product, or
the use of the Compound and/or the Product, or processing the Compound into the
Product including, without limitation, pre-clinical, clinical, and/or regulatory
documentation, data, information, and reports, if any, that are Controlled by
TAKEDA during the term of the Agreement and are necessary or useful for
PENINSULA to evaluate, develop, register, formulate, fill and finish, sell and
market Products in the Territory.
 
1.12           “Intermediate Manufacturing Cost” shall mean either (a) [***]the
actual, reasonable out-of-pocket costs incurred by TAKEDA to obtain
intermediates required for the manufacture of the Compound from a third party
manufacturer, or (b) [***] the actual out-of-pocket costs incurred, paid or
borne by TAKEDA to manufacture, quality check and supply intermediates required
for the manufacture of the Compound to PENINSULA.  It is understood that TAKEDA
may elect to entrust the manufacture, quality check and/or supply of the
Compound to a Third Party Manufacturer(s) and in such event, all the reasonable
consideration for such entrustment to be paid by TAKEDA to such Third Party
Manufacturer(s) for the manufacture of such intermediates supplied to PENINSULA
shall be included in the Intermediate Manufacturing Cost.  “Intermediate
Manufacturing Cost” may include [***].
 
1.13           “Major Market Country” shall mean the United States of America,
the United Kingdom, France, Germany, Italy, Spain, Austria and Switzerland, to
the extent such countries are included in the Territory.
 
1.14           “Compound Manufacturing Cost” shall mean the actual out-of-pocket
costs incurred, paid or borne by TAKEDA to manufacture, quality check and supply
the Compound to PENINSULA.  It is understood that TAKEDA may elect to entrust
the manufacture, quality check and/or supply of the Compound to a Third Party
Manufacturer(s) and in such event, all the reasonable consideration for such
entrustment to be paid by TAKEDA to such Third Party Manufacturer(s) for the
manufacture of the Compound supplied to PENINSULA shall be included in the
Compound Manufacturing Cost.  “Compound Manufacturing Cost” may include [***].
 

 
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1.15           “Product Manufacturing Cost” shall mean, with respect to a
particular Product sold by PENINSULA (or its Affiliate or sublicensee)
hereunder, the sum of: (a) either (i) the actual purchase price of the Compound
from TAKEDA, if the Compound in such Product was purchased from TAKEDA, or
(ii) [***] the actual out-of-pocket costs incurred, paid or borne by PENINSULA
in the manufacture and quality check of the Compound, if PENINSULA manufactures
or has a third party manufacture on its behalf the Compound included in such
Product; plus (b) [***] the actual out-of-pocket costs incurred, paid or borne
by PENINSULA to process the Compound into and package the Product and quality
check (or have a third party contractor perform such processing and
packaging).  “Product Manufacturing Cost” in subclause (b) above may include
[***] the actual purchase price of any raw materials other than the Compound and
insurance payments relating thereto, provided that any such consideration is
commercially reasonable.  It is understood that any payment to third party(ies)
by PENINSULA to obtain a license under such third party’s patent or other
intellectual property rights without which license the above mentioned
manufacturing, processing or packaging would constitute an infringement of such
patents or other intellectual property rights, which shall be treated pursuant
to Section 3.4, if any, shall not be included in the Product Manufacturing
Cost.  For clarity, the term “Product Manufacturing Cost” shall not include any
royalty paid by PENINSULA to TAKEDA under Section 3.3 or to any Third Party.
 
1.16           “Manufacturing Know-How” shall mean all technical know-how and
information relating to the manufacture of the Compound and all intermediates
thereof that are Controlled by TAKEDA during the term of this Agreement and that
are necessary or useful for PENINSULA to manufacture the Compound and all
intermediates thereof.
 
1.17           “NDA” shall mean a New Drug Application, as defined in the FD&C
Act, and applicable regulations promulgated thereunder by the FDA, or the
equivalent application to the equivalent agency in any other regulatory
jurisdiction in the Territory, to obtain approval or authorization to commence
marketing and sales of a pharmaceutical product.
 
1.18           “Net Sales” shall mean the gross amount received by PENINSULA and
its sublicensees for sales of Compounds and/or Products to unaffiliated third
parties that are not sublicensees of the selling party, less the following
deductions or allowances:
 
[***]
 
1.19           “NHI Price Listing” shall mean the listing of the Product in the
reimbursement list of a national health insurance system in a particular country
or jurisdiction in the Territory, any approval with regard to the selling price
of the Product, and the like in such country or jurisdiction.
 
1.20           “Patents” shall mean all patent applications and patents anywhere
in the Territory that are Controlled by TAKEDA during the term of the Agreement
and that claim, cover, or disclose the composition of matter of, or the method
of making or using, the Compound or Product, or any intermediate used in making
the Compound, including all patent applications listed in Schedule I attached
hereto, all patents arising from any such applications, and any additions,
divisions, continuations, continuations in part, substitutions, extensions,
renewals, reissues, reexaminations, registrations, revalidations, and the like
of any of the foregoing.
 

 
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1.21           “Product” shall mean a pharmaceutical preparation in any
formulation in final packaged form suitable for sale which contains a Compound
as an active ingredient.
 
1.22           “Registration” shall mean all permissions, licenses,
registrations, approvals, or authorizations by an applicable Regulatory
Authority in a particular country or jurisdiction in the Territory required for
the import of the Compound, the processing of the Compound into the Product and
the marketing and sale of such Product in such country or jurisdiction.
 
1.23           “Regulatory Authority” shall mean the FDA in the United States,
and the equivalent regulatory authority or governmental entity having the
responsibility, jurisdiction, and authority to approve the manufacture, use,
importation, packaging, labeling, marketing, and sale of pharmaceutical products
in any country or jurisdiction other than the United States.
 
1.24           “Results” shall mean all the data and information that is
produced as a result of the Development Work.
 
1.25           “Specifications” shall mean the specifications and testing
methods of the Compound as set forth in Schedule II attached hereto.  Schedule
II may be modified by mutual agreement between the parties hereto from time to
time during the term of this Agreement.
 
1.26           “Territory” shall mean all countries and territories worldwide
except for Japan and those Option Countries (if any) that are excluded from the
Territory pursuant to Section 2.3.
 
1.27           “Option Countries” shall mean all countries and territories set
forth in Schedule VII attached hereto.
 
1.28           “Third Party Manufacturer” shall mean any entity other than
TAKEDA that is contracted by TAKEDA to manufacture, quality check and/or supply
the Compound and/or Intermediates supplied to PENINSULA hereunder, in part or in
whole.
 
1.29           “Valid Claim” means a claim of an issued patent within the
Patents that has not (a) expired or been canceled, (b) been declared invalid by
an unreversed and unappealable decision of a court or other appropriate body of
competent jurisdiction, (c) been admitted to be invalid or unenforceable through
reissue, disclaimer, or otherwise, or (d) been abandoned.
 
1.30           “Year” shall mean each consecutive twelve (12) month period from
April 1 to March 31.
 

 
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ARTICLE  2
 
GRANT OF LICENSE
 
2.1           TAKEDA hereby grants to PENINSULA and PENINSULA hereby accepts an
exclusive license throughout the Territory under the Information and the
Patents, to develop and obtain the Registration for the Compound and/or Product
in the Territory, to import the Compound and/or Product in the Territory, to
process the Compound into the Product in the Territory, to use the Compound
and/or the Product and to sell the Product in the Territory.  TAKEDA retains all
rights with regard to the Compound and/or the Product in Japan and in those
Option Countries (if any) that TAKEDA and PENINSULA agree to exclude from the
Territory pursuant to Section 2.3 (Japan and those Option Countries, if any,
that are excluded from the Territory are hereinafter collectively referred to as
the “TAKEDA Territory”).  Solely for the purpose of developing and obtaining the
Registration for the Compound and/or Product in the TAKEDA Territory or selling
the Compound and/or Product in the TAKEDA Territory, TAKEDA retains the right
to, or to cause any third party to, import the Compound and/or the Product,
process the Compound into the Product, and use the Compound and/or Product in
the Territory.  Takeda also retains the worldwide right to manufacture and cause
any third party to manufacture the Compound.
 
2.2           PENINSULA shall have the right to grant to third parties
sublicenses under the license granted to PENINSULA in Section 2.1 subject to and
pursuant to Section 2.4.
 

 
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2.3           [Explanatory Note: Pursuant to that certain Consent letter dated
July 30, 2009, by and among Cerexa, Inc., Forest Laboratories Holdings Limited
(“FLH”, and collectively with Cerexa, the “Forest Parties”) and Takeda
Pharmaceutical Company Limited (the “Waiver”), Takeda waived all of its rights
under Section 2.3 of this Agreement with respect to the Option
Countries.]     Subject to the provisions of this Section 2.3, PENINSULA hereby
grants to TAKEDA an exclusive option to negotiate for the right to develop,
offer for sale and/or sell the Product in the Option Countries by itself or
through any third party (the “Option”).  Such Option shall be exercisable solely
as set forth in this Section 2.3.  Within [***] after the earlier of (a) the
date on which [***] or, (b) on which [***] PENINSULA shall inform TAKEDA of such
event in writing and shall provide to TAKEDA [***].  For the purpose of this
Section 2.3, [***] means [***].  TAKEDA shall have a period of [***] after its
receipt of the above notice and [***], which may from time to time be extended
upon mutual agreement of the Parties (the “Option Notice Period”), in which to
inform PENINSULA in writing that it exercises the Option and the specific Option
Countries for which TAKEDA is exercising the Option.  If TAKEDA exercises the
Option in writing within the Option Notice Period, TAKEDA and PENINSULA shall,
for a period of up to [***] from the date on which TAKEDA exercises the Option
(the “Option Negotiation Period”), in good faith negotiate the terms and
conditions of an agreement covering the applicable Option Countries (which
agreement would provide, if applicable, that such Option Countries are
thereafter excluded from the Territory and included in the TAKEDA Territory
thereafter or that PENINSULA shall grant TAKEDA a sublicense, with the right to
grant further sublicenses through multiple tiers of sublicensees, to develop,
offer for sale and/or sell the Product in the applicable Option Countries).  If
TAKEDA does not exercise the Option with respect to any or all of the Option
Countries in accordance with the provisions of this Section 2.3 during the
Option Notice Period, TAKEDA’s Option with respect to such Option Countries, for
which the Option was not exercised, shall expire and PENINSULA shall have the
right to develop, offer for sale, and/or sell the Product in such Option
Countries and/or grant sublicenses to one or more third parties to develop,
offer for sale, and/or sell the Product in such Option Countries.  If TAKEDA
exercises the Option with respect to specific Option Countries during the Option
Notice Period but TAKEDA and PENINSULA fail to execute an agreement covering
such Option Countries prior to the expiration of the Option Negotiation Period,
then PENINSULA may develop, offer for sale, and/or sell the Product in such
Option Countries and may grant rights to one or more third parties to develop,
offer for sale, distribute and/or sell the Product in one or more of such Option
Countries; provided, however, that for a period of [***] from the date of
expiration of the Option Negotiation Period, PENINSULA shall not enter into an
agreement with any third party with respect to such Option Countries unless the
terms and conditions of such agreement, when taken as a whole, are better in
PENINSULA’s reasonable judgment for PENINSULA than the terms and conditions last
offered by PENINSULA  to TAKEDA during the Option Negotiation Period, without
first offering such terms to TAKEDA for TAKEDA’s consideration and possible
acceptance.  If TAKEDA does not elect to enter into an agreement with PENINSULA
on such better terms to TAKEDA within [***] after the date on which PENINSULA
offers such terms to TAKEDA, then PENINSULA shall have the right to enter into
an agreement on such terms with a third party.
 

 
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2.4           [Explanatory Note:  Pursuant to the Waiver, Takeda waived all of
its rights under Section 2.4 of this Agreement to assume development or
commercialization of the Product from the Forest Parties if the Forest Parties
elected not to pursue such activities in a country, with respect to all
countries in the Territory other than U.S. and Canada.]  In addition to Section
2.3, if PENINSULA elects not to develop and/or sell the Product by itself in a
country(ies) of the Territory and decides to seek a third party sublicensee or
distributor to develop and/or sell the Product in such country(ies), PENINSULA
shall first provide to TAKEDA written notice offering to TAKEDA the opportunity
to develop and/or sell the Product as PENINSULA’s sublicensee or distributor in
such country(ies).  Notwithstanding the foregoing, if any of such country(ies)
are Option Countries with respect to which TAKEDA exercised the Option under
Section 2.3 during the Option Notice Period but TAKEDA and PENINSULA failed to
execute an agreement covering such Option Countries prior to the expiration of
the Option Negotiation Period, PENINSULA shall not be required to provide to
TAKEDA written notice offering to TAKEDA the opportunity to develop and/or sell
the Product as PENINSULA’s sublicensee or distributor in such Option Countries
except as may be required under Section 2.3.  TAKEDA shall inform PENINSULA of
its interest in such an opportunity within [***] after its receipt of the
applicable written offer (the “Notice Period”).  If TAKEDA informs PENINSULA in
writing within the Notice Period that TAKEDA is interested in developing,
offering for sale and/or selling Products in such country(ies) or distributing
the Product in such country(ies), as applicable, by itself or through any third
party, TAKEDA and PENINSULA shall in good faith negotiate the terms and
conditions of an agreement covering such country(ies) (which agreement would
provide, if applicable, that [***]) for up to [***] from the date of TAKEDA’s
notice expressing such interest (the “Negotiation Period”).  If TAKEDA does not
inform PENINSULA of its interest in distributing the Product or developing,
offering for sale and/or selling the Products in such country(ies), as
applicable, during the Notice Period, or if TAKEDA and PENINSULA fail to execute
an agreement covering such country(ies) within the Negotiation Period, then
PENINSULA may grant rights to one or more third parties to develop, offer for
sale, distribute and/or sell the Product in such country(ies), as applicable;
provided, however, that if TAKEDA informed PENINSULA of its interest in a
particular opportunity set forth in a Notice during the applicable Notice Period
but PENINSULA and TAKEDA were unable to execute an agreement related to such
opportunity within the Negotiation Period, PENINSULA shall not enter into an
agreement with any third party with respect to such opportunity on terms and
conditions that, when taken as a whole, are better to such third party than the
terms and conditions last offered by PENINSULA to TAKEDA during the Negotiation
Period without first offering such terms to TAKEDA for TAKEDA’s consideration
and possible acceptance.  If TAKEDA does not elect to enter into an agreement
with PENINSULA on such better terms to TAKEDA within [***] after the date on
which PENINSULA offers such terms to TAKEDA, then PENINSULA shall have the right
to enter into an agreement on such terms with a third party.  PENINSULA shall
inform TAKEDA of the names of its third party distributor(s) and/or
sublicensee(s) and obtain TAKEDA’s prior written consent, which consent shall
not be unreasonably withheld, impose upon the distributor(s) and/or
sublicensee(s) all applicable obligations which PENINSULA undertakes hereunder
and be responsible for the performance by the distributor(s) and/or
sublicensee(s) of such obligations.
 

 
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2.5           Each party covenants that during the term of this Agreement, it
will not develop, market or sell, and will not grant to any third party any
rights to develop, market or sell, any [***] product other than the Product in
the Territory (such product, a “Competitive Product”).  Notwithstanding the
foregoing, TAKEDA shall have the right to develop, market, offer for sale or
sell a Competitive Product in the Territory provided that such Competitive
Product does not result from TAKEDA’s (or its Affiliate’s) own internal research
or discovery program, and instead such Competitive Product is discovered and
developed initially by a third party, and TAKEDA subsequently obtains, by
license from, as a result of a merger with or acquisition of, such third party
or otherwise, rights to develop, market, offer for sale or sell such Competitive
Product.
 
ARTICLE 3
 
CONSIDERATION
 
3.1           As part of the consideration for the license granted by TAKEDA
hereunder, PENINSULA shall pay the following one-time milestone payments to
TAKEDA in U.S. Dollars upon the first occurrence of each of the following
events:
 
Milestone Event
 
Milestone Payment
Execution of the Agreement
 
US $500,000
Commencement of the first Phase III clinical study of the Product (First
administration for the first patient) in the first country or jurisdiction in
the Territory
 
[***]
First submission of an NDA in the first country or jurisdiction in the Territory
 
[***]
Obtaining the first Registration of the Product in the first country or
jurisdiction in the Territory
 
[***]
TOTAL POSSIBLE MILESTONE
 PAYMENTS:
[***]

 
PENINSULA shall notify TAKEDA in writing upon its achievement of each milestone
event, and shall make each milestone payment payable hereunder no later than
[***] from the date on which the applicable milestone event is achieved.
 
3.2           For each half Year period ending September 30 and March 31,
PENINSULA shall send to TAKEDA a report in such a form as reasonably specified
by TAKEDA setting forth, on a country-by-country basis, the quantities of the
Product sold by PENINSULA and its sublicensees in the Territory during the
applicable half Year period, the Net Sales, and the amount of royalties owed to
TAKEDA under Section 3.3 hereof for such half Year, within [***] after the close
of the applicable half Year period.
 

 
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3.3           As part of the consideration for the license granted by TAKEDA
hereunder, and subject to any applicable reductions and offsets under Sections
3.4 and 3.5, PENINSULA shall pay to TAKEDA royalties as a percentage of the
annual Net Sales of the Product sold in the Territory by PENINSULA in each Year,
according to the applicable royalty rates set forth below.  Such royalty
payments shall be paid not later than [***] after the end of each half Year with
respect to Net Sales in such half Year.  For each country in the Territory,
PENINSULA shall pay TAKEDA royalties on a country-by-country basis for the
period commencing on the date of the first commercial sale of the Product by
PENINSULA or its sublicensee in such country and ending on the later of (i) the
[***] anniversary of the first commercial sale of the Product in such country,
and (ii) the date of expiration of the last to expire Valid Claim in such
country that claims the composition of matter of such Product or the method of
using such Product.
 
(a)           For Net Sales in those countries and jurisdictions in the
Territory in which PENINSULA has obtained Registration of the Product having an
approved indication for the treatment of infections due to MRSA (such countries,
the “MRSA Countries”), the royalties shall be a percentage of such Net Sales in
those countries and jurisdictions, with the royalty rate determined based on the
aggregate amount of Net Sales in the MRSA Countries during the applicable
calendar year as of the date of the applicable sale, according to the following
schedule:
 
Royalty Rate                                                   Annual Net Sales
in the MRSA Countries
 
[***]                                                                Up to [***]
 
[***]                                                                Over [***]
 
[***]                                                                Over [***]
 
[***]                                                                Over [***]
 
For the avoidance of doubt, the aggregate annual Net Sales for any given Year
shall be reset to zero upon the beginning of the subsequent Year for purposes of
applying the applicable royalty rate.
 
(b)           For Net Sales in those countries and jurisdictions in the
Territory in which PENINSULA has not obtained Registration for the Product in
such countries or jurisdictions having an approved indication for the treatment
of infections due to MRSA (such countries, the “Adjusted Countries”), the
royalties shall be [***] of the Net Sales in those countries and jurisdictions.
 
By way of example, if the aggregate Net Sales achieved [***], and assuming for
purposes of this example that any reductions and offsets under Section 3.4 and
3.5 are not applicable, the amount payable hereunder for such sales [***].
 

 
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3.4           Subject to the limit set forth in Section 3.6, if PENINSULA
obtains a license or other similar right under any patent or patent application
owned or controlled by a third party in the Territory that claims or covers all
or any part of the composition of matter of, method of making, or method of
using the Product, pursuant to Section 15.3, then [***].  In addition, if
PENINSULA is required to pay any settlements or damages to a third party under
Section 15.3, then [***].
 
3.5           Subject to the limit set forth in Section 3.6, if the Product
Manufacturing Cost exceeds [***], the royalty rate payable to TAKEDA on Net
Sales of such Product under Section 3.3 shall be reduced by [***].  PENINSULA
agrees to use all commercially reasonable efforts to reduce the aspects of
Product Manufacturing Cost that are within its control.  For example, [***].  If
the above-mentioned reduction is applicable, PENINSULA shall explain, if
requested in writing by TAKEDA, the rationale of such reduction together with a
summary of the relevant records supporting the calculation of the reduction.
 
3.6           Notwithstanding anything in this Agreement to the contrary, in no
event shall the amount of royalties payable to TAKEDA hereunder on Net Sales of
Products in the Territory, after giving effect to applicable offsets or
reductions under Sections 3.4, 3.5 or 15.3 of this Agreement, be reduced by more
than [***] for any particular reporting period.
 
3.7           Income tax on the payments made to TAKEDA under Sections 3.1, 3.3,
7.3 and 7.6 hereof shall be borne by TAKEDA.  PENINSULA shall deduct mandatory
withholding tax (if any) and shall pay such tax on behalf of TAKEDA, and shall
immediately send to TAKEDA a certified receipt for such payment issued by the
applicable taxing authority.
 
3.8           Net Sales outside the United States shall be first determined in
the currency of the country in which they are earned and shall be converted each
half Year into an amount in U.S. Dollars using the rate of exchange reported by
Citibank in New York City as of the close of the last business day of such half
Year in which such royalty is due.
 
3.9           PENINSULA shall keep accurate records of sales of the Product and
Product Manufacturing Cost in sufficient detail to permit TAKEDA to confirm the
accuracy of calculations of all payments made under Section 3.  Once per Year,
TAKEDA, at its expense, may have an independent public accountant reasonably
acceptable to PENINSULA audit any and all account books and related records or
documents possessed by PENINSULA concerning the sale of the Product and Product
Manufacturing Cost, upon at least [***] notice and during normal business hours,
for the purpose of verifying the accuracy of royalty payments made under Section
3.  If the accountant finds a discrepancy of more than [***] for the period
audited, PENINSULA shall bear the reasonable costs and expenses for such
audit.  For the above purpose, PENINSULA shall keep such account books and their
relating records or documents for [***] after the end of the half Year
concerned.
 
3.10           TAKEDA shall not be obligated to refund payments made by
PENINSULA under this Agreement once received for any reason, including but not
limited to, invalidation of any claim(s) of the Patents.  However, it is
understood that the foregoing sentence shall not be interpreted to limit the
damages available to PENINSULA in the event of an uncured breach of this
Agreement by TAKEDA (but subject to Section 13.8).
 

 
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ARTICLE 4
 
DISCLOSURE OF INFORMATION
 
4.1           On the Effective Date, TAKEDA shall disclose to PENINSULA and/or
cause its appointee to disclose to PENINSULA in English the Information set
forth in the attached Schedule IV.  In addition, TAKEDA shall promptly disclose
to PENINSULA in English any additional Information developed or acquired and
Controlled by TAKEDA during the term of this Agreement, if any. PENINSULA may
use all Information solely for the purposes contemplated under this
Agreement.  If a Regulatory Authority in any jurisdiction or country of the
Territory requires PENINSULA to provide information which is not available to
TAKEDA and/or PENINSULA, both parties shall meet and agree on how to comply with
such requirement, provided, however, that such information shall be, except
otherwise agreed by the parties, generated by PENINSULA through the Development
Work and TAKEDA shall not be obligated to generate such information.
 
ARTICLE 5
 
DEVELOPMENT WORK
 
5.1           TAKEDA and PENINSULA shall establish a joint committee
(hereinafter called “JC”) which will discuss and decide upon the development
plan and strategy for the Product in the Territory, and will coordinate the
development activities undertaken by PENINSULA for the Product with the
development activities undertaken by TAKEDA to generate data necessary to obtain
Registration of the Product in the TAKEDA Territory.  The JC shall be comprised
of an equal number of members from TAKEDA and PENINSULA, which number of members
shall initially be a total of four (4), and will meet semi-annually at
alternating home office locations, or such other locations as the parties agree,
or by teleconference.  Each party shall bear its own costs associated with
attendance at JC meetings.  The JC shall keep minutes of all JC meetings in
order to confirm the matters discussed and the decisions reached at such
meetings.  If the JC is unable to agree on a development plan or strategy for
the Product, the senior management of TAKEDA and PENINSULA shall discuss the
issue in attempt to resolve the dispute.  However, if the parties are unable to
resolve such dispute, PENINSULA shall have the right to make all final decisions
regarding the development plan and strategy for the Product in the Territory;
provided that for clarity TAKEDA shall have the right to make final decisions
regarding the manufacture of the Compound and any other development work
conducted by TAKEDA, if any, except as otherwise expressly provided in this
Agreement with respect to Compound supplied to PENINSULA.  The JC may discuss
and decide upon other issues with regard to the Compound and/or the Product that
the parties mutually agree to have decided by the JC.
 

 
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5.2           TAKEDA acknowledges and agrees that it shall use diligent efforts
to conduct and complete, at its expense and pursuant to protocols determined by
the JC, the preclinical studies of the Compound as described in the attached
Schedule V (the “Studies”), within the time frame for such studies set forth in
Schedule V, which Studies are reasonably anticipated to be required by
Regulatory Authorities in both the Territory and Japan in order for the Compound
to be approved for use in human clinical trials.  For clarity, TAKEDA shall have
no obligation under this Agreement to conduct any preclinical studies of the
Compound other than the Studies and TAKEDA’s obligation is to conduct the
Studies pursuant to the protocol to be separately determined by JC.  It is
understood that TAKEDA makes no warranties with respect to the Studies,
including without limitation a warranty that PENINSULA will be able to
successfully develop the Compound using the results of the Studies.  However, if
reasonably requested by PENINSULA, TAKEDA shall use diligent efforts to conduct
any additional preclinical studies on the Compound that are required by any
Regulatory Authority in the Territory at PENINSULA’s expense.  TAKEDA shall
disclose to PENINSULA in English all Information resulting from the Studies and
any other preclinical studies conducted by TAKEDA under this Section 5.2
promptly after the completion of such studies.  Except as otherwise provided
above, PENINSULA shall be responsible for conducting, at PENINSULA’s expense,
any additional preclinical and clinical studies, as Development Work, that are
required by Regulatory Authorities in the Territory, that are not Studies.
 
5.3           Upon PENINSULA’s reasonable request and to the extent that TAKEDA
has available inventory of Compound on the Effective Date, TAKEDA shall promptly
supply to PENINSULA that quantity of Compound necessary to conduct the following
preclinical studies of the Compound: (a) four (4) week intravenous toxicity
study of the Compound in rats with a four (4) week recovery period, (b) three
(3) month intravenous toxicity study of the Compound in rats with a four (4)
week recovery period, and (c) three (3) month intravenous toxicity study of the
Compound in cynomolgus monkeys with a four (4) week recovery period.  All
Compound supplied to PENINSULA by TAKEDA under this Section 5.3 shall be
supplied at no cost to PENINSULA.  Promptly after the Effective Date, the
Parties shall determine the specific quantity of Compound to be supplied by
TAKEDA, the delivery date for such Compound, and other details for such supply.
 
5.4           PENINSULA shall undertake the Development Work as soon as possible
necessary to obtain the Registration for the Major Market Countries
promptly.  In addition, PENINSULA shall use commercially reasonable efforts to
undertake Development Work necessary to obtain Registration in such other
countries in the Territory where PENINSULA elects to do so based on its sound
business judgment in light of the economic opportunities for sales of the
Product in such other countries.  PENINSULA will report to TAKEDA on its
development progress, including without limitation its decision to seek
Registration in certain country(ies), from time to time, but no less frequently
than semi-annually in order for TAKEDA to confirm the status of development of
the Product.
 

 
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5.5           The Development Work shall be conducted by PENINSULA at its sole
cost, risk and responsibility.  Upon the request of TAKEDA and at TAKEDA’s
expense, PENINSULA shall allow TAKEDA representative(s), approved in advance by
PENINSULA, such approval not to be unreasonably withheld, to attend PENINSULA’s
meetings concerning development and/or marketing of the Product (including
internal meetings and meeting with investigators).  All TAKEDA representatives
that attend such meetings shall be bound by obligations of confidentiality
consistent with the obligations contained in Article 14.
 
5.6           PENINSULA shall use commercially reasonable efforts to conduct all
Development Work and compile the Results in accordance with ICH guidelines so
that the Results may be accepted by Regulatory Authorities in the TAKEDA
Territory.  PENINSULA shall, free of charge and without delay, provide TAKEDA
with all the Results in English.  TAKEDA shall have the right to use, and cause
any third parties who have a license under the Patents and Manufacturing
Know-How to develop, manufacture, or commercialize the Compound and/or the
Product in the TAKEDA Territory to use, the Results to develop, manufacture,
offer for sale or sell the Product in the TAKEDA Territory, including without
limitation to pursue Registration in the TAKEDA Territory, free of charge,
subject to the rights granted to PENINSULA hereunder.  In addition, for the
limited purpose of evaluating and determining its interest for the Option
Countries as set forth in Section 2.3, TAKEDA shall have the right to use and
cause any third party who is the candidate company to develop, offer for sale
and/or sell the Product in the Option Countries, to use the Results and any
other information which would be necessary or useful for such purpose.
 
ARTICLE 6
 
REGULATORY ISSUES AND REGISTRATION
 
[Section 6.1 deleted pursuant to Section 4(a) of the 2007 Amendment]
 
6.1           [***].
 
6.2           PENINSULA (or its Affiliate or sublicensee) shall use all
commercially reasonable efforts to apply for and obtain Registration in each
Major Market Country as soon as reasonably possible, but in accordance with the
timeline established by the JC under Section 5.1.  Notwithstanding the
foregoing, PENINSULA’s obligation under this Section 6.2 is contingent upon
TAKEDA fulfilling its obligations under Sections 5.2, 5.3, 6.3, and Article 7 so
long as TAKEDA is supplying Compound to PENINSULA under this Agreement.  In
addition, PENINSULA shall use commercially reasonable efforts to apply for and
obtain Registration in such other countries in the Territory where PENINSULA
elects to do so based on its sound business judgment in light of the economic
opportunities for sales of the Product in such other countries.  After obtaining
Registration in each country in the Territory, PENINSULA shall submit an
application for the NHI Price Listing in each such country as soon as possible,
if necessary for the marketing and sale of the Product in such country.
 

 
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[Section 6.3 superseded by Section 4(b) of the 2007 Amendment]
 
6.3           [***].
 
6.4           Immediately after filing an application for Registration and
obtaining the Registration in a country or jurisdiction in the Territory,
PENINSULA shall notify TAKEDA of the dates and numbers of the application for
such Registration and the resulting Registration and at the same time shall send
to TAKEDA photostat copies of the certificates of the Registration.
 
6.5           If PENINSULA fails to fulfill its obligations under Section 6.2 in
accordance with the timeline established by the JC under Section 5.1, PENINSULA
shall provide to TAKEDA written notice of such failure, including a detailed
description of the basis for PENINSULA’s belief that such failure has
occurred.  In such event, the parties shall discuss and agree upon what steps
should be taken by PENINSULA in order to fulfill its obligations under Section
6.2 including a commercially reasonable period of time for PENINSULA to fulfill
such obligations (if the parties cannot agree on such time period, an
independent research and development organization located in the Territory with
good reputation in the pharmaceutical industry to be mutually agreed upon shall
establish a commercially reasonable time period).  Thereafter, PENINSULA shall
use best efforts to take such steps in order to fulfill its obligations under
Section 6.2 within the period of time agreed to by the parties.  If PENINSULA
fails to use best efforts to take such steps to obtain Registration in a
particular Major Market Country within the time period agreed to by the parties,
TAKEDA may eliminate such country from the definitions of “Territory” and “Major
Market Country”, and in such event PENINSULA shall have no further rights or
obligations hereunder to market and sell the Product in such country.
 
[Sections 6.6 through 6.8 deleted pursuant to Section 4(a) of the 2007
Amendment]
 
[***]
 
6.9           PENINSULA shall be responsible for receiving, investigating, and
documenting all serious adverse drug reactions relating to the use of the
Products which require reporting to appropriate Regulatory Authorities in the
Territory.  PENINSULA will be solely responsible for filing all post-marketing
reports of such serious adverse drug reactions required by Regulatory
Authorities in the Territory, or as required by applicable laws or
regulations.  During the term of this Agreement and at any time thereafter, in
the event that a party receives a report of a serious adverse drug reaction
relating to the use of a Product anywhere in the world, it shall notify the
other in writing as soon as practicable, but in no event more than 24 hours
after becoming aware of such adverse drug reaction.  The parties shall
periodically exchange a summary of all serious adverse drug reactions of
Products during the term of this Agreement and any and all other information
that becomes available regarding the post-marketing surveillance of the
Product.  The scope and mechanisms for the exchange and of the treatment of such
information shall be provided for in “Standard Operating Procedure (SOP) For
International Post-Marketing Surveillance” attached hereto as Schedule III, as
it may be amended and updated from time to time as agreed by the parties.
 
[Articles 7 and 8 deleted pursuant to Section 4(a) of the 2007 Amendment]
 
[***]
 

 
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ARTICLE 9
 
PROCESSING AND PACKAGING
 
[Section 9.1 superseded by Section 4(c) of the 2007 Amendment]
 
9.1           [***]
 
9.2           PENINSULA shall prepare or have prepared, at its own expense,
packaging materials, labels and insert brochures of the Product for use in the
Territory, purchasing necessary materials from a source or sources selected by
PENINSULA.  PENINSULA shall provide to TAKEDA the descriptions of such packaging
materials, labels and insert brochures therein and designs thereof.  PENINSULA
shall be responsible for obtaining from Regulatory Authorities in the Territory
all approvals of the packaging materials, labels and insert brochures of the
Product that are necessary to secure and/or maintain the Registration.
 
ARTICLE 10
 
SALE OF THE PRODUCT AND REPORT
 
10.1           PENINSULA or its sublicensees or distributors shall make the
first commercial sale of the Product in each country of the Territory [***]
 
10.2.           Subject to Section 2.4, PENINSULA shall determine the selling
price of the Product in each country of the Territory at its discretion, but in
accordance with any applicable local laws or regulations.
 
[Section 10.3 superseded by Section 2 of the 2004 Amendment]
 
10.3          [***]
 
10.4           As a part of promotional and sales activities, and at PENINSULA’s
sole discretion, PENINSULA may carry out those Phase IIIb and Phase IV clinical
studies in the Territory [***] that are commercially appropriate and in
accordance with the protocol prepared by PENINSULA and approved by TAKEDA, which
approval shall not unreasonably withheld.  PENINSULA shall from time to time
make available to TAKEDA, for TAKEDA’s use in connection with the development
and commercialization of Products outside the Territory, all results obtained
from such clinical studies [***].
 
10.5           Upon TAKEDA’s reasonable request, and to the extent permitted by
applicable laws and regulations, PENINSULA shall send to TAKEDA samples of the
Product, all packaging materials and other printed materials, including
promotional materials, for the Product at TAKEDA’s expense.  Should TAKEDA find
any defects in such samples, TAKEDA shall inform PENINSULA of such defects
immediately and PENISULA shall remove such defects at its own expense and
responsibility.
 

 
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10.6           During the term of this Agreement, PENINSULA shall use reasonable
efforts to disclose to TAKEDA medical and other technical information that
PENINSULA may gain relating directly to the Product, and TAKEDA shall have the
right to use, and cause any third parties who have a license under the Patents
and Manufacturing Know-How to develop, manufacture, or commercialize the
Compound and/or the Product in the TAKEDA Territory to use, such information
solely to develop, manufacture, offer for sale or sell the Product in the TAKEDA
Territory, including without limitation to pursue Registration in the TAKEDA
Territory, free of charge, subject to the rights granted to PENINSULA hereunder.
 
ARTICLE 11
 
USE OF TAKEDA’S NAME; TRADEMARKS
 
[Section 11.1 deleted pursuant to Section 4(d) of the 2007 Amendment]
 
11.1           [***]
 
11.2           The Products sold in the Territory shall bear one or more
trademarks chosen and owned by PENINSULA.  PENINSULA shall disclose to TAKEDA
the trademarks PENINSULA intends to use on the Product prior to filing its NDA
covering the Product and any changes thereof.
 
ARTICLE 12
 
WARRANTIES
 
12.1           Each party warrants the following:
 
(a)           such party is duly organized and validly existing under the laws
of the state and/or nation of its organization and has full corporate power and
authority to enter into this Agreement and to carry out the provisions hereof;
 
(b)           such party is duly authorized to execute and deliver this
Agreement and to perform its obligations hereunder.  The person executing this
Agreement on such party’s behalf has been duly authorized to do so by all
requisite corporate action; and
 
(c)           this Agreement is a legal and valid obligation binding upon the
parties and enforceable in accordance with its terms, subject to applicable
bankruptcy, insolvency, fraudulent transfer, moratorium or other laws affecting
the enforcement of creditors’ rights and to general principles of equity.  The
execution, delivery and performance of this Agreement by each party does not
conflict with any agreement, instrument or understanding, oral or written, to
which it is a party or by which it may be bound, nor does it violate any
material law or regulation of any court, governmental body or administrative or
other agency having jurisdiction over it.
 
12.2           TAKEDA warrants to PENINSULA that:
 
[Section 12.2(a) deleted pursuant to Section 4(a) of the 2007 Amendment]
 
(a)           [***]
 

 
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(b)           as of the Effective Date, TAKEDA has not received any citations
with respect to its manufacturing facilities, including without limitation FDA
Form 483s or warning letters, and is not currently subject to an FDA consent
decree or other action of a Regulatory Authority impacting the manufacture of
the Compound to be supplied by TAKEDA under Article 7;
 
(c)           to TAKEDA’s knowledge as of the Effective Date, PENINSULA’s
practice of the Patents or manufacture, importation, use or sale of the Compound
or Product in the Territory will not infringe the intellectual property rights
of a third party patent;
 
(d)           to TAKEDA’s knowledge as of the Effective Date, the manufacture of
the Compound and the intermediates thereof using the Manufacturing Know-How that
exists as of the Effective Date, or the related importation by PENINSULA of the
resulting Compound and/or Products into the Territory will not infringe or
misappropriate the intellectual property rights of a third party patent;
 
(e)           the Patents licensed to PENINSULA hereunder are all the patents
and/or patent applications owned by or licensed to TAKEDA (or any of its
Affiliates) as of the Effective Date in the Territory that claim or cover the
Compound, the Product, any intermediates used in making the Compound, or the use
of the Compound or the Product;
 
(f)           to TAKEDA’s knowledge as of the Effective Date, there are no facts
or circumstances which would render any patent or patent application within the
Patents in the Territory invalid or unenforceable;
 
(g)           there is no interference action, opposition, reissue or
reexamination proceeding, or any intellectual property litigation pending before
any patent office or court concerning any Patents as of the Effective Date in
the Territory, and there is no litigation proceeding pending before any court
concerning the Compound or any Product as of the Effective Date;
 
(h)           Neither TAKEDA nor any of its Affiliates have granted to any third
party any licenses or other rights to use or practice the Patents in any manner
relating to use, importation, offering for sale or sale of the Compound or
Product anywhere in the Territory in any manner that would conflict with
PENINSULA’s rights granted herein, and TAKEDA has full legal rights and
authority to grant PENINSULA the license and other rights granted in this
Agreement; and
 
(i)           to TAKEDA’s knowledge as of the Effective Date, the manufacturing
activities to be undertaken by TAKEDA and/or its Third Party Manufacturer
hereunder to make the Compound supplied to PENINSULA hereunder and the related
importation by PENINSULA of the Compound and/or Products into the Territory will
not infringe any intellectual property rights of any third party.
 

 
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12.3           EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO REPRESENTATION
OR WARRANTY WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING ALL IMPLIED
WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PURPOSE, IS MADE OR GIVEN BY
OR ON BEHALF OF PENINSULA OR TAKEDA.  ALL SUCH OTHER REPRESENTATIONS AND
WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY
EXPRESSLY EXCLUDED.
 
ARTICLE 13
 
INDEMNIFICATION AND PRODUCT LIABILITY
 
13.1           Notwithstanding anything herein to the contrary, product
liability issues with regard to the Compound and/or the Product shall be, as
between the parties, exclusively governed by Section 13.4.
 
[Subsection (b) of Section 13.2 is superseded by Section 4(e) of the 2007
Amendment]
 
13.2           PENINSULA shall be responsible for, and shall indemnify, hold
harmless and defend TAKEDA, TAKEDA’s Third Party Manufacturer, and their
officers, employees and agents against any and all third party claims, suits,
losses, damages, costs, fees (including reasonable attorneys’ fees) and expenses
(collectively “Claims”) resulting from or arising out of (a) the Development
Work performed by PENINSULA to obtain the Registration; [***] (c) the
negligence, recklessness, or willful misconduct of PENINSULA or its officers,
directors, employees, distributor, sublicensee or agents; or (d) PENINSULA’s
breach of its obligations, representations, or warranties under this
Agreement.  Notwithstanding the foregoing, PENINSULA’s indemnification
obligations under this Section13.2 shall not apply to Product Liability Claims
(as defined in Section 13.4), which claims are addressed in Section 13.4.  In
addition, PENINSULA’s indemnification obligations under this Section 13.2 shall
not apply if TAKEDA fails to comply with the indemnification procedures in
Section 13.5, or to the extent that a Claim arises out of or results from (i)
the negligence, recklessness, or willful misconduct of TAKEDA, its Third Party
Manufacturer, or the officers, directors, employees, or agents of TAKEDA or its
Third Party Manufacturer; (ii) TAKEDA’s breach of its obligations,
representations, or warranties under this Agreement; or (iii) manufacturing
defects resulting from the manufacture of the Compound by TAKEDA or its Third
Party Manufacturer hereunder.
 

 
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13.3           TAKEDA shall be responsible for, and shall indemnify, hold
harmless and defend PENINSULA, its officers, employees and agents against any
and all Claims resulting from or arising out of (a) the negligence,
recklessness, or willful misconduct of TAKEDA, its Third Party Manufacturer, or
the officers, directors, employees, or agents of TAKEDA or its Third Party
Manufacturer; (b) TAKEDA’s breach of its obligations, representations, or
warranties under this Agreement; (c) manufacturing defects resulting from the
manufacture of the Compound by TAKEDA or its Third Party Manufacturer hereunder;
or (d) the development of the Compound, and/or the Product by TAKEDA or its
sublicensee or distributor, the importation and sale of the Compound and/or the
Product in the TAKEDA Territory by TAKEDA or its sublicensee or distributor, or
the use of the Compound and/or the Product in the TAKEDA
Territory.  Notwithstanding the foregoing, TAKEDA’s indemnification obligations
under this Section 13.3 shall not apply to Product Liability Claims (as defined
in Section 13.4), which claims are addressed in Section 13.4. In addition, such
indemnity shall not apply if PENINSULA fails to comply with the indemnification
procedures in Section 13.5, or to the extent that a Claim arises out of or
results from (i) the Development Work performed by PENINSULA for obtaining the
Registration, (ii) the processing, use and/or sale of the Compound and/or the
Product by PENINSULA or PENINSULA’s distributor, customers or sublicensees;
(iii) the negligence, recklessness, or willful misconduct of PENINSULA or its
officers, directors, employees, distributor, sublicensee or agents; or (iv)
PENINSULA’s breach of its obligations, representations, or warranties under this
Agreement.
 
13.4           PENINSULA shall be responsible for, and shall indemnify, hold
harmless and defend TAKEDA, its Third Party Manufacturer, and their officers,
employees and agents against any and all third party claims, suits, losses,
damages, costs, fees (including reasonable attorneys’ fees) and expenses with
respect to death or injury to any person (“Product Liability Claims”) arising
out of or resulting from the use of the Compound and/or the Product by
PENINSULA’s customers.  Notwithstanding the foregoing, such indemnity shall not
apply if TAKEDA fails to comply with the indemnification procedures in Section
13.5, or to the extent that a Product Liability Claim arises out of or results
from (a) the negligence, recklessness, or willful misconduct of TAKEDA, its
Third Party Manufacturer, or the officers, directors, employees, or agents of
TAKEDA or its Third Party Manufacturer; (b) TAKEDA’s breach of its obligations,
representations, or warranties under this Agreement; or (c) manufacturing
defects resulting from the manufacture of the Compound by TAKEDA or a Third
Party Manufacturer hereunder.
 
13.5           Each party’s indemnity obligations as provided for in this
Article 13 shall be conditioned upon the following:
 
(a)           the party entitled to indemnification for a Claim or Product
Liability Claim (the “Indemnified Party”) providing prompt (where practicable,
within [***] after the receipt thereof) notice of such Claim or Product
Liability Claim to the party providing indemnification (the “Indemnifying
Party”);
 
(b)           the Indemnified Party reasonably cooperating with the Indemnifying
Party in the defense of such Claim or Product Liability Claim; and
 
(c)           the Indemnified Party’s agreement not to compromise or otherwise
settle any such claims without the Indemnifying Party’s prior written consent,
which consent shall not be unreasonably withheld.
 

 
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13.6           Upon receiving prompt notice of a Claim or Product Liability
Claim, the Indemnifying Party shall assume the defense of such Claim or Product
Liability Claim with counsel reasonably satisfactory to the Indemnified
Party.  Each party shall, at its expense, secure and maintain insurance coverage
in amounts sufficient to cover its indemnification obligations hereunder and
shall, upon the other party’s request, deliver to the other party a copy of such
insurance policy.
 
13.7           NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY
BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH
DAMAGES.  NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 13.7 IS
INTENDED TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY
PARTY UNDER ARTICLE 13, OR DAMAGES AVAILABLE FOR A BREACH OF CONFIDENTIALITY
OBLIGATIONS IN ARTICLE 14.
 
13.8           Notwithstanding anything to the contrary in this Agreement,
[***].
 
ARTICLE 14
 
SECRECY
 
14.1           Except to the extent expressly authorized by this Agreement or
otherwise agreed to in writing by the parties, each party agrees that, for the
term of this Agreement and for [***] thereafter, it shall keep confidential and
shall not publish or otherwise disclose and shall not use for any purpose other
than as provided for in this Agreement any Confidential Information furnished to
it by the other party pursuant to this Agreement, except that the foregoing
shall not apply to any information for which the receiving party can
demonstrate, by competent proof, that it:
 
(a)           was already known to the receiving party, other than under an
obligation of confidentiality, at the time of disclosure by the other party;
 
(b)           was generally available to the public or otherwise part of the
public domain at the time of its disclosure to the receiving party;
 
(c)           later became part of the public domain through no act or omission
of the receiving party;
 
(d)           was disclosed to the receiving party without obligations of
confidentiality with respect thereto, by a third party who had no obligation to
the disclosing party not to disclose such information to others; or
 
(e)           was independently developed by employees of either party who were
unaware of and did not have access to Confidential Information disclosed by
either party.
 
     14.2           Each party may disclose Confidential Information disclosed
to it by the other party to the extent such disclosure is reasonably necessary
for the following reasons:
 

 
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(a)           for regulatory filings, including filings with the U.S. Securities
Exchange Commission, and filings with Regulatory Authorities permitted
hereunder;
 
(b)           prosecuting or defending litigation; and
 
(c)           complying with applicable governmental regulations, court orders,
and legal requirements.
 
Notwithstanding the foregoing, in the event a party is required to make a
disclosure of the other party’s Confidential Information pursuant to this
Section 14.2 it will, except where impracticable, give reasonable advance notice
to the other party of such disclosure and use reasonable efforts to cooperate
with the disclosing party’s efforts to secure confidential treatment of such
information.  In any event, each party agrees to take all reasonable actions to
avoid any unauthorized use or disclosure of Confidential Information of the
other party hereunder.
 
14.3           Notwithstanding the provisions of Section 14.1 hereinabove,
PENINSULA may disclose TAKEDA’s Confidential Information to its officers and
employees, sublicensees, advisors, consultants, its distributors in each country
of the Territory, and Regulatory Authorities in the Territory, provided,
however, that PENINSULA shall use commercially reasonable efforts to impose upon
such disclosees obligations of confidentiality and non-use at least equivalent
in scope to those set forth in Sections 14.1 and 14.2.
 
14.4           The Parties agree to that each Party may issue the agreed Press
Release in the form attached as Schedule VI, after the Effective Date.
 
ARTICLE 15
 
PATENTS
 
15.1           During the term of this Agreement, TAKEDA, at its cost and
expense, shall use diligent, good faith efforts to file, prosecute and maintain
the Patents having claims that cover composition of matter of or method of
manufacturing or using the Compound or Product in Major Market Countries and
other countries where PENINSULA is developing or selling the Product.  TAKEDA
shall use reasonable efforts to extend the term of the Patents covering the
Compound and/or the Product or its use in the countries in the Territory where
PENINSULA (or its Affiliate or sublicensee of distributor) is selling the
Product, and in such other countries as TAKEDA may in its discretion select, and
PENINSULA shall cooperate with TAKEDA in obtaining such extension, provided,
however, that the external expenses for such procedures shall be borne by
TAKEDA.  TAKEDA shall provide to PENINSULA, and PENINSULA shall be entitled to
review and comment upon, all documents to be filed or received from the
applicable patent offices relating to the prosecution of the Patents, and other
correspondence relating to such prosecution efforts to the extent that the
Patents directly relate to the Compound or the Product.  TAKEDA shall reasonably
consider PENINSULA’s reasonable comments regarding such prosecution.
 

 
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15.2           PENINSULA shall notify TAKEDA of any infringement or possible
infringement of the Patents in the Territory by a third party promptly after it
becomes aware of such infringement.  TAKEDA and PENINSULA shall consult together
in order to determine the appropriate action to be taken for elimination of any
infringement of the Patents, in order to protect both parties’
interests.  PENINSULA shall have the primary right, but not the obligation, to
institute, prosecute and control any action or proceeding with respect to such
infringement (an “Enforcement Action”), [***], by counsel of its choice and
approved by TAKEDA, which approval shall not be withheld unreasonably, including
any declaratory judgment action arising from such infringement.  TAKEDA shall
provide reasonable assistance and cooperation to PENINSULA [***] and may, at its
sole discretion, [***], by counsel of its choice and at any time, join in such
Enforcement Action.  If PENINSULA elects not to institute an Enforcement Action
within [***] after it has notice of the infringement, TAKEDA shall have the
right to institute an Enforcement Action [***] unless PENINSULA provides a
reasonable business reason for not instituting such Enforcement Action, and
PENINSULA shall provide reasonable assistance and cooperation to TAKEDA in
connection with such Enforcement Action [***].  All damages, settlement amounts
or costs recovered in connection with an Enforcement Action shall
[***].  Notwithstanding the foregoing, if the Patent is found or adjudicated
invalid or unenforceable in or as a result of the Enforcement Action taken by
PENINSULA, PENINSULA shall have the primary right, but not the obligation, to
appeal such adjudication or findings, or take any other procedure to secure the
validity or enforceability of the Patent (such appeal or other procedures are
hereinafter collectively referred to as the “Appeal”), [***], by counsel of its
choice and approved by TAKEDA, which approval shall not be withheld
unreasonably.  TAKEDA shall provide reasonable assistance and cooperation to
PENINSULA [***] and may, at its sole discretion, [***], by counsel of its choice
and at any time, join in such Appeal, if possible.  If PENINSULA does not
prosecute the Appeal immediately, TAKEDA may prosecute the Appeal [***], by
counsel of its choice, and PENINSULA shall provide reasonable assistance and
cooperation to TAKEDA in connection with such Appeal [***].  If TAKEDA is not
entitled to prosecute the Appeal, PENINSULA shall prosecute the Appeal upon
TAKEDA’s request to do so [***].  All damages, settlement amounts or costs
recovered in connection with an Appeal shall [***].
 

 
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15.3           In the event of any claim, threat or suit by a third party
against PENINSULA and/or TAKEDA alleging that the import, formulation and/or
sale of the Compound and/or the Product in the Territory infringes any patents
or other intellectual property rights of such third party, each party hereto
shall inform the other party of such claim, threat or suit, and PENINSULA and
TAKEDA shall defend in close cooperation with each other against such, claim,
threat or suit or settlement thereof and shall not settle such claim, threat or
suit without the prior written consent of the other party, which consent shall
not be unreasonably withheld provided, however, PENINSULA shall reserve the
final control of the defense against such claim, threat or suit or settlement
thereof in the Territory; provided, further, that PENINSULA shall not in such
case settle such claim, threat or suit in a manner that may adversely affect
TAKEDA’s interest in the Patents, Compound or Product, including without
limitation the validity of Patents, without the prior written consent of TAKEDA,
which consent shall not be unreasonably withheld. [***].  In addition, if
PENINSULA believes that a patent or patent application owned or controlled by a
third party in the Territory may claim or cover the composition of matter of,
method of making, or method of using the Compound, and PENINSULA intends to seek
a license from such third party under such patent or patent application,
PENINSULA shall first notify TAKEDA in writing of such intention, and if
requested by TAKEDA, shall meet with TAKEDA promptly and discuss in good faith
the reasons for PENINSULA seeking such license and the consideration that
PENINSULA intends to offer for such license, and PENINSULA shall consider in
good faith TAKEDA’s reasonable comments with respect to such
situation.  PENINSULA shall not obtain such license without the prior written
consent of TAKEDA, which consent shall not be unreasonably withheld.  It is
understood that in the communication pursuant to this Section 15.3, either party
shall not be required to disclose any specific information that is covered by
the attorney-client privilege.
 
15.4           Nothing in this Agreement shall be construed as:
 
(a)           a warranty or representation by TAKEDA of the validity or scope of
any of the Patents;
 
(b)           a warranty or a representation by TAKEDA that anything made, used,
sold or otherwise disposed of under any license granted hereunder is or shall be
free from infringement of patents or other property rights of third parties; or
 
(c)           an agreement by TAKEDA to bring or prosecute actions or suits
against third parties for infringement of the Patents.
 

 
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ARTICLE 16
 
FORCE MAJEURE
 
If either party is rendered unable to fulfill wholly or in part any part of its
obligations under this Agreement by reason of Force Majeure, such party shall
forthwith give to the other party a written notice briefly describing the
circumstances causing such inability, and, thereupon, to the extent that the
party giving such notice is unable to fulfill such obligations by reason of such
circumstances, such obligations shall be suspended during, but no longer than,
the continuance of such circumstances and provided that the party claiming force
majeure has exerted and continues diligently to exert all commercially
reasonable efforts to overcome the same.  “Force Majeure” means conditions
beyond the control of the parties, including without limitation, civil
commotion, terrorist act, failure or default of public utilities or common
carriers, destruction of production facilities or materials by fire, earthquake,
storm or like catastrophe, war, strikes, lockouts, riot, or epidemic diseases,
or Act of God.  In the event of Force Majeure, the other party has no right to
seek damages in connection with the affected party’s inability to perform its
obligations under this Agreement as a result of Force Majeure.  If a Force
Majeure event preventing a party’s performance hereunder continues for [***],
both parties shall in good faith negotiate and decide how to cope with the
situation.
 
ARTICLE 17
 
TERM AND TERMINATION
 
17.1           This Agreement shall be effective as of the Effective Date and,
unless sooner terminated by mutual agreement or in accordance with other
provisions herein, shall remain in effect as long as PENINSULA’s royalty
obligations exist.  The provisions of Sections 3.9, 3.10, 6.9, 7.6, 17.1, 17.4,
17.5, 17.6, 18.2, 18.4, 18.6, 18.9, and 18.10, and Article 13 shall survive
termination or expiration of this Agreement.  In addition, any payment
obligation that has accrued prior to such termination or expiration, including
without limitation pursuant to Sections 3.1, 3.3, and 7.3, if any, shall survive
such termination or expiration.  The provisions of Article 14 shall survive
termination or expiration of this Agreement for [***].  The license granted to
PENINSULA under Section 2.1 shall survive the expiration of this Agreement, but
shall, as of the date of expiration of the Agreement and unless sooner
terminated, be converted from a royalty-bearing license to a fully-paid and
royalty-free license.
 
17.2           Either party may terminate this Agreement by a registered letter
to the other party effective upon the other party’s receipt of such notice in
the following cases:
 
(a)           if the other party, after receiving written notice identifying a
material breach of this Agreement (including failure by PENINSULA to pay on time
the amounts owed under Article 3 or 7), fails to cure such breach within [***];
or
 

 
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(b)           in case of the filing by the other party of a petition in
bankruptcy or insolvency, or in case of the filing by the other party of any
petition or answer seeking reorganization, readjustment, or rearrangement of the
business of the other party under any law or any government regulation relating
to bankruptcy or insolvency, or in case of the appointment of a receiver for all
or substantially all of the property of the other party, or in case of the
making by the other party of any assignment or attempted assignment for the
benefit of creditors, or in case of the institution by the other party of any
proceedings for the liquidation or winding up of its business, or for the
termination of its corporate charter; or

[Section 17.2(c) superseded by Section 3 of the 2004 Amendment]
 
(c)           [***]
 
It is understood that TAKEDA’s failure to satisfy its Supply Obligation pursuant
to Section 7.2, TAKEDA’s decision to cease manufacturing the Compound pursuant
to Section 6.1 or 7.4, or TAKEDA’s inability to cure a Supply Disruption caused
by a Force Majeure event, shall not constitute a material breach under subclause
(a) above, but shall be treated pursuant to the following Section 17.3.
 
17.3           PENINSULA may terminate this Agreement as follows:
 
(a)           upon written notice if TAKEDA elects to cease trying to remedy a
DMF deficiency and thus cease supplying the Compound to PENINSULA as permitted
under Section 6.1;
 
(b)           upon written notice if PENINSULA cancels its order for [***] of
Compound as permitted under Section 7.2;
 
(c)           upon written notice if TAKEDA elects to cease manufacturing, or
having a Third Party Manufacturer manufacture, Compound under Section 7.4;
 
(d)           upon written notice if Supply Disruption is not cured within [***]
as permitted under Section 7.14; or
 
(e)           if PENINSULA determines that it is not feasible to pursue the
development, launch or sale of the Product due to scientific, technical
regulatory and/or commercial reasons, [***] PENINSULA may provide written notice
to TAKEDA of such determination, together with competent information thereof and
have serious discussions with TAKEDA regarding what steps to take in regards to
the problem.  PENINSULA may then terminate this Agreement effective upon written
notice [***].
 
It is understood that PENINSULA shall have no right to demand from TAKEDA any
compensation for the termination of this Agreement pursuant to above subsections
(a), (b), (c), (d) (but only if the applicable Supply Disruption is caused by a
Force Majeure event) and (e).
 

 
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17.4           Upon the termination of this Agreement for any reason, PENINSULA
shall no longer make any use of the license granted by TAKEDA hereunder and
shall promptly return to TAKEDA any and all data and information furnished by
TAKEDA so far, including, but not limited to, the Information and the
Manufacturing Know-How.  If the Agreement is terminated for any reason other
than for TAKEDA’s uncured material breach of the Agreement or financial
insolvency, PENINSULA shall, at TAKEDA’s request, transfer to TAKEDA or its
designee the Registration or the application therefor and any and all the data
and information so far obtained by PENINSULA, including the Results, if any, or
otherwise assist TAKEDA so that TAKEDA may take over the development and/or
commercialization of the Product, provided, however, if sublicensee(s) of
PENINSULA that are not in breach of their sublicense agreements, under which
PENINSULA has imposed such sublicensee(s) all applicable obligations which
PENINSULA undertakes hereunder, elect to continue the development and/or
commercialization of the Product, TAKEDA shall assume such sublicense agreements
as direct licenses from TAKEDA to such sublicensee(s), provided, however, that
TAKEDA shall not be obligated to assume any obligations under such agreements
that are in excess of the obligations of TAKEDA under this Agreement, unless
TAKEDA agrees otherwise in its sole discretion.  If the transfer of the
Registration or the application therefor is prohibited by applicable laws or if
TAKEDA does not require PENINSULA to make such transfer, PENINSULA shall,
without requiring any compensation from TAKEDA, abandon and waive the
Registration or the application therefor in the Territory.
 
17.5           Disposal of the Compound, goods in process and the Product in
PENINSULA’s stock on the day of termination shall be made in the following
manner in accordance with TAKEDA’s direction:
 
(a)           if TAKEDA consents, which consent shall, not be unreasonably
withheld, PENINSULA may manufacture the Product using such Compound and/or such
goods in process and may sell the Product in the Territory at its regular
commercial conditions and only for the term of [***] after such termination,
subject to PENINSULA’s agreement to strictly observe the terms and conditions
contained in this Agreement including the obligation to pay royalties in
accordance with Article 3 hereof; and
 
(b)           if so requested by TAKEDA, PENINSULA shall, at any time after
[***] post-termination, sell to TAKEDA any remaining portion of its stock of
Compound and/or Product (but only that portion of the stock that has some shelf
life remaining and meets the Specifications), at a price to be negotiated and
decided by the parties hereto, which price shall [***].
 
In any case, PENINSULA shall destroy all stock which does not meet the
Specifications at PENINSULA’s expense and responsibility without requiring
TAKEDA to pay any compensation therefor.
 
17.6           Without prejudice to the remedies for the breach of this
Agreement which have already accrued before the expiration of this Agreement,
the expiration or termination of this Agreement itself under this Article 17
shall not entitle either party to any compensation whatsoever based solely on
the fact of such expiration or termination.
 

 
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ARTICLE 18
 
MISCELLANEOUS
 
18.1           Assignment.  This Agreement or any of the rights or obligations
created under this Agreement shall not be assignable by either party hereto
without the prior written consent of the other party, except that each party may
assign this Agreement to its successor in interest pursuant to a merger,
acquisition, reorganization, consolidation or sale of all or substantially all
of the assets of the business to which this Agreement relates.  Any attempted
assignment that does not comply with the requirements of this Section 18.1 shall
be null and void.  This Agreement shall be binding upon each of the parties,
their successors and permitted assigns.
 
18.2           Severability.  If any provision or provisions of this Agreement
shall, to any extent, be held to be invalid or unenforceable by a court of
competent jurisdiction, the remainder of this Agreement shall not be affected
thereby and shall be valid and enforceable to the fullest extent permitted by
law.  However, in case such invalidation or unenforceability injures the rights
and interests of either party, the parties hereto shall renegotiate this
Agreement in good faith to replace any invalid or unenforceable provision with a
valid and enforceable one such that the objectives contemplated by the parties
when entering this Agreement may be realized.
 
18.3           Entirety of Agreement; Modification.  This Agreement constitutes
the entire, final and complete agreement and understanding between the parties,
and replaces and supersedes all prior discussions and agreements between them
with respect to the subject matter hereof.  No modification or amendment to this
Agreement shall be valid or binding upon the parties hereto unless made in
writing and duly executed on behalf of each of the parties hereto.
 
18.4           Official Text and Governing Law.  The English version of this
Agreement subscribed and executed by the parties hereto shall be the official
text, and this Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York without giving effect to any choice of law
principles that would require the application of the laws of a different state
or country.
 
18.5           Notice.  Any notice required to be given by either party in
connection with this Agreement shall be given in the English language by prepaid
airmail, cable, international express delivery service, or facsimile addressed
to the other party at its principal office first above written, and shall be
deemed to have been given for all purposes (a) when received, if sent by cable
or international express delivery service, (b) seven (7) business days after
mailing, if mailed by airmail, or (c) when received by recipient, if sent by
facsimile transmission with electronic confirmation of transmission if
transmission is confirmed during the recipient’s normal business hours, or
otherwise on the recipient’s next business day.
 

 
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18.6           Dispute Resolution/Arbitration.  If the parties are unable to
resolve a dispute arising under this Agreement (other than a dispute arising
under Section 5.1) within [***] after such dispute is first identified by either
party in writing to the other, the parties shall refer such dispute to the
senior management of TAKEDA and PENINSULA for attempted resolution by good faith
negotiations within [***] after such notice is received.  If the senior
management of TAKEDA and PENINSULA are not able to resolve such dispute within
such [***] period, such dispute shall be finally settled under the Rules of
Conciliation and Arbitration of the International Chamber of Commerce by one or
more arbitrators appointed in accordance with the Rules.  The award rendered
shall be final and binding upon both parties.  Such arbitration shall be held in
Osaka, Japan if it is initiated by PENINSULA and in San Francisco, California,
USA if initiated by TAKEDA.
 
18.7           Construction.  This Agreement has been prepared jointly and shall
not be strictly construed against either party.  Ambiguities, if any, in this
Agreement shall not be construed against any party, without regard to which
party may be deemed to have authored the ambiguous provision.  The headings of
each Article in this Agreement have been inserted for convenience of reference
only and are not intended to limit or expand on the meaning of the language
contained in the particular article or section.
 
18.8           Counterparts.  This Agreement may be executed in one or more
counterparts, each of which shall be an original and all of which shall
constitute together the same document.
 
18.9           Waiver.  Any delay in enforcing a party’s rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party’s rights to the future enforcement of its
rights under this Agreement unless such party provides an express written and
signed waiver as to a particular matter for a particular period of time.
 
18.10           Further Acts.  Each party agrees to execute, acknowledge and
deliver such further instruments, and to do all such other acts, as may be
necessary or appropriate in order to carry out the purposes and intent of this
Agreement.
 
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed by
their duly authorized officers in duplicate as of the Effective Date.
 

TAKEDA CHEMICAL INDUSTRIES, LTD.

/s/ Saburo Hamanaka                   
                                                                                     
Name:  Saburo Hamanaka
Title:    Corporate Officer
 General Manager
 Division of Americas
 
PENINSULA PHARMACEUTICALS, INC.

/s/  Paul F. Truex                             
                                                                           
Name:  Paul F. Truex
Title:    President & CEO

 
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[Schedules 1-7]
 
[***]
 

 
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Exhibit A
 
PENINSULA PHARMACEUTICALS, INC.
 

 
ACCEPTANCE CERTIFICATE
 
________________ hereby certifies that [s/]he is the duly authorized and elected
________________ of Peninsula Pharmaceuticals, Inc., a ________________
corporation (the “Company”), and further certifies that:
 
1. This Acceptance Certificate is executed and delivered pursuant to Section 7.9
of that certain Agreement by and between the Company and Takeda Chemical
Industries, Ltd., a corporation organized under the laws of [Japan] (“Takeda”)
dated ___________, 2003 (the “Agreement”). Capitalized terms used but not
otherwise defined herein shall have the meanings given them in the Agreement.
 
2. The Company hereby acknowledges receipt of [quantity] of Compound from Takeda
on [date] and accepts the delivery thereof.  Pursuant to the terms of Section
7.3 of the Agreement, the Company authorizes payment in the amount of
$__________ to Takeda.
 
3. The execution and delivery of this Acceptance Certificate shall not be deemed
to be a waiver or modification of any other term or condition of the Agreement
or of any other instrument or agreement referred to therein or to prejudice any
right or remedy which the Company may now have or may have in the future under
or in connection with the Agreement or any instrument or agreement referred to
therein.
 
In Witness the undersigned has executed this Acceptance Certificate on behalf of
the Company as of [date].
 
 
             
[Printed Name]
[Title]
 
 
 

 
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