Exhibit 10.1


 


***Text
Omitted and Filed Separately


CONFIDENTIAL
TREATMENT REQUESTED


Under 17
C.F.R. §§ 200.80(b)(4) and 230.406


 


COLLABORATIVE
RESEARCH AND DEVELOPMENT AND LICENSE AGREEMENT


 


THIS COLLABORATIVE RESEARCH AND DEVELOPMENT AND
LICENSE AGREEMENT (the “Agreement”)
is entered into as of March 31, 2006 (the “Effective Date”) by and between OPTIMER PHARMACEUTICALS INC., a Delaware corporation with
its offices located at 10110 Sorrento Valley Road, Suite C, San
Diego, California 92121 (“Optimer”),
and CEMPRA PHARMACEUTICALS, INC.,
a Delaware corporation with its offices located at 170 Southport Drive, Suite 500,
Morrisville, NC 27560. Optimer and Cempra may be referred to herein
individually as a “Party” or
collectively, as the “Parties.”


 


RECITALS


 


WHEREAS, Optimer is a
biopharmaceutical company engaged in the discovery and development of
pharmaceutical products using its proprietary carbohydrate synthesis
technology;


 


WHEREAS, Cempra is a
biopharmaceutical company engaged in the discovery and development of novel
pharmaceutical products;


 


WHEREAS, Cempra and Optimer desire
to enter into a relationship to identify, develop and commercialize
pharmaceutical products comprising novel Macrolide Antibiotics to treat
infectious diseases.


 


WHEREAS, Cempra and Optimer entered
into a letter agreement dated November 10, 2005 wherein Optimer and Cempra
agreed to execute a detailed agreement regarding the synthesis by Optimer of
Macrolide Antibiotics for Cempra; and


 


WHEREAS, Optimer is willing to
synthesize Macrolide Antibiotics using its proprietary carbohydrate synthesis
technology, assist Cempra in the development thereof, and is prepared to grant
Cempra a license under such technology to allow Cempra to develop and
commercialize pharmaceutical products arising from this relationship;


 


NOW, THEREFORE, in consideration of the
foregoing and the covenants and promises contained in this Agreement, the
Parties agree as follows:


 


1.  DEFINITIONS


 


1.1          “Affiliate” means a
person, corporation, partnership, or other entity that controls, is controlled
by or is under common control with a Party. For the purposes of this Section 1.1,
the word “control” (including, with correlative meaning, the terms “controlled
by” or “under the common control with”) means the actual power, either directly
or indirectly through one or more intermediaries, to direct the management and
policies of such entity, whether by the ownership of at least fifty percent
(50%) of the voting stock of such entity, or by contract or otherwise.


 


1.2          “ASEAN
Countries” means all member nations of the Association of
Southeast Asian Nations as of the Effective Date.


 


1.3          “Cempra
Know-How” means any Know-How which is developed or acquired
and Controlled by Cempra or its Affiliates during the term of this Agreement that
is necessary and useful for the research, development, manufacture,
importation, use, or sale of Cempra Products.


 


1.4          “Cempra
Patents” means any Patents, other than Optimer Patents,
which are Controlled by Cempra or its Affiliates during the term of this
Agreement and that claim the manufacture, importation, use or sale of Macrolide
Antibiotics or Cempra Products.


 

















 


1.5          “Cempra
Product” means a pharmaceutical product (including but not
limited to Combination Products or those comprised of one or more Test
Products, Macrolide Antibiotics, or any analogs or derivatives of either of the
foregoing) for which the use, sale, or manufacture thereof would, but for the
licenses granted Cempra hereunder, infringe the Optimer Patents in the country
in which such product is sold by Cempra, an Affiliate thereof, or a Third Party
sublicensee of either of the foregoing.


 


1.6          “Collaboration” means all
activities performed by or on behalf of Optimer or Cempra in the course of the
Research Program with respect to the Development and Commercialization of Test
Products and Cempra Products.


 


1.7          “Combination
Product” means a pharmaceutical product (i) containing (x) in
the case of Cempra, an active pharmaceutical ingredient for which, if included
in a pharmaceutical product as the sole active pharmaceutical ingredient the
use, sale, or manufacture thereof would, but for the licenses granted Cempra
hereunder, infringe the Optimer Patents in the country in which such product is
sold by Cempra, an Affiliate thereof, or a Third Party sublicensee of either of
the foregoing, or (y) in the case of Optimer, an active pharmaceutical
ingredient which (I) contains a Macrolide Antibiotic, Test Product, or
derivative or analog of either of the foregoing, (II) is a Cempra Product,
or (III) whose manufacture, sale, or use is covered in any ASEAN Country
by a Valid Claim of any Cempra Patent, Joint Invention Patent, or foreign
counterpart of any Optimer Patent; and (ii) one or more other
pharmaceutically active ingredients for which rights are not included in the
license granted to (x) Cempra under this Agreement, with respect to Cempra
Products, or (y) Optimer, with respect to Optimer Products.


 


1.8          “Commence” or “Commencement”, when used to describe a
Phase 1 Trial, Phase 2 Trial, Phase 3 Trial, or Phase 4
Trial, means the first dosing of the first patient for such trial.


 


1.9          “Commercialization” means all
activities that are undertaken after Regulatory Approval of an NDA for a
particular Product and that relate to the commercial marketing and sale of such
Product including advertising, marketing, promotion, distribution, and
Phase 4 Trials.


 


1.10        “Confidential
Information” means all Information, and other information and
materials, received by either Party from the other Party pursuant to this
Agreement that: (i) is designated as confidential at the time of
disclosure or promptly thereafter; (ii) under the circumstances
surrounding disclosure should be treated as confidential by the receiving
Party, or (iii) by reason of its nature would be treated as confidential
by a reasonable receiving party, which would include, without limitation,
trade secrets..


 


1.11        “Control” means, with
respect to any intellectual property right, that a Party owns or has a license
to such item or right, and has the ability to grant a license or sublicense in
or to such right as set forth herein without violating the terms of any
agreement or other arrangement with any Third Party.


 


1.12        “Develop”
or “Development” means, with respect to a Test Product or Product,
engaging in preclinical and clinical drug development activities, which may
include but is not limited to research, pre-clinical, clinical and regulatory
activities directed towards obtaining Regulatory Approval of a Product,
including but not limited to the performance by Optimer of its obligations and
Cempra of its responsibilities under the Research Program.


 


1.13        “Development
Plan” has the meaning set forth in Section 4.1.


 


1.14        “Diligent
Efforts” means the carrying out of obligations or tasks in a manner consistent
with the efforts a Party devotes to research, development or marketing of a
pharmaceutical product or products of similar market potential, profit
potential or strategic value resulting from its own research efforts, taking
into account technical and regulatory factors, target product profiles, product
labeling, past performance, costs, economic return, the regulatory environment
and competitive market conditions in the therapeutic area, all based on
conditions then prevailing, and subject to and in


 


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consideration
of, in each case, the resources available to such Party and within such Party’s
organization for such efforts. Diligent Efforts requires that a Party, at a
minimum, assign responsibility for such obligations to specific employees, sets
and seeks to achieve specific and meaningful objectives for carrying out such
obligations, and consistently makes and implements decisions designed and
allocates resources reasonably sufficient to advance progress with respect to
such objectives.


 


1.15        “Fair
Market Value” means the fair market value of Cempra capital stock
on the date the relevant milestone is achieved under Section 6.2(a) or (b),
as applicable, which shall be determined as follows:


 


(a)           if the Cempra capital stock to be
issued under Section 6.2(a) or (b) is traded on a public
securities exchange or through the Nasdaq National Market, the fair market
value thereof shall be deemed to be the average of the closing prices of such
security on such exchange over the 30-day period ending three (3) business
days prior to the date such security was received;


 


(b)           if the Cempra capital stock to be
issued under Section 6.2(a) or (b) is actively traded
over-the-counter, the fair market value thereof shall be deemed to be the
average of the closing bid or sale prices (whichever is applicable) over the
30-day period ending three (3) business days prior to the date such
security was received; or


 


(c)           If there is no active public market
for any Cempra capital stock issued under Section 6.2(a) or (b),
the fair market value thereof shall be as determined in good faith by Cempra’s
Board of Directors based on a reasonable consideration of all relevant factors.


 


1.16        “FDA” means the
United States Food and Drug Administration, or any successor federal
agency thereto.


 


1.17        “Field” means all
human and animal diagnostic and therapeutic uses.


 


1.18        “First
Commercial Sale” means the first sale of commercial quantities of
any Product sold to a Third Party by a Party, its Affiliate, or a sublicensee
of either of the foregoing in any country after, if and as reasonably necessary
or applicable, receipt of Regulatory Approval for such Product in such country.
Sales for test marketing, sampling and promotional uses or clinical trial or
research purposes or compassionate uses will not be considered to constitute a
First Commercial Sale


 


1.19        “FTE” means the
equivalent of one person working full time for one 12-month period in a
research, development, commercialization, regulatory or other relevant
capacity, approximating 1800 hours per year. In the interests of clarity,
though, a single individual who works more than 1800 hours in a single
year shall be treated as one FTE regardless of the number of hours worked.


 


1.20        “Good
Clinical Practices” or “GCP” means current Good Clinical
Practices as specified in the United States Code of Federal Regulations,
at the time of testing, and all FDA and ICH guidelines, including the ICH
Consolidated Guidelines on Good Clinical Practices.


 


1.21        “Good
Laboratory Practices” or “GLP” means current Good
Laboratory Practices as specified in the United States Code of Federal
Regulations at 21 CFR § 58 at the time of testing and all applicable
ICH guidelines.


 


1.22        “Good
Manufacturing Practices” or “GMP” means current Good
Manufacturing Practices and standards as provided for (and as amended from
time to time) in European Community Directive 91/356/EEC (Principles and
Guidelines of Good Manufacturing Practice for Medicinal Products) and in the
Current Good Manufacturing Practice Regulations of the United States Code
of Federal Regulations Title 21 (21 CFR §§ 210-211) in relation to
the production of pharmaceutical intermediates and active pharmaceutical
ingredients, as interpreted by ICH Harmonized Tripartite Guideline, Good
Manufacturing Practice Guide for Active Pharmaceutical Ingredients, and subject
to any arrangements, additions or clarifications agreed from time to time
between the Parties.


 


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1.23        “Governmental
Authority” means any court, agency, department or other
instrumentality of any foreign, federal, state, county, city or other political
subdivision.


 


1.24        “Human
Clinical Trial” means any Phase 1 Trial, Phase 2 Trial,
Phase 3 Trial or Phase 4 Trial the subject of which includes a Test
Product or Product.


 


1.25        “IND” means an
Investigational New Drug Application filed with the FDA or the equivalent
application or filing filed with any equivalent agency or government authority
outside of the United States (including any supra-national agency such as
in the European Union) necessary to Commence human clinical trials in such
jurisdiction, and including all regulations at 21 CFR § 312 et. esq.,
and equivalent foreign regulations.


 


1.26        “Information” means
information, results and data of any type whatsoever, including without
limitation, databases, inventions, practices, methods, techniques,
specifications, formulations, formulae, knowledge, know-how, skill, experience,
test data including pharmacological, biological, chemical, biochemical,
toxicological and clinical test data, analytical and quality control data,
stability data, studies and procedures, and patent and other legal information
or descriptions.


 


1.27        “Invention” means any
discovery, invention, improvement, concept or idea, whether or not patentable,
conceived or reduced to in the course of the activities conducted pursuant to
this Agreement, together with all intellectual property rights relating
thereto. Inventions may include, but not be limited to, processes, compounds,
compositions, or methods.


 


1.28        “Know-How” means any
non-public, proprietary Information and other data, instructions, processes,
methods, formulae, techniques, compositions, materials, expert opinions and
information, including without limitation, biological, chemical,
pharmacological, toxicological, pharmaceutical, physical and analytical,
clinical, safety, manufacturing and quality control data and information.
Know-How does not include any rights under Patents.


 


1.29        “Letter
Agreement” means the letter agreement between Optimer and
Cempra dated November 11, 2005.


 


1.30        “Macrolide
Antibiotics” means any macrolide or ketolide, including but not
limited to any (i) [***] compound that incorporates, is based on, or is
described in, or the synthesis of which is in whole or part based on or
described in, the Optimer Technology, including but not limited to those
synthesized by Optimer under this Agreement or the Letter Agreement, (ii) [***]
(including but not limited to [***]), and (iii) any derivatives or analogs
of any of the foregoing. For avoidance of doubt, the parties expressly agree
that Macrolide Antibiotics shall not mean any 18-membered- lactone-ring-based
compound (e.g., Optimer’s OPT-80).


 


1.31        “NDA” means a
New Drug Application filed with the FDA or the equivalent application or
filing filed with any equivalent Governmental Authority outside of the
United States necessary for approval of a drug in such jurisdiction.


 


1.32        “Net
Sales” means


 


(a)           with respect to a Product (subject to subsections (b) and (c) below),
the amount received by a Party or its Affiliate or a Third Party sublicensee
for sales of such Product to Third Parties, excluding reasonable sales returns,
allowances and rebates actually paid, granted or accrued, including, without
limitation, trade, quantity and cash discounts and any other reasonable
adjustments actually allowed, including, but not limited to, those granted on
account of price adjustments (including retroactive price adjustments), billing
errors, rejected goods, damaged or defective goods, recalls, returns, rebates,
chargeback rebates, reimbursements or similar payments granted or given to
wholesalers or other distributors, buying groups, health care insurance
carriers or other institutions, pharmacy benefit management companies, health
maintenance organizations or other health care organizations, or any
governmental or regulatory authority or agency (including their purchasers
and/or reimbursers), adjustments arising from consumer discount programs,
customs or excise duties, tariffs, sales tax,


 


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consumption
tax, value added tax, and other taxes (except income taxes) or duties relating
to sales, and similar payments respect to the United States government,
any state government, any local government, or any foreign government, or to
any governmental or regulatory authority in respect of sales, and freight,
handling, and insurance; and


 


(b)           in the case of
Combination Products,


 


(i)            if
a Party and/or its Affiliate and/or any Third Party sublicensee of either of
the foregoing separately sells in such country during such year when it sells
such Combination Product both (1) one or more Products containing solely
one particular active pharmaceutical ingredient and (2) products
containing other pharmaceutically active ingredient(s) that are also
contained in such Combination Product, the Net Sales attributable to such
Combination Product during such year shall be calculated by multiplying actual
Net Sales of such Combination Product by the fraction A/(A+B) where: A is such
Party’s (or its Affiliate’s or Third Party sublicensee’s, as applicable)
average Net Sales price per daily dose during such year for each Product(s) in
such Combination Product in such country and B is the sum of the average of
such Party’s (or its Affiliate’s or Third Party sublicensee’s, as applicable)
net sales price per daily dose during such year in such country, for each
product(s) containing the other pharmaceutically active ingredient(s) in
such Combination Product (other than the Product);


 


(ii)           if
a Party and/or its Affiliate and/or any Third Party sublicensee of either of
the foregoing separately sells, in such country during such year when it sells
such Combination Product, one or more Products containing solely one particular
active pharmaceutical ingredient entity but do not separately sell, in such
country, other products containing the other active ingredient(s) that are
also contained in such Combination Product, the Net Sales attributable to such
Combination Product during such year shall be calculated by multiplying the Net
Sales of such Combination Product by the fraction A/C where: A is the
applicable Party’s (or its Affiliate’s or Third Party sublicensee’s, as
applicable) average Net Sales price per daily dose during such year for each
Product in such Combination Product in such country, and C is such Party’s (or
its Affiliate’s or Third Party sublicensee’s, as applicable) average Net Sales
price per daily dose during such year for the Combination Product in such
country; and


 


(iii)          if
a Party and/or its Affiliates and/or their Third Party sublicensees do not
separately in such country during such year sell products containing each
active pharmaceutical ingredient in the Combination Product, then the Net Sales
attributable to such Combination Product may, following mutual agreement of the
Parties concerning the applicable fair market values, be determined by
multiplying the Net Sales of such Combination Product by the fraction D/(D+E)
where D is the fair market value of the portion of the Combination Product that
contains the Product with a single active pharmaceutical ingredient and E is
the fair market value of the portion of the Combination Product containing the
other pharmaceutically active ingredient(s) and the delivery device
included in such Combination Product, as such fair market values are reasonably
determined by mutual agreement of the Parties in good faith. In the event that
the Parties are unable to mutually agree upon appropriate fair market values
for D and E as set forth herein, such matter may be referred to arbitration as
set forth in Section 12.3 below.


 


(c)           In the case of
discounts on “bundles” of separate products or services which include Products,
a Party may with notice to the other Party discount the bona fide list price of
a Product by the average percentage discount of all products of such Party (the
“Selling Party”) and/or its
Affiliates or Third Party sublicensees in a particular “bundle”, calculated as
follows:


 


	
   

  	
  Average
  percentage

  	
   

  	
   

  
	
   

  	
  discount
  on a

  	
  =

  	
  1 - (X/Y) × 100

  
	
   

  	
  particular
  “bundle”

  	
   

  	
   

  



 


5

















 


where
X equals the total discounted price of a particular “bundle” of products, and Y
equals the sum of the undiscounted bona fide list prices of each unit of every product
in such “bundle”. The Selling Party shall provide the other Party documentation
reasonably supporting such average discount with respect to each “bundle.” If a
Product in a “bundle” is not sold separately, and no bona fide list price
exists for such Product, the parties shall negotiate in good faith a reasonable
imputed list price for such Product and Net Sales with respect thereto shall be
based on such imputed list price; provided, however, that in the event that the
Parties are unable to mutually agree upon appropriate imputed list price as set
forth herein, then such matter may be referred to arbitration as set forth in Section 12.3
below.


 


1.33        “Optimer
Improvements” means any Other Sole Inventions of Optimer and, to
the extent owned by Optimer, Other Joint Inventions that, in either case,
constitute improvements, enhancements, or modifications of any Macrolide
Antibiotics, Cempra Products, or other technology claimed in the Optimer
Patents listed on Schedule 1.30,
or which would be useful or necessary in the manufacture, use, or sale of
Cempra Products.


 


1.34        “Optimer
Know-How” means all Know-How Controlled by Optimer or its
Affiliates as of the Effective Date, or which is developed or acquired by and
Controlled by Optimer or its Affiliates during the term of this Agreement,
including but not limited to any Know-How related to Optimer Improvements, that
is necessary or useful for the research, development, manufacture, importation,
use or sale of the Macrolide Antibiotics, Test Products or Cempra Products.


 


1.35        “Optimer
Patents” means any Patents Controlled by Optimer or its
Affiliates as of the Effective Date or which are developed and Controlled, or
licensed to and Controlled, by Optimer or its Affiliates during the term of
this Agreement, that are necessary or useful for the research, development,
manufacture, importation, use or sale of Macrolide Antibiotics, Test Products,
or Cempra Products, including without limitation, the Patents listed on Schedule 1.35 and any Patents
(or, with respect to Patents jointly owned by the Parties, Optimer’s rights to
any such Patents) claiming any Optimer Improvements.


 


1.36        “Optimer
Product” means any product (including but not limited to
Combination Products) developed and/or commercialized by Optimer in any ASEAN
Country that (i) contains a Macrolide Antibiotic, Test Product, or
derivative or analog of either of the foregoing, (ii) is a Cempra Product,
or (iii) whose manufacture, sale, or use is covered in any ASEAN Country
by a Valid Claim of any Cempra Patent, Joint Invention Patent, or foreign
counterpart of any Optimer Patent. For avoidance of doubt, the parties
expressly agree that, for purposes of this Agreement (including, but not
limited to, Optimer’s royalty payment obligation set forth in Article 6),
Optimer Products shall not include any product which incorporates an
18-membered-lactone-ring-based compound as an active pharmaceutical ingredient
(e.g., Optimer’s OPT-80) unless such product incorporates an additional
active pharmaceutical ingredient which itself (or the mechanism of action
of which) independently renders such product an Optimer Product pursuant to the
foregoing definition.


 


1.37        “Optimer
Technology” means Optimer Patents and Optimer Know-How.


 


1.38        “Patent” means: (a) an
issued unexpired United States or foreign patent (including inventor’s
certificate) that has not been held invalid or unenforceable by a court of
competent jurisdiction from which no appeal can be taken or has been taken
within the required time period, including without limitation any substitution,
extension, registration, confirmation, reissue, re-examination, renewal or any
like filing thereof; or (b) any pending United States or foreign
patent application, including without limitation any continuation, division or
continuation-in-part thereof and any provisional application.


 


1.39        “Phase 1
Trial” means a clinical trial that generally provides for the first
introduction into humans of a Product with the primary purpose of determining
safety, metabolism and pharmacokinetic properties and clinical pharmacology of
the Product, and generally consistent with 21 CFR § 312.21(a).


 


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1.40        “Phase 2
Trial” means a clinical trial of a Product on patients, including possibly
pharmacokinetic studies, the principal purpose of which is to make a
preliminary determination that such Product is safe for its intended use and to
obtain sufficient information about such Product’s efficacy to permit the
design of further clinical trials, and generally consistent with 21 CFR
§ 312.21(b).


 


1.41        “Phase 3
Trial” means a clinical trial that provides for a pivotal human clinical
trial of a Product, which trial is designed to: (a) establish that a
Product is safe and efficacious for its intended use; (b) define warnings,
precautions and adverse reactions that are associated with the Product in the
dosage range to be prescribed; (c) support Regulatory Approval of such
Product; and (d) generally consistent with 21 CFR § 312.21(c).


 


1.42        “Phase 4
Trial” means clinical trial of a Product Commenced in a particular country
after Regulatory Approval for such Product in such country in order to support
commercialization of the Product.


 


1.43        “Product” means an
Optimer Product or Cempra Product, as appropriate.


 


1.44        “Regulatory
Approval” means any and all approvals (including supplements,
amendments, pre- and post-approvals, pricing and reimbursement approvals),
licenses, registrations or authorizations of any national, supra-national
(e.g., the European Commission or the Council of the European Union),
regional, state or local regulatory agency, department, bureau, commission,
council or other governmental entity, that are necessary for the manufacture,
distribution, use or, in the Commercializing Party’s reasonable judgment, sale
of a Product in a regulatory jurisdiction.


 


1.45        “Regulatory
Authority” means any Governmental Authority with
responsibility for granting any licenses or approvals necessary for the
marketing and sale of pharmaceutical products including, without limitation,
the FDA and any drug regulatory authority of countries of the European Union,
and Japan, and where applicable any ethics committee or any equivalent
review board.


 


1.46        “Regulatory
Filing” means the NDA, biologic license application (“BLA”), IND, or any
foreign counterparts thereof and any other filings required by regulatory
authorities relating to the study, manufacture or commercialization of
any Product.


 


1.47        “Research
Program” means the activities conducted by Optimer and
Cempra pursuant to the obligations and responsibilities set forth in a Work
Plan and Budget established by the Parties pursuant to this Agreement.


 


1.48        “Research
Term” means the period commencing on the Effective Date and continuing until
the earlier of (i) completion by Optimer of the tasks assigned to Optimer
in the Work Plan and Budget or (ii) the second anniversary of the
Effective Date, subject to any extensions thereof agreed to by the Parties
in writing.


 


1.49        “Royalty
Term” means, on a country-by-country and Product-by-Product basis:


 


(a)           For Cempra Products, the period
commencing on the First Commercial Sale thereof in a particular country and
continuing until the later of (a) the last to expire Valid Claim of an
Optimer Patent covering the manufacture, use or sale of such Cempra Product in
such country or (b) ten (10) years following the First Commercial
Sale of such Cempra Product in such country; and


 


(b)           For Optimer Products, the period
commencing on the First Commercial Sale thereof in a particular country and
continuing until the later of (a) the last to expire Valid Claim of a
Cempra Patent covering the manufacture, use or sale of such Optimer Product in
such country or (b) ten (10) years following the First Commercial
Sale of such Optimer Product in such country.


 


1.50        “Sublicensing
Revenue” means net revenue received from Third Party
sublicensees, other than royalties or other payments calculated on the basis of
sales of Cempra Products, directly and solely as consideration for Cempra’s or
its Affiliates’ sublicensing to Third Parties (other than Cempra Affiliates) of
the rights to Optimer Patents licensed to Cempra and its Affiliates under this
Agreement, including but not limited to upfront and milestone payments, but
excluding (i) [***]


 


1.51        “Term” has the
meaning assigned to it in Section 9.1.


 


1.52        “Territory” means
worldwide, excluding ASEAN Countries.


 


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1.53        “Test
Product” means a Macrolide Antibiotic or derivative or
analog thereof that has been designated by Cempra to be the subject of
Development pursuant to Section 3.4.


 


1.54        “Third
Party” means any entity other than (a) Optimer, (b) Cempra or (c) an
Affiliate of either of them.


 


1.55        “Valid
Claim” means a claim of any pending patent application or any issued,
unexpired United States or granted foreign patent within any Patent that
has not been dedicated to the public, disclaimed, abandoned or held invalid or
unenforceable by a court or other body of competent jurisdiction from which no
further appeal can be taken, and that has not been explicitly disclaimed, or
admitted by the Party Controlling such Patent in writing to be invalid or
unenforceable or of a scope not covering Products through reissue, disclaimer
or otherwise.


 


1.56        “Work
Plan and Budget” has the meaning set forth in Section 3.1.


 


1A.  JOINT
STEERING COMMITTEE


 


1A.1  Joint
Steering Committee.  Promptly
after the Effective Date, the Parties shall establish a “Joint Steering
Committee” as described in this Section 1A. The Joint Steering Committee
shall exist during the Research Term. The Joint Steering Committee shall,
subject to applicable provisions of this Agreement concerning the Research
Program, Work Plan, and Budget, (i) develop, review, approve, and
establish all aspects of the Work Plan and Budget and, once the initial Work
Plan and Budget have been established, (ii) monitor and oversee the
Parties’ progress thereunder, advise the Parties with respect thereto, and
develop, review, and approve any changes or amendments to the Work Plan and
Budget, such changes and amendments to be effective upon approval thereof by
the Joint Steering Committee and agreement by (i) Optimer with respect to
obligations of Optimer (such agreement not to be unreasonably withheld) or (ii) Cempra
with respect to responsibilities of Cempra, provided that, notwithstanding the
foregoing, the Joint Steering Committee shall have no authority to amend the
body of this Agreement. Each party shall indicate in writing within five (5) business
days of approval by the Joint Steering Committee whether or not it agrees to
its proposed obligations or responsibilities, and, if not agreeing to its
proposed obligations or responsibilities, provide its reasonable objections
thereto. In the absence of such written notice within such five (5) business
day period, a party shall be deemed to have rejected its proposed obligations
or responsibilities, and, in the event Optimer rejects its proposed obligations
or responsibilities (whether by written notice or the absence thereof), Cempra
shall be free to pursue alternative solutions therefor. Notwithstanding
anything to the contrary in this Agreement, the Joint Steering Committee shall
have no rights or responsibilities, and Cempra shall have no obligations with
respect to the Joint Steering Committee, following the Research Term.


 


1A.2  Membership.  The Joint Steering Committee will be
comprised of an equal number of representatives from each Party. The exact
number of such representatives shall be as agreed upon by the Parties, but no
event shall such number be less than two (2) nor more than five (5) for
each Party. Each Party shall provide the other with a list of its initial
members of the Joint Steering Committee promptly after the Effective Date. Each
Party may replace any or all of its representatives on the Joint Steering
Committee at any time upon written notice to the other Party. Any member of the
Joint Steering Committee may designate a substitute to attend and perform the
functions of that member at any meeting of the Joint Steering Committee. Each
Party may, in its reasonable discretion, invite non-member representatives of
such Party to attend meetings of the Joint Steering Committee.


 


1A.3  Meetings.  During the Research Term, the Joint Steering
Committee shall meet at least twice per calendar year, or more frequently as
the Parties deem appropriate, on such dates, and at such places and times, as
provided herein or as the Parties shall agree, provided, however, that (i) the
first meeting shall be held within 30 days of the Effective Date and (ii) the
Joint Steering Committee and the Parties shall use best efforts to draft,
review, and approve the initial Work Plan and Budget as soon as reasonably
practicable following the Effective Date. Meetings of the Joint Steering
Committee shall


 


8

















 


alternate
between the offices of the Parties or their respective Affiliates, or such
other place as the Parties may agree. The members of the Joint Steering
Committee also may convene or be polled or consulted from time to time by means
of telecommunications, video conferences, electronic mail or correspondence, as
deemed necessary or appropriate, provided that the Parties hold at least one
face-to-face meeting each year. Each Party shall bear all costs and expenses
relating to its members’ attendance at meetings of the Joint Steering
Committee.


 


1A.4  Decision-Making.  The Joint Steering Committee shall use good
faith efforts to operate and make decisions by consensus, provided that in the
event the Joint Steering Committee is unable to reach consensus regarding any
matter before the Joint Steering Committee within a reasonable period of time
not to exceed ten (10) business days, Cempra shall have the tie-breaking
vote to resolve such deadlock and determine the Joint Steering Committee’s
final decision regarding such matter, including but not limited to approval of
any Work Plan and Budget, or any changes thereto, consistent with the
parameters described below, provided that no Work Plan or Budget shall be
effective without the written agreement of (i) Optimer with respect to any
obligations of Optimer thereunder (such agreement not to be unreasonably
withheld) and (ii) Cempra with respect to any responsibilities of Cempra
thereunder (such agreement not to be unreasonably withheld). Each party shall
indicate in writing within five (5) business days of approval by the Joint
Steering Committee whether or not it agrees to its proposed obligations or
responsibilities, and, if not agreeing to its proposed obligations or
responsibilities, provide its reasonable objections thereto. In the absence of
such written notice within such five (5) business day period, a party
shall be deemed to have rejected its proposed obligations or responsibilities,
and, in the event Optimer rejects its proposed obligations or responsibilities
(whether by written notice or the absence thereof), Cempra shall be free to
pursue alternative solutions therefor.


 


2.  MANAGEMENT
OF THE RESEARCH PROGRAM


 


2.1  General.  The general purpose of the Collaboration
described in Sections 2 and 3 of this Agreement is to synthesize,
develop and commercialize Macrolide Antibiotics for sale as Cempra Products. If
and as determined by the Joint Steering Committee, Optimer shall synthesize Macrolide
Antibiotics and conduct preliminary research and biological testing on such
Macrolide Antibiotics according to a Work Plan and Budget that has been
developed and approved by the Joint Steering Committee and agreed upon by
Optimer and Cempra (such agreement not to be unreasonably withheld). Each party
shall indicate in writing within five (5) business days of approval by the
Joint Steering Committee whether or not it agrees to the Work Plan or Budget
approved by the Joint Steering Committee and, if not agreeing thereto, provide
its reasonable objections thereto. In the absence of such written notice within
such five (5) business day period, a party shall be deemed to have agreed
to such Work Plan and Budget. Cempra shall, as determined by the Joint Steering
Committee, conduct (or have conducted by Third Parties) preclinical and
animal testing on such Macrolide Antibiotics synthesized by Optimer. Based on
the results of such research, the Joint Steering Committee may designate
certain Macrolide Antibiotics as Test Products for preclinical testing and
further development by Cempra. Cempra shall be solely responsible, at its
expense, for animal testing, preclinical and clinical development of such Test
Products, including as may be provided for in a Work Plan and Budget approved
by the Joint Steering Committee and agreed upon (i) by Optimer with
respect to Optimer’s obligations thereunder (such agreement not to be
unreasonably withheld) and (ii) Cempra with respect to Cempra
responsibilities thereunder. Each party shall indicate in writing within five (5) business
days of approval by the Joint Steering Committee whether or not it agrees to
its proposed obligations or responsibilities, and, if not agreeing to such
obligations or responsibilities, provide its reasonable objections thereto. In
the absence of such written notice within such five (5) business day
period, a party shall be deemed to have rejected its proposed obligations or
responsibilities, and in the event Optimer rejects its proposed obligations or
responsibilities (whether by written notice or the absence thereof), Cempra
shall be free to pursue alternative solutions therefor. For so long as Cempra
retains its license hereunder, and except as provided for performance by


 


9

















 


Optimer
under any Work Plan and Budget, Cempra shall be responsible for the research,
Development, manufacturing, marketing and Commercialization of Cempra Products,
subject only to the terms and conditions of this Agreement, including without
limitation the payments owed to Optimer for such Cempra Products as set forth
in Article 6.


 


2.2  Information
Exchange.  During the
Research Term, Optimer and Cempra shall keep the Joint Steering Committee fully
and regularly informed of their activities (and the activities of their
Affiliates and/or sublicensees) in connection with their conduct of the
Research Program and the Development and Commercialization of Test Products and
Cempra Products, and shall diligently respond to any other reasonable requests
by the Joint Steering Committee or the other Party for information. Each Party
will provide the Joint Steering Committee (during the Research Term) and the
other Party (during the entire term of this Agreement) with formal written
progress reports of its activities under this Agreement, no less than twice
per year.


 


2.3  Independence.  Subject to the terms of this Agreement and
any applicable Work Order and Budget, the activities and resources of each
Party shall be managed by such Party, acting independently and in its
individual capacity. The relationship between Optimer and Cempra is that of
independent contractors and neither Party shall have the power to bind or
obligate the other Party in any manner, other than as is expressly set forth in
this Agreement.


 


3.  CONDUCT OF
THE RESEARCH PROGRAM


 


3.1  Work Plan
and Budget.  The Research
Program shall be carried out by Optimer and Cempra according to a written work
plan setting forth the obligations of Optimer and responsibilities of Cempra (the “Work Plan”) and budget providing for
Cempra’s funding of Optimer’s obligations thereunder (the “Budget”). The Work Plan shall set forth in
reasonable detail the obligations of Optimer and responsibilities of Cempra
with respect to the Research Program, including the identity and number of
Macrolide Antibiotics that Optimer shall endeavor to synthesize and formulate
for animal testing, and shall include the desired quantities of such Macrolide
Antibiotics, timeframe for delivery, technical specifications (the “Specifications”), and the Budget shall set
forth the budget for such synthesis and formulation work by Optimer. The Joint
Steering Committee shall develop an initial Work Plan and Budget and shall
submit such plan to Optimer and Cempra for review and approval, such approval
not to be unreasonably withheld, within thirty (30) days following the
execution of this Agreement. In the absence of a party’s written approval of or
reasonable objection to the Work Plan and Budget within five (5) business
days of its submission to the parties by the Joint Steering Committee, a party
shall be deemed to have agreed to such Work Plan and Budget. The Work Plan and
Budget may be amended from time to time by the Joint Steering Committee during
the Research Term, based upon the data obtained in the Research Program or from
Cempra’s independent activities, provided such amendments do not violate or
contradict any provision of this Agreement. In the event of an inconsistency or
disagreement between the Work Plan and Budget and this Agreement, the terms of
this Agreement shall prevail.


 


3.2  Work
Performed to Date.  The Parties
acknowledge that initial research and Macrolide Antibiotics synthesis
activities have been conducted by the Parties pursuant to the Letter Agreement
(the “Initial Research”).
All Initial Research, including any Macrolide Antibiotics, Information,
inventions, know-how, data, information, or other intellectual property rights
created pursuant to the Initial Research, is deemed included within the scope
of this Agreement. No amounts shall be due Optimer by Cempra for the conduct of
the Initial Research.


 


3.3  Synthesis
of Macrolide Antibiotics and Biological Testing.  The Joint Steering Committee shall, during
the Research Term, determine the Macrolide Antibiotics designated for synthesis
and Development under this Agreement, and Optimer shall provide its advice and
comment with respect thereto. The Joint Steering Committee shall determine
which Macrolide Antibiotics will be the subject of synthesis and Development as
part of Optimer’s performance under the Research Program, and


 


10
















 


Optimer shall provide its
advice and comment with respect thereto, provided that Optimer shall have no
obligation to perform such synthesis and Development without its consent (such
consent not to be unreasonably withheld). Optimer shall indicate in writing
within five (5) business days of approval by the Joint Steering Committee
whether or not it consents, and, if not consenting, provide its reasonable
objections to such obligations. In the absence of such written consent or
reasonable objection within such five (5) business day period, Optimer
shall be deemed to have rejected such obligations and Cempra shall be free to
seek alternative solutions therefor. The Joint Steering Committee shall, during
the Research Term, designate the initial number of Macrolide Antibiotics for
synthesis under this Agreement, provided Optimer shall provide its advice and
comment with respect thereto. Optimer shall, if and as included in the Work
Plan and Budget, use Diligent Efforts to synthesize Macrolide Antibiotics that
have been designated by the Joint Steering Committee for synthesis, to conduct
biological testing on such Macrolide Antibiotics, and to provide such Macrolide
Antibiotics in reasonable quantities to Cempra as determined by the Joint
Steering Committee. If and as included in the Work Plan and Budget, Optimer
shall use Diligent Efforts to synthesize and conduct biological testing with
respect to each Macrolide Antibiotic according to applicable Specifications for
such Macrolide Antibiotics, and to produce and provide to Cempra a sufficient
quantity of each Macrolide Antibiotic to allow Cempra to conduct further
Development of such Macrolide Antibiotics. Optimer shall use Diligent Efforts
to provide additional quantities of each Macrolide Antibiotics to Cempra at Cempra’s
reasonable request on an as needed basis. The reasonable, documented direct
expense of manufacturing additional quantities of Macrolide Antibiotics will be
paid for by Cempra as set forth in the Work Plan and Budget.


 


3.4  Preclinical
Testing and Human Clinical Testing.  Cempra may perform, in its sole discretion
and at its own expense, after, during the Research Term, providing reasonable
opportunity for advice and comment by the Joint Steering Committee, preclinical
testing on Macrolide Antibiotics that have been synthesized by Optimer or any
other Cempra Products of Cempra’s choosing. Based on the results of any such
preclinical testing, the Joint Steering Committee may, subject to the advice
and comment of Cempra and Optimer, determine whether additional Macrolide
Antibiotics should be synthesized or developed by Optimer for preclinical
testing, or whether any existing Macrolide Antibiotics should be reformulated
by Optimer (or a Third Party) for further testing. The Joint Steering
Committee may, subject to Optimer’s and Cempra’s approval (such approval not to
be unreasonably withheld), amend or revise the applicable Work Plan and Budget
accordingly to allow for such additional synthesis or reformulation activities.
Each party shall indicate in writing within five (5) business days of
approval by the Joint Steering Committee whether or not it approves of such
amendment or revision, as applicable, and, if not approving thereof, provide
its reasonable objections thereto. In the absence of such a written response
from a particular party within such five (5) business day period, a party
shall be deemed to have rejected such amendment or revision to the extent it
proposes additional obligations or responsibilities for the objecting party,
and, in the event Optimer rejects its proposed obligations or responsibilities
(whether by written notice or the absence thereof), Cempra shall be free to
pursue independent solutions with respect to the subject matter of the rejected
amendment or revision. Cempra shall, after, during the Research Term, providing
reasonable opportunity for advice and comment by the Joint Steering Committee,
have the right to designate one or more of such Macrolide Antibiotics as Test
Products for human clinical testing. In the event that Cempra enrolls a patient
for human clinical testing of any Macrolide Antibiotics prior to formal
designation of such Macrolide Antibiotics as a Test Product, such Macrolide
Antibiotics shall be deemed to have been designated as a Test Product upon
enrollment of the first such patient. If a Test Product does not achieve
desirable results during Phase 1 Trials, then, if and as requested by the
Joint Steering Committee, subject to Optimer’s consent (such consent not to be
unreasonably withheld), Optimer shall use Diligent Efforts to reformulate such
Test Product according to specifications established by the Joint Steering
Committee. Any such reformulation activities shall be reflected in a revised
Work Plan and Budget to be developed and approved by the Joint Steering
Committee, negotiated in good faith, and agreed


 


11

















 


upon by the Parties (such
agreement not to be unreasonably withheld), and the reasonable, documented,
direct costs incurred by Optimer for such reformulation and related additional
testing of a Test Product by Optimer shall be borne by Cempra pursuant to such
Budget. Each party shall indicate in writing within five (5) business days
of approval by the Joint Steering Committee whether or not it agrees to such
revised Work Plan and Budget, and, if not agreeing to its proposed additional
obligations or responsibilities contained therein, provide its reasonable
objections thereto. In the absence of providing such written notice within such
five (5) business day period, a party shall be deemed to have rejected its
proposed obligations or responsibilities, and, in the event Optimer rejects its
proposed obligations or responsibilities (whether by written notice or the
absence thereof), Cempra shall be free to seek alternative solutions therefor.
In the event that Cempra enrolls a patient in a Phase 2 Trial or in a
Phase 3 Trial, or obtains Regulatory Approval, for any Macrolide
Antibiotics or Test Product prior to formal designation of such Macrolide Antibiotics
or Test Product as a Cempra Product, such Macrolide Antibiotics or Test Product
shall be deemed to have been designated as a Cempra Product upon the first such
event to occur with respect to such Macrolide Antibiotics or Test Product.


 


3.5  Pre-Clinical
and Clinical Supply.  As may be
provided in any Work Plan and Budget established by the Joint Steering
Committee and agreed upon by Optimer, Optimer shall use Diligent Efforts in
accordance with such Work Plan and Budget to produce, or have produced, a
sufficient quantity of each Test Product to enable Cempra to conduct
preclinical testing of such Test Products, and to cooperate with Cempra in
preparing formulations, conducting feasibility studies, and facilitating such
testing. Optimer shall not have any obligation or responsibility for providing
clinical supplies of Test Products or Cempra Products.


 


3.6  Research
and Supply Costs.  Cempra shall
reimburse Optimer for Optimer’s reasonable, documented internal costs
associated with Optimer’s work under the Work Plan and Budget, which shall
equal the pro-rated cost of full-time equivalent employees to the extent used
by Optimer in performing its portion of the Research Program. Such cost shall (1) be
commercially reasonable based on the applicable employees’ role in performing
Optimer’s portion of the Research Program, job title and responsibilities with
Optimer, training, education, and expertise, which shall, in each case, be
reasonably appropriate for the tasks performed thereby, and (2) not exceed
US$[***] on an annual basis in any event. Cempra shall reimburse Optimer for
the purchasing of key intermediates from Third Parties at Optimer’s cost, which
cost shall be commercially reasonable and included in the Budget. Cempra shall
also reimburse Optimer for commercially reasonable and documented external
out-of-pocket expenses consistent with the Work Plan and Budget that Optimer
incurs for performing such work, including without limitation commercially
reasonable and documented payments to any Third Party manufacturer for
production of Macrolide Antibiotics, Test Products and/or Cempra Products. At
the end of each calendar quarter, Optimer shall submit to Cempra an invoice
that sets forth in reasonable detail the internal costs and external expenses
Optimer has incurred in performing its obligations under the Work Plan and
Budget. Cempra shall remit payment to Optimer within thirty (30) days
following Cempra’s receipt of such invoice. Any disputes arising between the
Parties related to the amounts invoiced under this Section 3.6 shall be
resolved in accordance with Article 12. Notwithstanding anything to the
contrary, (i) Cempra shall not be obligated to pay Optimer any amounts
with respect to Optimer’s performance of its obligations under the Research
Program except as specifically described in any Budgets established by the
Joint Steering Committee, (ii) Optimer shall not incur any Third Party
costs in performing under the Research Program, and Cempra shall not be
responsible for the reimbursement of any such Third Party costs, except as
approved in advance by the Joint Steering Committee, and (iii) Cempra
shall not be obligated to reimburse any costs of Optimer incurred in performing
its obligations under the Research Program to the extent such costs are covered
by any grant funding provided to Optimer (including but not limited to any SBIR
or other government grants).


 


12

















 


3.7  Conduct of
Research.  The Parties
shall use Diligent Efforts to conduct their tasks and responsibilities under
the Work Plan and Budget throughout the Research Program. In addition, the
Parties shall conduct their tasks and responsibilities under the Research
Program in compliance in all material respects with the requirements of applicable
laws, rules and regulations and all applicable GLP to attempt to achieve
their objectives consistent with industry standards. Optimer shall use
commercially reasonable efforts to (i) perform in accordance with,
maintain, and obtain any awarded, active, or future grants (including but not
limited to any SBIR or other government grants) concerning research or
development related to the research and development of Macrolide Antibiotics,
Test Products, and/or Cempra Products (collectively, such grants, “Subject
Grants”), (ii) ensure payment and receipt of all funds to be provided to
Optimer under Subject Grants to the extent covering any of Optimer’s costs of
performing of Optimer’s portion of the Research Program, and (iii) ensure
that (a) all Optimer Improvements, Optimer Know-How, and results
generated, in each case, under the Subject Grants, and all intellectual
property rights appurtenant to the foregoing (including but not limited to
Optimer Patents) shall be owned by Optimer and included in the licenses granted
to Cempra hereunder, subject to any nonexclusive rights the United States
government may have in any of the foregoing, by operation of law pursuant to
the terms of such Subject Grants.


 


3.8  Acceptance.  If, as set forth in the Work Plan, Cempra has
responsibility for performing quality control and/or quality assurance testing
on Macrolide Antibiotics and/or Test Products supplied by Optimer, Cempra shall
have thirty (30) business days following its receipt of a shipment to
confirm that such shipment meets the applicable Specifications. If, as set
forth in the Work Plan, Optimer has responsibility for performing quality
control and/or quality assurance testing on Macrolide Antibiotics and/or Test
Products supplied by Optimer, Cempra shall be deemed to have accepted any
delivery of Macrolide Antibiotics and/or Test Products supplied by Optimer
unless Cempra gives Optimer written notice of its rejection within fifteen
(15) business days of delivery, unless any defect in the Macrolide
Antibiotics and/or Test Products could not have been identified by reasonable
visual examination, in which event Cempra shall not be deemed to have accepted
such Macrolide Antibiotics and/or Test Products until fifteen
(15) business days after the date when such defect could first have been
reasonably identified by Cempra. If Cempra reasonably rejects in whole or in
part any nonconforming shipment at any time following its receipt thereof,
Cempra shall provide Optimer written notice of such rejection within the
applicable time period described above. If nonconforming Macrolide Antibiotics
or Test Products are delivered to Cempra by Optimer in the course of the
Research Program, Optimer shall, if and as elected by Cempra in its sole
discretion (i) use commercially reasonable efforts to replace in a timely
manner the nonconforming Macrolide Antibiotics or Test Products at no
additional cost to Cempra or (ii) refund to Cempra any amounts paid to
Optimer with respect to the manufacture or supply of such Macrolide Antibiotics
or Test Products.


 


4.  DEVELOPMENT
AND COMMERCIALIZATION


 


4.1  Development
Plan; Reports.  The
Development of Cempra Products shall be governed by a development plan
developed by Cempra, in consultation with the Joint Steering Committee, subject
to amendment at any time by Cempra, that describes the proposed overall program
of Development (the “Development Plan”). Cempra shall engage, at its sole
expense, a Scientific Advisory Board, which shall, during the Research Term,
include one representative of Optimer, initially to be Yoshi Ichikawa, Ph.D.,
to review and comment on the Development Plan. During the Research Term,
Optimer and the Joint Steering Committee shall have the right to comment and
make suggestions with respect to the Development Plan; provided, however, that
Cempra shall have the sole right and responsibility for determining the
Development Plan for Cempra Products. Each Party shall conduct its Development
of Products in compliance in all material aspects with the requirements under
all applicable laws, rules and regulations, including without limitation
applicable GLP, GCP and GMP. Each Party shall keep the other Party and, during
the Research Term, the Joint Steering Committee regularly informed on a
semiannual basis via summary updates with respect to its material Development
and Commercialization 


 


13

















 


activities and those of its
Affiliates and Third Party sublicensees. Such reports shall be the Confidential
Information of a Party and subject to applicable provisions set forth in Article 8.


 


4.2  Regulatory
Matters.  Cempra shall
have control of and be responsible for all regulatory applications, filings and
communications with regulatory authorities regarding Cempra Products, including
obtaining Regulatory Approval of Cempra Products, in any jurisdiction in the
Territory. Cempra shall keep Optimer regularly informed of its efforts and
progress with respect to regulatory matters and approvals on a semiannual
basis. Cempra shall own all the Regulatory Filings it makes and Regulatory
Approvals it obtains. Optimer shall have the right of access to such regulatory
documents and material for its use in obtaining Regulatory Approval in ASEAN
Countries (subject to any payment obligations under Sections 6.6 and 6.7).
Optimer shall cooperate with Cempra in all such regulatory efforts as
reasonably requested by Cempra and provide all reasonable assistance to Cempra.
If and as requested by Cempra, Optimer shall be responsible, at the expense of
Cempra, which expense shall be reasonable, documented, and agreed upon in
advance by the parties, for preparing and providing to Cempra in a timely
manner all documents and submissions that relate directly to the manufacturing
of Cempra Product, as reasonably required for Regulatory Filings and Regulatory
Approval of the Cempra Product in the Territory, including the CMC of any IND
or NDA in electronic format, for filing by Cempra.


 


4.3  Manufacture
and Supply.  With respect
to the Territory, and except as may otherwise be specified in the Work Plan and
Budget, Section 3.5, or any separate clinical supply agreement entered
into by the Parties, Cempra shall, as between the Parties, be responsible for
the manufacture of clinical materials for each Cempra Product, and for the commercial
supply of each Cempra Product, and for all costs associated therewith. Cempra
shall use Diligent Efforts to make necessary Regulatory Filings to obtain, or
cause a Third Party manufacturer to obtain, Regulatory Approval in the
Territory for the manufacture of Cempra Products.


 


4.4  Development
and Commercialization Costs.  Cempra shall be responsible for all costs
associated with its Development and Commercialization of the Cempra Products,
including the manufacture, marketing and commercialization of such Cempra
Products in the Field and in the Territory, provided that, notwithstanding the
foregoing, Cempra’s only obligations to Optimer with respect to any such costs
shall solely be as provided for in Section 3 and 4.2, or as otherwise
agreed to by the parties in writing.


 


4.5  Third Party
Commercialization.  Subject to
the terms and conditions set forth in Section 5.2, Cempra may utilize, at
its discretion, Third Party contractors, distributors, marketing organizations,
agents or sublicensees to research, develop, manufacture, supply, promote,
market, distribute, and/or sell Cempra Products in one or more countries or
jurisdictions in the Territory.


 


4.6  Pricing.  Cempra shall be solely responsible for
pricing and other terms of sale for Cempra Products.


 


4.7  Diligent
Efforts; Decision Not to Develop.


 


(a)           Cempra shall, itself and/or
through its Affiliates and Third Party sublicensees, use Diligent Efforts to
Develop and Commercialize Cempra Products in the Territory. In the event that
Cempra makes a determination not to Develop and Commercialize at least one
Cempra Product hereunder, Cempra shall promptly notify Optimer in writing of
such determination in writing. If Cempra (itself or through its Affiliates or
Third Party sublicensees) does not use Diligent Efforts as set forth in this Section 4.7(a),
or if Cempra makes a determination not to further Develop and Commercialize at
least one Cempra Product hereunder, then Optimer may terminate this Agreement
in accordance with Section 9.3(a) below; provided, however, that if
Cempra has notified Optimer in writing of a determination not to Develop and
Commercialize at least one Cempra Product, then the cure period set forth in Section 9.3(a) shall
not apply.


 


14

















 


(b)           Optimer shall, itself and/or
through its Affiliates and Third Party sublicensees, use Diligent Efforts to
develop and commercialize Products in ASEAN Countries. In the event that
Optimer makes a determination not to Develop and Commercialize at least one
Product hereunder in ASEAN Countries, Optimer shall promptly notify Cempra in
writing of such determination in writing. If Optimer (itself or through its
Affiliates or Third Party sublicensees) does not use Diligent Efforts as set
forth in this Section 4.7(b), or if Optimer makes a determination not to
further Develop and Commercialize at least one Product in ASEAN Countries
hereunder, then Cempra may terminate this Agreement in accordance with Section 9.3(a) below;
provided, however, that if Optimer has notified Cempra in writing of a
determination not to Develop and Commercialize at least one Product in ASEAN
Countries, then the cure period set forth in Section 9.3(a) shall
not apply.


 


5.  LICENSES
AND RELATED RIGHTS


 


5.1  License to
Cempra.  Optimer hereby grants to Cempra
and its Affiliates an exclusive license, with the right to sublicense as set
forth in Section 5.2, under the Optimer Technology and the Optimer
Improvements to make, have made, use, sell, offer for sale and import Macrolide
Antibiotics, Test Products, and Cempra Products in the Field in the Territory.
It is understood and agreed that Optimer retains the right under the Optimer
Technology to conduct activities allocated to Optimer in the Research Program.


 


5.2  Cempra
Sublicensing.  Cempra and
its Affiliates shall have the right to sublicense their rights under Section 5.1
to one or more Third Parties. Cempra shall promptly provide Optimer a
written copy of each such sublicense (and each amendment thereto, if any),
and in no event more than ten (10) days following its execution, provided
that Cempra may redact any portions of such sublicenses (or amendments)
disclosing sublicensees’ proprietary information, technology, or research and
development plans as reasonably necessary to comply with any confidentiality
provisions of such sublicense. Each sublicense shall be consistent with the
terms and conditions of this Agreement. For purposes of this Agreement, a Third
Party to whom Cempra or its Affiliate grants exclusive rights to market one or
more Cempra Products in a given territory shall be deemed a “sublicensee” of
Cempra hereunder for such territory.


 


5.3  [***]
Intellectual Property.  If
Optimer licenses any rights to any Macrolide Antibiotics from [***] or any
affiliate thereof during the term of this Agreement, it shall provide prompt
written notice thereof to Cempra, identifying such licensed intellectual
property, and, if and as elected by Cempra in writing its sole discretion, (i) Patents
to which Optimer obtains rights under such a license shall be deemed included
in Optimer Patents for purposes of this Agreement and (ii) Know-How to
which Optimer obtains rights under such a license shall be deemed include in
Optimer Know-How.


 


5.4  Optimer
Rights in ASEAN Countries.  Cempra hereby grants to Optimer and its
Affiliates an exclusive license, with the right to sublicense as set forth in Section 5.5,
in the Field under Cempra Patents and Cempra Know-How to make, have made, use,
sell, offer for sale and import Optimer Products in ASEAN Countries, which
license shall include a right of reference to all Regulatory Filings,
Regulatory Approvals, and supporting data and documentation of Cempra with
respect to Cempra Products.


 


5.5  Optimer
Sublicensing.  Optimer and
its Affiliates shall have the right to sublicense their rights under Section 5.4
to one or more Third Parties. Optimer shall promptly provide Cempra a
written copy of each such sublicense (and each amendment thereto, if any),
and in no event more than ten (10) days following its execution, provided
that Optimer may redact any portions of such sublicenses (or amendments)
disclosing sublicensees’ proprietary information, technology, or research and
development plans as reasonably necessary to comply with any confidentiality
provisions of such sublicense. Each sublicense shall be consistent with the
terms and conditions of this Agreement. For purposes of this Agreement, a Third
Party to whom Optimer or its Affiliate grants exclusive rights to


 


15

















 


market one or more Optimer
Products in a given territory shall be deemed a “sublicensee” of Optimer
hereunder for such territory


 


5.6  Bankruptcy.  All rights and licenses granted under or
pursuant to any section of this Agreement are, and shall otherwise be deemed to
be, for purposes of Section 365(n) of the U.S. Bankruptcy Code,
licenses of rights to “intellectual property” as defined under Section 101(35A)
of the U.S. Bankruptcy Code. The Parties shall retain and may fully
exercise all of their respective rights and elections under the
U.S. Bankruptcy Code. The Parties agree that a Party that is a licensee of
such rights under this Agreement shall retain and may fully exercise all of its
rights and elections under the U.S. Bankruptcy Code, and that upon
commencement of a bankruptcy proceeding by or against the licensing Party (such
Party, the “Involved Party”)
under the U.S. Bankruptcy Code, the other Party (such Party, the “Noninvolved Party”) shall be entitled to a
complete duplicate of or complete access to (as such Noninvolved Party
deems appropriate), any such intellectual property and all embodiments of such
intellectual property, provided the Noninvolved Party continues to fulfill its
payment or royalty obligations as specified herein in full. Such intellectual
property and all embodiments thereof shall be promptly delivered to the
Noninvolved Party (a) upon any such commencement of a bankruptcy
proceeding upon written request therefore by the Noninvolved Party, unless the
Involved Party elects to continue to perform all of its obligations under this
Agreement or (b) if not delivered under (a) above, upon the rejection
of this Agreement by or on behalf of the Involved Party upon written request
therefor by the Noninvolved Party. The foregoing is without prejudice to any
rights the Noninvolved Party may have arising under the U.S. Bankruptcy
Code or other applicable law.


 


5.7  Disclosure
of Information.  Upon
execution of this Agreement and thereafter during the term hereof, each party
shall disclose to the other party, in confidence under the terms of Article 8
hereof, (a) all relevant Information as shall become available to it
relating to the Macrolide Antibiotics, Test Products and Cempra Products, and (b) all
relevant Information as shall become available to it relating to the safety and
efficacy of each Macrolide Antibiotic, Test Product, and Cempra Product to the
extent necessary or useful to develop or manufacture a Cempra Product. Optimer
will use reasonable efforts to disclose to Cempra or, if and as requested by
Cempra, to the FDA all relevant Information in its possession required for
Cempra to register for sale or obtain approval for sale of each
Cempra Product.


 


5.8  No Implied
Licenses.  Other than
those rights and licenses expressly granted herein, no other rights or licenses
are granted or shall be deemed granted under this Agreement by
either Party.


 


6.  FINANCIAL
TERMS


 


6.1  Upfront
Payment.  Cempra shall
issue Optimer [***] [***] [***] shares of Cempra common stock ([***]% of total
number of outstanding shares as determined on a fully-diluted basis as of the
Effective Date), within thirty (30) after the Effective Date of this
Agreement. The Cempra common stock issued to Optimer pursuant to this Section 6.1
shall not be subject to dilution until after Cempra closes on an Equity
Investment (as defined below). Upon closing of an Equity Investment,
Cempra shall issue Optimer additional shares of Cempra common stock sufficient
to ensure that the total number of shares of Cempra common stock held by
Optimer immediately following such Equity 


 


16

















 


Investment equals the
percentage of Cempra’s total number of outstanding shares (as calculated
on a fully-diluted basis immediately following the Equity Investment)
noted below:


 




	
  Gross Proceeds to Cempra in Equity Financing

  	
   

  	
  Percentage of Cempra Common Stock to be Held by Optimer

  
	
  $[***] to $[***]

  	
   

  	
  [***]%

  
	
   

  	
   

  	
   

  
	
  $[***] to $[***]

  	
   

  	
  [***]%

  
	
   

  	
   

  	
   

  
	
  $[***] to $[***]

  	
   

  	
  [***]%

  
	
   

  	
   

  	
   

  
	
  $[***] to $[***]

  	
   

  	
  [***]%

  
	
   

  	
   

  	
   

  
	
  $[***] or more

  	
   

  	
  [***]%

  






 


Following the first such issuance of
additional shares, all shares issued to Optimer will be subject to dilution on
a pari passu basis with the
Cempra common stock held by other holders of Cempra common stock and Optimer
shall not be entitled to any further shares of stock under this Section 6.1.
For purposes of this Agreement, an “Equity Investment” shall mean Cempra’s
issuance and sale of equity securities to venture capital, institutional,
corporate, or private investors resulting in aggregate gross proceeds to Cempra
of at least [***] [***]. The issuances of stock to Optimer under this Section 6.1
shall be done pursuant to separate Subscription Agreements, a form of which is
attached hereto as Schedule 6.1(1),
and the Cempra common stock held by Optimer shall be subject to a shareholders
agreement, which shall initially be in the form of set forth at Schedule 6.1(2). Optimer agrees to
enter into reasonable or customary agreements required by any future equity
investors regarding subjecting Optimer’s shares of Cempra common stock to
rights of first refusal and co-sale, such rights to terminate on an initial
public offering of Cempra stock pursuant to a registration statement filed
pursuant to the Securities Act of 1933, as amended.


 


6.2  Milestone
Payments to Optimer.


 


(a)           Cempra shall pay to Optimer
a milestone payment (the “[***]
Milestone Payment”) in the amount of $[***] upon Cempra’s, its
Affiliate’s, or their sublicensee’s [***] (the “[***] Milestone”), and the [***] Milestone Payment
shall be payable in cash or Cempra capital stock, as further described below.
Cempra shall notify Optimer within thirty (30) days of its determination
that a [***] Milestone has occurred. Optimer shall indicate in writing, within
ten (10) business days of such notice from Cempra, whether it elects the
[***] Milestone Payment to be paid in cash or shares of Cempra capital stock
having a Fair Market Value, as calculated as of the date the [***] Milestone is
achieved, equal to the [***] Milestone Payment; in the absence of such election
within such ten (10) business day period, Cempra shall be entitled to make
such election in its sole discretion. The [***] Milestone Payment shall be paid
(or, if to be paid in Cempra capital stock, such stock shall be issued) no
later than twenty (20) days after the earlier of (i) the date on
which Optimer provides its written election, as described above, or (ii) the
expiration of the ten (10) business day period referenced above. Only one
[***] Milestone Payment shall be payable by Cempra under this Agreement,
regardless of the number of Cempra Products or indications therefor developed
by Cempra, its Affiliates, or their sublicensees under this Agreement.


 


(b)           Cempra shall pay to Optimer
a milestone payment (each, a “[***]
Milestone Payment”) in the amount of $[***] upon Cempra’s, its
Affiliate’s, or their sublicensee’s completion of the first [***] Trial of each
Cempra Product resulting in data reasonably sufficient to support the conduct
of a [***] Trial with respect to such Cempra Product (the “[***] Milestone”), and the initial
[***] Milestone Payment shall be payable in cash or Cempra capital stock, as
further described below. Cempra shall notify Optimer within thirty
(30) days of its determination that a [***] Milestone has occurred.
Optimer shall indicate in writing, within ten (10) business days of the
initial such notice from Cempra, whether it elects the initial [***] Milestone
Payment to be paid in cash or shares of Cempra capital stock having a Fair
Market Value, as calculated as of the date the initial [***] Milestone is
achieved, equal to the


 


17

















 


[***] Milestone Payment; in the absence of
such election within such ten (10) business day period, Cempra shall be
entitled to make such election in its sole discretion. The initial [***]
Milestone Payment shall be paid (or, if to be paid in Cempra capital stock,
such stock shall be issued) no later than twenty (20) days after the
earlier of (i) the date on which Optimer provides its written election, as
described above, or (ii) the expiration of the ten (10) business day
period referenced above; all other [***] Milestone Payments shall be paid in
immediately available funds, pursuant to Section 6.9 below, no later than
thirty (30) days following the achievement of such [***] Milestone. Only
one [***] Milestone Payment shall be payable by Cempra under this Agreement
with respect to each Cempra Product, regardless of the number of indications
therefor developed by Cempra, its Affiliates, or their sublicensees under
this Agreement.


 


(c)           In addition to the
Phase 2 Milestone Payments, in the event that (i) Cempra or an
Affiliate thereof sublicenses rights for Development and Commercialization of a
Cempra Product to a Third Party sublicensee and (ii) Cempra, an Affiliate,
or such sublicensee completes a Phase 3 Trial of such Cempra Product
resulting in data sufficient to support Regulatory Approval of such Cempra
Product (the date upon which both of the foregoing have been achieved, the
“Sublicensee Milestone”), then
Cempra shall pay to Optimer (a) the following amounts with respect to each
of the first two (2) Cempra Products to achieve the Sublicensee Milestone:
(1) $[***] within thirty (30) days after each such Cempra Product
achieves the Sublicensee Milestone (the “Initial
Sublicensee Milestone Payments”) and (2) [***] percent ([***]%)
of all Sublicensing Revenue, if any, received in excess of $[***] with respect
to each such Cempra Product from the Third Party sublicensee(s) for such
Cempra Product (to be paid to Optimer within thirty (30) days of
Cempra’s receipt of each applicable payment of Sublicensing Revenue from such
sublicensee(s)) (“Trailing Sublicensee
Milestone Payments”) and, with respect to each of the subsequent two
Cempra Products to achieve the Sublicensee Milestone, (b) $[***] within
thirty (30) days after the date upon which such subsequent Cempra Product
achieves the Sublicensee Milestone (“Subsequent
Sublicensee Milestone Payments”; collectively, with all of the
foregoing payments described in this subsection (c), the “Sublicensee Milestone Payments”). Cempra
shall notify Optimer within thirty (30) days of each of the first four
occurrences of the Sublicensee Milestone.


 


Notwithstanding anything to
the contrary, (i) the Initial Sublicensee Milestone Payment shall only be
payable by Cempra [***] under this Agreement, (ii) an Initial Sublicensee
Milestone Payment shall not be due or payable under this Agreement with respect
to a particular Cempra Product if the Initial Cempra Milestone Payment
(as defined in Section 6.2(d) below) becomes due for such Cempra
Product prior to the date upon which the applicable Initial Sublicensee
Milestone Payment becomes due for such Cempra Product, (iii) the
aggregate, combined, total number of Subsequent Sublicensee Milestone Payments
and Subsequent Cempra Milestone Payments due under this Agreement shall be
[***] (regardless of the number of Cempra Products or indications therefor),
and (iv) a Subsequent Sublicensee Milestone Payment shall not be due or
payable under this Agreement with respect to a particular Cempra Product if the
Subsequent Cempra Milestone Payment (as defined in Section 6.2(d) below)
becomes due with respect to such Cempra Product prior to the date upon which
the Subsequent Sublicensee Milestone Payment becomes due with respect thereto.
Except with respect to Trailing Sublicensee Milestone Payments, and
notwithstanding anything to the contrary in this Agreement, the total possible
combined aggregate amount due Optimer under this Section 6.2(c) and Section 6.2(d) below
shall not exceed, and Cempra shall not be obligated to pay Optimer any amounts
in excess of, $[***].


 


18

















 


(d)           In addition to the [***]
Milestone Payments, if, prior to the occurrence of a Sublicensee Milestone with
respect to a Cempra Product, an [***] is obtained (the “Cempra Milestone”), Cempra shall pay
Optimer (i) $[***] with respect to each of the first [***] Cempra Products
to achieve the Cempra Milestone (the “Initial
Cempra Milestone Payments”) and (ii) $[***] with respect to
each of the subsequent two Cempra Products to achieve the Cempra Milestone (the “Subsequent Cempra Milestone Payments”;
collectively, with the Initial Cempra Milestone Payment, the “Cempra Milestone Payments”) within, in
each case, thirty (30) days of the first anniversary of such Cempra
Product’s achievement of the Cempra Milestone.


 


Notwithstanding anything to
the contrary, each Cempra Milestone Payment (i) shall only be payable by
Cempra once under this Agreement with respect to a particular Cempra Product,
regardless of the number of indications therefor, (ii) an Initial Cempra
Milestone Payment shall not be due or payable under this Agreement with respect
to a particular Cempra Product if an Initial Sublicensee Milestone Payment
(as defined in Section 6.2(c) above) becomes due with respect to
such Cempra Product prior to the date upon which the Initial Cempra Milestone
Payment becomes due with respect to such Cempra Product, (iii) the
aggregate, combined, total number of Subsequent Sublicensee Milestone Payments
and Subsequent Cempra Milestone Payments due under this Agreement shall be
[***] (regardless of the number of Cempra Products or indications therefor),
and (iv) a Subsequent Cempra Milestone Payment shall not be due or payable
under this Agreement with respect to a particular Cempra Product if the
Subsequent Sublicensee Milestone Payment (as defined in Section 6.2(c) above)
becomes due with respect to such Cempra Product prior to the date upon which
the Subsequent Cempra Milestone Payment becomes due with respect thereto.


 


(e)           As a condition to the
issuance(s) of Cempra capital stock to Optimer pursuant to
Sections 6.2(a) and/or 6.2(b), as applicable, Optimer shall
enter into reasonable or customary agreements (including but not limited to
subscription or purchase agreements) substantially consistent with those
entered into by other holders of such shares of stock, including but not
limited to investors, as applicable, and which may concern the issuance of such
stock, voting provisions, and/or rights of first refusal and co-sale with
respect to such shares.


 


6.3  Royalty
Payments to Optimer.  For the
duration of the applicable Royalty Term for each Cempra Product, Cempra shall
pay to Optimer the following royalty payments, subject to adjustment as
described in Sections 6.4 and 6.5, based on Net Sales of Cempra
Products sold in the Territory by Cempra, its Affiliates, and their Third Party
sublicensees:


 


(i)            [***] percent ([***]%) of
Net Sales for the first $[***] of aggregate worldwide Net Sales of Cempra
Products sold by Cempra, its Affiliates, and their Third Party sublicensees in
a particular calendar year; and


 


(ii)           [***] percent ([***]%) of
Net Sales for the portion, if any, of aggregate worldwide Net Sales of Cempra
Products sold by Cempra, its Affiliates, and their Third Party sublicensees
exceeding $[***] in a particular calendar year.


 


As an example of the royalty
calculation contemplated above, if aggregate worldwide Net Sales of Cempra
Products by Cempra, its Affiliates, and their Third Party sublicensees in a
particular calendar year total $[***], Cempra shall owe Optimer $[***] under
this Section 6.3 ([***]% × $[***] = $[***]; [***]% of
$[***] = $[***]; $[***] + $[***] = $[***]).


 


6.4  Third Party
Royalties on Cempra Products.  In the event that:


 


(a)           a Cempra Product is deemed
by a final, unappealable decision of a court of competent jurisdiction to
infringe a claim of a patent(s) owned or controlled by a Third Party in
any given country of the Territory, and Cempra, an Affiliate thereof, or any
sublicensee thereof licenses such patent(s) in settlement of such claims (“Cempra Infringement License”),


 


19

















 


(b)           Cempra, an Affiliate
thereof, or any sublicensee of either of the foregoing determines that it is
commercially, reasonably necessary or advisable to pay royalties to a Third
Party to obtain a license to practice any Third Party’s rights in order to
manufacture, use, Commercialize or Develop a Cempra Product in any given
country of the Territory (“Cempra Necessary
License”), or


 


(c)           it would be useful to obtain
a license to practice any Third Party’s rights that could improve, enhance, or
modify a Cempra Product in any given country of the Territory (“Cempra Improvement License”), as
determined reasonably and in good faith by Cempra, an Affiliate thereof, or any
sublicense of either of the foregoing,


 


then Cempra may deduct any
fees, milestones or royalties paid for Cempra Infringement Licenses, Cempra
Necessary Licenses and Cempra Improvement Licenses due to such Third Parties
(or such amounts paid by Cempra, its Affiliate, or any sublicensee of
either of the foregoing in settlement of such infringement action)
(collectively, all of the foregoing, “Third
Party Royalties”) from the royalties otherwise due to Optimer with
respect to Net Sales; provided, however, that, notwithstanding the foregoing,
the total amount due to Optimer under this Agreement with respect to Net Sales
for Cempra Products sold by Cempra and its Affiliates any particular calendar
quarter shall not be reduced by more than [***] percent ([***]%) as a result of
any such deduction, and any amounts not deducted in a calendar quarter shall be
carried forward for deduction in the subsequent calendar quarter(s), subject to
such [***] percent ([***]%) limitation in each case.


 


6.5  Cempra
Compulsory Licenses.  Should a
compulsory license be granted, or be the subject of a possible grant, to a
Third Party under the applicable laws of any country in the Territory under the
Optimer Patents and/or Optimer Know-How, or to any Cempra Product, the Party
receiving notice thereof or otherwise becoming aware thereof shall promptly
notify the other Party thereof, including any material information concerning
such compulsory license, and the applicable royalty rate payable hereunder for
sales of Cempra Products in such country will be adjusted to match any lower
royalty rate granted to such Third Party for such country with respect to the
sales of such Cempra Products, subject to any adjustments pursuant to Section 6.4 above.


 


6.6  Milestone
Payments to Cempra.  For each of
the first [***] Optimer Products to achieve the Optimer Milestone
(as defined below), Optimer shall, within two (2) years of the
earlier of (i) the [***] of an Optimer Product in any ASEAN Country by
Optimer, an Affiliate thereof, or any sublicensee of either of the foregoing or
(ii) [***] of an Optimer Product in any ASEAN Country, pay Cempra $[***]
with respect to such Optimer Product (the first to occur of the foregoing
with respect to an Optimer Product, the “Optimer
Milestone”). Such payment shall be due with respect solely to each
of the first [***] (2) Optimer Products to achieve the Optimer Milestone.
Optimer shall notify Cempra in writing within thirty days of each occurrence of
the Optimer Milestone.


 


6.7  Royalties
to Cempra.  For the
duration of the applicable Royalty Term for each Optimer Product, Optimer shall
pay to Cempra the following royalty payments based on Net Sales of Optimer
Products in ASEAN Countries by Optimer, its Affiliates, and their Third Party
sublicensees:


 


(iii)          [***] percent ([***]%) of
Net Sales for the first $[***] of aggregate worldwide Net Sales of Optimer
Products by Optimer, its Affiliates, and their Third Party sublicensees in a
particular calendar year; and


 


(iv)          [***] percent ([***]%) of
Net Sales for the portion, if any, of aggregate worldwide Net Sales of Optimer
Products by Optimer, its Affiliates, and their Third Party sublicensees
exceeding $[***] million in a particular calendar year.


 


As an example of the royalty
calculation contemplated above, if aggregate Net Sales of Optimer Products in a
particular calendar year total $[***], Optimer shall owe Cempra $[***] under
this Section 6.7 ([***]% × $[***] = $[***]; [***]% of
$[***] = $[***]; $[***] + $[***] = $[***]).


 


20
















 


6.8  Third Party
Royalties on Optimer Products.  In the event that:


 


(a)        a Optimer Product is deemed
by a final, unappealable decision of a court of competent jurisdiction to
infringe a claim of a patent(s) owned or controlled by a Third Party in
any given country of the Territory, and Optimer, an Affiliate thereof, or any
sublicensee thereof licenses such patent(s) in settlement of such claims (“Optimer Infringement License”),


 


(b)        Optimer, an Affiliate
thereof, or any sublicensee of either of the foregoing determines that it is
commercially, reasonably necessary or advisable to pay royalties to a Third
Party to obtain a license to practice any Third Party’s rights in order to
manufacture, use, Commercialize or Develop an Optimer Product in any given
country of the Territory (“Optimer Necessary
License”), or


 


(c)        it would be useful to obtain
a license to practice any Third Party’s rights that could improve, enhance, or
modify a Optimer Product in any given country of the Territory (“Optimer Improvement License”), as
determined reasonably and in good faith by Optimer, an Affiliate thereof, or
any sublicense of either of the foregoing,


 


then Optimer may deduct any
fees, milestones or royalties paid for Optimer Infringement Licenses, Optimer
Necessary Licenses and Optimer Improvement Licenses due to such Third Parties
(or such amounts paid by Optimer, its Affiliate, or any sublicensee of
either of the foregoing in settlement of such infringement action)
(collectively, all of the foregoing, “Third
Party Royalties”) from the royalties otherwise due to Cempra with
respect to Net Sales; provided, however, that, notwithstanding the foregoing,
the total amount due to Cempra under this Agreement with respect to Net Sales
for Optimer Products sold by Optimer and its Affiliates any particular calendar
quarter shall not be reduced by more than [***] percent ([***]%) as a result of
any such deduction, and any amounts not deducted in a calendar quarter shall be
carried forward for deduction in the subsequent calendar quarter(s), subject to
such [***] percent ([***]%) limitation in each case.


 


6.9  Optimer
Compulsory Licenses.  Should a
compulsory license be granted, or be the subject of a possible grant, to a
Third Party under the applicable laws of any country in the Territory under the
Cempra Patents and/or Cempra Know-How, or to any Optimer Product, the Party
receiving notice thereof or otherwise becoming aware thereof shall promptly
notify the other Party thereof, including any material information concerning
such compulsory license, and the applicable royalty rate payable hereunder for
sales of Optimer Products in such country will be adjusted to match any lower
royalty rate granted to such Third Party for such country with respect to the
sales of such Optimer Products, subject to any adjustments pursuant to Section 6.8 above.


 


6.10  Payments
and Payment Reports.  Except as
otherwise provided herein, all royalties and payments due under this Section 6
shall be paid within ninety (90) days of the end of the relevant calendar quarter
for which the applicable Net Sales occur and/or revenues are received, subject,
with respect to Net Sales, as applicable, by Third Party sublicensees, to any
longer reporting periods which may be reasonably agreed to by Cempra, Optimer,
or their Affiliates with respect to such sublicensees. Each royalty payment
shall be accompanied by a statement stating (as applicable) the number,
description, and aggregate Net Sales, by country, of each Product sold during
the relevant calendar quarter by Cempra or Optimer, as applicable, and their
respective Affiliates and Third Party sublicensees and detailing the
calculation of royalties due for such calendar quarter, as well as, with
respect to Cempra’s reporting obligations, an accounting of Sublicense Revenues
received in the applicable calendar quarter.


 


6.11  Payment
Method.  Except with respect to any
milestone payments due under Sections 6.2 (a) and (b) that are
paid in Cempra stock in accordance therewith, all payments due under this
Agreement shall be made by bank wire transfer in immediately available funds to
an account 


 


21

















 


designated by the Party owed
such payments. All payments hereunder shall be made in the legal currency of
the United States of America.


 


6.12  Taxes.  It is understood and agreed between the
Parties that any payments made under Section 6.1, 6.2, or 6.6 of this
Agreement are inclusive of any value added or similar tax imposed upon such
payments. In addition, in the event any of the payments made by either Party
(the “Paying Party”) pursuant to Article 6 become subject to
withholding taxes under the laws of any jurisdiction, such amounts payable or,
in the case of stock to be issued to Optimer pursuant to Sections 6.2(a) or (b),
as applicable, shares issuable to the other Party (the “Paid Party”) shall
be reduced by the amount of taxes deducted and withheld, and the Paying Party
shall pay the amounts of such taxes to the proper Governmental Authority in a
timely manner and promptly transmit to the Paid Party an official tax
certificate or other evidence of such tax obligations together with proof of
payment from the relevant Governmental Authority of all amounts deducted and
withheld sufficient to enable the Paid Party to claim such payment of taxes.
Any such withholding taxes required under applicable law to be paid or withheld
shall be an expense of, and borne solely by, the Paid Party. The Paying Party
will provide the Paid Party with reasonable assistance to enable the Paid Party
to recover such taxes as permitted by law.


 


6.13  Blocked
Currency.  In each
country where the local currency is blocked and cannot be removed from the
country under such country’s applicable law, royalties accrued in that country
shall be paid to a Party in the country in local currency by deposit in a local
bank designated by such Party, unless the Parties otherwise agree.


 


6.14  Sublicenses.  For avoidance of doubt, the Parties agree
that in the event that a Party grants licenses or sublicenses to Third Parties
to sell Products, the licensing (or sublicensing) Party shall use
commercially reasonable efforts to include in such licenses or sublicenses an
obligation for the licensee or sublicense to account for and report its sales
of Products on a basis reasonably sufficient to enable payment of royalties
hereunder with respect to such sales as if such sales of the licensee or
sublicensee were Net Sales of the applicable Party.


 


6.15  Foreign
Exchange.  Conversion
of a Party’s Net Sales recorded in local currencies to U.S. dollars will
be performed by such Party in a manner consistent with such Party’s normal
practices used to prepare its audited financial statements for external
reporting purposes, provided that such practices use a widely accepted source
of published exchange rates. Each Party shall notify the other of the
conversion method(s) used by it for such purposes.


 


6.16  Interest.  If either Party fails to make any payment
when due to the other Party under this Agreement, then interest shall accrue on
a daily basis at a rate equal to the thirty (30) day U.S. dollar
LIBOR rate effective for the date that payment was due, as published by The Wall Street Journal. The obligation to
pay interest on such late payments set forth herein shall not be construed to
limit or restrict a Party’s right to terminate this Agreement in accordance
with the terms and conditions of Section 9.3.


 


6.17  Records;
Audits.  Each Party shall keep or cause
to be kept such records as are required to determine, in a manner consistent
with generally accepted accounting principles in the United States, the
sums or credits due under this Agreement, including, but not limited to Net
Sales. At the request (and expense) of either Party, the other Party and
its Affiliates and sublicensees shall permit an independent certified public
accountant appointed by such Party and reasonably acceptable to the other
Party, at reasonable times not more than once a year and upon reasonable
notice, to examine only those records as may be necessary to determine, with
respect to any calendar year ending not more than three (3) years prior to
such Party’s request, the correctness or completeness of any royalty report or
payment made under this Agreement. The Party requesting the audit shall bear
the full cost of the performance of any such audit, unless such audit discloses
a variance adverse to the Party requesting the audit of more than five percent
(5%) from the amount of the original invoice, report, royalty or 


 


22

















 


payment calculation, in
which case the Party being audited shall bear the reasonable, documented cost
of the performance of such audit. Each Party shall promptly pay to the other
Party the amount of any underpayment of royalties revealed by an examination
and review. Any overpayment by a Party of royalties or any other amount paid to
the other Party revealed by an examination and review shall, in the overpaying
Party’s sole discretion, (i) be fully-creditable against future payments
under this Agreement or (ii) refunded to the overpaying Party within sixty
(60) business days of its request.


 


7.  Intellectual
Property


 


7.1  General
Principles.


 


(a)           The Optimer Technology
existing as of the Effective Date shall, subject to the rights granted under
this Agreement, remain the sole property of Optimer and may be licensed by
Optimer for any purpose that is not inconsistent nor in conflict with
this Agreement.


 


(b)           All right, title, and
interest in any and all Know-How or Inventions generated, conceived or reduced
to practice by employees, agents or independent contractors of Optimer or its
Affiliates, solely or jointly with employees, agents or independent contractors
of Cempra or any Affiliate thereof, in connection with the performance of
Optimer’s obligations under this Agreement, or that relate to Cempra Products
in any manner, except any such Know-How or Inventions that are generated using
grant monies provided by the United States government to Optimer and which
are, therefore, subject to the limitations and requirements of such grants with
respect to such intellectual property (collectively, all of the foregoing, “Optimer Inventions”), and all right,
title, and interest in all intellectual property rights appurtenant thereto,
shall vest in Cempra, subject to the terms of the license grant set forth in Article 5
and Optimer’s ownership of the Optimer Technology and sole or joint
ownership (as applicable) of Optimer Improvements. Optimer shall notify
Cempra promptly in writing and in reasonable detail of any Optimer Inventions.
Optimer hereby assigns all right, title, and interest to Optimer Inventions and
all intellectual property rights appurtenant thereto to Cempra, and agrees to
take all actions and execute all documents, and to cause its Affiliates, employees,
agents, and independent contractors to execute all documents and take all
actions, requested by Cempra to effect the purposes of the foregoing. Optimer
hereby appoints Cempra as it attorney to effect on its behalf any assignment of
the Optimer Inventions which Optimer has failed to make to Cempra within
7 days in accordance with the terms of this Section with the right
but not the obligation to do any and all acts and things reasonably necessary
to effect unconditionally such assignment including the right for Cempra to
execute all deeds, documents or instruments and swear any oaths or declarations
in the name of and on behalf of Optimer necessary for such purpose. Cempra’s
appointment as attorney under this Section is given to secure Cempra’s
interest in the Optimer Inventions and intellectual property rights appurtenant
thereto and to secure the performance of Optimer’s obligations to assign the
Optimer Inventions and intellectual property rights appurtenant thereto in the
event of termination and such appointment shall be perpetual and irrevocable,
notwithstanding Optimer entering into liquidation, being wound-up or dissolved
or having a receiver, manager, administrator, administrative receiver or
similar person appointed over any of its assets.


 


(c)           Subject to Section 7.1(d) below,
Optimer and Cempra shall each own any inventions conceived solely by its own
employees or agents, other than those inventions that are Optimer Inventions (“Other Sole Inventions”), including but not
limited to (i) Know-How, conceived or reduced to practice during the term
of this Agreement or (ii) such inventions generated using grant monies
provided by the United States government to Optimer and which are,
therefore, subject to the limitations and requirements of such grants with
respect to such intellectual property. Subject to Section 7.1(d) below,
Cempra and Optimer shall each own an undivided one-half interest in any
inventions conceived jointly by employees or agents of both Cempra and Optimer,
other than those inventions that are Optimer Inventions (“Other Joint Inventions”), 


 


23

















 


including but not limited to
(i) Know-How conceived or reduced to practice during the term of this
Agreement and (ii) such inventions generated using grant monies provided
by the United States government to Optimer and which are, therefore,
subject to the limitations and requirements of such grants with respect to such
intellectual property. Subject to Sections 7.1(d), 7.2, and 7.3 below,
each Party may use, protect, license and enforce its own Other Sole Inventions
in its discretion. The determinations of inventorship, and each Party’s rights
and interests with respect to Other Joint Inventions and jointly created
Know-How relating to such Other Joint Inventions, shall be the same as provided
with respect to patents under United States law, and in particular,
subject in all cases to the provisions of this Agreement, either Party may
exploit or grant licenses under such Other Joint Inventions and jointly created
Know-How without a duty of accounting to the other Party.


 


(d)           Notwithstanding anything to
the contrary, the exclusive license granted in Section 5.1 above shall
include rights to Optimer Improvements, Optimer’s rights in Other Joint Inventions
and Other Sole Inventions, Optimer’s rights in all Patents claiming any of the
foregoing, and Optimer’s rights in all Know-How related to all of the
foregoing, subject to any nonexclusive rights the United States government
may have in any of the foregoing, by operation of law pursuant to the terms of
any applicable grants.


 


(e)           Notwithstanding anything to
the contrary, the exclusive license granted in Section 5.4 above shall
include rights to Cempra’s rights in Other Joint Inventions and Other Sole Inventions,
Cempra’s rights in all Patents claiming any of the foregoing, and Cempra’s
rights in all Know-How related to all of the foregoing.


 


7.2  Patent
Prosecution and Maintenance of Optimer Patents.  Optimer shall be responsible for, and be
obligated to the extent it is commercially reasonable to diligently pursue, or
to cause Optimer’s licensors to diligently pursue, the preparation, filing,
prosecution (including but not limited to, by conducting interferences,
oppositions and reexaminations or other similar proceedings), maintenance
(by timely paying all maintenance fees, renewal fees and other applicable
fees and costs), and extension of Patents within the Optimer Patents (including
but not limited to those claiming Optimer’s Other Sole Inventions). Optimer
will regularly advise Cempra of the status of all pending Optimer Patent
applications, including any related hearings or other proceedings, and, at
Cempra request, will provide Cempra with copies of all documentation concerning
such applications, including all correspondence to and from any Governmental
Authority. Optimer shall consult with and obtain written consent from Cempra
prior to abandoning any Optimer Patent, which consent shall not be unreasonably
withheld, delayed, or conditioned. Optimer will solicit Cempra’s advice and
review of such applications and important prosecution matters related thereto
in reasonably sufficient time prior to filing thereof, and will take into
account Cempra’s reasonable comments related thereto. The costs of prosecution
and maintenance of Optimer Patents shall be borne by Optimer.


 


7.3  Patent
Prosecution and Maintenance of Cempra Patents.  Cempra shall be responsible for, and be
obligated to the extent it is commercially reasonable to diligently pursue, or
to cause Cempra’s licensors to diligently pursue, the preparation, filing,
prosecution (including but not limited to, by conducting interferences,
oppositions and reexaminations or other similar proceedings), maintenance
(by timely paying all maintenance fees, renewal fees and other applicable
fees and costs), and extension of Patents within the Cempra Patents (including
but not limited to those claiming Cempra’s Other Sole Inventions). Cempra will
regularly advise Optimer of the status of all pending Cempra Patent
applications, including any related hearings or other proceedings, and, at
Optimer’s request, will provide Optimer with copies of all documentation
concerning such applications, including all correspondence to and from any
Governmental Authority. Cempra shall consult with and obtain written consent
from Optimer prior to abandoning any Cempra Patent, which consent shall not be
unreasonably withheld, delayed, or conditioned. Cempra will solicit Optimer’s
advice and review of such applications and important prosecution matters
related thereto in reasonably sufficient time prior to 


 


24

















 


filing thereof, and will
take into account Optimer’s reasonable comments related thereto. The costs of
prosecution and maintenance of Cempra Patents shall be borne by Cempra.


 


7.4  Patent
Prosecution and Maintenance of Patents Claiming Other Joint Inventions.  Subject to Sections 7.7 and 7.8,
for Patents claiming Other Joint Inventions (“Joint
Invention Patents”), Cempra will have, without prejudice to
ownership, the first right to prepare, file and prosecute such Patent
applications and maintain any resulting Patents; provided, however, that Cempra
may request that Optimer undertake such responsibilities upon written notice to
Optimer, and Optimer may agree to do so, in its sole discretion. If Optimer
does not agree to undertake such responsibilities within ten (10) days of
such request with respect to any such Patents, Cempra shall not have any
further obligations to prosecute or maintain such Patents. Within nine (9) months
after the filing date of a Patent application in respect of an Other Joint
Invention, the Party filing such application will request that the other Party
identify those non-priority, non-PCT (“foreign”) countries in which the other
Party desires that the filing Party file corresponding Patent applications.
Within thirty (30) days after receipt of such request, the other Party
will provide to the filing Party a written list of such foreign countries in which
the other Party wishes to effect corresponding foreign patent application
filings. The Parties will then attempt to agree on the particular countries in
which such applications will be filed, provided that in the event agreement is
not reached, the issue shall be resolved pursuant to Section 12.3 (“Designated Foreign Filings”). Thereafter,
the filing Party will effect all such Designated Foreign Filings in a timely
manner. It is presumed unless otherwise agreed in writing by the Parties, that
a corresponding PCT application will be filed designating all PCT member
countries. Should the Party filing the priority application not agree to file
or cause to be filed a Designated Foreign Filing, the other Party will have the
right to effect such Designated Foreign Filing.


 


Regardless of which Party is
responsible for preparation, prosecution and maintenance of a Joint Invention
Patent, the Parties shall share equally all reasonable, documented costs and
expenses incurred in connection with procuring Joint Invention Patents
(including entering national phase in all agreed countries), including
application preparation, filing fees, prosecution, maintenance and all costs
associated with reexamination, oppositions and interference proceedings. The
filing Party shall invoice the other Party for such costs and expenses, and the
other Party will pay such invoices within thirty (30) days
after receipt.


 


7.5  Cooperation.  The Parties agree to cooperate in the
preparation and prosecution of all Joint Invention Patent applications filed
under Section 7.3, including obtaining and executing necessary powers of
attorney and assignments by the named inventors, providing relevant technical
reports to the filing Party concerning the Other Joint Invention disclosed in
such Joint Invention Patent applications, obtaining execution of such other
documents which will be needed in the filing and prosecution of such Joint
Invention Patent applications, and, as requested, updating each other regarding
the status of such Joint Invention Patent applications. The Parties will
reasonably cooperate to obtain any export licenses that might be required for
such activities.


 


7.6  Disclosure.  Each party shall make available to the other
party in confidence all information in its possession necessary or expedient
for the filing of Patents arising out of such party’s performance under this
Agreement in all countries of the world.


 


7.7  Infringement.  If in the opinion of either Party any issued
Patent contained in the Optimer Patents has been infringed by a Third Party,
such Party shall give to the other Party prompt written notice of such alleged
infringement.


 


(a)   Optimer Patents.  With
respect to any alleged infringement of any Optimer Patents with respect to the
rights granted to Cempra under this Agreement, Cempra shall have the first and
primary right, but not the obligation, to, in its sole discretion, to initiate,
prosecute, and control any action or legal proceedings, and/or enter into a
settlement, including any declaratory judgment action, on its behalf or in
Optimer’s name, if necessary, with respect to such alleged infringement. 


 


25

















 


If, within [***] months
of the notice above, Cempra (i) shall have been unsuccessful in persuading
the alleged infringer to desist, (ii) shall not have brought and shall not
be diligently prosecuting an infringement action, or (iii) has not entered
into settlement discussions with respect to such infringement, or if Cempra
notifies Optimer that it has decided not to undertake any of the foregoing
against any such alleged infringer, then Optimer shall then have the right to
bring suit to enforce such Optimer Patents at its own expense. In any such
litigation brought by Cempra, Cempra shall have the right to use and sue in
Optimer’s name, and Optimer shall cooperate reasonably, as requested by Cempra
and at Cempra’s expense (which expense shall be reasonable).


 


(b)   Cempra Patents.  With
respect to any alleged infringement of any Cempra Patents with respect to the
rights granted to Optimer under this Agreement, Optimer shall have the first
and primary right, but not the obligation, to, in its sole discretion, to
initiate, prosecute, and control any action or legal proceedings, and/or enter
into a settlement, including any declaratory judgment action, on its behalf or
in Cempra’s name, if necessary, with respect to such alleged infringement. If,
within [***] months of the notice above, Optimer (i) shall have been
unsuccessful in persuading the alleged infringer to desist, (ii) shall not
have brought and shall not be diligently prosecuting an infringement action, or
(iii) has not entered into settlement discussions with respect to such
infringement, or if Optimer notifies Cempra that it has decided not to
undertake any of the foregoing against any such alleged infringer, then Cempra
shall then have the right to bring suit to enforce such Cempra Patents at its
own expense. In any such litigation brought by Optimer, Optimer shall have the
right to use and sue in Cempra’s name, and Cempra shall cooperate reasonably,
as requested by Optimer and at Optimer’s expense (which expense shall
be reasonable).


 


(c)   Procedure.  The Party
pursuing or controlling any action against an alleged infringer pursuant to the
foregoing (the “Controlling Party”)
shall be free to enter into a settlement, consent judgment, or other voluntary
disposition of any such action, provided, however, that (i) the
Controlling Party shall consult with the other Party (the “Secondary Party”) prior to entering into
any settlement thereof and (ii) any settlement, consent judgment or other
voluntary disposition of such actions which (1) materially limits the
scope, validity, or enforceability of any Optimer Patents (if Optimer is
the Secondary Party) or Patents Controlled by Cempra (if Cempra is the
Secondary Party), (2) subjects the Secondary Party to any non-indemnified
liability or obligation, or (3) admits fault or wrongdoing on the part of
Secondary Party must be approved in writing by Secondary Party, such approval not
to be unreasonably withheld. Secondary Party shall provide the Controlling
Party notice of its approval or denial of such approval within ten (10) business
days of any request for such approval by the Controlling Party, provided that (i) in
the event Secondary Party wishes to deny such approval, such notice shall
include a written description of Secondary Party’s reasonable objections to the
proposed settlement, consent judgment, or other voluntary disposition and (ii) Secondary
Party shall be deemed to have approved such proposed settlement, consent
judgment, or other voluntary disposition in the event it fails to provide such
notice within such ten (10) business day period. Any recovery or damages
received by the Controlling Party with respect to the infringement of a Party’s
rights under this Agreement shall be used first to reimburse the Parties for
unreimbursed reasonable, documented expenses incurred in connection with such
action, and the remainder shall be split [***] ([***]%) to Controlling Party
and [***] percent ([***]%) to Secondary Party. Notwithstanding the foregoing,
the Secondary Party, at its expense, shall have the right to be represented by
counsel of its choice in any such proceeding.


 


7.8  Infringement
of Third Party Rights.


 


(a)           If a claim is brought by a
Third Party alleging patent infringement by Cempra, Optimer, their Affiliates,
or their sublicensees with respect to the manufacture, use, sale, offer for
sale or importation of Macrolide Antibiotics, Test Products, Cempra Products, or
Optimer Products or any third party


 


26

















 


challenges the validity of any claims of any
Optimer Patents or Cempra Patents, each Party will give prompt written notice
to the other Party of such claim.


 


(b)           As between the parties to
this Agreement, Cempra shall have the first and primary right at its own
expense to defend, control the defense of, and/or settle any such claim against
Cempra, its Affiliates, or its sublicensees in the Territory, using counsel of
its own choice. Cempra shall be free to enter into a settlement, consent
judgment, or other voluntary disposition of such action, provided that any
settlement, consent judgment or other voluntary disposition of such actions
which (i) materially limits the scope, validity, or enforceability of
patents included in the Optimer Patents, (ii) subjects Optimer to any
nonindemnified liability, or (ii) admits fault or wrongdoing on the part
of Optimer must be approved in writing by Cempra, such approval not being unreasonably
withheld. Optimer shall provide Cempra notice of such approval or denial of
such approval within ten (10) business days of any request for such
approval by Cempra, provided that (i) in the event Optimer wishes to deny
such approval, such notice shall include a written description of Optimer’s
reasonable objections to the proposed settlement, consent judgment, or other
voluntary disposition and (ii) Optimer shall be deemed to have approved of
such proposed settlement, consent judgment, or other voluntary disposition in
the event it fails to provide such notice within such ten (10) business
day period. Optimer agrees to cooperate with Cempra in any reasonable manner
deemed by Cempra to be necessary in defending any such action. Cempra shall
reimburse Optimer for any out of pocket expenses incurred in providing such
assistance. Any recovery or damages received by Cempra in any action or
settlement under this Section 7.7(b) with respect to the rights
licensed to Cempra under this Agreement shall be used first to reimburse the
Parties for unreimbursed reasonable, documented expenses incurred in connection
with such action, and the remainder shall be split [***] percent ([***]%) to
Cempra and [***] percent ([***]%) to Optimer. Notwithstanding the foregoing,
either Party, at its expense, shall have the right to be represented by counsel
of its choice in any such proceeding controlled by the other Party.


 


(c)           As between the parties to
this Agreement, Optimer shall have the first and primary right at its own expense
to defend, control the defense of, and/or settle any such claim against
Optimer, its Affiliates, or its sublicensees in any ASEAN Countries, using
counsel of its own choice. Optimer shall be free to enter into a settlement,
consent judgment, or other voluntary disposition of such action with respect to
any ASEAN Countries, provided that any settlement, consent judgment or other
voluntary disposition of such actions which (i) materially limits the
scope, validity, or enforceability of any Patents owned or Controlled by
Cempra, (ii) subjects Cempra to any nonindemnified liability, or (ii) admits
fault or wrongdoing on the part of Cempra must be approved in writing by
Cempra, such approval not being unreasonably withheld. Cempra shall provide
Optimer notice of such approval or denial of such approval within ten (10) business
days of any request for such approval by Optimer, provided that (i) in the
event Cempra wishes to deny such approval, such notice shall include a written
description of Cempra’s reasonable objections to the proposed settlement,
consent judgment, or other voluntary disposition and (ii) Cempra shall be
deemed to have approved of such proposed settlement, consent judgment, or other
voluntary disposition in the event it fails to provide such notice within such
ten (10) business day period. Cempra agrees to cooperate with Optimer in
any reasonable manner deemed by Optimer to be necessary in defending any such
action. Optimer shall reimburse Cempra for any out of pocket expenses incurred
in providing such assistance. Any recovery or damages received by Optimer in
any action or settlement under this Section 7.7(c) with respect to
the rights licensed to Optimer under this Agreement shall be used first to
reimburse the Parties for unreimbursed reasonable, documented expenses incurred
in connection with such action, and the remainder shall be split [***] percent
([***]%) to Optimer and [***] percent ([***]%) to Cempra. Notwithstanding the
foregoing, either Party, at its expense, shall have the right to be represented
by counsel of its choice in any such proceeding controlled by the
other Party.


 


27

















 


7.9  Reimbursement.  Each Party shall invoice the other Party for
any reasonable, documented costs incurred that are to be borne by the other
Party pursuant to this Article 7. Each Party shall pay the other Party
such amounts within thirty (30) days of its receipt of any
such invoice.


 


7.10  Trademarks.  Cempra may, in its sole discretion, select
trademarks for Cempra Products and shall own all such trademarks world-wide. To
the extent Cempra pursues trademarks for Cempra Products, as between the
parties, Cempra shall have the sole responsibility for the filing, prosecution
and maintenance of registrations of product trademarks for Cempra Products, at
its sole expense. Optimer shall not have any rights to any trademarks of Cempra
under this Agreement; provided that, if it is commercially reasonable to do so,
Cempra shall, at Optimer’s request, license such trademarks under a separate
agreement to Optimer for use in the ASEAN Countries. Optimer may, in its sole
discretion, select trademarks for Optimer Products and shall own all such
trademarks world-wide. To the extent Optimer pursues trademarks for Optimer Products,
as between the parties, Optimer shall have the sole responsibility for the
filing, prosecution and maintenance of registrations of product trademarks for
Optimer Products, at its sole expense. Cempra shall not have any rights to any
trademarks of Optimer under this Agreement; provided that, if it commercially
reasonable to do so, Optimer shall, at Cempra’s request, license such
trademarks under a separate agreement to Cempra for use in the Territory.


 


8.  CONFIDENTIALITY


 


8.1  Treatment
of Confidential Information.  The Parties agree that during the Term, and
for a period of five (5) years after the end of the Term, a Party
receiving Confidential Information of the other Party will (a) maintain in
confidence such Confidential Information to the same extent such Party
maintains its own proprietary industrial information of similar kind and value
(but at a minimum each Party shall use commercially reasonable efforts), (b) not
disclose such Confidential Information to any Third Party without prior consent
of the other Party, and (c) not use such Confidential Information for any
purpose except those permitted by this Agreement.


 


8.2  Exceptions.  A Party shall not have the obligations set
forth in Section 8.1 with respect to any portion of such Confidential
Information that it can show by adequate documentation:


 


(a)           is publicly
disclosed by the disclosing Party, either before or after it becomes known to
the receiving Party;


 


(b)           was known to
the receiving Party, without obligation to keep it confidential, prior to when
it was received from the disclosing Party, as demonstrated by receiving Party’s
written records;


 


(c)           is subsequently
disclosed to the receiving Party without obligation of confidentiality or
limitation on use by a Third Party lawfully in possession thereof without
obligation to keep it confidential;


 


(d)           has been
published by a Third Party; or


 


(e)           has been
independently developed by the receiving Party without the aid, application or
use of Confidential Information.


 


8.3  Authorized
Disclosure. 
Notwithstanding Section 8.1, a Party may disclose Confidential
Information belonging to the other Party to the extent such disclosure is
necessary in the following instances:


 


(a)           filing or
prosecuting Patents pursuant to Article 7;


 


(b)           Regulatory Filings;


 


28

















 


(c)           prosecuting or
defending litigation relating to Macrolide Antibiotics, Test Products
or Products;


 


(d)           complying with
applicable laws and governmental regulations; and


 


(e)           disclosure, in
connection with the performance of this Agreement or exercise of the licenses
or rights conveyed herein, to Affiliates, licensees, sublicensees, employees,
consultants, or agents of either Party, each of whom prior to disclosure must
be bound by substantially similar obligations of confidentiality and non-use at
least equivalent in scope to those set forth in this Article 8.


 


8.4  Terms of
the Agreement.  The Parties
acknowledge that the terms of this Agreement shall be treated as Confidential
Information of both Parties. Such terms may be disclosed by a Party to
individuals or entities covered by 8.3(e) above, each of whom prior to
disclosure must be bound by similar obligations of confidentiality and non-use
at least equivalent in scope to those set forth in this Article 8.
Disclosure of the terms of this Agreement (but not other Confidential
Information received from the other Party) may also be made, under obligations
of confidentiality and non use at least equivalent in scope to those set forth
in this Article 8, to actual or potential bankers, lenders, investors,
acquirors, acquisition targets, and strategic partners of either Party.


 


8.5  Publicity.  The public announcement of the execution of
this Agreement is set forth on Schedule 8.5
hereto. Each Party shall be entitled, in its sole discretion, to make public
announcements regarding its Development and Commercialization of Products,
subject to the other Party’s opportunity to review and comment with respect
thereto provided below. In addition, either Party may make a public statement,
including in analyst meetings, concerning the Agreement or the progress of the
Test Products or Products where such statement is required by law, applicable
stock exchange regulation or legal proceedings. In connection with any filing
described in the foregoing sentence, such Party shall use commercially
reasonable efforts to obtain confidential treatment of economic and trade
secret information. In any event, the Parties agree to take all reasonable
action to avoid disclosure of Confidential Information except as permitted
hereunder, and shall cooperate with each other with respect to all such
disclosures. The Party that is required to or has otherwise decided to make a
public statement pursuant permitted under this Section 8.5 will give the
other Party reasonable advance notice of the text of any proposed statement so
that the other Party will have the opportunity to comment upon the statement.
Either Party may disclose any matter that has previously been publicly
disclosed in accordance with this Section 8.5. Except as described above,
neither Party will make any public announcement regarding the terms of or
events related to the Agreement without the prior consent of the
other Party.


 


8.6  Publications.  Neither Optimer nor its employees,
contractors or investigators shall publish or present any information,
including without limitation the results of the Research Program or preclinical
or clinical studies, with respect to any Macrolide Antibiotic, Test Product or
Cempra Product without Cempra’s prior consent (which may be withheld in Cempra’s
sole and final discretion), except as permitted under Section 8.3(d) or this
Section 8.6. Optimer agrees to provide Cempra a copy of any such proposed
publication or presentation at least 60 days prior to its submission for
publication, and Cempra shall have 60 days in which to review the proposed
publication or presentation for the purposes described below. Cempra may
request in writing, and the Optimer shall agree to, (i) the deletion of
any of Cempra’s Confidential Information, (ii) any reasonable changes
requested by Cempra, consistent with scientific practice, or (iii) a delay
of such proposed submission for an additional period, not to exceed ninety
(90) days, in order to protect the potential patentability of any
technology described therein. Cempra, at its election, shall be entitled to
receive in any such publication an acknowledgment of its support of and
involvement in the Research Program and its rights to Optimer Technology.


 


29

















 


9.  TERM AND
TERMINATION


 


9.1  Term.  This Agreement shall become effective on the
Effective Date and shall continue on a Product-by-Product (Cempra Product or
Optimer Product, as applicable) and country-by-country basis until the earlier
of (1) the expiration of the Royalty Term with respect to the applicable
Product (Cempra Product or Optimer Product, as applicable) in the applicable
country; or (2) the effective date of termination pursuant to Section 9.2
or 9.3 (the “Term”).
Upon expiration of this Agreement pursuant to clause (1) above with
respect to a particular Product in a particular country, the Parties and their
Affiliates shall have the perpetual, unrestricted, fully-paid, royalty-free
world-wide right, with rights of sublicense, to make, use, sell, offer for
sale, and import such Product in such country.


 


9.2  Termination
by Cempra or Optimer. 
Cempra may terminate this Agreement at any time upon thirty
(30) days prior written notice to Optimer. At any time following the end
of the Research Term, Optimer may terminate this Agreement upon thirty
(30) days prior written notice to Cempra. In either case, the effects of
such termination shall be as further described in Section 9.4 below.


 


9.3  Mutual Termination
Rights.  Either Party will have the
right to terminate this Agreement upon the following:


 


(a)           It believes
that the other Party is in material breach of this Agreement, in which case the
non-breaching Party may deliver written notice of such material breach to the
other Party, such notice to describe in detail the nature of such breach. The
allegedly breaching Party shall have [***] days from receipt of such
notice to cure such breach. Any such termination shall become effective at the
end of such [***] period unless the breaching Party has cured any such breach
or default prior to the expiration of such [***] period (or, if such default is
capable of being cured but cannot be cured within such [***]-day period, the
breaching Party has commenced and diligently continued actions to cure such
default provided always that, in such instance, such cure must have occurred
within [***] days after notice thereof was provided to the breaching Party
by the non-breaching Party to remedy such default); or


 


(b)           the other Party
is generally unable to meet its debts when due, or makes a general assignment
for the benefit of its creditors, or there shall have been appointed a
receiver, trustee or other custodian for such Party for or a substantial part
of its assets, or any case or proceeding shall have been commenced or other
action taken by or against such Party in bankruptcy or seeking the
reorganization, liquidation, dissolution or winding-up of such Party or any
other relief under any bankruptcy, insolvency, reorganization or other similar
act or law, and any such event shall have continued for sixty (60) days
undismissed, unstayed, unbonded and undischarged. In such circumstances, the
other Party may, upon notice to such Party, terminate this Agreement, such termination
to be effective upon such Party’s receipt of such notice.


 


9.4  Effects of
Termination.


 


(a)           Except as set forth in
Sections 9.1, 9.4(b), 9.4(c), and 9.4(d), upon any termination of this
Agreement, all licenses granted under this Agreement shall terminate, Cempra
and its Affiliates shall cease Development and Commercialization of all
Macrolide Antibiotics, Test Products and Cempra Products, and Optimer and its
Affiliates shall cease development and/or commercialization of Optimer
Products, provided that, notwithstanding the foregoing, each Party and its
Affiliates shall have the privilege, subject to the payment of royalties as
required under Section 6, of (i) completing the manufacture of any
Products in the process of manufacture as of the effective date of such
termination (the “Termination Date”),
(ii) selling such Products and all finished Products in their possession
or under their control as of the Termination Date for a period of one year
following the Termination Date upon commercially reasonable conditions, and (iii) completing
performance of all contracts entered into with third parties prior to the
Termination Date (1) for the marketing, sale, or manufacture of Products
or (2) requiring the use of Products or technology claimed in the Optimer
Patents or Cempra Patents,


 


30
















 


as applicable, for a period of one year
following the Termination Date. Notwithstanding any provision herein to the
contrary, no termination of this Agreement by either Party shall be construed
as a termination of any valid sublicense granted by the other Party, its
Affiliates, or its sublicensees with respect to the rights granted under this
Agreement. Upon termination of this Agreement by a Party each sublicense of
rights granted to a Third Party by the other Party shall, to the extent not
imposing obligations on the other Party in excess of those contained herein, be
automatically assigned to such Party.


 


(b)           If a Party terminates this
Agreement in accordance with Section 9.2, then, at the other Party’s
express election upon notice of termination, all licenses granted by the
terminating Party to the non-terminating Party shall survive, in which event,
the non-terminating Party’s obligations set forth in Article 4 and in
Article 6 (including without limitation the obligation to pay to the
terminating Party any milestone and/or royalty payments set forth in Article 6
and provide the reports set forth therein), the non-terminating Party’s
rights under Section 7, and al other provisions of this Agreement
applicable to the foregoing, other than Sections 1A, 2, and 3 (which shall
terminate), shall survive. It is understood and agreed that following such a
termination, the terminating Party shall retain the right to terminate the
other Party’s remaining licenses and rights in accordance with Section 9.3,
and the non-terminating Party shall retain the right to subsequently terminate
its remaining licenses and rights under this Agreement pursuant to Section 9.2,
in which event the applicable provisions of Section 9.4(a) shall apply.


 


(c)           If Cempra terminates this
Agreement in accordance with Section 9.3, then at Cempra’s express
election upon notice of termination, all licenses and rights granted by Optimer
to Cempra shall survive, in which event Cempra’s obligations set forth in Article 4
and in Article 6 (including without limitation the obligation to pay
to Optimer the royalty and milestone payments set forth in Article 6
and provide the reports set forth therein), Cempra’s rights under Section 7,
and all other provisions of this Agreement applicable to the foregoing, other
than Sections 1A, 2, and 3 (which shall terminate), shall survive. It is
understood and agreed that following such a termination, Optimer shall retain
the right to terminate the remaining licenses and rights of Cempra in
accordance with Section 9.3, and Cempra shall retain the right to
subsequently terminate its remaining licenses and rights under this Agreement
pursuant to Section 9.2, in which event the applicable provisions of Section 9.4(a) shall apply.


 


(d)           If Optimer terminates this
Agreement in accordance with Section 9.3, then at Optimer’s express
election upon notice of termination, all licenses and rights granted by Cempra
to Optimer shall survive, in which event Optimer’s obligations set forth in Article 4
and in Article 6 (including without limitation obligation to pay to
Cempra the royalty and milestone payments set forth in Article 6
and provide the reports set forth therein), Optimer’s rights under Article 7,
and all other provisions of this Agreement applicable to the foregoing, other
than Sections 1A, 2, and 3 (which shall terminate), shall survive. It is
understood and agreed that following such a termination, Cempra shall retain
the right to terminate the remaining licenses and rights of Optimer in
accordance with Section 9.3, and Optimer shall retain the right to
subsequently terminate its remaining licenses and rights under this Agreement
pursuant to Section 9.2, in which event the applicable provisions of Section 9.4(b) shall apply.


 


(e)           Termination of this
Agreement shall not terminate the obligations of a Party to make any payments
then owing through the date of termination or the obligations of
confidentiality imposed on either Party.


 


(f)            The remedies set forth in
this Article 9 are not exclusive, and shall not limit any other legal or
equitable remedies that are available to the parties.


 


31

















 


9.5  Survival.  The following provisions shall survive any
expiration or termination of this Agreement: Sections 5.6, 6.15, 7, 8, 9,
10, 11, 12 and 13, together with any sections referenced in such surviving
provisions or necessary to give them effect.


 


10.  REPRESENTATIONS
AND WARRANTIES


 


10.1  General
Representations and Warranties.  Each Party represents and warrants to the
other that, as of the date hereof:


 


(a)           it is duly
organized and validly existing under the laws of its state or country of
incorporation, and has full corporate power and authority to enter into this
Agreement and to carry out the provisions hereof;


 


(b)           it is duly authorized
to execute and deliver this Agreement and to perform its obligations hereunder,
and the person or persons executing this Agreement on its behalf has been duly
authorized to do so by all requisite corporate action;


 


(c)           this Agreement
is legally binding upon it and enforceable in accordance with its terms. The
execution, delivery and performance of this Agreement by it does not conflict
with any agreement, instrument or understanding, oral or written, to which it
is a party or by which it may be bound, nor violate any material law or
regulation of any Governmental Authority having jurisdiction over it;


 


(d)           it is aware of
no action, suit or inquiry or investigation instituted by any governmental
agency that questions or threatens the validity of this Agreement;


 


(e)           all necessary
consents, approvals and authorizations of all governmental authorities and
other Persons required to be obtained by such Party to enter into, or perform
its obligations under, this Agreement have been obtained (provided, however,
that the foregoing shall not be construed as a representation or warranty
concerning governmental authorizations and non-infringement of intellectual
property rights of Third Parties disclaimed in Section 10.3 below).


 


(f)            it has not
granted, and will not grant during the Term of the Agreement, any right to any
Third Party that would conflict with the rights granted to the other Party
hereunder. It has (or will have at the time the performance is due)
maintained and will maintain and keep in full force and effect all agreements
necessary to perform its obligations hereunder;


 


(g)           all products,
materials and Information created by the Parties under this Agreement is
current and accurate, is such Party’s original work (except for identified
third-party materials), and, to such Party’s knowledge, will not infringe upon,
violate or misappropriate any intellectual property right of any third
party; and


 


(h)           to the extent
any third-party materials are incorporated in the products, such Party has
obtained from such third party rights (if any) reasonably sufficient to
enable the such Party to comply with this Agreement.


 


10.2  Optimer
Representations and Warranties.  Optimer represents, warrants, and
covenants that:


 


(a)           Optimer has
not, and during the term of the Agreement will not, grant any right to any
Third Party relating to Optimer Technology which conflicts with the rights
granted to Cempra hereunder;


 


(b)           During the
Term, Optimer will not, without the prior written consent of Cempra, encumber
the Optimer Patents or Optimer Know-How, respectively, with liens, mortgages,
security interests or another similar interest that would give the holder the
right to convert the interest into ownership, unless the encumbrance is
expressly subject to the licenses herein;


 


32

















 


(c)           Optimer has
(or will have at the time performance is due) maintained and will maintain
and keep in full force and effect all agreements necessary to perform its
obligations hereunder;


 


(d)           Optimer does
not have any present knowledge from which it would reasonably conclude that the
Optimer Patents are invalid or that their exercise would infringe patent rights
of any Third Party;


 


(e)           The Optimer
Patents listed on Schedule 1.30
are, as of the Effective Date, the only patents or patent applications owned,
controlled, or licensed by Optimer claiming Macrolide Antibiotics, Test
Products, Cempra Products, Optimer Technology, or the manufacture, use or
application of any of the foregoing.


 


(f)            To the best of
Optimer’s knowledge, each item included in the Optimer Patents that is
registered, filed or issued under the authority of an appropriate governmental
authority is and at all times has been in compliance with all legal
requirements applicable thereto, and all filings, payments, and other actions
required to be made or taken to maintain such item of Optimer Patents in full
force and effect have been made by the applicable deadline. Furthermore, (1) no
patent application or patent included in the Optimer Patents has been abandoned
or allowed to lapse and (2) no provisional patent application included
therein has expired without the filing of a nonprovisional patent application
that claims the benefit of such provisional patent application.


 


(g)           Optimer has, to
the knowledge of Optimer’s executive management, furnished to Cempra all
tangible manifestations of the Optimer Technology which Optimer owns or
possesses as of the Effective Date;


 


(h)           Optimer has
taken commercially reasonable measures, using its good faith business judgment,
to protect the confidentiality of the Optimer Know How;


 


(i)            None of the
Optimer Patents is the subject of any pending interference, opposition,
cancellation or other protest proceeding;


 


(j)            Optimer has no
knowledge of any claim pending, threatened, or previously made alleging
infringement or misappropriation of any patent, trade secret, or other
intellectual property right of any Third Party relative to the Optimer Patents,
the technology claimed therein, Optimer Know How, Test Products, Macrolide
Antibiotics, or Cempra Products; and


 


(k)           Optimer is not
aware of any third party activities which would constitute misappropriation or
infringement of the Optimer Technology (including but not limited to Optimer
Patents);


 


(l)            Optimer owns
all right, title, and interest to all Optimer Technology, free and clear of any
liens, claims, and encumbrances of any party, and none of the Optimer
Technology has been obtained by Optimer pursuant to any license or other
agreement with any third party;


 


(m)          Optimer does
not presently own or Control any rights to any trademarks, service marks, trade
dress, or similar intellectual property rights with respect to Cempra Products
or Macrolide Antibiotics.


 


10.3  Cempra
Representations and Warranties.  Optimer represents, warrants, and
covenants that:


 


(a)           Cempra has not,
and during the term of the Agreement will not, grant any right to any Third
Party relating to Cempra Patent, Cempra Product, or Cempra Know-How which
conflicts with the rights granted to Optimer hereunder;


 


(b)           During the
Term, Cempra will not, without the prior written consent of Optimer, encumber
the Cempra Patents or Cempra Know-How, respectively, with liens, mortgages,
security


 


33

















 


interests or another similar
interest that would give the holder the right to convert the interest into
ownership, unless the encumbrance is expressly subject to the licenses
herein; and


 


(c)           Cempra has
(or will have at the time performance is due) maintained and will maintain
and keep in full force and effect all agreements necessary to perform its
obligations hereunder.


 


10.4  Disclaimer
Concerning Technology.  EACH
PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR
IMPLIED, EXCEPT FOR THOSE SET FORTH IN THIS AGREEMENT, INCLUDING WITHOUT
LIMITATION THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR
PURPOSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, (A) BOTH
PARTIES ACKNOWLEDGE AND AGREE THAT THE ACTIVITIES TO BE CONDUCTED UNDER THE
RESEARCH PROGRAM ARE INHERENTLY UNCERTAIN AND, PROVIDED THAT EACH PARTY ENGAGES
IN DILIGENT EFFORTS TO PERFORM ITS OBLIGATIONS HEREUNDER, THAT THERE ARE
OTHERWISE NO ASSURANCES THAT THE PARTIES WILL SUCCESSFULLY SYNTHESIZE MACROLIDE
ANTIBIOTICS MEETING THE SPECIFICATIONS SET FORTH BY CEMPRA AND OPTIMER JOINTLY
OR IDENTIFY A TEST PRODUCT, OR SUCCESSFULLY CONDUCT OTHER ACTIVITIES
CONTEMPLATED TO BE PERFORMED IN THE RESEARCH PROGRAM, OR THAT ANY MACROLIDE
ANTIBIOTICS OR TEST PRODUCT WILL BE SUCCESSFULLY DEVELOPED AND COMMERCIALIZED
BY CEMPRA AS A LICENSED PRODUCT, OR THAT REQUIRED GOVERNMENTAL APPROVALS IN
CONNECTION WITH THE MANUFACTURE, CLINICAL DEVELOPMENT AND/OR COMMERCIALIZATION
OF MACROLIDE ANTIBIOTICS, TEST PRODUCTS AND/OR LICENSED PRODUCTS CAN OR WILL BE
OBTAINED; AND (B) EACH PARTY EXPRESSLY DISCLAIMS ANY REPRESENTATIONS OR
WARRANTIES, EXPRESS OR IMPLIED, TO THE CONTRARY.


 


11.  INDEMNITIES


 


11.1  Mutual
Indemnification.  Subject to Section 11.2,
each Party hereby agrees to indemnify, defend and hold the other Party, its
Affiliates, its licensees, and its and their officers, directors, employees,
consultants, contractors, sublicensees and agents (collectively, “Representatives”) harmless from and
against any and all damages or other amounts payable to a Third Party claimant,
as well as any reasonable attorneys’ fees and costs of litigation arising out
of any such Claim (as defined in this Section 11.1), (collectively, “Damages”) resulting from claims, suits,
proceedings or causes of action (“Claims”)
brought by a Third Party against a Party or its Representatives based on: (a) material
breach by the indemnifying Party of this Agreement, (b) breach of any
applicable law, rule, or regulation by such indemnifying Party in connection
with the performance of its obligations hereunder or the exercise of licenses
or rights conveyed hereunder, (c) gross negligence or willful misconduct
by such indemnifying Party, its Affiliates, or their respective employees,
contractors or agents, (d) the indemnifying Party’s Development,
Commercialization, manufacture, use or sale of Macrolide Antibiotics, Test
Products, or Products, except, in each case, to the extent such Damages are
subject to indemnification by the other Party under this Section 11.1.


 


11.2  Notification.  In the event that any Third Party asserts a
claim with respect to any matter for which a Party (the “Indemnified Party”) is entitled to
indemnification hereunder (a “Third
Party Claim”), then the Indemnified Party shall promptly notify the
Party obligated to indemnify the Indemnified Party (the “Indemnifying Party”) thereof; provided,
however, that no delay on the part of the Indemnified Party in notifying the
Indemnifying Party shall relieve the Indemnifying Party from any obligation
hereunder unless (and then only to the extent that) the Indemnifying Party
is prejudiced thereby. Indemnifying Party may assume the complete control of
the defense, compromise or settlement of any Third Party Claim (provided that
any settlement of any Third Party Claim that (i) subjects Indemnified
Party to any non-indemnified liability or (ii) admits fault or wrongdoing
on the 


 


34

















 


part of Indemnified Party
will require the prior written consent of such Indemnified Party, provided such
consent will not be unreasonably withheld), including, at its own expense,
employment of legal counsel, and at any time thereafter Indemnifying Party will
be entitled to exercise, on behalf of Indemnified Party, any rights which may
mitigate the extent or amount of such Third Party Claim; provided, however,
that if Indemnifying Party has exercised its right to assume control of such
Third Party Claim, Indemnified Party (i) may, in its sole discretion and
at its own expense, employ legal counsel to represent it (in addition to
the legal counsel employed by Indemnifying Party) in any such matter, and in
such event legal counsel selected by Indemnified Party will be required to
reasonably confer and cooperate with such counsel of Indemnifying Party in such
defense, compromise or settlement for the purpose of informing and sharing
information with Indemnifying Party; (ii) will, at Indemnifying Party’s
own expense, make available to Indemnifying Party those employees, officers,
contractors, and directors of Indemnified Party whose assistance, testimony or
presence is necessary or appropriate to assist Indemnifying Party in evaluating
and in defending any such Third Party Claim; provided,
however, that any such access
will be conducted in such a manner as not to interfere unreasonably with the
operations of the businesses of Indemnified Party; and (iii) will
otherwise fully cooperate with Indemnifying Party and its legal counsel in the
investigation and defense of such Third Party Claim.


 


11.3  Exclusion
of Damages.  IN NO EVENT
SHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANY
INDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES,
WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICT
LIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT, UNLESS
SUCH DAMAGES ARE DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THE
LIABLE PARTY. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOREGOING SHALL NOT
BE CONSTRUED TO LIMIT THE INDEMNITY OBLIGATIONS SET FORTH IN SECTION 11.1
ABOVE OR EITHER PARTY’S LIABILITY FOR PATENT INFRINGEMENT OR BREACH OF
SECTIONS 8 (CONFIDENTIALITY), 7 (INTELLECTUAL PROPERTY), 5.1 (WITH RESPECT
TO CEMPRA’S BREACH THEREOF), OR 5.4 (WITH RESPECT TO OPTIMER’S BREACH THEREOF).


 


12.  DISPUTE
RESOLUTION


 


12.1  Disputes.  The Parties recognize that disputes as to
certain matters may from time to time arise during the Term that relate to
either Party’s rights and/or obligations hereunder. It is the objective of the
Parties to facilitate the resolution of disputes arising under this Agreement
in an expedient manner by mutual cooperation and without resort to litigation
or arbitration. To accomplish this objective, the Parties agree that, in the
event of any disputes, controversies or differences that may arise between the
Parties, out of or in relation to or in connection with this Agreement, or for
the breach thereof, upon the request of either Party, the Parties agree to meet
and discuss in good faith a possible resolution thereof. If the matter is not
resolved within thirty (30) days following the request for discussions,
either Party may refer the matter to arbitration              in accordance with Section 12.3
below. Notwithstanding the foregoing, each Party shall be entitled to seek
appropriate injunctive relief in any court of competent jurisdiction (i) to
preserve such Party’s rights pending resolution of arbitration proceedings
under this Agreement, (ii) to avoid irreparable damages, or (iii) with
respect to any matters concerning intellectual property rights or
confidentiality.


 


12.2  Governing
Law.  Resolution of all disputes
arising out of or related to this Agreement or the performance, enforcement,
breach or termination of this Agreement and any remedies relating thereto,
shall be governed by and construed under the substantive laws of the State of
California, without regard to conflicts of law rules that would provide
for application of the law of a jurisdiction outside California.


 


35

















 


12.3  Arbitration.  Except as otherwise expressly provided
herein, the Parties agree that any dispute not resolved internally by the
Parties, within thirty (30) days after meeting pursuant to Section 12.1,
shall be finally resolved, upon notice to the other Party by either Party, by
binding arbitration in accordance with the provisions of this Section 12.3.
The arbitration shall be conducted by the Judicial Arbitration and Mediation
services, Inc. (“JAMS”) under its rules of arbitration then in
effect, except as modified in this Agreement. Each Party shall select one (1) independent,
neutral arbitrator experienced in the biotechnology/pharmaceutical industry,
and the two (2) arbitrators so selected shall choose a third independent,
neutral arbitrator experienced in the biotechnology/pharmaceutical industry. In
the event a Party fails to select its such arbitrator within fifteen
(15) business days of its receipt of the notice provided above, the other
Party shall be entitled to select such arbitrator. The arbitrators shall use
their best efforts to rule on each disputed issue within sixty
(60) calendar days after completion of hearings on the matter(s) in
dispute, and the arbitration decision(s) shall be rendered in writing to
the Parties and must specify the basis(es) on which the decision(s) was(were)
made. Such decision(s) shall be binding and not be appealable to any court
in any jurisdiction. Unless otherwise mutually agreed upon by the Parties, the
arbitration proceedings shall be conducted in New York, New York. One
or more of the Parties to any arbitration proceeding commenced under this
Agreement shall be entitled, as a part of the arbitration award, to the costs
and expenses (including reasonable attorneys fees and interest on any award) of
investigating, preparing and pursuing an arbitration claim to the extent that
the arbitrators award such costs and expenses, provided that, notwithstanding
the foregoing, the Parties shall bear the costs and expenses incurred in
connection with an arbitration under this section in inverse proportion to the
award granted to each of them by the arbitrators.


 


13.  MISCELLANEOUS


 


13.1  Entire
Agreement; Amendment.  This
Agreement, including the exhibits attached hereto, sets forth the complete,
final and exclusive agreement and all the covenants, promises, agreements,
warranties, representations, conditions and understandings between the Parties
hereto and supersedes and terminates all prior agreements and understandings
between the Parties, including the Letter Agreement. There are no covenants,
promises, agreements, warranties, representations, conditions or
understandings, either oral or written, between the Parties other than as are
set forth herein and therein. No subsequent alteration, amendment, change or
addition to this Agreement shall be binding upon the Parties unless reduced to
writing and signed by an authorized officer of each Party.


 


13.2  Force
Majeure.  Both Parties
shall be excused from the performance of their obligations under this Agreement
to the extent that such performance is prevented by force majeure and the
nonperforming Party promptly provides notice of the prevention to the other
Party. Such excuse shall be continued so long as the condition constituting force
majeure continues and the nonperforming Party takes reasonable efforts to
remove the condition. For purposes of this Agreement, force majeure shall
include conditions beyond the control of the Parties, including without
limitation, an act of God, voluntary or involuntary compliance with any
regulation, law or order of any government, war, civil commotion, labor strike
or lock-out, epidemic, failure or default of public utilities or common
carriers, destruction of production facilities or materials by fire,
earthquake, storm or like catastrophe; provided,
however, the payment of invoices
due and owing hereunder shall not be delayed by the payer because of a force
majeure affecting the payer, unless such force majeure specifically precludes
the payment process.


 


13.3  Notices.  Any notices, approvals, or consents required
or permitted to be given under this Agreement shall be in writing, shall
specifically refer to this Agreement and shall be deemed to have been
sufficiently given for all purposes if mailed by first class certified or
registered mail, postage


 


36

















 


prepaid, or by
internationally recognized express delivery service or personally delivered.
Unless otherwise specified in writing, the mailing addresses of the Parties
shall be as described below:


 


	
  For
  Optimer:

  	
   

  	
  Optimer
  Pharmaceuticals, Inc.

  
	
   

  	
   

  	
  10110 Sorrento Valley
  Rd., Suite C

  
	
   

  	
   

  	
  San Diego, CA 92121

  
	
   

  	
   

  	
  FEIN: 33-0830300

  
	
   

  	
   

  	
  Fax: (858) 909-0737

  
	
   

  	
   

  	
  Attention: Michael N.
  Chang, President/CEO

  
	
   

  	
   

  	
   

  
	
  For
  Cempra:

  	
   

  	
  Cempra
  Pharmaceuticals Inc.

  
	
   

  	
   

  	
  170 Southport Drive,
  Suite 500

  
	
   

  	
   

  	
  Morrisville, NC 27560

  
	
   

  	
   

  	
  Fax: (919) 467-1716

  
	
   

  	
   

  	
  Attention: Dr. Prabha
  Fenandes, President/CEO

  



 


13.4  United States
Dollars.  References
in this Agreement to “Dollars” or “$” shall mean the legal tender of the
United States of America.


 


13.5  No Strict
Construction.  This
Agreement has been prepared jointly and shall not be strictly construed against
either Party.


 


13.6  Assignment.  Neither Party may assign or transfer this
Agreement or any rights or obligations hereunder without the prior consent of
the other; provided, however, that a Party may make such an
assignment without the other Party’s consent (a) to an Affiliate or in
conjunction with a merger, acquisition, or sale of all or substantially all of
the business or assets of such Party to which this Agreement pertains, or (b) if
such Party or its Affiliates is required to, or reasonably believes that it
will be required to, divest any Product or a competing product in order to
comply with law or the order of any Governmental Authority as a result of a
merger or acquisition. This Agreement shall be binding upon and inure to the
benefit of the successors and permitted assigns of the Parties. Any assignment
or attempted assignment by either Party in violation of the terms of this Section 13.6
shall be null and void and of no legal effect.


 


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


 


13.8  Further
Actions.  Each Party
agrees to execute, acknowledge and deliver such further instruments (including
without limitation patent assignments), 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.


 


13.9  Severability.  If any one or more of the provisions of this
Agreement is held to be invalid or unenforceable by any court of competent
jurisdiction from which no appeal can be or is taken, or in arbitration
proceedings between the Parties as set forth in Article 12 of this
Agreement, the provision shall be considered severed from this Agreement and
shall not serve to invalidate any remaining provisions hereof. The Parties shall
make a good faith effort to replace any invalid or unenforceable provision with
a valid and enforceable one such that the objectives contemplated by the
Parties when entering into this Agreement may be realized.


 


13.10  Headings.  The headings for each article and section 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.


 


13.11  No 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 


 


37

















 


enforcement of its rights
under this Agreement, excepting only as to an express written and signed waiver
as to a particular matter for a particular period of time.


 


REMAINDER OF PAGE INTENTIONALLY LEFT BLANK


 


38

















 


IN WITNESS WHEREOF, the Parties
have executed this Agreement in duplicate originals by their proper officers as
of the date and year first above written.


 


	
  CEMPRA PHARMACEUTICALS INC.

  	
   

  	
  OPTIMER PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
  BY:

  	
   

  	
   

  	
  BY:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  NAME:

  	
   

  	
   

  	
  NAME:

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  TITLE: 

  	
   

  	
   

  	
  TITLE:

  	
   

  



 


39

















 


Schedule 1.35


 


Optimer Patents


 


Macrolide Patent Estate


 


	
  “Macrolides and Process for Their 

  Preparation” 8024-006-PR

  	
   

  	
  (3/10/2003)

  	
   

  	
  Lapsed

  	
   

  	
  Provisional

  	
   

  	
  The application has converted to PCT

  application, 8024-006-WO.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  “Novel Antibacterial
  Agents”, 8024-006-WO

  	
   

  	
  WO2004080381/ 23-Sep-04
  (3/5/2004)

  	
   

  	
  Published

  	
   

  	
  PCT

  	
   

  	
  The application claims composition of matter comprising 14 membered
  macrolide triazole compounds and/or 14 membered macrolide compounds with
  novel suger or sugar mimic moieties at C5 position. The PCT application was
  published and has entered national phase in US, Europe and Canada.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8024-006-US

  	
   

  	
  (9/9/2005)

  	
   

  	
  Pending

  	
   

  	
  US

  	
   

  	
  Notice of Acceptance and Filing Receipt received on 1/12/06. Projected
  publication date 5/11/06.

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8024-006-CA

  	
   

  	
  (12/19/2005)

  	
   

  	
  Pending

  	
   

  	
  Canada

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8024-006-EP

  	
   

  	
  (1/11/2006)

  	
   

  	
  Pending

  	
   

  	
  Europe

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  



 
















 


Schedule 6.1(1)


 


Subscription Agreement


 

















 


THE SECURITIES SUBJECT TO
THIS SUBSCRIPTION AGREEMENT ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND
RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE “1933 ACT”), AND APPLICABLE STATE
SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM. INVESTORS
SHOULD BE AWARE THAT THEY WILL BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS
INVESTMENT FOR AN INDEFINITE PERIOD OF TIME.


 


NAME OF PURCHASER:


OPTIMER PHARMACEUTICALS INC.


 


CEMPRA PHARMACEUTICALS, INC.


 


SUBSCRIPTION AGREEMENT


 


The undersigned (the “Purchaser”)
hereby subscribes to and agrees to purchase            shares
of Common Stock (the “Shares”) of Cempra Pharmaceuticals, Inc., a Delaware
corporation (the “Corporation”). The purchase price hereunder shall be
considered paid in full upon the execution by Purchaser of that certain
Collaborative Research and Development and License Agreement dated March 31,
2006 (the “License Agreement”) between the Corporation and Purchaser, with
consideration taking the form of the Purchaser’s agreement to perform certain
obligations and grant of various intellectual property rights to the
Corporation pursuant to such License Agreement.


 


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


 


Section 1.  Stock
Subscription.  The Purchaser
hereby subscribes for          shares
of Corporation Common Stock. The Shares are being issued as consideration under
the License Agreement.


 


Section 2. 
Representation and Warranties of the Purchaser.  The Purchaser hereby represents, warrants and
agrees as follows:


 


(a)           The Purchaser is a resident
of the State of California, is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware, and has all the
power and authority to enter into, and perform its obligations under this
Subscription Agreement.


 


(b)           That the transfer of
securities contemplated hereby is made in reliance upon the Purchaser’s
representation to the Corporation, which by its acceptance hereof the Purchaser
hereby confirms, that the Shares to be received by it will be acquired for
investment for its own account, not as a nominee or agent, and not with a view
to the sale or distribution of any part thereof, and that it has no present
intention of selling, granting participation in, or otherwise distributing the
same. By executing this Subscription Agreement, the Purchaser further
represents that it does not have any contract, undertaking, agreement, or
arrangement with any person to sell, transfer or grant participations to such
person, or to any third person, with respect to any of the Shares.


 


(c)           The Purchaser understands
that the Shares have not been registered under the 1933 Act on the grounds that
the sale provided for in this Agreement and the issuance of securities
hereunder is exempt from registration under the 1933 Act, and that the
Corporation’s reliance on such exemption is predicated in part on the Purchaser’s
representations set forth herein. The Purchaser realizes that the basis for the
exemption may not be present if, notwithstanding such representations, the
Purchaser has in mind merely acquiring the Shares for a fixed or determined
period in the future, or for a market rise, or for sale if the market does not
rise. The Purchaser does not have any such intention.


 


(d)           The Purchaser represents
that it is an “Accredited Investor” as such term is defined in Rule 501 or
Regulation D promulgated under the Securities Act of 1933, as amended.


 

















 


(e)           The Purchaser represents
that it is experienced in evaluating early-stage companies such as the
Corporation, is able to fend for itself in the transactions contemplated by
this Agreement, has such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of its investment,
and has the ability to bear the economic risks of its investment. The Purchaser
further represents that it has had access, during the course of the
transactions and prior to its acquisition of Shares, to all such information as
it deemed necessary or appropriate (to the extent the Corporation possessed
such information or could acquire it without unreasonable effort or expense),
and that it has had, during the course of the transactions and prior to its
acquisition of Shares, the opportunity to ask questions of, and receive answers
from, the Corporation concerning the terms and conditions of the offering and
to obtain additional information (to the extent the Corporation possessed such
information or could acquire it without unreasonable effort or expense)
necessary to verify the accuracy of any information furnished to him or to
which it had access.


 


(f)            The Purchaser understands
that the Shares may not be sold, transferred or otherwise disposed of without
registration under the 1933 Act or an exemption therefrom, and that in the
absence of an effective registration statement covering the Shares or an
available exemption from registration under the 1933 Act, the Shares must be
held indefinitely. In particular, the Purchaser is aware that the Shares may
not be sold pursuant to Rule 144 promulgated under the 1933 Act unless all
of the conditions of that Rule are met. Among the conditions for use of Rule 144
is the availability of current information to the public about the Corporation.
Such information is not now available and the Corporation has no present plans
to make such information available. The Purchaser represents that, in the
absence of an effective registration statement covering the Shares it will
sell, transfer, or otherwise dispose of the Shares only in a manner consistent
with its representations set forth herein.


 


(g)           The Purchaser agrees that in
no event will it make a transfer or disposition of any of the Shares (other
than pursuant to an effective registration statement under the 1933 Act or, to
the Corporation’s reasonable satisfaction, pursuant to Rule 144), unless
and until (i) the Purchaser shall have notified the Corporation of the
proposed disposition and shall have furnished the Corporation with a statement
of the circumstances surrounding the disposition, and (ii) if requested by
the Corporation, at the expense of the Purchaser or transferee, it shall have
furnished to the Corporation an opinion of counsel, reasonably satisfactory to
the Corporation, to the effect that such transfer may be made without registration
under the 1933 Act.


 


(h)           The Purchaser understands
that each certificate representing the Shares will be endorsed with a legend
substantially as follows:


 


“THE SECURITIES REPRESENTED
BY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,
AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEEN
ACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOT
BE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT AN
EFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACT
OF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR THE
AVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIES
ACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.”


 


(i)            The Purchaser understands
that no public market now exists for any of the securities issued by the
Corporation and that there is no assurance that a public market will ever exist
for the Shares.


 


2

















 


Section 3.  Indemnity.  The Purchaser will indemnify the Corporation,
its officers, directors, shareholders, employees and agents against any losses
or damages suffered by any of them as a result of the failure of the above representations
and warranties to be true or the failure of the Purchaser to comply with the
agreements set forth herein.


 


Section 4. 
Representations and Warranties of the Corporation.  The Corporation hereby represents and
warrants to the Purchaser as follows:


 


(a)           The Corporation is a
corporation duly organized and validly existing under the laws of the State of
Delaware. The Corporation has the requisite corporate power to own and operate
its properties and assets, and to carry on its business as currently conducted.


 


(b)           The Corporation has a
requisite legal and corporate power to: (i) execute and deliver this
Subscription Agreement; and (ii) to carry out and perform its obligations
under this Subscription Agreement.


 


(c)           [The Corporation has no subsidiaries
or affiliated companies and does not otherwise own or control, directly or
indirectly, any other corporation, association or business entity.](1)


 






(1)                                 This subsection
shall be subject to deletion or revision with respect to issuances made following
the Effective Date of the License Agreement as necessary to reflect the facts
as they exist as of such date of such issuance.


 


(d)           [The authorized capital
stock of the Corporation consists of                shares
of Common Stock, of which                shares
are issued and outstanding prior to the sale of the stock contemplated
hereunder. Other than as set forth above and except for the transactions
contemplated by this Agreement and the License Agreement, there are no other
outstanding options, warrants, rights (including conversion or preemptive
rights and rights of first refusal or similar rights) or agreements,
orally or in writing, for the purchase or acquisition from the Corporation of
any of the Corporation’s securities.](2)


 






(2)                                 This subsection
shall be subject to revision with respect to issuances made following the
Effective Date of the License Agreement as necessary to reflect the facts as
they exist as of such date of such issuances.


 


(e)           The outstanding shares of
the capital stock of the Corporation are duly and validly issued, fully paid
and non-assessable. The Shares, issuable upon execution of the License
Agreement, shall, upon the terms of the License Agreement, be duly and validly
issued, fully paid and non-assessable.


 


(f)            The Corporation is not, and
will not be by virtue of entering into, and performing its obligations under,
this Agreement, in violation of any term of the Corporation’s Certificate of
Incorporation, Bylaws or contractual undertakings or the provisions of any material
agreement, mortgage, indenture, contract, lease agreement, instrument, judgment
or decree to which the Corporation is a party or by which it is bound.


 


(g)           There are no actions, suits,
proceedings or investigations pending or, to the knowledge of the Corporation,
currently threatened against the Corporation or its properties before any court
or governmental body.


 


(h)           No representation or
warranty by the Corporation in this Agreement, or in connection with the
execution or performance of this Agreement, contains or will contain any untrue
statement of a material fact or omits or will omit to state a material fact
required to be stated herein or necessary to make any statement not misleading.


 


Section 5.  Lock-Up
Agreement.  The Purchaser
agrees, in connection with the first registration with the United States
Securities and Exchange Commission under the Securities Act of 1933, as 


 


3

















 


amended, of the public sale
of the Corporation’s Common Stock upon request of the Corporation or any
underwriters managing such offering, not to sell, make any short sale of, loan,
grant any option for the purchase of or otherwise dispose of any such
securities of the Corporation (other than those included in the registration)
or the economic risk of the ownership thereof without the prior written consent
of the Corporation or such underwriters, as the case may be, for such period of
time (not to exceed 180 days) from the effective date of such registration
as the Corporation or the underwriters, as the case may be, shall specify;
provided each officer and director of the Corporation and all other holders of
at least 5% of the Corporation’s voting securities will agree to the same
restriction. Each such recipient agrees that the Corporation may instruct its
transfer agent to place stop-transfer notations in its records to enforce this
paragraph.


 


Section 5.  Miscellaneous


 


5.1  Amendment.  This Subscription Agreement may be amended
only by written agreement among Purchaser and the Corporation.


 


5.2  Survival of
Representations, Warranties and Agreements.  All representations, warranties and
agreements made in this Subscription Agreement, or any other instrument or
document delivered in connection herewith or therewith, shall survive the
execution and delivery hereof or thereof.


 


5.3  Further
Assurances.  All parties agree
to execute any additional documents necessary to carry out the purposes of this
Subscription Agreement.


 


5.4  Notices.  All demands, notices, approvals, consents,
requests, and other communications hereunder shall be in writing and shall be
deemed to have been given when the writing is delivered, if given or delivered
by hand, overnight delivery service or by facsimile (with confirmed receipt),
or three (3) days after being mailed, if mailed, by first class,
registered or certified mail, postage prepaid, to the applicable address
established under Section 13.3 of the License Agreement.


 


5.5  Governing
Law; Successors and Assigns. 
This Subscription Agreement shall be governed by the laws of the State
of North Carolina. The rights and benefits of this Subscription Agreement shall
inure to the benefit of, and be enforceable by, the successors and assigns of
the parties.


 


[Remainder of page intentionally left blank.]


 


4

















 


IN WITNESS WHEREOF, the
parties have duly executed this Agreement as of this          day
of                 200
..


 


	
   

  	
  CORPORATION:

  
	
   

  	
   

  
	
   

  	
  CEMPRA PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  PURCHASER:

  
	
   

  	
   

  	
   

  
	
   

  	
  OPTIMER PHARMACEUTICALS INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


5

















 


Schedule 6.1(2)


Shareholders Agreement


 

















 


AGREEMENT TO JOIN AS A PARTY TO STOCKHOLDERS AGREEMENT


OF CEMPRA PHARMACEUTICALS, INC.


 


THIS AGREEMENT (the “Agreement”) dated as of March 31, 2006
is between CEMPRA PHARMACEUTICALS, INC., a Delaware corporation (the “Company”), and


 


OPTIMER
PHARMACEUTICALS, INC. (the “New
Stockholder”).


 


WITNESSETH:


 


WHEREAS, the Company and
certain holders of capital stock of the Company (the “Existing Stockholders”) are parties to
Stockholders Agreement, dated as of January 11, 2006, a copy of which is
attached hereto as Exhibit A
(the “Stockholders”);


 


WHEREAS, pursuant to that
certain Collaborative Research and Development and License Agreement and
Subscription Agreement between the parties, each dated March 31, 2006, New
Stockholder has received [***] ([***]) shares of the Company’s Common Stock,
$.0001 par value (the “New Shares”); and


 


WHEREAS, Section 5.12
of the Stockholders Agreement permits any party who acquires shares of the
Company’s capital stock to become party to the Stockholders Agreement in the
form of a joinder agreement whereby such party agrees to be bound and subject
to the terms of the Stockholders Agreement with respect to such shares held by
such Company stockholder; and


 


WHEREAS, the New Stockholder
must join as party to the Shareholders Agreement in connection with their
receipt of the New Shares.


 


NOW, THEREFORE, in consideration
of the issuance of New Shares to New Stockholder and for the premises, the
covenants of the parties set forth below and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the parties hereby agree as follows.


 


1.             The undersigned New
Stockholder hereby joins as party to and thereby agrees to be bound by the
terms and conditions of the Stockholders Agreement, effective as of the date
hereof.


 


2.             The Company hereby consents
to New Stockholder joining as party to the Stockholders Agreement.


 


3.             For all purposes under the
Stockholders Agreement the New Stockholder shall be deemed a “Stockholder” and
the New Shares shall be deemed to be “Shares.”


 


4.             This Agreement shall be
governed by and interpreted in accordance with the laws of the State of North
Carolina.


 


5.             This Agreement may be
executed in one or more counterparts.


 


[The Next Page is the Signature Page]


 

















 


IN WITNESS WHEREOF, the
undersigned have executed this Agreement as of the date first written above.


 


	
   

  	
  OPTIMER PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  CEMPRA PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  



 


2

















 


EXHIBIT A


 


Stockholders Agreement


 






 












 


CEMPRA PHARMACEUTICALS, INC.


 


STOCKHOLDERS AGREEMENT


 


This Stockholders Agreement
(the “Agreement”) is made as of
this 11th day of January, 2006, by and among Cempra
Pharmaceuticals, Inc., a Delaware corporation (the “Company”), and the persons owning shares of
the capital stock of the Company listed on the Schedule of Stockholders
attached hereto as Exhibit A
(and any additional stockholder named in any amendment to Exhibit A, referred to herein
individually as a “Stockholder”
and collectively as the “Stockholders”).


 


ARTICLE 1 RECITALS


 


1.1           The Stockholders are
collectively the owners of all the issued and outstanding capital stock of the
Company (the “Shares”), as
indicated on Exhibit A
(which shall be amended from time to time to reflect purchases or transfers of
Shares).


 


1.2           The Company and the
Stockholders realize that, in the event of the death or termination of
employment of one of the Stockholders, or the sale, transfer or encumbrance of
his/its stock in the Company during his/its lifetime, should the stock of the
Company owned by such Stockholder pass into the ownership or control of a
person or entity other than the remaining Stockholders, it would tend to
disrupt the harmonious and successful management and control of the Company.


 


1.3           It is the earnest desire of
the Company and the Stockholders to avoid the happening of any such unfortunate
contingencies by assuring to the remaining Stockholders a succession to the
ownership and control of the Company through the acquisition of the stock of a
Stockholder at the time of his death, termination of employment or prior to the
sale or encumbrance of such Stockholder’s stock.


 


In consideration of the
mutual covenants contained herein, and for other valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agree as follows:


 


ARTICLE 2 TRANSFER OF SHARES


 


2.1  Prohibited
Transfers.  No Stockholder
shall sell, assign, transfer or dispose of all or any of his/its Shares except
in compliance with the terms of this Agreement. Notwithstanding anything to the
contrary contained in this Agreement, any Stockholder may transfer without the
necessity of prior approval all or any of his/its Shares by way of gift to his
spouse, to any of his lineal descendants or ancestors, or to any trust for the
benefit of any one or more of such Stockholder, his spouse or his lineal
descendants or ancestors. The Company shall not be required to transfer on its
books any capital stock transferred in violation hereof or to treat any transferee
of capital stock transferred in violation hereof as an owner or Stockholder.


 


2.2  Right of
First Refusal on Dispositions.


 


(a)           If at any time a Stockholder
(a “Selling Stockholder”) desires
to sell or otherwise transfer all or any part of his Shares pursuant to a bona
fide offer from a third party (the “Proposed
Transferee”), the Selling Stockholder shall submit a written offer
(the “Offer”), by delivering the
Offer to the Company and the other Stockholders, to sell such Shares (the “Offered Shares”) to the Company on terms
and conditions, including price, not less favorable than those on which the
Selling Stockholder proposes to sell such Offered Shares to the Proposed
Transferee. The Offer shall disclose the identity of the Proposed Transferee,
the number of Offered Shares proposed to be sold, the total number of Shares
owned by the Selling Stockholder, the terms and conditions, including price, of
the proposed sale, and any other material facts relating to the proposed sale.


 


(b)           If the Company does not
purchase all of the Offered Shares within 30 days after receipt of notice
of an Offer (the “Option Period”),
then the other Stockholders shall have a 30-day right, beginning on the day
after the expiration of the Option Period, to purchase all such Offered Shares,
on the terms and conditions disclosed in the Offer (the “Second Option Period”), on a pro-rata basis
based on the total Shares owned by all Stockholders electing to purchase the
Offered Shares. Upon the expiration of the Second Option Period or the express
rejection of the Offer by both the Company and 


 

















 


other Stockholders, whichever occurs earlier,
the Selling Stockholder may sell all of the Offered Shares to the Proposed
Transferee at any time within 90 days after such time, subject to the provisions
of Section 2.3. Any such sale shall be to the Proposed Transferee, at not
less than the price and upon other terms and conditions, if any, not more
favorable to the Proposed Transferee than those specified in the Offer. Any
remaining Offered Shares not sold within such 90-day period shall again be
subject to the requirements of a prior offer pursuant to this Section 2.2.
If Offered Shares are sold pursuant to this Section 2.2 to any purchaser
who is not a party to this Agreement, the purchaser of such Offered Shares
shall execute a counterpart of this Agreement as a precondition of the purchase
of such Offered Shares and any Offered Shares sold to such purchaser shall
continue to be subject to the provisions of this Agreement, including, without limitation,
the provisions of Article II.


 


2.3  Right of
Participation in Sales.


 


(a)           If at any time a Stockholder
desires to sell any Shares owned by him to a Proposed Transferee, and those
Shares to be transferred have not been purchased by the Company or other
Stockholders under Section 2.2, each of the other Stockholders (other than
those who have elected to purchase Shares pursuant to Section 2.2) shall
have the right to sell to the Proposed Transferee, as a condition to such sale
by the Selling Stockholder, at the same price per share and on the same terms
and conditions as involved in such sale by the Selling Stockholder, a pro rata portion of the amount of Shares
proposed to be sold to the Proposed Transferee. The “pro rata portion” of Shares which a Stockholder shall be
entitled to sell to the Proposed Transferee shall be that number of Shares as
shall equal the number of Offered Shares proposed to be sold to the Proposed
Transferee multiplied by a fraction, the numerator of which is the aggregate of
all shares of Common Stock (including shares issuable upon conversion or
exercise of Preferred Stock, warrants, options or other convertible securities
held by such person) which are then held by the Participating Stockholder (as
defined below), and the denominator of which is the aggregate of all shares of
Common Stock (including shares issuable upon conversion or exercise of
Preferred Stock warrants, options or other convertible securities) which are
then held by the Selling Stockholder and all Stockholders wishing to
participate in any sale under this Section 2.3.


 


(b)           Each Stockholder who wishes
to make a sale to a Proposed Transferee which is subject to this Section 2.3
shall, after complying with the provisions of Section 2.2, give to each
other Stockholder notice of such proposed sale, and stating that all Offered
Shares were not purchased pursuant to the Offer as discussed in Section 2.2.
Such notice shall be given at least 20 days prior to the date of the
proposed sale to the Proposed Transferee. Each other Stockholder wishing to
participate in such sale (a “Participating
Stockholder”) shall notify the Selling Stockholder in writing of
such intention within 15 days after such Participating Stockholder’s
receipt of the notice described in the preceding sentence.


 


(c)           The Selling Stockholder and
each Participating Stockholder shall sell to the Proposed Transferee all, or at
the option of the Proposed Transferee, any part of the Shares proposed to be
sold by them at not less than the price and upon other terms and conditions, if
any, not more favorable to the Proposed Transferee than those in the notice
provided by the Selling Stockholder under Section 2.3(b) above; provided, however, that any purchase of
less than all of such Shares by the Proposed Transferee shall be made from the
Selling Stockholder and each Participating Stockholder pro rata based upon the relative number of
the Shares that the Selling Stockholder and each Participating Stockholder is
otherwise entitled to sell pursuant to Section 2.3(a).


 


(d)           If any Shares are sold
pursuant to this Section 2.3 to any purchaser who is not a party to this
Agreement, the purchaser of such Shares shall execute a counterpart of this
Agreement as a precondition to the purchase of such Shares and such Shares shall
continue to be subject to the provisions of this Agreement.


 


2.4  Transferee
Restrictions.  Any transferee
of capital stock under this Agreement must become a party to this Agreement by
executing any instruments or documents that may be deemed necessary or 


 


2

















 


advisable by counsel to the
Company to make such transferee a party to this Agreement, or such transfer
shall be deemed null and void. If and when all the capital stock of the Selling
Stockholder shall have been transferred in accordance with the terms and
conditions of this Agreement, such person shall cease to be a Stockholder under
this Agreement.


 


ARTICLE 3 VOTING OF SHARES


 


3.1  Election of
Directors.  In any and all
elections of directors of the Company (whether at a meeting or by written
consent in lieu of a meeting), each Stockholder shall vote or cause to be voted
all Shares (as defined in Section 4 below) owned by him or it, or over
which he or it has voting control, and to otherwise use his or its best efforts
to elect:


 


(a)           Four (4) designees of
[***]; and


 


(b)           any additional designee or
designees approved by [***].


 


3.2  Vacancies.  Any vacancy in the office of a director shall
be filled by either (a) a unanimous vote of the Board of Directors, or (b) in
the manner specified in Section 3.1 hereof.


 


3.3  Definition of
Shares.  The term “Shares” shall mean and include any and all
shares of Common Stock and/or shares of Preferred Stock of the Company by
whatever name called, which carry voting rights (including voting rights which
arise by reason of default) and shall include any shares now owned or
subsequently acquired by a Stockholder, however acquired, including without
limitation by stock splits and stock dividends.


 


3.4  Size of
Board.  The Stockholders shall
vote or cause to be voted (whether by actual vote or by written consent), all
shares owned by him, her or it, or over which he, she or it has voting control,
and to otherwise use his, her or its best efforts to ensure that the size of
the Company’s Board of Directors shall be set at four members, unless otherwise
agreed to by [***].


 


ARTICLE 4 TERMINATION AND REVOCATION


 


4.1  Termination.  This Stockholders’ Agreement shall continue
in effect as long as at least two of the Stockholders are living or in
existence and own shares of the Company’s capital stock, and shall terminate
upon (i) the death of one of the last remaining two Stockholders and the
consummation of the transfer to, and payment for, his shares by the last
remaining Stockholder or the Company, as the case may be, (ii) the closing
of the Company’s sale of all or substantially all of its assets or the
acquisition of the Company by another entity by means of merger or other
transaction, or (iii) the closing of the Company’s initial public offering
covering the offer and sale of its Common Stock for the account of the Company.


 


4.2  Revocation.  The voting agreements contained herein are
coupled with an interest and may not be revoked, except in accordance with the
amendment provisions of Section 5.8 hereof.


 


ARTICLE 5 MISCELLANEOUS


 


5.1  Restrictive
Legend.  All certificates
representing Shares owned or hereafter acquired by the Stockholders or any
permitted transferee of any Stockholder bound by this Agreement shall have affixed
thereto a legend substantially in the following form:


 


THE SHARES OF STOCK
REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND PROVISIONS OF A
STOCKHOLDERS AGREEMENT BY AND AMONG THE COMPANY AND ITS STOCKHOLDERS, AND ARE
TRANSFERABLE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF SUCH
AGREEMENT. A COPY OF THE STOCKHOLDERS AGREEMENT IS AVAILABLE FOR INSPECTION AT
THE OFFICES OF THE SECRETARY OF THE COMPANY.


 


3

















 


5.2  Action as
Director.  No party hereto who
is or may become a director of the Company either agrees or implies that he
will exercise his actions as a director in any manner other than in accordance
with his considered judgment at such time with respect to the best interests of
the Company and all of its stockholders.


 


5.3  Transferees;
Binding Effect.  This
Agreement shall be binding upon the Stockholders and their respective heirs,
executors, administrators, legal representatives, successors and assigns.


 


5.4  Severability.  The provisions of this Agreement are
severable, so that the invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other term or
provision of this Agreement, which shall remain in full force and effect.


 


5.5  Specific
Enforcement.  Each Stockholder
expressly agrees that other Stockholders and the Company may be irreparably
damaged if this Agreement is not specifically enforced. Upon a breach or
threatened breach of the terms, covenants and/or conditions of this Agreement
by any Stockholder, the other Stockholders and the Company shall, in addition
to all other remedies, each be entitled to apply for a temporary or permanent
injunction, and/or a decree for specific performance, in accordance with the provisions
hereof.


 


5.6  Governing
Law.  This Agreement shall be
governed by, and construed and enforced in accordance with, the laws of the
State of North Carolina.


 


5.7  Notices.  Any and all notices or elections permitted or
required to be made under this Agreement shall be in writing, signed by the
party giving such notice or election and shall be delivered personally, or sent
by registered or certified mail, return receipt requested, to the other parties
at their respective addresses shown below.


 


5.8  Complete
Agreement; Amendments.  This
Agreement constitutes the full and complete agreement of the parties hereto
with respect to the subject matter hereof. No amendment, modification or
termination of any provision of this Agreement shall be valid unless in writing
and signed by each of the parties hereto.


 


5.9  Pronouns.  Whenever the content may require, any
pronouns used in this Agreement shall include the corresponding masculine,
feminine or neuter forms, and the singular form of nouns and pronouns shall
include the plural, and vice-versa.


 


5.10  Counterparts.  This Agreement may be executed in any number
of counterparts, each of which shall constitute one Agreement binding on all
the parties hereto.


 


5.11  Captions.  Captions of sections have been added only for
convenience and shall not be deemed to be a part of this Agreement.


 


5.12  Additional
Stockholders.  Any parties who
acquire shares of the Company’s capital stock after the date hereof who as a
condition of such acquisition are required to become party to this Agreement,
may do so by executing a form of joinder agreement whereby such party agrees to
be bound and subject to the terms of this Agreement with respect to the Shares
held by such Company stockholder. Upon execution of such joinder agreement, Exhibit A shall be amended to reflect
the addition of such stockholders and its Shares.


 


[THE NEXT PAGE IS THE SIGNATURE PAGE]


 


4

















 


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


 


	
   

  	
  THE COMPANY:

  
	
   

  	
   

  
	
   

  	
  CEMPRA PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
   

  
	
   

  	
   

  
	
   

  	
  THE STOCKHOLDERS:

  
	
   

  	
   

  
	
   

  	
   

  	
  (SEAL)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (SEAL)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  (SEAL)

  
				



 


5

















 


EXHIBIT A


 


SCHEDULE OF STOCKHOLDERS


 




	
  Founders

  	
   

  	
  Number of Shares

  of Common Stock

  	
   

  
	
  [***]

  	
   

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  [***]

  	
   

  	
  [***

  	
  ]

  
	
   

  	
   

  	
   

  	
   

  
	
  TOTAL:

  	
   

  	
  [***

  	
  ]

  






 

















 


Schedule 8.5


 


Press Release


 


        [LOGO]


 


FOR IMMEDIATE RELEASE


 


Cempra Pharmaceuticals, Inc.


Prabhavathi Fernandes,
Ph.D.


+ 1 919 467 1716


 


CEMPRA PHARMACEUTICALS RECEIVES EXCLUSIVE RIGHTS FROM OPTIMER
PHARMACEUTICALS FOR ITS MACROLIDE ANTIBACTERIAL PROGRAM


 


MORRISVILLE, NC April 4,
2006 Cempra Pharmaceuticals, Inc. announced that Optimer Pharmaceuticals
has granted to Cempra exclusive worldwide rights (except ASEAN countries) to
patents and know-how related to its macrolide/ketolide antibacterial program.
Cempra has licensed rights to discover, develop and commercialize drugs based
on the class of compounds called macrolides and ketolides. Optimer will receive
an equity position in Cempra, as well as royalties and milestone payments from
any drugs and drug candidates developed and/or co-developed by Cempra. The
license includes joint drug discovery and development activities at both
companies.


 


Included in the license
agreement are several pre-clinical compounds in addition to ground-breaking
chemistry technology for creating the next generation of macrolides and
ketolides. Pre-clinical candidates derived from this technology have been shown
to possess potent activity against multi-drug resistant Streptococcus pnuemoniae and Streptococcus pyogenes. The most advanced
lead, is orally active with potent efficacy in animal models after once-a-day
administration. This lead will be initially developed for respiratory tract
infections in adults and children, including sinusitis, pharyngitis, and
community acquired mild to moderate pneumonia.


 


“We are extremely happy that
Optimer has chosen to license their macrolide patents and know-how to Cempra
Pharmaceuticals to develop and commercialize new macrolides that could be
useful in the armamentarium for treating drug resistant bacteria” said
Prabhavathi Fernandes, Ph.D., Cempra’s President and Chief Executive Officer.
She added, “This license will be the founding stone of Cempra and will allow us
to build a company focused on developing a portfolio of antibacterial
compounds.”


 


Dr. Michael Chang,
President and CEO of Optimer said “Optimer is enthusiastic about this
opportunity to move some of our earlier stage programs forward. Cempra has
recruited leaders in antibacterial drug discovery and development and by
licensing these macrolides to Cempra, we are enhancing the potential to realize
value from our macrolide program as we focus our resources on other later stage
products.”


 


About
Macrolide Antibiotics 
Macrolides such Clarithromycin, Azithromycin and Telithromycin are
favored by physicians and pediatricians for use in upper and lower respiratory
tract infections where the primary pathogens could be S. pneumoniae, S. aureus, S. pyogenes, H. influenzae, M. catarrhalis, and Legionella pneumophila. Macrolides are
also used to treat Helicobater pylori
gastritis. Many of these pathogens are now resistant to currently available
macrolides.


 


About
Optimer Pharmaceuticals


 


Optimer Pharmaceuticals, Inc.
in San Diego, California (www.optimerpharma.com), a privately held
biotechnology company and leader in carbohydrate chemistry, has a strong
portfolio of late-stage anti-infective products. Older generation antibiotics
were mostly derived from natural products and 


 


1

















 


these antibiotics have key sugar components
that contribute to their antibacterial properties. The sugar components of
antibiotics have been generally beyond the reach of medicinal chemistry.
Optimer has applied its unique sugar chemistry technology to modify regions of
macrolides and ketolides that could not be addressed previously, discovering
new antibiotics that are effective against drug-resistant bacteria.


 


About
Cempra Pharmaceuticals


 


Cempra Pharmaceuticals, Inc.,
located in Morrisville, North Carolina, is a newly founded biotechnology
company focused on anti-infectives. The company was founded in 2006 by
Prabhavathi Fernandes, Ph.D. who was the leading microbiologist for
Clarithromycin development at Abbott. Cempra is committed to the development of
best-in-class antibiotics to meet urgent and unmet needs to treat drug
resistant bacteria.


 


This press
release contains statements that constitute “forward-looking statements These
statements contain information that is not historical fact and are essentially
predictions and are subject to risks and uncertainties, including risks
associated with our ability to raise capital, the success of pre-clinical
studies and clinical trials, intellectual property risks, the difficulty of
predicting FDA filings and approvals, and market acceptance.


 


# # #


 


2






 












 


December 31, 2008


 


Optimer Pharmaceuticals, Inc.


10110 Sorrento Valley
Road, Suite C


San Diego, California
92121


 


Attention:  John
Prunty, Chief Financial Officer


 


Cempra
Pharmaceuticals, Inc. (the “Company”) and Optimer Pharmaceuticals, Inc.
(“Optimer”) are parties to that certain Collaborative Research and Development
and License Agreement dated March 31, 2006 (the “License Agreement”). 
Pursuant to Sections 6.2(a) and 6.2(b) of that License Agreement,
Optimer may elect, upon written request to the Company, that it be paid certain
milestone payments in shares of Cempra capital stock (“Cempra Capital Stock”)
rather than in cash, such Cempra Capital Stock having a Fair Market Value
calculated as of the date the respective milestone is achieved equal to the value
of the milestone payments, as the case may be.  All capitalized terms not
otherwise defined in this Letter Agreement shall have the meanings ascribed to
them in the License Agreement.


 


As you may be
aware, the Company plans to engage in a reorganization whereby the Company will
merge with Cempra Merger Corp. (“MergeCo”), a Delaware corporation and
wholly-owned subsidiary of Cempra Holdings, LLC, a Delaware limited liability
company (the “Holding Company”).  Upon such merger, the separate corporate
existence of MergeCo will terminate, the Company will remain as the surviving
entity and the stockholders of the Company will receive units of the Holding
Company (“Holding Company Units”) in exchange for their shares of Cempra
Capital Stock (the “Reorganization”).  The rights belonging to each
respective class or series of Holding Company Units will be essentially the
same as those of the corresponding class or series of Cempra Capital
Stock.  Subsequent to the Reorganization, the Company will distribute its shares
of CEM-102 Pharmaceuticals, Inc., the Company’s wholly-owned subsidiary
that holds assets unrelated to the technology licensed under the License
Agreement, to the Holding Company (the “Spin-Off”).


 


As a result of the
Reorganization and Spin-Off, it is currently intended that the equity holdings
for the combined company will be held, and the ultimate liquidity for that
equity will be realized, at the Holding Company level.  Therefore, the
parties find it necessary to modify Sections 1.15, 6.2(a), 6.2(b) and 6.2(e) of
the License Agreement, which refer to Cempra Capital Stock in the context of
milestone payments described in Sections 6.2(a) and 6.2(b) of the
License Agreement, to refer to Holding Company equity.  This letter
agreement reflects the parties’ mutual intent to modify those Sections so as to
use the term “Holding Company Units” in lieu of “Cempra Capital Stock” in each
phase where used or referenced.  Except as specifically modified herein,
the License Agreement shall remain in full force and effect as originally
executed.


 


By their execution
below, the parties agree that, upon the completion of the Reorganization, the
references to “Cempra Capital Stock” in Sections 1.15, 6.2(a), 6.2(b) and
6.2(e) of the License Agreement will be modified to become “Holding
Company Units” (as defined in this Letter Agreement).  By its execution
below, the Holding Company agrees to issue Holding Company Units to Optimer
when, if and as required under the terms of the License Agreement, as modified
by this Letter Agreement.


 


[THE NEXT PAGE IS THE SIGNATURE PAGE]


 

















 


	
  CEMPRA
  PHARMACEUTICALS, INC.

  	
   

  	
  OPTIMER
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Prabhavathi
  Fernandes

  	
   

  	
  By:

  	
  /s/ John Prunty

  
	
   

  	
  Prabhavathi Fernandes,
  Ph.D.

  	
   

  	
   

  	
  John Prunty

  
	
   

  	
  Chief Executive Officer
  and President

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  CEMPRA
  HOLDINGS, LLC

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Prabhavathi
  Fernandes

  	
   

  	
   

  
	
   

  	
  Prabhavathi Fernandes,
  Ph.D.

  	
   

  	
   

  
	
   

  	
  Chief Executive Officer
  and President