exv10w2






Exhibit 10.2




LICENSE AND OPTION AGREEMENT




     THIS LICENSE AND OPTION AGREEMENT (the “Agreement”) is made this 22nd day of October, 2002
(the “Effective Date”) by and between GENESOFT PHARMACEUTICALS, INC., a Delaware corporation having
its principal place of business at 7300 Shoreline Court, South San Francisco, CA, USA 94080 (“GS”)
and LG LIFE SCIENCES, LTD., a corporation organized under the laws of the Republic of Korea having
its principal place of business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721,
Republic of Korea (“LGLS”). LGLS and GS are sometimes referred to herein individually as a “Party”
and collectively as the “Parties”.



RECITALS




WHEREAS:



LGLS is the owner of all right, title and interest in certain patents and know-how relating to
Gemifloxacin (as hereafter defined); and



LGLS is the owner or licensee of certain patent rights, know-how, trademark rights and other
intellectual property related to Gemifloxacin; and



LGLS wishes to license to GS the foregoing intellectual property rights to enable GS to develop and
commercialize Gemifloxacin in the Territory (as hereafter defined) and in the Field (as hereafter
defined) and GS wishes to obtain such a license, all on the terms and conditions set forth herein;




     NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the
Parties hereto agree as follows:



ARTICLE 1

DEFINITIONS




     When used in this Agreement, the following terms shall have the meanings indicated below.



     1.1 “Active Pharmaceutical Ingredient” or “API” means Gemifloxacin in active bulk form meeting
the API Specifications.



     1.2 “Additional Indication” means an FDA-approved indication or formulation for Gemifloxacin
within the Field other than the Initial Indication(s).



     1.3 “Affiliate” means an individual, trust, business trust, joint venture, partnership,
corporation, association or any other entity which (directly or indirectly) is controlled by,





 




			
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controls or is under common control with a Party. For the purposes of this definition, the term
“control” (including, with correlative meanings, the terms “controlled by” and “under common
control with”) as used with respect to any Party, shall mean the possession (directly or
indirectly)
at least 50 percent of the outstanding voting securities of a corporation or comparable equity
interest in any other type of entity.




     1.4 “API Specifications” shall mean the specifications for Active Pharmaceutical Ingredient
attached hereto as Schedule 1.4.



     1.5 “Combination Product” means a product consisting of Gemifloxacin and at least one other
biologically active ingredient.



     1.6 “Commercialization” means all activities undertaken relating to the marketing, promotion,
distribution, use, storage, sale and offer for sale of a Product in the Territory including,
without limitation, advertising and any Phase IV clinical trials.



     1.7 “Development” means:



          (a) all activities relating to obtaining and/or maintaining Regulatory Approval of the Product
in the Territory for the Initial Indication including, without limitation, clinical trials and the
preparation, submission, review and development of data or other information related thereto;




          (b) Phase IV clinical trials supporting pre-launch and commercialization of the Product but
not contributing to obtaining and/or maintaining Marketing Authorization Applications of the
Product for the Initial Indication and any Additional Indications in the Territory;




          (c) all activities relating to obtaining and/or maintaining Marketing Authorization of Product
for an Additional Indication in the Territory, including Phase III clinical trials and the
preparation, submission, review and development of data or other information related thereto; and




          (d) all formulation studies for intravenous administration and any other new formulation of
the Product.



The term “Development” shall not include process development or final finish or fill of Product.




     1.8 “EMEA” means the European Agency for the Evaluations of Medical Products.



     1.9 “FDA” means the U.S. Food and Drug Administration.



     1.10 “Field” means [***].





 




			
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     1.11 “Final Product” means the Product in final form for commercialization and distribution,
labeled in accordance with applicable regulatory requirements and custom and meeting the Final
Product Specifications.



     1.12 “Final Product Specifications” means the specifications for Final Product attached hereto
as Schedule 1.12.



     1.13 “Fully Burdened Cost of Manufacture” means: [***]



     1.14 “Gemifloxacin” means the racemic compound whose mesylate is represented on Schedule 1.14
hereto as well as the pharmaceutically acceptable salts, physiologically hydolyzable esters, and
solvates thereof, but excluding either enantiomer alone. The mesylate salt of Gemifloxacin is also
known under the trademark Factive®.



     1.15 “GLAXO” means GlaxoSmithKline plc and its Affiliates.



     1.16 “GLAXO Agreement” means a certain Termination and Transfer Agreement dated on or about
October 14, 2002, by and among GLAXO (including certain of its Affiliates) and LGLS (including its
Affiliate LG Chem Investment, Ltd.).



     1.17 “GLAXO Know-how” means that Information relating to the Product identified on Schedule
1.17 hereto.



     1.18 “GLAXO Patents” means those patents and patent applications shown on Schedule 1.18 hereto
and the equivalents thereof in all countries in the Territory and patents issuing from such patent
applications, as well as divisionals, continuations, continuations-in-part, reissues,
reexaminations, renewals, extensions, utility models, additions and supplementary protection
certificates to any such patents and patent applications which are necessary or useful for the
development, use, importation, manufacture, formulation, packaging, sale or offer for sale of
Product in the Territory.



     1.19 “GS” means Genesoft Pharmaceuticals, Inc. and its Affiliates.



     1.20 “GS Know-how” means all Information relating to the Product developed by GS as a result
of its activities under this Agreement and any and all patent applications and patents covering or
claiming any such Information.



     1.21 “Information” means, whether or not patentable: (i) techniques and data including
inventions, practices, methods, know-how, data (including pharmacological, toxicological and
clinical test data, regulatory submissions and data and analytical and quality control data),
marketing, distribution, and sales data or descriptions, (ii) compounds, compositions of matter,
assays and biological materials, and (iii) dossiers of information necessary for Regulatory
Approvals.





 




			
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     1.22 “Initial Indication(s)” means the first indication(s) for a Product approved by
Regulatory Authorities anywhere in the Territory, formulated in the manner so approved.



     1.23 “Launch” means the first commercial sale of a Product in a country in the Territory by GS
or any of its Affiliates or sub-licensees following receipt of Regulatory Approval in such country.



     1.24 “[***]” shall mean that compound represented on Schedule 1.24 hereto, as well as [***].



     1.25 “LGLS” means LG Life Sciences, Ltd. and its Affiliates.



     1.26 “LGLS Know-How” means all Information now or hereafter within the Control of LGLS
necessary or useful for the Development or Commercialization of the Product in the Territory, or
for the filling, labeling and packaging of the Product anywhere in the world for use or sale in the
Territory.



     1.27 “LGLS Patents” means: (i) those patents and patent applications shown on Schedule 1.27
attached hereto and the equivalents thereof in all countries in the Territory, (ii) all patents
issuing from such patent applications, divisionals, continuations, continuations-in-part, reissues,
reexaminations, renewals, extensions, utility models, additions and supplementary protection
certificates to any such patents and patent applications, and (iii) all patents and patent
applications now or hereafter owned or controlled by LGLS necessary or useful for the development,
use, importation, formulation, packaging, sale or offer for sale of Product in the Territory.



     1.28 “Marketing Authorization Application” means an application for Regulatory Approval
required before commercial sale or use of the Product in the Field in a regulatory jurisdiction in
the Territory.



     1.29 “Memorandum of Understanding” means an agreement between the Parties so titled and dated
August 23, 2002.



     1.30 “Net Sales” means, with respect to a Product that is not a Combination Product, the gross
receipts representing sales of Product to Third Parties by GS and its Affiliates and sub-licensees
in the Territory, less deductions for the following items:




(i) reasonable transportation and insurance charges borne by the selling party,




(ii) sales and excise taxes or customs duties paid by the selling party and any other
governmental charges imposed upon the sale of the Product,




(iii) rebates or allowances actually granted or allowed, including government and
managed care rebates,





 




			
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(iv) quantity discounts, cash discounts or chargebacks actually granted, allowed or
incurred in the ordinary course of business in connection with the sale of the Product, and




(v) allowances or credits to customers, not in excess of the selling price of the Product,
on account of governmental requirements, rejection, outdating, recalls or return of the
Product.


Sales between GS and its Affiliates and sub-licensees shall be excluded from the computation of Net
Sales and no royalties shall be payable on such sales. With respect to a Combination Product,
[***].




     1.31 “Patent Expenses” means governmental fees and the reasonable fees and expenses of outside
counsel and payments to Third Parties incurred after the Effective Date in connection with the
preparation, filing, prosecution and maintenance of patents or patent applications, including the
costs of patent interference, opposition and revocation proceedings related thereto or to any Third
Party patents containing claims which cover the manufacture, use, sale, offer for sale, importation
or exportation of Product in the Territory.



     1.32 “Product” means any compound including Gemifloxacin as an active ingredient.



     1.33 “Regulatory Approvals” means all approvals (including pricing and reimbursement
approvals) and licenses, registrations or authorizations of a Regulatory Authority, necessary for
the use, import, storage, export, transport, filling, labeling, packaging (to the extent that
filling, labeling or packaging are carried out by GS or its Affiliates) or sale of a Product in a
regulatory jurisdiction in the Territory. “Regulatory Approval” shall not, however, include any
regulatory approvals related to the manufacture of API and supply of API by LGLS to GS as
contemplated herein.



     1.34 “Regulatory Authority” means a governmental entity with the authority to grant Regulatory
Approvals.



     1.35 “Steering Committee” means the entity described in Article 3, below.



     1.36 “Territory” means the United States of America, Canada, Mexico, France, Germany, the
United Kingdom, Luxembourg, Ireland, Italy, Spain, Portugal, Belgium, the Netherlands, Austria,
Greece, Sweden, Denmark, Finland, Norway, Iceland, Switzerland, Andorra, Monaco, San Marino and
Vatican City.



     1.37 “Third Party” means an entity or person other than LGLS or GS or their respective
Affiliates.



     1.38 “Trademarks” means those trademarks, trade names, domain names and logos identified on
Schedule 1.38 hereto.





 




			
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ARTICLE 2

PRODUCT DEVELOPMENT




     2.1 Scope of Development. Upon the Effective Date, GS will assume lead responsibility for
Development throughout the Territory for the Initial Indication(s), in consultation with LGLS.
Following the Effective Date GS shall in good faith establish internal and external competence and
controls appropriate for the assumption of full responsibility for Development for the Initial
Indication and, on notice to LGLS not later than the date on which first Regulatory Approval is
received in the Territory LGLS shall, to the extent permitted by law, transfer to GS ownership of
all pending Marketing Authorization Applications and Regulatory Approvals including, without
limitation, New Drug Application Nos. 21-158 and 21-376 (the “NDA”). Following the Effective Date,
GS shall have sole responsibility for such Additional Indications as GS, in its sole discretion,
elects to pursue; provided, however, that GS shall notify LGLS prior to filing a Marketing
Authorization Application for any Additional Indication.



     2.2 Development Effort. GS shall carry out its responsibilities under Section 2.1 using
reasonable efforts consistent with prudent business judgment, and in accordance with all applicable
legal and regulatory requirements including, without limitation, then-current Good Laboratory
Practices, and Good Clinical Practices.



     2.3 Ownership of Regulatory Approvals. Following the transfer of ownership provided in Section
2.1, above, all Marketing Authorization Applications shall be filed and maintained in the name of
GS and GS shall be the owner of all resulting Regulatory Approvals. Through meetings of the
Steering Committee, GS shall: (i) keep LGLS informed regarding the schedule and progress for the
preparation and submission of Marketing Authorization Applications in the Territory, and (ii)
permit LGLS a reasonable opportunity to comment on such Marketing Authorization Applications.



     2.4 Communication with Regulatory Authorities. GS shall have primary responsibility for
dealing with Regulatory Authorities in the Territory, including filing all supplements and other
documents with such authorities with respect to obtaining Regulatory Approvals, reporting all
adverse drug experiences related to the Product, and handling all Product complaints. At each
meeting of the Steering Committee, GS shall provide to the Steering Committee a report describing
the regulatory filing status of each Product throughout the Territory.



     2.5 Costs of Development. All Development expenses shall be borne by GS. Without limiting the
foregoing, within 30 days after receipt of an appropriate invoice from LGLS, GS shall reimburse
LGLS for Development expenses in the Territory incurred between August 23, 2002 and the Effective
Date, as contemplated by the Memorandum of Understanding; provided, however, that the amount of
reimbursement due for LGLS activities during such period in the Territory but outside of the United
States of America shall not exceed [***] unless GS shall have previously approved such excess.





 




			
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ARTICLE 3

MANAGEMENT OF THE COLLABORATION




     3.1 Steering Committee. Within 30 days after the Effective Date, LGLS and GS shall create a
Steering Committee consisting of an equal number of qualified representatives of each Party. A
Party may change or replace its representatives on the Steering Committee as it deems appropriate,
by notice to the other Party. Each Party will designate one of its members of the Steering
Committee as co-chairperson. The co-chairperson appointed by each Party shall be empowered to bind
such Party to decisions of the Steering Committee to the extent contemplated herein.



     3.2 Meetings of the Steering Committee. The Steering Committee shall hold meetings at such
times and places as shall be determined by the co-chairpersons. The meetings shall be held no less
frequently than once every six months in the period from the Effective Date through the third year
after the first Launch in the United States of America, and not less than once every 12 months
thereafter. Steering Committee meetings may be held in person or by telephone or video conference.
The co-chairpersons shall alternate in keeping written minutes that shall reflect the decisions
taken at the meetings. Such minutes shall be circulated to the Steering Committee for review and
approval within two weeks after each meeting.



     3.3 Function of the Steering Committee. The Steering Committee shall coordinate the activities
of the Parties under this Agreement, and perform such other functions as appropriate to further the
purposes of this Agreement as determined by the Parties.



     3.4 Decision Making. To the extent feasible, the Steering Committee shall make decisions and
take actions [***].



     3.5 Limitations of Powers of the Steering Committee. The Steering Committee shall have only
such powers as are expressly delegated to it in this Agreement. The Steering Committee is not a
substitute for the rights or the obligations of the Parties and, inter alia, shall not have the
authority to amend this Agreement.



     3.6 Liaison Manager. Each Party will designate one of its members of the Steering Committee to
act as its liaison manager to facilitate the performance of its rights and satisfaction of its
obligations hereunder.



     3.7 Development and Commercialization Outside the Territory. LGLS shall have the sole
responsibility for development and commercialization of the Product outside of the Territory. LGLS
shall regularly disclose to GS its plans for such development and afford GS a reasonable
opportunity to comment thereon. During the term of this Agreement, LGLS shall assure that its
development of Product outside of the Territory (whether directly or through one or more
sub-licenses) is conducted in a manner which minimizes the risk of disruption of or other adverse
effects on the development and commercialization of the Product in the Territory by GS as
contemplated herein. Without limiting the foregoing: [***]. At LGLS’s request, the





 




			
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Parties shall in good faith discuss the matters for which GS approval or consultation is required
pursuant subsections (ii) and (iii), above, at each meeting of the Steering Committee.




ARTICLE 4

COMMERCIALIZATION




     4.1 Commercialization Efforts. Commencing on the Effective Date, and subject to Section 4.3,
below, GS shall be responsible for carrying out Commercialization, at its sole expense, using
reasonable efforts consistent with prudent business judgment. GS, directly or through one or more
Affiliates or sub-licensees, shall [***].



     4.2 Pricing in the Territory. GS shall [***] obtain such Product pricing approvals as may be
required in each country of the Territory. GS shall be free to set the sale price of the Product in
the Territory as it deems appropriate.



     4.3 Co-Promotion. (a) LGLS shall have the option, exercisable on notice to GS prior to July
1, 2007, to co-promote Product in the Territory commencing on January 1, 2008. If LGLS timely
exercises this option, the Parties shall promptly and in good faith negotiate a co-promotion
agreement which establishes their respective rights and obligations, which agreement shall become
effective on January 1, 2008. [***].



     (b) If LGLS exercises its option pursuant to subsection (a), above, all GS royalty obligations
under Section 10.4, below, shall terminate with respect to Product sales occurring on or after
January 1, 2008, but GS’s obligations under Section 10.2 shall remain in full force and effect.



ARTICLE 5

MANUFACTURE AND SUPPLY




     5.1 General. (a) The intent of the Parties is that: (i) between the Effective Date and July
1, 2004, LGLS shall supply to GS, and GS shall exclusively purchase from LGLS all of GS’s
requirements of Product in final form according to the Final Product Specifications, and (ii)
following July 1, 2004 LGLS shall supply to GS, and GS shall purchase from LGLS all of GS’s
requirements of Product in bulk form according to the API Specifications, with final finish and
fill to be provided either by LGLS or a Third Party, as provided in Section 5.1(b). The terms and
conditions of LGLS supply pursuant to subsection (i) are as set forth in this Article 5. The terms
and conditions of LGLS supply pursuant to subsection (ii) shall be set forth in a supply agreement
to be entered into as provided in Section 5.2.



     (b) The Parties acknowledge that secure long-term supply of Product for GS is essential to the
success of the relationship reflected herein. No later than December 31, 2002 that Parties shall
identify and, to the extent practicable, contractually commit to a long-term final





 




			
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finish and fill facility for the Product. Either the Parties will jointly agree on a Third Party or
LGLS shall commit to provide these services, either directly through the acquisition of a
U.S.-based facility or by contract with a mutually acceptable third party. If LGLS elects to
provide these services, it shall notify GS to that effect no later than December 31, 2002.
Regardless of whether final finish and fill is provided by LGLS or through a Third Party, GS shall
have the right to approve the site selected for final finish and fill, which approval shall not be
unreasonably withheld.




     5.2 Supply Agreement. Not later than December 31, 2002, the Parties shall complete and enter
into a supply agreement covering the supply of API by LGLS for the remainder of the term of this
Agreement. Such supply agreement shall be consistent with the terms and conditions of this
Agreement with respect to supply of Final Product and shall include such other terms and conditions
as the Parties may mutually agree including, without limitation, adequate provision for API
shortages and supply interruption events to assure GS a secure long-term source of supply of API as
well as license to GS or its designee of the right to manufacture API in the event that LGLS fails
to supply. The supply price for API provided under the Supply Agreement shall be equal to [***]
percent of LGLS’s Fully Burdened Cost of Manufacturing for API supplied thereunder, which shall in
no event [***]$[***] per kg [***]$[***] per kg. In addition, the supply agreement shall provide
that: (i) if GS purchases more than [***] kg of API in any calendar year, the $[***]supply price
shall be reduced by $[***] for each [***]kg of API purchased in such year in excess of [***] kg,
and (ii) the bulk supply price (including the [***] such price) shall be renegotiated in good faith
in the event that [***] purchases more than [***] kg of API in any 12 month period.



     5.3 Manufacturing Approvals. GS shall be promptly notified of any proposed change in the
process for the manufacture of Product pursuant to this Article 5 which potentially impacts the
Marketing Authorization Applications or Regulatory Approval in the Territory including, without
limitation, any proposed change as to the site at which such manufacture is to occur. No Product
incorporating any such proposed change and no Product manufactured at any proposed new facility
shall be supplied by LGLS to GS hereunder without such changes having first been approved by the
appropriate Regulatory Authorities or by mutual agreement by the Parties, which regulatory
approvals the Parties agree to pursue diligently following notice from LGLS of such proposed
changes.



     5.4 Specifications. LGLS warrants that the Product it supplies hereunder shall meet the Final
Product Specifications, and shall have been manufactured in accordance with all applicable laws and
regulations including, without limitation, then-current Good Manufacturing Practice (“GMP”)
compliance standards.



     5.5 Purchase Order and Forecasting. On or before the later of: (i) December 31, 2002, or (ii)
three business day after the date on which the NDA is accepted by the FDA, GS shall place a [***]
for the amount of Product produced to Final Product Specifications which [***]. On [***], GS shall
provide to LGLS a [***] forecast of [***]. As shall be provided in the





 




			
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supply agreement, this forecast shall be updated by GS on [***] of each calendar year for the
following [***]. Within [***] after receipt of each such forecast, LGLS shall provide to GS a [***]
forecast of the Fully Burdened Cost of Manufacturing of the supply forecast by GS.




     Without limiting the foregoing, GS shall use [***] to provide LGLS with supply orders for the
delivery of Final Product or API within the following dates:




	 	(i)	 	[***], GS shall provide its supply orders for delivery during the [***];
	 
	 	(ii)	 	[***], GS shall provide its supply orders for delivery during the [***];
	 
	 	(iii)	 	[***], GS shall provide its supply orders for delivery during the [***]; and
	 
	 	(iv)	 	[***], GS shall provide its supply orders for delivery during the [***].





     5.6 Delivery. The first order of [***] placed by GS pursuant to Section 5.5 shall be delivered
to GS no more than [***] to the date on which the Parties in good faith anticipate receipt of final
FDA approval of the Product for the Initial Indication(s). All deliveries of Product shall be made
Ex Works (“EXW”) as such term is defined in the INCOTERMS 2000. Title to the Product and all risks
of loss or damage to Product shall remain with LGLS until Product is delivered to the carrier for
shipment at the EXW point, at which time title and all risks of loss or damage shall transfer to
GS. LGLS agrees, in accordance with GS’s reasonable written instructions, to arrange for shipping
and insurance, to be paid by GS from the EXW point to such locations as are requested by GS.



     5.7 Inspection and Rejection.



          5.7.1 GS shall, [***] upon receipt of a shipment of Product from LGLS, inspect such shipment
for defects that cause the Product to deviate from the Final Product Specifications (other than
those resulting subsequent to delivery of Product to GS). If GS discovers such a defect, GS may
reject such defective Product, and shall promptly notify LGLS in writing of the rejection and the
reason therefor.




          5.7.2 Any rejection of defective or non-conforming Product by GS must occur within [***] from
delivery, failing which GS shall be deemed to have accepted such shipment and to have irrevocably
waived any claims it may have with respect to such shipment failing to meet the Final Product
Specifications.




          5.7.3 At the request of LGLS, GS shall either allow a representative of LGLS to inspect the
rejected Product and to make a determination as to the cause of the defect, or return a






 




			
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sample of the defective Product to LGLS for such inspection. If LGLS disagrees with GS’s
determination, it shall notify GS within [***] after inspection by LGLS as provided in this Section
5.7.3, whereupon the Parties shall select an independent laboratory to draw a sample and determine
whether such Product in fact conformed to the Final Product Specifications at the time of delivery
to GS. The determination of such independent laboratory shall be final. The Party whose
determination was not accurate shall bear the cost of the independent analysis.




          5.7.4 At the request and expense of LGLS, Product under the control of GS found to be
defective shall be returned to LGLS (if by permitted by law) or disposed of in accordance with
LGLS’s lawful instructions. With respect to payments previously made by GS with respect to
defective Product, GS shall be entitled, at its discretion, either to a refund or a credit against
amounts otherwise due to LGLS for supply hereunder.




     5.8 Remedies.



          5.8.1 If GS asserts that a shipment of Product was defective or non-conforming at the time of
delivery to GS, LGLS shall as soon as practical replace the rejected or disputed Product, pending
resolution of the question of whether such original shipment was or was not defective.




          5.8.2 The remedies set forth in this Article 5 are GS’s [***] for claims by GS against LGLS
based on Product supplied by LGLS pursuant to this Agreement not conforming to the Final Product
Specifications.




     5.9 Supply Price and Payment Mechanism.



          5.9.1 Product for use by GS non-commercial purposes (including, without limitation, clinical
trials and for pre-Launch compassionate use) shall be supplied by LGLS at[***].




          5.9.2 Product for commercial use shall be supplied by LGLS at [***].




          5.9.3 Payment for API and Final Product supplied by LGLS hereunder shall be due [***] after
delivery to GS’s premises pursuant to Section 5.6, above; provided, however, that payment for the
[***] ordered by GS pursuant to Section 5.5, above, shall be due in two equal installments. The
first such installment shall be due [***] after delivery to GS’s premises pursuant to Section 5.6,
above, and the second such installment shall be due [***] after the first installment is due.




          5.9.4 Notwithstanding the foregoing, in the event that any of the Product ordered by and
delivered to GS pursuant to this Article 5 is unused by GS because of: (i) the expiration of FDA-
or EMEA- approved Product dating, or (ii) commercial considerations which make such Product
unusable (including, without limitation, because the Product is not approved by the FDA or the
EMEA), GS shall return such unused Product to LGLS (or at LGLS’s request






 




			
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and expense lawfully dispose of such Product). LGLS shall be responsible for the [***] of such
returned Product and, if GS has previously paid for such Product, shall give GS a credit or prompt
reimbursement for such amount. GS shall be responsible for the [***] associated with such returned
Product.




     5.10 Release Certificate. LGLS shall provide to GS with each delivery of Final Product a
Release Certificate, a Certificate of Analysis and a Certificate of Compliance signed by a
responsible person duly authorized by LGLS to certify the quality of the API delivered, each in a
form reasonably acceptable to GS. The Release Certificate shall, inter alia, state that the results
of the agreed upon testing procedures are in compliance with the Final Product Specifications as
well as any additional applicable requirements of Regulatory Authorities. Without limiting the
foregoing, unless expressly agreed by the Parties all Final Products supplied hereunder shall meet
all release criteria established by the FDA or EMEA with respect to such Final Product.



     5.11 Production Records. LGLS shall maintain records related to its manufacture and handling
of Final Product in accordance with the applicable rules and regulations and conditions of its
licensure (including applicable rules of the FDA and EMEA and any other applicable regulatory
requirements for record retention), for the longer of: (i) [***] years after the date of
manufacture of each batch of API, and (ii) the period required by applicable law. LGLS shall notify
GS of any intent to destroy or dispose of records related to the manufacture or handling of API and
allow GS an opportunity to secure said records for additional storage periods in accordance with
the written procedures of GS or its designee. Upon GS’s request with no fewer than five days’ prior
notice, and at GS’s sole expense, LGLS shall send to GS copies of the relevant documents or permit
GS or an independent auditor selected by GS to have access to such records from time to time during
ordinary business hours to verify compliance by LGLS with such rules and regulations. The
provisions set forth in this section shall survive termination of the Agreement for a period of 10
years.



     5.12 Post Expiration Supply. The Parties recognize that following the expiration of the term
of this Agreement GS may (or may not) continue to sell Product under the Trademark as contemplated
by Sections 10.4 and 11.4. In the event that GS does so and in the further event that LGLS or any
Affiliate of LGLS is at such time producing API in commercial quantities, LGLS shall offer to
supply API to GS on a [***].



ARTICLE 6

CONFIDENTIALITY




     6.1 Confidentiality; Exceptions. The receiving Party shall keep confidential and shall not
publish or otherwise disclose or use for any purpose other than as provided for in this Agreement
any Information and other information and materials furnished to it by the other Party pursuant to
this Agreement, or any provision of this Agreement that is the subject of an effective





 




			
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Securities and Exchange Commission.





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order of the Securities Exchange Commission granting confidential treatment pursuant to the
Securities Act of 1934, as amended (collectively, “Confidential Information”), except to the extent
that it can be established by the receiving Party that such Confidential Information:





	 	(i)	 	was already known to the receiving Party at the time of disclosure by the other
Party;
	 
	 	(ii)	 	was generally available to the public or otherwise part of the public domain at
the time of its disclosure to the receiving Party;
	 
	 	(iii)	 	became generally available to the public or otherwise part of the public
domain after its disclosure by the disclosing Party and other than through any act or
omission of the receiving Party in breach of this Agreement;
	 
	 	(iv)	 	was disclosed to the receiving Party, other than under an obligation of
confidentiality, by a Third Party who had no obligation to the disclosing Party not to
disclose such information to others; or
	 
	 	(v)	 	was developed by the receiving Party’s employees without the use of or access
to confidential information of the disclosing Party, as demonstrated by contemporaneous
written records of the receiving Party.





     6.2 Authorized Disclosure. A Party may disclose Confidential Information of the other Party to
the extent such disclosure is reasonably necessary in filing or prosecuting patent applications,
prosecuting or defending litigation, complying with applicable governmental regulations or
conducting pre-clinical or clinical trials, provided that if a Party is required by law to make any
such disclosure it will, to the extent practicable, give reasonable advance notice to the other
Party of such disclosure requirement and, except to the extent inappropriate in the case of patent
applications, use reasonable efforts to secure confidential treatment of such Confidential
Information required to be disclosed. In addition, each Party shall be entitled to disclose
Confidential Information, under a binder of confidentiality containing provisions as protective as
those of this Article 6, to a Third Party for the purpose of carrying out activities authorized
under this Agreement, including disclosures to authorized or potential sub-licensees. Nothing in
this Article 6 shall restrict any Party from using for any purpose outside the Field any
Information developed by it during the course of the collaboration hereunder.



     6.3 Survival. This Article 6 shall survive the expiration or termination of this Agreement for
a period of five years; provided, however, that Confidential Information regarding LGLS’s
manufacturing process for API shall be kept confidential by GS during the term of this Agreement
and for a further period of 10 years after the expiration or termination of this Agreement, subject
to the exceptions in Section 6.1, above.



ARTICLE 7

INFORMATION AND REPORTS




     7.1 Information and Reports During Development and Commercialization.



13









 





          7.1.1 To the extent permitted by law, GS and LGLS will each regularly disclose and make
available to the other without charge all Information (including, without limitation, copies of all
pre-clinical and clinical reports and training, marketing and promotional materials) known to them.
Without limiting the foregoing, promptly following the Effective Date, and at reasonable intervals
thereafter, LGLS shall disclose and transfer to GS all LGLS Know-how and GLAXO Know-how and GS
shall disclose and transfer to LGLS all GS Know-how.




          7.1.2 Upon reasonable prior notice, each Party shall have the right to: (i) review the raw
data generated in any clinical trial conducted by the other Party with respect to Product, (ii)
visit clinical investigators and centers involved in performance of such clinical trials, and (iii)
discuss any such clinical trial and its results in detail with such clinical investigators.




     7.2 Publicity Review.



          7.2.1 Neither Party shall originate any publicity, news release, or other announcement
disclosing any non-public terms of this Agreement (collectively, “Disclosure”), without the prior
prompt review and written approval of the other, which approval shall not be unreasonably withheld.
Once specific information has been approved for disclosure, that information may be reiterated in
any subsequent Disclosure without further approval; provided, however, that the Parties shall, to
the extent lawful, maintain the confidentiality of financial information contained in this
Agreement and resulting from the activities contemplated hereunder.




          7.2.2 Notwithstanding Section 7.2.1, a Party may make any Disclosure it believes in good faith
based upon the advice of its counsel or its auditors is required by applicable law and without the
prior approval of the other Party may make such disclosures as are required by the rules or
regulations of the U.S. Securities and Exchange Commission or its relevant foreign counterpart.
With respect to disclosures other than those required under such rules or regulations, prior to
making such Disclosure, the disclosing Party shall provide the other Party with a written copy or
rendition of the materials proposed to be disclosed and provide the receiving Party with an
opportunity to promptly review the proposed Disclosure.




     7.3 Use of Names. Except as required by law or in furtherance of the exercise of its rights
hereunder, neither Party shall use the name of the other in any public announcement, press release
or other public document related to this Agreement or the understanding reflected herein without
the written consent of such other Party, which consent shall not be unreasonably withheld or
delayed. No such approval shall be required to republish a disclosure previously made or otherwise
in the public domain.



     7.4 Adverse Drug Events. Each Party shall promptly report to the other Party any adverse
event observed during any use of a Product. Prior to the first commercial sale of a Product in the
Territory, the Parties shall in good faith enter into a data safety exchange agreement consistent
with applicable law and regulatory requirements and practices in the United States and European
Union.



     7.5 Recall



14









 





          7.5.1 Any necessary recall of Product or any batch of Product from the market in the Territory
shall be effected by GS at GS’s reasonable discretion following, to the extent practicable,
consultation with LGLS. Upon any Product recall, any then-pending orders of Product pursuant to
Article 5, above, shall be suspended until the reinstatement of the Product or revocation of the
recall.




          7.5.2 If any Product is recalled either: [***], then GS shall bear all costs and expenses of
such recall including, without limitation, expenses or obligations to Third Parties, the cost of
notifying end users and costs associated with shipment of any recalled Products from end users and
destruction of such Products.




          7.5.3 If any Product is recalled as a result of [***], then LGLS shall bear all costs and
expenses of such recall including, without limitation, refund of the supply price of the recalled
Products, expenses or obligations to Third Parties, the cost of notifying end users and costs
associated with shipment of any recalled Products from end users and destruction of such Products.




          7.5.4 If a recall of Products is necessary for reasons attributable in part to each of the
Parties, then LGLS and GS shall be responsible for a proportionate share of such recall costs on
the basis of their respective responsibilities with respect to the event justifying the recall.




          7.5.5 In the event of a recall of Products, each Party shall immediately notify the other
Party and cooperate in a manner which is appropriate and reasonable under the circumstances.




     7.6 Except as may be expressly provided herein and without prejudice to either Party’s
responsibility for Third Party damages as provided for in Article 14, below, no claim for
compensation, losses or damages (including, without limitation, punitive, exemplary, incidental or
consequential damages) may be made by one Party against the other as a result of any Product recall
or any other act or omission of a Party pursuant to this Agreement (including, without limitation,
the termination of this Agreement by either Party).



ARTICLE 8

PATENT RIGHTS




     8.1 LGLS Patents and GLAXO Patents. (a) During the term of this Agreement, LGLS shall [***]
maintain the LGLS Patents and the GLAXO Patents in the Territory and shall use [***] to convert any
currently pending or future filed patent applications into granted patents without [***] delay.
LGLS shall use patent counsel selected by LGLS and reasonably approved by GS for such prosecution
and maintenance and LGLS shall bear all related Patent Expenses. GS shall cooperate fully with LGLS
in all such matters, at GS’s expense.





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





15









 





     (b) LGLS shall promptly disclose to GS the text of all LGLS Patents filed after the Effective
Date as well as all information received after the Effective Date concerning the institution or
possible institution of any interference, opposition, re-examination, reissue, revocation,
nullification or any official proceeding involving an LGLS Patent or GLAXO Patent any where in the
Territory. GS shall have the right to review all such pending applications and other proceedings
and make recommendations to LGLS with respect thereto. LGLS shall keep GS promptly and fully
informed of the course of patent prosecution and other proceedings and shall provide GS with copies
of all substantive communications, search reports and Third Party observations submitted to or
received from patent offices throughout the Territory. All such disclosures shall be considered
“Confidential Information” subject to Article 6, above.



     8.2 Abandonment. LGLS shall be free, on at least 30 days’ prior notice to GS, to abandon and
stop funding Patent Expenses related to any of the LGLS Patents in any country in the Territory. In
such event, GS may, at its sole option, assume and continue prosecution or maintenance of the LGLS
Patents and GLAXO Patents in question, and shall thereafter bear all related Patent Expenses.
Following such abandonment of a LGLS Patent by LGLS, LGLS shall have no further rights hereunder
with respect to the LGLS Patent in question to the extent of such abandonment, and the term “LGLS
Patents” shall be deemed to have been modified accordingly. LGLS shall not abandon any GLAXO Patent
nor stop funding Patent Expenses related thereto without the prior consent of GS, which consent
shall not be unreasonably withheld.



     8.3 Infringement. If either Party learns of an infringement or threatened infringement of the
LGLS Patents or GLAXO Patents in the Territory in the Field it shall promptly notify the other
Party and shall provide the latter Party with all information reasonably available to the notifying
Party evidencing such infringement or threatened infringement. Thereafter, the Parties shall in
good faith consult and cooperate in abating such infringement or threatened infringement.



     GS shall have the right, but not the obligation, to bring, defend and maintain any appropriate
suit or action for abatement of the infringement or threatened infringement of the LGLS or GLAXO
Patents in the Territory and in the Field, at GS’s sole expense. If GS requests LGLS to join GS as
a party in such suit or action, LGLS shall execute all papers and perform such other acts as may be
reasonably requested by GS, at GS’s expense. LGLS shall have the right to participate in any such
suit or action using independent counsel, at its sole expense. Any amount recovered by GS as a
result of such suit or action shall first be applied to reimburse each of the Parties, pro rata,
for any costs or expenses incurred in bringing, defending and maintaining any such action. The
balance (the “Net Recovery”) shall be for the sole benefit of GS. The Net Recovery shall be
considered “Net Sales” with respect to the calendar quarter in which payment to GS was received,
and royalties shall accordingly be paid on the amount of the Net Recovery exclusively at the
rate(s) specified in Section 10.3, below. The Net Recovery shall be considered “Net Sales” for
purposes of calculating annual Net Sales in accordance with Milestone 3 and in Section 10.2, below.



     If GS fails to initiate suit or action within 90 days after first notice of infringement or
threatened infringement of the LGLS Patents or the GLAXO Patents, or if having initiated such suit
or action it thereafter diligently fails to prosecute such suit or action, LGLS shall have the



16









 







right, but not the obligation, to bring, defend and maintain any appropriate suit or action
for abatement of the infringement or threatened infringement, at LGLS’s sole expense. If LGLS
requests GS to join LGLS as a party in such suit or action, GS shall execute all papers and perform
such other acts as may be reasonably requested by LGLS, at LGLS’s expense. GS shall have the right
to participate in any such suit or action using independent counsel, at its sole expense. Any
amount recovered by LGLS as a result of such suit or action shall first be applied to reimburse
each of the Parties, pro rata, for any costs or expenses incurred in bringing, defending and
maintaining any such action. The balance shall be divided equally between the Parties. The amount
of any recovery, net of the amounts necessary to reimburse the Parties as provided above shall be
considered “Net Sales” for purposes of calculating annual Net Sales in accordance with Milestones 3
and in Section 10.2, below. If such recovery is apportioned by the court such that portions thereof
are attributed to infringing activity in different calendar years, or if such apportionment of the
recovery can otherwise be readily ascertained, then such apportionment shall govern as to the
calendar year(s) in which Net Sales shall be deemed to have occurred for purposes of such
Milestones. Otherwise, the amount of such recovery shall be apportioned equally over the number of
calendar years in which infringement was found to have occurred (or in the event of a settlement,
over the number of calendar years in which it was alleged to have occurred).



     8.4 Third Party Claims. If a Third Party asserts that a patent or other right owned by it is
infringed by the development, manufacture, import, use, sale or offer for sale of a Product by GS
or its Affiliates or sub-licensees in the Territory in the Field, the Party first obtaining
knowledge of such claim shall immediately provide the other Party notice of such claim and the
related facts in reasonable detail. In such event, the Parties shall determine how best to control
the defense of any such claim. In the event the Parties cannot agree on the defense of such claim,
such defense shall be controlled by GS with respect to sales of Product in the Territory and by
LGLS with respect to Product sales outside of the Territory. In each such case, the other Party
shall have the right, at its own expense, to participate in such defense and to be represented in
any such action by counsel of its choice at its sole discretion. With respect to any such claim,
the Party entitled to control defense shall also have the right to control settlement of such
claim; provided, however, that no settlement shall be entered into without the written consent of
the other Party, which consent shall not be withheld unreasonably.



     8.5 Ownership. Subject to Section 9.2, below, each Party shall have and retain sole and
exclusive title to all inventions, discoveries and know-how which are made, conceived, reduced to
practice or generated solely by its employees or agents in the course of or as a result of this
Agreement. Each Party shall own an equal undivided interest in all such inventions, discoveries and
know-how made, conceived, reduced to practice or generated jointly by the employees or agents of
one Party and the employees or agents of the other Party.



ARTICLE 9

LICENSES and OPTIONS




     9.1 License Grant by LGLS. Subject to the terms and conditions of this Agreement, LGLS hereby
grants to GS and GS hereby accepts from LGLS a sole and exclusive license under the LGLS Patents,
LGLS Know-How, GLAXO Patents, GLAXO Know-how to use, import,



17









 







package, sell and offer for sale Products within the Field in the Territory, as well as the
exclusive right to use the Trademarks in the Territory in conjunction with the use or sale of
Products.



     9.2 License Grant by GS. Subject to the terms and conditions of this Agreement, GS hereby
grants to LGLS and LGLS hereby accepts from GS a [***] license under the GS Know-How to develop,
use, import, formulate, package, sell and offer for sale Products outside of the Territory. Without
limiting the foregoing, the Parties agree that any patent application filed by or on behalf of GS
prior to January 1, 2010 which covers or claims any novel use or formulation or means of
administration of Product shall be jointly owned by the Parties regardless of inventorship, and to
the extent of LGLS’s ownership interest shall be considered an “LGLS Patent” for purposes of this
Agreement. At LGLS’s request GS shall take all steps reasonably required to assign to LGLS its
joint ownership interest.



     9.3 Sub-licensing. GS may sub-license the license granted to it hereunder on prior notice to
LGLS. LGLS may sub-license the license granted to it with respect to GS Know-how [***].



     9.4 Use of Licenses. Neither Party shall use or disseminate the Know-how of the other Party
other than as expressly provided under this Agreement. In addition, GS warrants that it shall not
adapt the GLAXO databases included in the GLAXO Knowhow or software operating on such databases for
uses unrelated to the uses of Product authorized herein.



     9.5 [***]. During the period commencing on the Effective Date and ending on December 31, 2002
(the “Negotiating Period”), the Parties shall in good faith negotiate the terms and conditions on
which LGLS would grant to GS [***]. During the Negotiating Period LGLS shall not solicit or
otherwise participate in any communications with any Third Party regarding [***].



     9.6 DNA Nanobinder Compounds. Schedule 9.6 hereto describes GS’s DNA nanobinder compounds
being developed for use in the fields of [***] (each, a “GS Option Field”). Promptly following the
completion of the first Phase II clinical trial for a DNA nanobinder compound in each of the GS
Option Fields, GS shall notify LGLS and disclose to LGLS all available preclinical and clinical
data regarding the use of such DNA nanobinder compound in the GS Option Field in question. During
the [***]period following such closure the Parties shall in good faith negotiate the terms and
conditions on which GS would grant to LGLS the exclusive right to develop and commercialize such
DNA nanobinder compound in the GS Option Field in question in East Asia, including Japan. If the
Parties are unable to reach agreement by the end of such [***]period, GS shall be free to develop
and commercialize such DNA nanobinder compound in the GS Option Field in question as it sees fit.



     9.7 [***]. In the event that LGLS proposes to grant commercial rights in the Territory with
respect [***] to a Third Party, it shall first offer such rights to GS on definitive terms. GS
shall have [***] after receipt of such offer to accept, failing which LGLS shall be free to offer





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





18









 




such rights to a Third Party on overall terms and conditions no more favorable to such Third Party
than those offered to GS. In the event that LGLS proposes to develop and commercialize [***] in the
Territory directly or in a collaboration with a Third Party, it shall notify GS. Upon request by GS
within [***] following such notice, the Parties shall in good faith negotiate commercially
reasonable terms and conditions on which GS would receive from LGLS an exclusive license with
respect to such proposed development and commercialization. If the Parties are unable to reach such
agreement within [***] after GS’s notice, at GS’s request the terms of such an exclusive license
shall be set by [***], and the Parties shall promptly execute a license agreement consistent with
[***].




ARTICLE 10

PAYMENTS TO LGLS




     10.1 License Fee. Within 45 days following the Effective Date GS shall: (i) pay to LGLS a
non-refundable license fee of $5.5 million, and (ii) deliver to LGLS 4,749,659 fully-paid up and
non-assessable shares of GS common stock (the “Shares”). GS represents and warrants that the Shares
represent 14.0 percent of the total equity of GS on October 22, 2002, calculated on a fully diluted
basis. The rights and further characteristics of the Shares (including, without limitation, certain
anti-dilution rights) are as set forth in the Stock Purchase Agreement and related documents
attached hereto as Schedule 10.1.



     10.2 Milestone Payments. Within [***] after the achievement of each milestone set forth below,
GS shall owe to LGLS a non-refundable milestone payment to LGLS in the amount set forth below. Each
milestone payment shall be due only once, notwithstanding the number of Products actually developed
or commercialized by GS hereunder. Milestone payments 3 and 4, when earned by LGLS, shall be
payable [***]. All other milestone payments shall be due [***] after the relevant milestone event.



	 	 	 	 	 
	Milestone Event	 	Payment
	1. Upon FDA approval of the Product for the Initial
Indication. If at the time of such approval GS has not
received and accepted the first shipment of Product
required pursuant to Section 5.8, one half of this milestone
shall be deemed to have been earned, with the second half
earned upon receipt and acceptance by GS of such shipment
	 	$5.0 million
	 
	 	 	 	 
	2. Upon an initial public offering (“IPO”) by GS of its
shares or a sale of GS if, at the time of such IPO or sale,
Product has been approved for an Initial Indication
	 	$8.0 million








 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





19









 





	 	 	 	 	 
	Milestone Event	 	Payment
	3. Upon both: (i) approval for the first Additional
Indication or approval of an IV formulation of the
Product, and (ii) annual Net Sales in the Territory reaching $[***]
	 	$	[***]	 
	 
	 	 	 	 
	4. Upon both: (i) approval for a second Additional
Indication or approval of an IV formulation of the
Product, and (ii) annual Net Sales in the Territory reaching $380
million
	 	$	[***]	 
	 
	 	 	 	 
	5. Upon approval of the Product for an Initial Indication in the
United Kingdom
	 	$	[***]	 
	 
	 	 	 	 
	6. Upon approval of the Product for an Initial Indication in the
first of Italy, Germany, France or Spain
	 	$	[***]	 





As used in this Section 10.2, “IV formulation” shall mean a formulation of Product for intravenous
administration.




     10.3 Royalty Payments. In addition to the foregoing license fee and milestone payments, GS
shall, subject to Sections 4.3 and 10.4, pay to LGLS royalties on Net Sales in each calendar year
at the following rates:



	 	 	 
	Annual Net Sales	 	Royalty Rate
	on the first $100 million

	 	[***] percent
	over $100 million to $150 million

	 	[***] percent
	over $150 million to $200 million

	 	[***] percent
	over $200 million

	 	[***] percent





The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at a rate of [***]
percent of Net Sales for the use of the GLAXO Patents, the GLAXO Know-how and the Trademarks (the
“GLAXO Royalty”). During the first two years following first commercial sale of a Product in the
Territory, GS shall be solely responsible for payment of the GLAXO Royalty and shall pay all
amounts so due to LGLS in accordance with Sections 10.7 through 10.11, below. Thereafter, LGLS
shall be responsible for payment of the GLAXO Royalty and shall indemnify GS and hold GS harmless
from and against any claims by GLAXO as a result of such use.






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





20









 





     10.4 Term of Royalty Obligations. GS’s obligation to make royalty payments
pursuant to Section 10.3 with respect to a Product shall commence on the date of the first
commercial sale of such Product in a given country in the Territory and shall continue until the
later of: (i) the expiration of the last to expire of the LGLS Patents and GLAXO Patents claiming
or covering such Product in such country, and (ii) 10 years after first commercial sale of such
Product in such country. Following the expiration of GS’s royalty obligations, GS shall retain a
non-exclusive, royalty-free right to use, sell and offer for sale Product in the Territory, using
LGLS Know-how and GLAXO Know-how licensed to GS as of the Effective Date and the exclusive right to
use the Trademarks for such purposes. GS shall continue to pay to LGLS a royalty in return for such
right to use the Trademark, as provided in Section 11.4, below.




     10.5 Royalty Reductions. If GS is required to pay royalties to Third Parties in order to
exercise the license granted to GS in Section 9.1, above, with respect to any Product in any
country in the Territory, GS will be entitled to deduct [***] percent of the amount due to such
Third Parties from the amounts due to LGLS pursuant to Section 10.3, above, with respect to Net
Sales of such Product in such country. In no event shall any such royalty reductions in any
calendar quarter be more than [***] percent of the royalty payment due to LGLS with respect to such
calendar quarter in a given country. Any royalty reduction to which GS would otherwise be entitled
may be carried forward by GS and used by GS in a future period (subject to the maximum reductions
specified in this Section 10.5).



     10.6 Royalties Payable Only Once; Sales to Affiliates and Sub-Licensees. The obligation to
pay royalties is imposed only once with respect to the same unit of each Product. Sales of Products
between GS and its Affiliates or sub-licensees, or among such Affiliates and sub-licensees, shall
not be subject to royalties under Sections 10.3 but in such cases the royalties shall be calculated
on the Net Sales by such Affiliates or sub-licensees to Third Parties.



     10.7 Reports. GS shall deliver to LGLS, within 60 days after the end of each calendar quarter,
reasonably detailed written accountings of Net Sales that are subject to royalty payments due to
LGLS for such calendar quarter. Such quarterly reports shall indicate gross sales on a
country-by-country and Product-by-Product basis. When GS delivers such reports to LGLS, GS shall
also deliver all royalty payments due to LGLS hereunder for such calendar quarter.



     10.8 Accounting and Audits.



          (a) GS shall keep, and shall require its Affiliates and sub-licensees to keep, complete and
accurate records of the latest five years of sales of Products on which royalties are due
hereunder. For the purpose of verifying royalties due to LGLS hereunder, LGLS shall have the right
annually, at LGLS’s expense, to retain an independent certified public accountant selected by LGLS
and reasonably acceptable to GS, to review such records in the location(s) where such records are
maintained by GS, its Affiliates or its sub-licensees upon reasonable notice and during regular
business hours and under obligations of confidence. Results of such review shall be made available
to both LGLS and GS. If the review reflects an underpayment of






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





21









 




royalties to LGLS such underpayment shall be promptly remitted to LGLS, together with [***]. If the
underpayment of royalties is equal to or greater than [***], then GS pay all of the costs of such
review.




          (b) LGLS shall keep complete and accurate records of the latest five years of supply hereunder
sufficient to enable GS to confirm LGLS’s cost of goods. For the purpose of verifying cost of
goods, GS shall have the right annually, at GS’s expense, to retain an independent certified public
accountant selected by GS and reasonably acceptable to LGLS, to review such records in the
location(s) where such records are maintained, upon reasonable notice and during regular business
hours and under obligations of confidentiality. Results of such review shall be made available to
both LGLS and GS. If the review reflects an overcharge by LGLS, such overcharge shall be promptly
remitted to GS, together with interest calculated in the manner provided in Section 10.9, below. If
the amount of such overcharge is equal to or greater than [***], then LGLS pay all of the costs of
such review. If the review reflects an undercharge by LGLS, GS shall promptly refund the amount of
the overpayment to LGLS, together with [***].




     10.9 Currency and Method of Payment. All payments due or payable hereunder shall be made in US
Dollars, delivered by wire transfer to such account as LGLS may identify from time to time on
notice to GS. Royalty payments due hereunder with respect to sales not denominated in US Dollars
shall be converted using the applicable conversion rates quoted in the Wall Street Journal for
buying US Dollars in accordance with U.S. generally accepted accounting principles, consistently
applied. GS shall pay interest to LGLS on the amount of any payments that are not paid on or before
the date such payments are due under this Agreement at a rate of [***] for the applicable period,
calculated on the number of days such payment is delinquent.



     10.10 Tax Withholding. The Parties shall use all reasonable and legal efforts to reduce tax
withholding on payments made to LGLS hereunder. Notwithstanding such efforts, if GS concludes that
tax withholdings under the laws of any country are required with respect to payments due to LGLS,
GS shall withhold the required amount and pay it to the appropriate governmental authority. In such
a case, GS will promptly provide LGLS with original receipts or other evidence reasonably desirable
and sufficient to allow LGLS to document such tax withholdings adequately for purposes of claiming
foreign tax credits and similar benefits. No withholding deduction shall be made if LGLS furnishes
lawful documentation demonstrating that the payment due is exempt from withholding according to the
applicable convention for the avoidance of double taxation between the United States and the
Republic of Korea or other applicable law or treaty.



     10.11 Blocked Payments. If, by reason of applicable laws or regulations in any country, it
becomes impossible or illegal for GS or its Affiliates or sub-licensees to transfer, or have
transferred on its behalf, royalties or other payments due hereunder to LGLS, such royalties or
other payments shall be deposited in local currency in the relevant country to the credit of





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





22









 




LGLS in a recognized banking institution designated by LGLS or, if none is designated by LGLS
within a period of 30 days after inquiry from GS, in a recognized banking institution selected by
GS and identified by notice to LGLS.




ARTICLE 11

TRADEMARKS




     11.1 Responsible Party. GS, in consultation with LGLS, shall be responsible for maintaining
the trademark Factive® in all countries in the Territory in which such mark is registered as of the
Effective Date and for establishing and maintaining such trademark in other countries in the
Territory in which GS intends to Commercialize the Products, all at GS’s expense.



     11.2 Infringement and Third Party Claims. Each party shall afford the other full cooperation
in the defense and assertion of the Trademarks against Third Parties. Absent agreement by the
Parties, the provisions of Sections 8.2 and 8.3 shall apply by analogy with respect to infringement
of or Third Party challenges to the Trademarks.



     11.3 Termination of the Agreement. Following termination of this Agreement for any reason (but
not expiration of its term) GS will refrain from all further use of the Trademarks in the
Territory.



     11.4 Expiration of the Agreement. Following expiration of GS’s royalty obligations as provided
in Section 10.4, above, and for so long as GS continues to use the Trademark in the use or sale of
Product, GS shall pay to LGLS a royalty equal to [***] percent of Net Sales. Such royalty shall be
calculated and payable as provided in Sections 10.7 through 10.11, above.



ARTICLE 12

REPRESENTATIONS, WARRANTIES AND COVENANTS




     12.1 Joint Representations and Warranties. Each of the Parties hereby represents and warrants
to the other Party that this Agreement is a legal and valid obligation binding upon such Party and
enforceable in accordance with its terms. The execution, delivery and performance of the Agreement
by such Party does not conflict with any agreement, instrument or understanding, oral or written,
to which it is a Party or by which it is bound, nor violate any law or regulation of any court,
governmental body or administrative or other agency having jurisdiction over it.



     12.2 Representations and Warranties by LGLS. LGLS represents and warrants to GS that, as of
the Effective Date, to the actual knowledge of the executive officers and directors of LGLS:



          (a) The information disclosed to GS during the course of its “due diligence” review of
materials related to the Product was true and correct and, through the Effective Date,






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





23









 




no material information has been omitted from the “due diligence” disclosures made to GS by LGLS.




          (b) No litigation exists or is threatened which would, if successful, adversely affect the
rights granted to GS hereunder.




          (c) All material safety issues related to the Product and to its manufacture have been
disclosed to GS.




          (d) All renewal fees related to the LGLS Patents, the GLAXO Patents and the Trademarks have
been paid in full.




          (e) LGLS has good title to the LGLS Patents, the GLAXO Patents, the LGLS Know-how and the
GLAXO Know-how and to the Trademarks (to the extent that filings thereof exist as of the Effective
Date), free and clear of any liens or encumbrances.




          (f) As of the Effective Date LGLS has not been served with notice of any interference
proceedings with respect to the LGLS Patents or the GLAXO Patents and to the actual knowledge of
LGLS, no such proceedings have been instituted. To the actual knowledge of LGLS, as of the
Effective Date there is no existing Third Party infringement of the LGLS Patents, the GLAXO Patents
or the Trademarks.




          (g) The information submitted to the Regulatory Authorities with respect to the Product is
true and correct.




          (h) It has disclosed to GS the complete texts of all of the LGLS Patents and the GLAXO Patents
existing as of the Effective Date as well as all information known to LGLS as of the Effective Date
concerning the institution or possible institution of any interference, opposition, re-examination,
reissue, revocation, nullification or any official proceeding involving any of the LGLS Patents or
GLAXO Patents any where in the Territory.




     12.3 Covenants by LGLS. LGLS hereby covenants that: (i) the Transition Plan contemplated by
Section 2.1 of the GLAXO Agreement shall be completed in full not later than December 31, 2002,
(ii) LGLS shall use its best efforts to finalize the Technology Transfer Agreement contemplated by
Section 3.4 of the GLAXO Agreement not later than January 31, 2003, and (iii) LGLS shall use its
best efforts to finalize the Supply Agreement contemplated by Section 8.1 of the GLAXO Agreement,
on terms and conditions consistent with this Agreement, not later than January 31, 2003. LGLS shall
indemnify GS and hold GS harmless from and against any and all losses resulting from the failure by
LGLS to complete the Transition Plan or to finalize the Technology Transfer Agreement or the Supply
Agreement by the dates specified in this Section 12.3.



     [***]





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





24









 





     12.4 Performance by Affiliates and Sub-licensees. The Parties recognize that each may perform
some or all of its obligations under this Agreement through Affiliates or, to the
extent permitted, by sub-licensees. Nonetheless, each Party shall remain responsible and shall
be the guarantor of the performance by its Affiliates and sub-licensees and shall cause its
Affiliates and sub-licensees to comply with the provisions of this Agreement in connection with
such performance. In the event of a dispute arising out of the actions of an Affiliate or
sub-licensee under this Agreement, each of GS and LGLS may proceed directly against the other
Party, without any obligation to first proceed against the Affiliate or sub-licensee.



ARTICLE 13

TERM AND TERMINATION




     13.1 Term. The term of this Agreement shall commence on the Effective Date and shall expire
upon the termination or expiration in all of the countries of the Territory of the royalty
obligations as set forth in Section 10.4, above.



     13.2 Termination for Material Breach. If either Party materially breaches this Agreement at
any time, which breach is not cured within 30 days of notice thereof from the non-breaching Party,
the non-breaching Party shall have the right to terminate this Agreement on notice to the Party in
breach following the expiration of such cure period; provided, however, that if the Party alleged
to be in breach shall have invoked the dispute resolution mechanism of Article 15 prior to the
expiration of such cure period then termination shall not be effective until the sooner of
abandonment of such proceedings by the Party alleged to be in breach or completion of the dispute
resolution proceedings and a non-appealable finding in arbitration in favor of the non-breaching
Party.



     13.3 Termination for Challenge to Patent Rights. If either Party challenges the validity
and/or enforceability of any of the other Party’s patent rights to which a license is granted
hereunder, the latter Party shall have the right, to the extent lawful, to terminate the license
granted pursuant to this Agreement with respect to the challenged patents.



     13.4 Unilateral Termination by GS. GS may, at any time by delivery of 30 days’ prior notice
to LGLS, elect to abandon its rights and obligations with respect to any country in the Territory,
or to terminate this Agreement in its entirety. GS shall be entitled to suspend or discontinue its
Development, distribution and/or sale of any Product immediately upon notice to LGLS if [***]. Upon
notice by GS pursuant to this Section 13.4, this Agreement and all obligations of LGLS and GS
hereunder with respect to the country or countries in question shall terminate and GS shall
promptly transfer to LGLS all Marketing Authorization Applications and Regulatory Approvals and the
Trademarks with respect to the country or countries in question, as well as all other Information
and know-how related to such country or countries. In the event that GS terminates its rights with
respect to one or more countries but not the entire Territory, then this Agreement shall remain in
effect with respect to the countries not subject to such termination which countries shall,
thereafter, be considered the “Territory.”





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





25









 





     13.5 Bankruptcy. All rights granted hereunder are, and shall otherwise be deemed to be, for
purposes of Section 365(n) of the U.S. Bankruptcy Code (the “Code”) licenses of rights to
“intellectual property” as defined in Section 101(52) of the Code. The licensee Party under
this Agreement shall retain and may fully exercise all of its rights and elections under the Code,
subject to performance by such Party of its obligations under this Agreement. In the event of the
commencement of a bankruptcy proceeding by or against a Party under the Code, the licensee Party
shall, to the extent permitted by law, be entitled to a complete duplicate of (or complete access
to, as appropriate) any such intellectual property and all embodiments thereof, which shall
promptly be delivered to the licensee Party, at its sole expense: (i) upon written request
following commencement of a bankruptcy proceeding, or (ii) if not delivered pursuant to subsection
(i), above, upon written request following the rejection in bankruptcy of this Agreement by or on
behalf of the bankrupt Party. In the event of a filing for bankruptcy or insolvency by a Party,
such Party shall, to the extent permitted by law, confirm to the receiver, trustee or liquidator
that the intellectual property rights licensed hereunder are, notwithstanding such license, the
sole property of the licensor Party and may not be disposed of by licensee except as expressly
provided herein.



     13.6 Minimum Sales. LGLS shall have the right to terminate this Agreement on notice to GS in
the event that GS’s aggregate gross sales of Products in the Territory in the 12 month period
commencing on the third anniversary of the date of first commercial of Product in the United States
is less than $30 million [***]; provided, however, that such right to terminate shall not apply in
the event that GS sales of Product were at any time materially impeded by either force majeure or
failure of supply outside of GS’s control.



     13.7 Effect of Termination



          13.7.1 Termination of this Agreement shall not relieve the Parties of any liability, including
any obligation to make payments hereunder, which accrued hereunder prior to the effective date of
such termination, nor preclude a Party from pursuing all rights and remedies it may have hereunder
or at law or in equity with respect to any breach of this Agreement nor prejudice a Party’s right
to obtain performance of any obligation which accrued hereunder prior to the effective date of such
termination. Upon termination (but not expiration of the term of this Agreement), all licenses and
rights to Patents and Know-How granted hereunder shall terminate.




          13.7.2 Upon termination of this Agreement (but not expiration of its term), all Confidential
Information supplied by one Party shall be returned by the other Party except for one copy of such
information retained solely for legal archival or regulatory purposes.




          13.7.3 Upon termination of this Agreement (but not expiration of its term), GS shall cooperate
in the prompt transfer to LGLS of all Marketing Authorization Applications and Regulatory Approvals
related to the Products in the Territory, and shall diligently take such other actions and execute
such other instruments, assignments and documents as may be necessary to effect the transfer or
reconveyance of rights hereunder to LGLS and the relinquishment of such rights by GS.






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





26









 





          13.7.4 Following termination of this Agreement, GS shall have 120 days to sell any Product in
its possession as of the effective date of termination, subject to its obligation to pay royalties
to LGLS as provided hereinabove with respect to such sales.




     13.8 Memorandum of Understanding. The Memorandum of Understanding shall terminate effective as
of the Effective Date.



     13.9 Surviving Rights. The rights and obligations set forth in this Agreement shall extend
beyond the term or termination of the Agreement only to the extent expressly provided for herein,
or the extent that the survival of such rights or obligations are necessary to permit their
complete fulfillment or discharge. Without limiting the foregoing, the following shall survive the
expiration or termination of this Agreement: Sections 5.11, 6.1, 6.2, 6.3, 7.4, 7.5, 7.7, 8.3, 8.4,
10.7, 10.8, 11.2, 11.3, 11.4, and 13.7 and Articles 14, 15 and 16.



ARTICLE 14

INDEMNIFICATION




     14.1 Indemnification by GS. GS shall defend and hold LGLS and its agents, directors and
employees harmless from and against any and all suits, claims, actions, demands, damages,
obligations, settlements, penalties, fines, costs, liabilities, expenses and/or loss claimed by a
Third Party, including reasonable attorneys’ fees and expenses (collectively, “Losses”), resulting
from [***], except to the extent such Losses result from [***].



     14.2 Indemnification by LGLS. LGLS shall defend and hold GS and its agents, directors and
employees harmless from and against any and all Losses resulting from: [***], except to the extent
such Losses result from [***].



     14.3 Procedure. A Party seeking indemnification under Section 14.1 or Section 14.2, shall
inform the other Party of a claim as soon as reasonably practicable after it receives notice of the
Third Party claim, permit the indemnifying Party to assume direction and control of the defense of
the Third Party claim (including the right to settle the claim solely for monetary consideration),
and cooperate as requested (at the expense of the indemnifying Party) in the defense of the Third
Party claim.



     14.4 Insurance. Promptly following the Effective Date and for a period of [***] after the
expiration or termination of this Agreement, each Party shall obtain and thereafter maintain, at
its sole cost and expense, product liability insurance in amounts which are reasonable and
customary in the U.S. pharmaceutical industry for companies of comparable size and activities at
the respective place of business of each Party. Such product liability insurance shall insure
against all liability arising as a result of activities completed or permitted under this Agreement
(including, without limitation, liability for personal injury, physical injury and property
damage). Each Party shall provide written proof of the existence of such insurance to the other
Party promptly upon request.





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





27









 





ARTICLE 15

DISPUTE RESOLUTION




     15.1 Disputes. All disputes arising between the Parties hereunder or with respect to this
Agreement shall be resolved solely as provided in this Article 15. Any such dispute that the
Parties are unable to resolve directly may be referred by either Party to the Steering Committee
for resolution. If the Steering Committee is unable to resolve such dispute within 30 days after
referral, either Party may, on notice to the other, have such dispute referred to the CEOs of LGLS
and GS for attempted resolution by good faith negotiation. If such individuals are unable to
resolve such dispute within 30 days after referral, then either Party may thereafter seek to
resolve the dispute through arbitration in accordance with the Rules of Arbitration of the
International Chamber of Commerce by one or more arbitrators appointed in accordance with such
rules, in English. The place of arbitration shall be London, England.



     15.2 Applicable Law. This Agreement shall be governed by and construed under the substantive
laws of the State of California, without regard to conflicts of law principles.



ARTICLE 16

MISCELLANEOUS




     16.1 Assignment.



          16.1.1 Either Party may assign all of its rights and obligations under this Agreement to an
Affiliate with the consent of the other Party, such consent not to be unreasonably withheld or
delayed.




          16.1.2 A Party may assign its rights or obligations under this Agreement to a non-Affiliate
without the approval of the other Party only in connection with a merger of that Party with a Third
Party, acquisition of that Party by a Third Party, a similar reorganization affecting that Party,
or in connection with the sale by that Party to a Third Party of all or substantially all of the
assets to which this Agreement relates. This Agreement shall survive any such merger, acquisition
or reorganization of a Party with or into, or such sale of assets to, another party and no consent
for such merger, acquisition, reorganization or sale shall be required hereunder; provided,
however, that in the event of such merger, acquisition, reorganization or sale, no intellectual
property rights of the other merging or acquiring corporation shall be included in the intellectual
property licensed hereunder. This Agreement shall be binding upon and inure to the benefit of the
successors and permitted assigns of the Parties. Any assignment not in accordance with this
Agreement shall be void.




          16.1.3 In the event of an assignment resulting from a merger or acquisition permitted pursuant
to Section 16.1.2, above, LGLS and its successor entity shall endeavor to assure that GS
confidential information provided under this Agreement is kept confidential and distributed within
the successor entity solely to the limited extent necessary in order to satisfy such entity’s
obligations, and exercise such entity’s rights, with respect to Gemifloxacin hereunder.




28









 





     16.2 Force Majeure. Except as otherwise expressly provided herein, neither Party shall lose
any rights hereunder or be liable to the other Party for damages or losses on account of failure of
performance by the defaulting Party if the failure is occasioned by government action, war, acts of
gods, or any other similar or dissimilar cause beyond the control of the defaulting Party, provided
that the Party claiming force majeure has exerted all reasonable efforts to avoid or remedy such
force majeure.



     16.3 Further Actions. Each Party agrees to execute, acknowledge and deliver such further
instruments, and to do all such other acts, as may be necessary or appropriate in order to carry
out the purposes and intent of this Agreement.



     16.4 Notices. All notices hereunder shall be in writing and shall be deemed given if delivered
personally or by facsimile transmission with confirmed answer-back, mailed by registered mail
(return receipt requested), postage prepaid, or sent by internationally recognized express courier
service, to the Parties at the addresses first set forth above (or at such other address for a
Party as shall be specified by like notice; provided, that notices of a change of address shall be
effective only upon receipt thereof). Notice by personal delivery shall be deemed effective upon
receipt. Notice by courier or registered mail shall be deemed effective three business dates after
the date sent. Notice by fax shall be deemed effective upon receipt by the sending Party of
confirmation of receipt of the fax by the receiving Party.



     16.5 Waiver. The waiver from time to time by either of the Parties of any of their rights or
their failure to exercise any remedy shall not operate or be construed as a continuing waiver of
same or of any other of such Party’s rights or remedies provided in this Agreement.



     16.6 Severability. If any term, covenant or condition of this Agreement or the application
thereof to any Party or circumstance shall, to any extent, be held to be invalid or unenforceable,
then the remainder of this Agreement, or the application of such term, covenant or condition to
Parties or circumstances other than those as to which it is held invalid or unenforceable, shall
not be affected thereby and each term, covenant or condition of this Agreement shall be valid and
be enforced to the fullest extent permitted by law. In such event the Parties shall in good faith
attempt to reform this Agreement to reflect the intent and anticipated consequences of the
invalidated or unenforceable provision, to the extent possible in a way that is lawful.



     16.7 Ambiguities. Ambiguities, if any, in this Agreement shall not be construed against either
Party, irrespective of which Party may be deemed to have authored the ambiguous provision.



     16.8 Headings. The section and article heading contained herein are for the purposes of
convenience only and are not intended to define or limit the contents of said sections or articles.



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



29









 





     16.10 Entire Agreement. This Agreement (including all Schedules hereto) sets forth all the
covenants, promises, agreements, warranties, representations, conditions and understanding between
the Parties hereto and supersedes and terminates all prior agreements and understanding between the
Parties.



     16.11 Limitation of Liability. IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE OTHER
HEREUNDER FOR ANY SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES, WHETHER IN CONTRACT,
WARRANTY, TORT, STRICT LIABILITY OR OTHERWISE.


IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by their proper
officers as of the Effective Date.




	 	 	 	 	 	 	 	 	 	 	 
	GENESOFT PHARMACEUTICALS, INC.	 	 	 	LG LIFE SCIENCES, LTD.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	     /s/ David B. Singer
	 	 	 	By:
	 	      /s/ Heung Joon, Yang	 	 
	 

	 	 

      David B. Singer
	 	 
	 	 	 	 

      Heung Joon, Yang
	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Its:

	 	     Chairman and CEO
	 	 	 	Its:
	 	     President and CEO	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 






30









 







Schedule 1.4 

API Specification



Chemical Name



(R,S)-7-[(4Z)-3-(aminomethyl)-4-(methoxyimino)-l-pyrrolidinyl]-l-cyclopropyl-6-fluoro-l,4-dihydro-4-oxo-l,8-naphthyridine-3-carboxylic acid, monomethanesulfonate










Molecular Formula: C18H20FN5O4ŸCH4O3S

Molecular Weight: 485.49



Description (Visual examination)


White to light brown solid




[***]




[***]




[***]






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





 









 







Schedule 1.12

Final Product Specification




Material: FactiveTM Tablet 320mg




Tablet



Description (Visual)



A white to off-white, oval, film-coated tablet with breaklines in both faces and debossed with GE
320 on both faces




[***]




[***]




[***]




[***]




[***]




[***]




[***]




	 	 	 
	Package


For commercial use:

	 	


320 mg * 5 tablets in Blister
	 

	 	320 mg * 7 tablets in Blister
	 

	 	320 mg * 30 tablets (3*10 tablets) in Blister
	 

	 	320 mg * 30 tablets in Bottle
	 

	 	   For Promotional use: 320 mg Single tablet in Blister








 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.






 









 








Schedule 1.14

Gemifloxacin



Chemical Name



(R,S)-7-[(4Z)-3-(aminomethyl)-4-(methoxyimino)-l-pyrrolidinyl]-l-cyclopropyl-6-fluoro-l,4-dihydro-4-oxo- l,8-naphthyridine-3-carboxylic acid, monomethanesulfonate









Molecular
Formula: C18H20FN5O4ŸCH4O3S

Molecular Weight: 485.49




 









 





Schedule 1.17 

GLAXO Knowhow



“GLAXO Knowhow” shall mean the following inventions and discoveries, to the extent that they were
conceived, devised and/or reduced to practice by GSK as of the September 30, 2002, and which are
not yet the subject of patent applications:




[***]






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





 









 





Schedule 1.18 

GLAXO Patents




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

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	 	[***]	 	 	 	 	 	 






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
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	 	[***]	 	 	 	 	 	 






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
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	 	[***]
	 	[***]
	 	[***]	 	 	 	 	 	 





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
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	 	[***]
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	 	[***]
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	 	[***]	 	 	 	 	 	 






[***]






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





 









 





Schedule 1.24

[***]




Chemical Name




[***]






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





 









 





Schedule 1.27

LGLS Patents




	 	 	 	 	 	 	 	 	 	 	 	 	 
	 

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	 	[***]
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	 	[***]
	 	[***]
	 	[***]	 	 






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.



 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
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	 	[***]
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	 	[***]	 	 	 	 	 	 






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.



 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
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	 	[***]
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	 	[***]	 	 	 	 	 	 






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.



 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
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	 	[***]
	 	[***]
	 	[***]	 	 	 	 	 	 





 
 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.



 









 






	 	 	 	 	 	 	 	 	 	 	 	 	 
	[***]

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	 	[***]	 	 	 	 	 	 
	 

	 	[***]
	 	[***]
	 	[***]	 	 	 	 	 	 








 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.






 











 







Schedule 1.38 

Trademark




FACTIVE




	 	 	 	 	 	 	   	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Country	 	 	Class(es)	 	 	Status	 	 	App. No.	 	App. Date	 	 	Reg. No.	 	Reg. Date
	 
	Andorra

	 	 	5	 	 	 	Registered
	 	 	12191	 	 	19/11/1998
	 	 	11723	 	 	19/11/1998
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) MEDICINES FOR HUMAN USE; PHARMACEUTICAL PRODUCTS; REMEDIES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Austria

	 	 	5	 	 	 	Registered
	 	 	AM2218/96
	 	12/04/1996
	 	 	166024	 	 	30/08/1996
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Canada

	 	 	Filed
	 	 	 	79870600	 	 	 	01/12/1995	 	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) ANTI-VIRAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Denmark

	 	 	5	 	 	 	Registered
	 	 	VA 199600283
	 	16/01/1996
	 	VR199600791
	 	02/02/1996
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PREPARATIONS AND SUBSTANCES FOR THE TREATMENT OF RESPIRATORY DISORDERS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	European Union

	 	 	5	 	 	 	Registered
	 	 	000950352	 	 	08/10/1998
	 	 	000950352	 	 	31/01/2000
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Finland

	 	 	5	 	 	 	Registered
	 	 	T199802485	 	 	21/07/1998
	 	 	214152	 	 	14/05/1999
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE; SPECIFICALLY AN ANTI-BACTERIAL
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	France

	 	 	5	 	 	 	Registered
	 	 	95600030	 	 	07/12/1995
	 	 	95600030	 	 	07/12/1995
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Greece

	 	 	5	 	 	 	Registered
	 	 	128137	 	 	31/01/1996
	 	 	128137	 	 	17/03/1998
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE






 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Country	 	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	 	Reg. No.	 	Reg. Date
	 
	Iceland

	 	 	5	 	 	Registered
	 	 	351/1996	 	 	12/03/1996
	 	 	1216/1996	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE, INCLUDING AN ANTI-VIRAL
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Ireland

	 	 	5	 	 	Registered
	 	 	95/8291	 	 	05/12/1995
	 	 	171292	 	 	05/12/1995
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Italy

	 	 	5	 	 	Registered
	 	 	MI95C012228
	 	06/12/1995
	 	 	00733838	 	 	14/11/1997
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mexico

	 	 	5	 	 	Registered
	 	 	260065	 	 	17/04/1996
	 	 	542746	 	 	27/02/1997
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Monaco

	 	 	5	 	 	Registered
	 	 	020534	 	 	17/02/1999
	 	 	99.20373	 	 	17/02/1999
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Netherlands Antilles

	 	 	5	 	 	Registered
	 	 	D-900	 	 	24/12/1998
	 	 	21301	 	 	09/02/1999
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL, VETERINARY AND SANITARY PREPARATIONS; DIETETIC SUBSTANCES ADAPTED FOR MEDICAL USE, FOOD FOR BABIES; PLASTERS, MATERIALS FOR
DRESSINGS; MATERIAL FOR STOPPING TEETH, DENTAL WAX; DISINFECTANTS; PREPARATIONS FOR DESTROYING VERMIN; FUNGICIDES, HERBICIDES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Norway

	 	 	5	 	 	Filed
	 	 	200112664	 	 	25/10/2001	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) ANTI-INFECTIVE PREPARATIONS FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Norway

	 	 	5	 	 	Registered
	 	 	19961885	 	 	19/03/1996
	 	 	182042	 	 	15/05/1997
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL PREPARATIONS FOR THE TREATMENT OF RESPIRATORY DISORDERS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Portugal

	 	 	5	 	 	Registered
	 	 	314842	 	 	15/01/1996
	 	 	314842	 	 	14/10/1996
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Spain

	 	 	5	 	 	Registered
	 	 	2184599	 	 	18/09/1998
	 	 	2184599	 	 	05/10/1999
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE






 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Country	 	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	 	Reg. No.	 	Reg. Date
	 
	Sweden

	 	 	5	 	 	Registered
	 	 	95-14489	 	 	13/12/1995
	 	 	315811	 	 	09/08/1996
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Switzerland

	 	 	5	 	 	Registered
	 	 	00225/1996	 	 	16/01/1996
	 	 	433454	 	 	30/12/1996
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE, EXCEPT FOR DISINFECTANT OR STERILIZATION PURPOSES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	United Kingdom

	 	 	5	 	 	Registered
	 	 	2041126	 	 	13/10/1995
	 	 	2041126	 	 	13/10/1995
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE; BUT NOT INCLUDING ANY SUCH GOODS BEING DISINFECTANTS OR STERILIZING PREPARATIONS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	USA

	 	 	5	 	 	Registered
	 	 	75045500	 	 	19/01/1996
	 	 	2281877	 	 	28/09/1999
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE, NAMELY, ANTI- VIRALS AND ANTI-INFECTIVES
	 
	FACTIVE DEV.
	 	 
	Country	 	 	Class(es)	 	Status	 	 	 	 	App. No.	 	App. Date	 	 	Reg. No.	 	Reg. Date
	 
	Andorra

	 	 	5	 	 	Registered
	 	 	 	 	 	 	 	 	 	 	14905	 	 	14/07/2000
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Austria

	 	 	5	 	 	Registered
	 	 	 	 	AM4560/2000
	 	21/06/2000
	 	 	195230	 	 	04/04/2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Canada

	 	 	 	 	 	Filed
	 	 	 	 	1066283	 	 	06/07/2000	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES, NA MELYANTI-VIRALS AND ANTI-INFECTIVES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	European Union

	 	 	5	 	 	Registered
	 	 	 	 	001721273	 	 	23/06/2000
	 	 	001721273	 	 	29/05/2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Iceland

	 	 	5	 	 	Registered
	 	 	 	 	2304/2000	 	 	29/06/2000
	 	 	1149/2000	 	 	01/09/2000






 









 








	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Country	 	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	 	Reg. No.	 	Reg. Date
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Mexico

	 	 	5	 	 	Registered
	 	 	444544	 	 	28/08/2000
	 	 	688725	 	 	28/02/2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Monaco

	 	 	5	 	 	Registered
	 	 	022925	 	 	06/07/2001
	 	 	01.22636	 	 	06/07/2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Netherlands Antilles

	 	 	5	 	 	Registered
	 	 	D-395	 	 	10/07/2000
	 	 	22486	 	 	01/11/2000
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Norway

	 	 	5	 	 	Registered
	 	 	200007413	 	 	27/06/2000
	 	 	205945	 	 	07/12/2000
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Switzerland

	 	 	5	 	 	Registered
	 	 	07922/2000	 	 	03/07/2000
	 	 	480382	 	 	18/01/2001
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE, EXCEPT FOR DISINFECTANT OR STERILISATION
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	United Kingdom

	 	 	5	 	 	Registered
	 	 	2236543	 	 	20/06/2000
	 	 	2236543	 	 	20/06/2000
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICAL AND MEDICINAL PREPARATIONS AND SUBSTANCES FOR HUMAN USE; BUT NOT INCLUDING ANY SUCH GOODS BEING DISINFECTANTS OR STERILISING PREPARATIONS
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	USA

	 	 	16	 	 	Filed
	 	 	76054224	 	 	23/05/2000	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16) PRINTED EDUCATIONAL MATERIALS, NAMELY, BROCHURES AND PAMPHLETS CONCERNING HEALTHCARE RELATED ISSUES AND PHARMACEUTICAL TREATMENTS FOR INFECTION
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	USA

	 	 	42	 	 	Filed
	 	 	76052305	 	 	18/05/2000	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	42) PROVIDING INFORMATION, VIA GLOBAL COMPUTER NETWORKS, CONCERNING INFECTIOUS DISEASES, INCLUDING RESPIRATORY TRACT INFECTIONS AND TREATMENTS THEREFOR
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	USA

	 	 	5	 	 	Filed
	 	 	76054223	 	 	23/05/2000	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS






 









 







FACPAC3 DAY




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Country	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date
	USA

	 	5	 	 	Filed
	 	 	78086704	 	 	03/10/2001	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO ENSURE PATIENT COMPLIANCE WITH RESPECT TO COMPLETE COURSE OF MEDICATION
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	USA

	 	5	 	 	Filed
	 	 	78032521	 	 	26/10/2000	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO ENSURE PATIENT COMPLIANCE WITH RESPECT TO COMPLETE COURSE OF MEDICATION
	 
	FACPAC7 AND DEV.
	 
	Country	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date
	USA

	 	5	 	 	Filed
	 	 	78028794	 	 	03/10/2000	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO 

ENSURE PATIENT COMPLIANCE WITH RESPECT TO COMPLETE COURSE OF MEDICATION
	 
	FACPAC7 DAY
	 
	Country	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date
	USA

	 	5	 	 	Filed
	 	 	78086707	 	 	03/10/2001	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO ENSURE PATIENT COMPLIANCE WITH RESPECT TO COMPLETE COURSE OF MEDICATION






 









 






FACPAC7 (STYLIZED)




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	Country	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date
	USA

	 	5	 	 	Filed
	 	 	78032520	 	 	26/10/2000	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICALS, NAMELY, ANTIBIOTICS IN TABLET FORM PACKAGED IN CONVENIENCE CARTONS TO
ENSURE PATIENT COMPLIANCE WITH RESPECT TO COMPLETE COURSE OF MEDICATION
	 
	FAST. ACTIVE. FACTIVE
	 
	Country	 	Class(es)	 	Status	 	 	App. No.	 	App. Date	 	Reg. No.	 	Reg. Date
	USA

	 	16	 	 	Filed
	 	 	76092242	 	 	19/07/2000	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	16) PRINTED EDUCATIONAL MATERIALS, NAMELY BROCHURES, PAMPHLETS, AND BOOKLETS CONCERNING RESPIRATORY TRACT INFECTIONS AND TREATMENTS THEREOF
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	USA

	 	5	 	 	Filed
	 	 	76092240	 	 	19/07/2000	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	5) PHARMACEUTICALS, NAMELY ANTIBIOTICS






FACTIVE.COM

FACTIVE.ORG

FACTIVE.NET

FACTIVE.BIZ

FACTIVE.INFO




 









 





Schedule 9.6 

DNA Nanobinder Compounds



DNA nanobinder compounds are compounds that [***]. DNA nanobinder compounds include, but are not
limited to, compounds covered by one or more of the following GS patent applications




US Patent Application No. 09/808,729, filed March 14, 2001 (PCT equivalent PCT/US
01/08252, filed March 14, 2001). [GS ref. GSFT005]



US Patent Application No. 10/165856, filed June 6, 2002 (PCT equivalent PCT/US
02/17952, filed June 6, 2002). [GS ref. GSFT007]



US Patent Application No. 10/132,887, filed April 24, 2002 (PCT equivalent PCT/US
02/13199, filed Apr. 24, 2002). [GS ref. GSFT009]



[***]



US Patent Application No. 10/165,433, filed June 6, 2002 (PCT equivalent PCT/US
02/17953, filed June 6, 2002). [GS ref. GSFT011]



US Patent Application No. 10/165,857, filed June 6, 2002 (PCT equivalent PCT/US
02/17954, filed June 6, 2002). [GS ref. GSFT012]



US Patent Application No. 10/165764, filed June 6, 2002 (PCT equivalent PCT/US
02/17951, filed June 6, 2002). [GS ref. GSFT013]



[***]



[***]





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.





 









 








AMENDMENT NO. 1 TO LICENSE AND OPTION AGREEMENT




     THIS AMENDMENT NO. 1 TO LICENSE AND OPTION AGREEMENT (the “Amendment”) is made and entered
into this 21st day of November, 2002 (the “Effective Date”) by and between GENESOFT
PHARMACEUTICALS, INC., a Delaware corporation having its principal place of business at 7300
Shoreline Court, South San Francisco, CA, USA 94080 (“GS”) and LG LIFE SCIENCES, LTD., a
corporation organized under the laws of the Republic of Korea having its principal place of
business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721, Republic of Korea
(“LGLS”). LGLS and GS may be referred to herein individually as a “Party” and collectively as the
“Parties.”



RECITALS




WHEREAS:



LGLS and GS entered into the License and Option Agreement on October 22, 2002 (“License”).



The Parties have identified several typographical errors in Section 8.3 of the License.



The Parties seek to amend Section 8.3 to reflect the original intent of the Parties.



NOW, THEREFORE, in consideration of the promises and mutual covenants herein contained, the Parties
agree as follows:




AMENDMENT



1. The Parties agree to delete Section 8.3 in its entirety and to replace it with the revised
Section 8.3 set forth below:





Infringement. If either Party learns of an infringement or threatened infringement of the LGLS
Patents or GLAXO Patents in the Territory in the Field it shall promptly notify the other
Party and shall provide the latter Party with all information reasonably available to the
notifying Party evidencing such infringement or threatened infringement. Thereafter, the
Parties shall in good faith consult and cooperate in abating such infringement or threatened
infringement.




GS shall have the right, but not the obligation, to bring, defend and maintain any
appropriate suit or action for abatement of the infringement or threatened infringement of the
LGLS or GLAXO Patents in the Territory and in the Field, at GS’s sole expense. If GS requests
LGLS to join GS as a party in such suit or action, LGLS shall execute all papers and perform
such other acts as may be reasonably requested by GS, at GS’s expense. LGLS shall have the
right to participate in any such suit or action using independent counsel, at its sole
expense. Any amount recovered by GS as a result of such suit or action shall first be applied
to reimburse each of the Parties, pro rata, for any costs or expenses incurred in bringing,
defending and maintaining any such action. The balance (the “Net Recovery”) shall



 









 







be for the sole benefit of GS. The Net Recovery shall be considered “Net Sales” with
respect to the calendar quarter in which payment to GS was received, and royalties shall
accordingly be paid on the amount of the Net Recovery exclusively at the rate(s) specified in
Section 10.3, below. The Net Recovery shall be considered “Net Sales” for purposes of
calculating annual Net Sales in accordance with Milestones 3 and 4 and in Section 10.2, below.




     If GS fails to initiate suit or action within 90 days after first notice of infringement
or threatened infringement of the LGLS Patents or the GLAXO Patents, or if having initiated
such suit or action it thereafter diligently fails to prosecute such suit or action, LGLS
shall have the right, but not the obligation, to bring, defend and maintain any appropriate
suit or action for abatement of the infringement or threatened infringement, at LGLS’s sole
expense. If LGLS requests GS to join LGLS as a party in such suit or action, GS shall execute
all papers and perform such other acts as may be reasonably requested by LGLS, at LGLS’s
expense. GS shall have the right to participate in any such suit or action using independent
counsel, at its sole expense. Any amount recovered by LGLS as a result of such suit or action
shall first be applied to reimburse each of the Parties, pro rata, for any costs or expenses
incurred in bringing, defending and maintaining any such action. The balance shall be divided
equally between the Parties. The amount of any recovery, net of the amounts necessary to
reimburse the Parties as provided above shall be considered “Net Sales” for purposes of
calculating annual Net Sales in accordance with Milestones 3 and 4 and in Section 10.2, below.
If such recovery is apportioned by the court such that portions thereof are attributed to
infringing activity in different calendar years, or if such apportionment of the recovery can
otherwise be readily ascertained, then such apportionment shall govern as to the calendar
year(s) in which Net Sales shall be deemed to have occurred for purposes of such Milestones.
Otherwise, the amount of such recovery shall be apportioned equally over the number of
calendar years in which infringement was found to have occurred (or in the event of a
settlement, over the number of calendar years in which it was alleged to have occurred).


2. Except as is expressly provided herein, the License shall remain in full force and effect.



IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by the proper
officers as of the Effective Date.




	 	 	 	 	 	 	 	 	 
	GENESOFT PHARMACEUTICALS, INC.	 	 	 	LG LIFE SCIENCES, LTD.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ David B. Singer
	 	 	 	By:
	 	/s/ Soon-Jae Park
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	               CEO
	 	 	 	Its:
	 	               Vice President
	 

	 	 
	 	 	 	 	 	 






 









 








AMENDMENT NO. 2 TO THE

LICENSE AND OPTION AGREEMENT




     THIS AMENDMENT NO. 2 TO THE LICENSE AND OPTION AGREEMENT (“Amendment”) is made and entered
into as of December 6, 2002, by and among GeneSoft Pharmaceuticals, Inc., a Delaware corporation
(the “GS”), and LG Life Sciences, Ltd., a corporation organized under the laws of the Republic of
Korea (“LGLS”). Capitalized terms not otherwise defined in this Amendment shall have the meaning
given them in that certain License and Option Agreement by and among GS and LGLS dated as of
October 22, 2002 (the “Agreement”).



RECITALS




     WHEREAS, each of GS and LGLS deem it advisable to enter into this Amendment to amend certain
of the payment obligations under the Agreement;



     NOW, THEREFORE, in consideration of the mutual promises and covenants hereinafter set forth,
and certain other good and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, GS and LGLS hereby agree as follows:



     1. Section 10.1 of the Agreement shall be amended and restated in its entirely to read as
follows:



     “License Fee. Within 45 days following the Effective Date GS shall: (i) pay to LGLS a
non-refundable license fee of $2.5 million, (ii) issue to LGLS a promissory note with a principal
amount of three million dollars ($3,000,000) in the form attached hereto as Exhibit A (the
“Note”) and (iii) deliver to LGLS 4,749,659 fully-paid up and non-assessable shares of GS common
stock (the “Shares”). GS represents and warrants that the Shares represent 14.0 percent of the
total equity of GS on October 22, 2002, calculated on a fully diluted basis. The rights and further
characteristics of the Shares (including, without limitation, certain anti-dilution rights) are as
set forth in the Stock Purchase Agreement and related documents attached hereto as Schedule 10.1.”



     2. Section 13.2 of the Agreement shall be amended and restated in its entirety to read as
follows:



     “Termination for Material Breach. Subject to the last sentence of this Section 13.2, if either
Party materially breaches this Agreement at any time, which breach is not cured within 30 days of
notice thereof from the non-breaching Party, the non-breaching Party shall have the right to
terminate this Agreement on notice to the Party in breach following the expiration of such cure
period; provided, however, that if the Party alleged to be in breach shall have invoked the dispute
resolution mechanism of Article 15 prior to the expiration of such cure period then termination
shall not be effective until the sooner of abandonment of such proceedings by the Party alleged to
be in breach or completion of the dispute resolution proceedings and a non-appealable finding in
arbitration in favor of the non-breaching Party. Notwithstanding the foregoing, if GS fails to make
any payment of principal and interest required by the terms of the Note on the date on which



 









 







such payment is due, which failure (a “Payment Failure”) is not cured within 2 business days
of notice thereof from LGLS, LGLS shall have the right to terminate this Agreement on notice to GS
following the expiration of such cure period and GS shall have no right to invoke the dispute
resolution mechanism set forth in Article 15 hereof with regard to or in connection with such
Payment Failure.”



     3. Section 15.1 of the Agreement shall be amended and restated in its entirety to read as
follows:



     “Disputes. Except as set forth in Section 13.2 above, as amended, all disputes arising between
the Parties hereunder or with respect to this Agreement shall be resolved solely as provided in
this Article 15. Any such dispute that the Parties are unable to resolve directly may be referred
by either Party to the Steering Committee for resolution. If the Steering Committee is unable to
resolve such dispute within 30 days after referral, either Party may, on notice to the other, have
such dispute referred to the CEOs of LGLS and GS for attempted resolution by good faith
negotiation. If such individuals are unable to resolve such dispute within 30 days after referral,
then either Party may thereafter seek to resolve the dispute through arbitration in accordance with
the Rules of Arbitration of the International Chamber of Commerce by one or more arbitrators
appointed in accordance with such rules, in English. The place of arbitration shall be London,
England.”



     4. This Amendment shall be governed by and construed under the substantive laws of the State
of California, without regard to conflicts of law principles.



     5. This Amendment 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.



     6. This Amendment, when executed by GS and LGLS, shall be binding upon each of GS and LGLS and
each of their successors and assigns.



     7. The Agreement and this Amendment and the documents referred to therein and herein
constitute the entire agreement between the parties hereto pertaining to the subject matter thereof
and hereof.



     8. Except as modified hereby, all other terms and provisions of the Agreement are hereby
ratified and confirmed in all respects.



 









 





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



	 	 	 	 	 	 
	 	 	





GENESOFT PHARMACEUTICALS, INC.

 	 
	 	 	By:  	/s/    David B. Singer
 	 
	 	 	Name:	David B. Singer 	 
	 	 	Title:	Chairman and CEO 	 
	 
	 	Address:	 7300 Shoreline Court

South San Francisco, CA, USA 94080





LG LIFE SCIENCES, LTD.

 	 
	 	 	By:  	/s/    Heung Joon Yang
 	 
	 	 	Name:	Heung Joon Yang 	 
	 	 	Title:	President and CEO 	 
	 
	 	Address:	 LG Twin Tower

20 yoido-dong, Youngdungopo-gu

Seoul, 150-721, Republic of Korea

 	 




 









 





AMENDMENT NO. 3 TO LICENSE & OPTION AGREEMENT




     THIS AMENDMENT NO. 3 TO LICENSE & OPTION AGREEMENT (“the Amendment”) is made and entered into
this 16th day of October, 2003 (the “Amendment Effective Date”) by and between GENESOFT
PHARMACEUTICALS, INC., a Delaware corporation having its principal place of business at 7300
Shoreline Court, South San Francisco, CA, USA 94080 (“GS”) and LG LIFE SCIENCES, LTD., a
corporation organized under the laws of the Republic of Korea, having its principal place of
business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721, Republic of Korea
(“LGLS”). LGLS and GS may be referred to herein individually as a “Party” and collectively as the
“Parties.”



RECITALS




WHEREAS:



LGLS and GS entered into the License and Option Agreement on October 22, 2002 (“License Effective
Date”) and amended said License and Option Agreement by Amendment No. 1 thereto on November 21,
2002 and Amendment No. 2 thereto on December 6, 2002 (as amended, the “License”);



The License sets forth the terms by which LGLS grants to GS the sole and exclusive license to use,
import, package, sell, and offer for sale Products within the Field in the Territory, and the
exclusive right to use the Trademarks in the Territory in conjunction with the use or sale of the
Products;



The License further sets forth the terms by which LGLS agrees to supply to GS Final Product or
Active Pharmaceutical Ingredient (“API”); and



The Parties now seek to amend the License to conform its terms to the terms by which Final Product
is to be supplied to LGLS under the supply agreement entered into between LGLS and SB PHARMCO
PUERTO RICO, INC. and its affiliates (“GLAXO” or “GSK Supply Agreement”) on February 26, 2003 and
to revise certain other terms set forth herein.



NOW, THEREFORE, in consideration of the premises and mutual covenants herein contained, the Parties
agree as follows:



1. Section 1.13 shall be deleted in its entirety and replaced with the following revised paragraph:




     “Fully Burdened Cost of Manufacture” means: [***].





 




			
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Securities and Exchange Commission.




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2. Section 1.32 shall be revised to define “Product” as follows:




     “Product” means any compound containing Gemifloxacin as an active ingredient, including API
and Final Product.


3. A new Section 1.39 shall be inserted to define “Obsolete Materials” as follows:




     “Obsolete Materials” mean any Materials ordered at the request of GS that will become obsolete
as a result of (i) the expiration or termination of the GSK Supply Agreement or (ii) changes in
Final Product Specifications and/or the changes in labeling and packaging.


4. A new Section 1.40 shall be inserted to define “Materials” as follows:




     “Materials” mean all material except API used in the manufacture, storage, and shipment of
Final Products.


5. A new Section 1.41 shall be inserted to define “Long Lead Time Materials” as follows:




     “Long Lead Time Materials” means [***].


6. A new Section 1.42 shall be inserted, which defines “Second Source Supplier” as follows:




     “Second Source Supplier” means a contract manufacturer, which is retained to produce API in
the event of an interruption to LGLS’s supply, and which has an existing manufacturing plant
suitable for the production of API.


7. A new Section 1.43 shall be inserted, which defines “Adverse Event” as follows:




     “Adverse Event” shall have the meaning ascribed to the term “adverse drug experience” by the
FDA in 21 CFR 310.305(b).


8. A new Section 1.44 shall be inserted, which defines “Serious Adverse Event” as follows:




     “Serious Adverse Event” shall have the meaning ascribed to the term “serious adverse drug
experience” by the FDA in 21 CFR 310.305(b).





 




			
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9. A new Section 1.45 shall be inserted to define “Non-Commercial Use” as follows:




     “Non-Commercial Use” means any use of a Product by GS, which is non-commercial in nature,
including but not limited to the distribution of samples, use in clinical trials, pre-Launch
compassionate use, and any other use from which GS derives no direct commercial benefit.


10. Section 5.1 shall be deleted in its entirety and replaced with the following revised
text:




     5.1 General.



          (a) Intent of the Parties. The intent of the Parties is that:





     (i) between the Effective Date and until the expiration or termination of the
GSK Supply Agreement, (including any renewal periods thereof, the “Initial Period”),
LGLS shall supply to GS, and GS shall exclusively purchase from LGLS, all of GS’s
requirements of Final Product according to the Final Product Specifications, and




     (ii) following the expiration or termination of the Initial Period and until
the expiration or termination of this Agreement (“Remaining Period”), LGLS shall
supply to GS, and GS shall exclusively purchase from LGLS, all of GS’s requirements
of API in bulk form according to the API Specifications.



          (b) Terms and Conditions. The terms and conditions by which LGLS shall supply GS and
GS shall purchase from LGLS Final Product or API, as applicable, pursuant to Section 5.1(a) are set
forth in this Article 5.




          (c) Manufacturing Site Change.





     (i) Prior to the expiration or termination of the Initial Period, GS shall




          (A) select and contract with a Third Party to conduct final
finish and fill operations at a facility operated by such Third Party
during the Remaining Period to produce Final Product from API
supplied by LGLS pursuant to Section 5.l(a)(ii); provided, however,
that GS shall have no liability to LGLS for costs or damages
resulting from the performance or failure of performance by such
Third Party, except to the extent that such costs or damages result
from the negligence or willful misconduct of GS, and the agreement
with such Third Party shall contain provisions, enforceable by LGLS
as a third party beneficiary, pursuant to which such Third Party
agrees to indemnify and hold LGLS harmless from and against claims
made against LGLS as a result of the negligence or willful misconduct
of such Third Party; and




          (B) obtain all necessary Regulatory Approvals for the engagement
of such Third Party to so produce such Final Product.



3









 






     (ii) The commencement of such finish and fill operations at such facility
operated by such Third Party in accordance with such Regulatory Approvals so
obtained is referred to in this Amendment as the “Manufacturing Site Change”.




     (iii) Within thirty (30) days (the “Plan Preparation Period”) following the
execution of this Amendment, GS shall, subject to the approval of LGLS, which
approval shall not be unreasonably withheld, complete the preparation of a plan (as
so completed and approved, the “Manufacturing Site Change Plan”) for effecting the
Manufacturing Site Change and obtaining the Regulatory Approvals for doing so.
Promptly following the Plan Preparation Period, GS shall begin implementation of the
Manufacturing Site Change Plan. Until such time as the Manufacturing Site Change
occurs, GS shall advise LGLS in writing no less frequently than once per month as to
the status of the implementation of the Manufacturing Site Change Plan.




     (iv) GS shall use [***] to cause the Manufacturing Site Change to occur on or
before the date of expiration or termination of the Initial Period, and LGLS shall
provide such assistance as GS reasonably requests to cause such Manufacturing Site
Change to so occur.



          (d) Assured Inventory Levels.




          If, at any time during the Initial Period, GS and LGLS mutually agree in their reasonable
discretion that it is unlikely that the Manufacturing Site Change will occur on or before the date
of expiration or termination of the Initial Period and/or that the actual capacity of the facility
contemplated by the Manufacturing Site Change will be less than its rated capacity and/or that the
delivery times of Final Product from such contemplated facility will not be in accordance with the
scheduled delivery times previously agreed by GS and LGLS, and that a shortage of Final Product
inventory will thereby occur in respect of projected sales of Final Product following such date as
set forth in GS’s then most recent forecast (the amount of such shortage as initially forecasted
and adjusted from time to time in accordance with the procedures set forth below being the “Missed
Manufacturing Site Change Shortage”), then LGLS shall use commercially reasonable efforts to
undertake any combination of the following actions in order to avoid any such shortage:





     (i) (A) negotiate with GLAXO to extend the term of the GSK Supply Agreement and
(B) so extend such term, provided that if such term is so extended, then the Initial
Period shall be extended for the same length of time as the GSK Supply Agreement is
so extended,





 




			
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     (ii) (A) cause GLAXO to increase its production of Finished Product during the
Initial Period by the amount of the Missed Manufacturing Site Change Shortage and
(B) require GS to purchase such Missed Manufacturing Site Change Shortage according
to the terms and conditions of this Article 5.



     The Missed Manufacturing Site Change Shortage shall be initially calculated before June 30,
2004 by forecasting the combined influence of the anticipated delay or supply shortfall and other
related factors agreed to by the parties. Thereafter, the Missed Manufacturing Site Change Shortage
shall be adjusted from time to time as LGLS and GS may agree to account for the actual experience
with such factors through the passage of time and revisions to the initial assumptions of the
Parties regarding the extent and duration of the problem.


11. Section 5.2 shall be deleted in its entirety and replaced with the following:




     Supply Price.



     (i) The supply price for Final Product provided by LGLS to GS during the Initial Period until
June 30, 2004, shall be equal to [***] percent of LGLS’s Fully Burdened Cost of Manufacture for
Final Product supplied thereunder, which shall [***] $[***] per finished tablet, [***]
$[***] per finished tablet. Final Product provided by LGLS to GS for Non-Commercial Use shall be
[***] provided, however, that the prices of Final Product shall [***] per finished tablet [***].



     (ii) The supply price for Final Product provided by LGLS to GS, following June 30, 2004 and
the expiration or termination of any renewal or extension periods to the GSK Agreement, shall be
equal to [***] percent of LGLS’s Fully Burdened Cost of Manufacture for Final Product supplied
thereunder, which shall [***] $[***] per finished tablet, [***]. The supply price for Final
Product provided by LGLS to GS for Non-Commercial Use shall be [***].



     (iii) The supply price for API provided by LGLS to GS during the Remaining Period, shall be
equal to [***] percent of LGLS’s Fully Burdened Cost of Manufacture for API supplied thereunder,
which shall in no event [***] $[***] per kg [***] $[***] per kg. In addition, (i) if GS purchases
more than [***] kg of API in any calendar year, the $[***] supply price shall be
reduced by $[***] per kg for each additional [***] kg of API purchased in such year in excess of
[***] kg, and (ii) the bulk supply price (including the [***]price) shall be renegotiated in good
faith in the event that GS purchases more than [***] kg of API in any 12 month period. In the
event that there is an interruption in LGLS’s supply of API for any reason, which continues uncured
for more than [***], then GS shall have the right to procure an alternative source of supply for
the duration of the interruption (“Second Source”). Notwithstanding the foregoing, GS shall only
have the right to procure a Second Source in the event that the interruption arises with respect to
a supply order quantity, which is less than or equal to [***] percent of the quantity anticipated
by GS in the most recently updated forecast, immediately preceding the submission of the supply
order. LGLS shall have the opportunity to resume its





 




			
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Securities and Exchange Commission.




5









 









supply of API upon the elimination or resolution of the events causing the interruption; provided
that, however, LGLS shall not resume its role as the exclusive supplier until GS is able to
negotiate a termination of its purchase obligations with the Second Source Supplier. LGLS shall be
responsible for any expenses incurred in excess of the price set forth herein, including any
expenses related to the termination of any agreement with the Second Source Supplier; provided,
however, that LGLS shall not be responsible for such excess expenses to the extent that such
interruption is due to the negligence or willful malfeasance of GS.



12. Section 5.4 shall be deleted in its entirety and replaced with the following:




     Specifications.



     5.4.1 LGLS warrants that the Final Product it supplies hereunder during the Initial Period
shall meet the Final Product Specifications, and shall have been manufactured in accordance with
all applicable laws and regulations including, without limitation, then-current Good Manufacturing
Practice (“cGMP”) standards. LGLS further warrants that the API comprising Final Product supplied
hereunder and the API supplied hereunder in bulk form shall meet the API Specifications.



     5.4.2 If, during the Initial Period, GS requests LGLS to make changes to the Final Product
Specifications or the labeling and packaging, then LGLS shall initiate such changes and GS shall be
responsible for the costs incurred by LGLS in making such change, including without limitation, the
cost of any change requested in order to maintain the Specifications or packaging and labeling in
conformity with the Final Product’s drug application filed with the FDA, applicable cGMPs, and
applicable regulatory acts or legal requirements (including, without limitation, with respect to
any of the materials used in the Final Product), not generally applicable to the manufacture of
pharmaceutical products or types of dosage forms (e.g., blister packs or sterile vials). GS retains
the right and responsibility for Regulatory Approvals of the Final Product Specifications.



     5.4.3 During the Initial Period, GS shall provide to LGLS, at GS’s sole cost and expense,
camera-ready artwork for the Final Product Specifications as approved for each market, relating to
graphics. GS shall bear all artwork costs and expenses incurred as a result of any revision to the
Final Product Specifications.



     5.4.4 During the Initial Period, GS shall pay for Obsolete Materials in the amount of [***];
provided, however, that to the extent that such Obsolete Materials are solely attributable to
LGLS’s ordering quantities of materials in excess of quantities necessary to fulfill volumes
projected in the Nonbinding Forecast, GS shall not be required to pay for such Obsolete Materials.





 




			
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6









 









13. Section 5.5 shall be deleted in its entirety and replaced with the following paragraphs set
forth below:




     Purchase Order and Forecasting.



     5.5.1 During the Initial Period, GS shall provide to LGLS a nonbinding projection of [***] of
the anticipated volumes of each Final Product for each market to be ordered by GS pursuant to
Section 5.5.3 below. GS shall provide such projections to LGLS on [***] during the Initial Period;
provided that GS shall provide to LGLS the first such report no later than the execution of this
Amendment No. 3.



     5.5.2 On or before March 1, 2003, GS shall place a firm order for the amount of Final Product
produced to Final Product Specifications which incorporates [***] of API. With GS’s permission,
LGLS may request that GLAXO order Long Lead Time Materials to fulfill such firm order, subject to
GS obtaining any required Regulatory Approval from the FDA. LGLS shall have no responsibility for
lost Long Lead Time Materials due to FDA delays or requirements, and GS shall pay for such Long
Lead Time Materials regardless of any FDA delay or requirement relating to the Final Product.



     5.5.3 All subsequent supply orders for the delivery of Final Product, submitted prior to the
expiration or termination of Initial Period, shall specify the aggregate volumes of Final Product
ordered for each market and the delivery date, and each such supply order shall be submitted to
LGLS not less than [***] prior to the delivery date on which GS has requested shipment pursuant to
such supply order; provided that, however, in the event that GS purchases long lead time materials
(as defined in Article I and Section 2.4(c) of the GSK Supply Agreement), then such supply orders
shall be submitted to LGLS not less than [***] prior to the requested delivery date for each such
supply order. GS shall submit [***] supply orders for the aggregate Final Product volumes for each
market, which volumes shall be equivalent to the minimum order quantity for each Final Product in a
particular market. The minimum order quantity shall be [***].



     5.5.4 LGLS shall not be obligated to produce more than [***] of Final Product (totaling
approximately [***] tablets) in 2003, unless on or before [***], GS submits an additional supply
order for Final Product to be manufactured in 2003, for delivery on or before [***]. Such order
shall be for [***] of Final Product.



     5.5.5 Upon the commencement of the Remaining Period, GS shall provide to LGLS a non-binding
forecast of the quantities of API to be manufactured during the [***] period. This forecast shall
be updated by GS on or before [***] of each [***] for the following [***]. Within [***] after the
receipt of such forecast, LGLS shall provide to GS a good faith non-binding forecast of the Fully
Burdened Cost of Manufacture of the supply of API forecasted by GS for the [***].





 




			
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Securities and Exchange Commission.




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     5.5.6 Notwithstanding the foregoing, GS shall use [***] to provide LGLS with supply orders for
the delivery of Final Product or, upon the commencement of the Remaining Period, API, within the
following dates:



     In [***], GS shall provide its supply orders for delivery during the [***];



     In [***], GS shall provide its supply orders for delivery during the [***];



     In [***], GS shall provide its supply orders for delivery during the [***]; and



     In [***], GS shall provide its supply orders for delivery during the [***].



     GS shall issue each supply order to LGLS at least [***] prior to the delivery date on which GS
has requested LGLS to ship pursuant to each such supply order.


14. Section 5.6 shall be deleted in its entirety and replaced with the following paragraph:




     Delivery.



     5.6.1 During the Initial Period, all Final Product shall be shipped FCA GLAXO’s manufacturing
facility located at Road 172 Km 9.1, Bo. Certenejas, Cidra, Puerto Rico (as defined in the
INCOTERMS, 2000 edition, published by the International Chamber of Commerce, ICC Publication 560),
except with regard to title and risk of loss. LGLS shall arrange for pickup from the facility by a
freight forwarder, and title and risk of loss with respect to Final Product shall pass to GS upon
pick up of the Final Product by the carrier or freight forwarder at the facility. LGLS agrees, in
accordance with GS’s reasonable written instructions, to arrange for shipping and insurance to such
locations as are requested by GS, at the expense of GS. During the Remaining Period, the Parties
agree that API shall be shipped Ex Works (“EXW”), as such term is defined in INCOTERMS 2000, in
which case, title and all risks of loss or damage to the API shall remain with LGLS until the API
is delivered to the carrier for shipment at the EXW point, at which time title and all risks of
loss or damage shall transfer to GS. During the term of this Agreement, GS shall promptly reimburse
LGLS for the cost of any duties incurred in conjunction with the delivery of the Final Product, and
any insurance purchased at the request of GS to cover any risks of loss to GS arising from
shipment.



     5.6.2 The initial supply order for Final Product shall be delivered by August 30, 2003, and
the delivery date for all subsequent supply orders shall be the later to occur of (a) the date set
forth in the applicable supply order, or (b) the date that is [***] after LGLS’s receipt of the
applicable supply order; provided that, however, the delivery of Product purchased under the
initial Product supply order shall be contingent upon (i) preliminary indication of artwork and NDC
number for GS on or before April 4, 2003, (ii) LGLS obtaining NDA approval for the Product from the
FDA on or before July 1, 2003; and (iii) GS delivering final artwork specifications to LGLS on or
before July 1, 2003. In the event of any delays regarding the delivery of the initial Product
supply order, which arise as a result of the failure to meet any of





 




			
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the foregoing contingencies, LGLS shall not be obligated to deliver the initial Product purchase
order until November 15, 2003. Products shall be delivered in the volumes set forth on the
applicable supply order, plus or minus [***] due to normal production variances and waste.




     5.6.3 GS shall pay and otherwise be responsible for all applicable sales taxes in connection
with any payment made by GS related to Final Product and/or API by LGLS pursuant to this Agreement.


15. Sections 5.7.1, 5.7.2, 5.7.3, and 5.8.2 shall be amended to insert “or API Specifications, as
applicable” immediately following the words “Final Product Specifications, as applicable to whether
Final Product or API is being sold.”



16. Sections 5.9.1 and 5.9.2 shall be deleted in their entirety.



17. Section 5.9.3 shall be amended to delete both references “to GS’s premises.”



18. Section 5.9.4 shall be amended to delete “pursuant to this Article 5” and to replace it with
the phrase “pursuant to Section 5.5.2 and delivered to GS pursuant to Section 5.6.2.”



19. A new Section 5.9.5 shall be added, which shall state as follows:




     During the Initial Period, on or before March 15, 2004, LGLS shall provide to GS an accounting
and reconciliation statement, showing the difference between LGLS’s actual cost of manufacture and
supply of the Final Product and the estimated cost invoiced and paid by GS for such manufacture and
supply during the period beginning on the Effective Date and continuing until December 31, 2003.
In the event that LGLS’s actual cost for such manufacture and supply exceeds the cost paid by GS
during such period, LGLS shall invoice GS for the difference in cost, and GS shall pay such invoice
within [***] after receipt thereof. In the event that the cost paid by GS for such manufacture and
supply during such period exceeds LGLS’s actual cost, LGLS shall credit GS for such difference and
apply such credit toward future costs. LGLS shall provide a similar accounting and reconciliation
statement within [***] following the expiration or termination of the Initial Period for the period
beginning January 1, 2004 and ending on the date of the expiration or termination of the Initial
Period, and LGLS shall invoice or reimburse GS for any difference in costs, accordingly. Upon the
reasonable request of GS within [***] following GS’s receipt of an accounting and reconciliation
statement under this Section 5.9.5, LGLS shall allow GS to review LGLS’s documentation to support
the accounting and reconciliation statement. Notwithstanding the foregoing, any reconciliation of
costs by GS under this Section 5.9.5 shall be subject to the terms and conditions of this
Agreement, including Section 5.2


20. Section 5.10 shall be deleted and revised as follows:




     Release Certificate. LGLS shall provide to GS with each delivery of Final Product or API a
Release Certificate, a Certificate of Analysis, and a Certificate of Compliance signed by a





 




			
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Securities and Exchange Commission.




9









 









responsible person duly authorized by LGLS or GLAXO to certify the quality of Final Product or API
delivered, each in a form reasonably acceptable to GS. The Release Certificate shall, inter alia,
state that the results of the agreed upon testing procedures are in compliance with the Final
Product or API Specifications as well as any additional applicable requirements of Regulatory
Authorities. Without limiting the foregoing, unless expressly agreed by the Parties all Final
Products or API supplied hereunder shall meet all release criteria established by the FDA or EMEA
with respect to such Final Product or API.



21. Section 5.11 shall be revised to replace the term “Final Product” with the term “API.”



22. A new Section 5.13 shall be added, along with a new Schedule 10.2 attached hereto, which shall
state as follows:




     Quality. The Parties have agreed to adopt certain manufacture and control procedures for API
Production, which are set forth in Schedule 10.2 attached hereto.


23. A new Section 7.1.3 shall be added to state as follows:




     During the Initial Period and prior to the release of Final Products, LGLS shall ensure that
the Final Product is tested in accordance with the testing procedures outlined in the
Specifications and shall provide to GS a Certificate of Analysis and batch summary for each batch
of the Final Products.


24. Section 7.4 shall be amended to add to the end of the paragraph the following:




     Upon receipt of any information from GLAXO regarding an Adverse Event, LGLS shall provide, or
cause GLAXO to provide, written notice to GS of the occurrence of the Adverse Event as soon as
possible, but (i) no later than twenty-four (24) hours following its receipt of information
concerning a possible Serious Adverse Event and (ii) no later than forty-eight (48) hours following
its receipt of information of a possible Adverse Event that is not a Serious Adverse Event.


25. Section 7.5.5 shall be amended to add the following:




     LGLS shall further have the obligation to immediately notify GLAXO of the recall, and to cause
GLAXO to cooperate with LGLS and GS in administering the recall as the Parties require.


26. A new Section 7.7 shall be inserted, which states the following:




     Deviation Reports. If during the manufacture or other handling of a Final Product by GLAXO,
(i) the process or analytical limits vary from the typical or established report ranges, release
guidelines, or release limits, (ii) Specifications or cGMPs were not followed in the production of
the Products, or (iii) the Products fail to conform to Specifications, then LGLS shall provide to
GS, or cause GLAXO to provide to GS, the written report detailing such deviation (“Deviation
Report”) prepared by GLAXO, along with all supporting documentation. The Deviation Report shall be
attached to, and shall accompany, copies of all relevant batch records. Any batch or shipment of
Final Product that is the subject of a nonconformity or a



10









 







Deviation Report shall not be shipped to GS, unless otherwise directed by GS, or, if such
Final Product was shipped and is held in stock by GS, then it shall be given a “Hold” or “Unpassed”
status and shall not be released into the passed inventory of GS until GS has completed any
investigations related to such Products and approved the disposition of the Final Product. GS
shall provide written instructions to LGLS regarding the destruction of any nonconforming Final
Products. The cost of destruction and the replacement cost of Final Product [***].


27. A new Section 7.8 shall be inserted, which states the following:




     Product Complaint. LGLS shall provide, or cause GLAXO to provide prompt written notification
to GS of, any complaints of which GLAXO becomes aware relating to any Final Product, including,
without limitation, those complaints which implicate GLAXO’s manufacturing or other processes.


28. A new Section 7.9 shall be inserted, which states the following:




     Regulatory Inspections. During the period that any Glaxo facility is engaged in the
manufacture, packaging, generation, storage, testing, treatment, holding, transportation,
distribution, release, or other handling or receiving of Final Product distributed or to be
distributed by GS and LGLS is notified that any such Final Product or facility will be subject to
inspection, LGLS shall promptly advise, or cause GLAXO to advise, GS of such inspection.


29. A new Section 7.10 shall be inserted which states the following:




     Audit and Inspection. During the period that any Glaxo facility is engaged in the
manufacture, packaging, generation, storage, testing, treatment, holding, transportation,
distribution, release, or other handling or receiving of Final Products distributed or to be
distributed by GS, in the event of an Adverse Event associated with any Final Product or any
proposed or actual inspection by the FDA or other governmental body of such Glaxo facility, or upon
request by GS reasonably related to compliance by such Glaxo facility with applicable cGMP
standards, LGLS shall promptly arrange for an audit and inspection of the portions of such GLAXO
facility or facilities. All audits shall be conducted by an independent third party, who is
selected by LGLS upon the prior written approval of GS, and copies of all audit results shall be
provided to GS, which results shall be treated as GLAXO confidential information, pursuant to the
Confidential Disclosure Agreement, dated January 24, 2003 and entered into between GLAXO and GS. GS
shall be responsible for the cost of all audits conducted as a result of a GS request; provided,
however, if the audit reveals any items of material non-compliance with applicable cGMP standards
which is found to have caused such Adverse Event, then LGLS shall be responsible for the payment of
all costs of such audit.


30. A new Section 7.11 shall be inserted, along with a new Schedule 10.3 attached hereto, which
shall state as follows:






 




			
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     FDA Guaranty. LGLS has provided to GS a guaranty, attached hereto as Schedule 10.3, that the
Products supplied to GS shall not be adulterated or misbranded as of the date of shipment or
delivery so as to thereby not be in compliance with the Federal Food, Drug, and Cosmetic Act.


31. The phrase “Notwithstanding Section 8.1 hereinabove” should be inserted at the beginning of
Section 8.2.



32. Sections 8.3, 8.4 and 8.5 shall be deleted and revised as follows:




     8.3 Infringement or Misappropriation of Intellectual Property Rights. If either Party learns
of an infringement or threatened infringement of the LGLS Patents or GLAXO Patents, or of a
misappropriation of LGLS Know-How, GLAXO Know-How or GS Know-How, in any state or country of the
Territory in which exists a colorable cause of action for infringement, including patent
infringement or provisional rights, or for misappropriation of trade secrets, it the Party first
learning of or discovering the alleged infringement or misappropriation shall promptly notify the
other Party in writing and shall provide the other Party with all information reasonably available
to the notifying Party evidencing such infringement or threatened infringement, or of such
misappropriation. Upon such notice, the parties shall in good faith consult in an effort to
determine whether a reasonably prudent owner or licensee of intellectual property would institute
litigation to enforce the rights at issue in light of all relevant business, economic, and legal
factors (including the projected cost of litigation, the likelihood of success on the merits, the
probable amount of any damage award, the prospects for satisfaction of any judgment against the
alleged infringer or other potential defendant, the possibility of counterclaims against LGLS or
GS, the diversion of LGLS’s or GS’s human and economic resources, the impact of any possible
adverse outcome on LGLS or GS and the effect any publicity might have on LGLS’s or GS’s respective
reputations and goodwill).



     If GS has standing, GS shall have the right, but not the obligation, to bring, defend and
maintain any appropriate suit or action, or commence settlement negotiations with an alleged
infringer, or other potential defendant, for abatement of the infringement or threatened
infringement of the LGLS or GLAXO Patents, or of the misappropriation of LGLS Know-How, GLAXO
Know-How or GS Know-How, in any state or country of the Territory, at GS’s sole expense. If GS
lacks such standing and requests LGLS to join GS as a party in such suit or action in order for GS
to bring such an action, LGLS shall execute all papers and perform such other acts as may be
reasonably requested by GS, at GS’s expense. LGLS shall have the right to participate in any such
suit or action using independent counsel, at its sole expense. Any amount recovered by GS as a
result of such suit or action shall first be applied to reimburse each of the Parties, pro rata,
for any costs or expenses incurred in bringing, defending and maintaining any such action. The
balance (the “Net Recovery”) shall be for the sole benefit of GS. The Net Recovery shall be
considered “Net Sales” with respect to the calendar quarter in which payment to GS was received,
and royalties shall accordingly be paid on the amount of the Net Recovery exclusively at the
rate(s) specified in Section 10.3, below. The Net Recovery shall be considered “Net Sales” for
purposes of calculating annual Net Sales in accordance with Milestones 3 and 4 in Section 10.2,
below.



12









 





     If GS fails to initiate suit or action, or commence settlement negotiations with an alleged
infringer, or other potential defendant, within 90 days after first notice of infringement or
threatened infringement of the LGLS Patents or the GLAXO Patents, or of a misappropriation of LGLS
Know-How, GLAXO Know-How or GS Know-How or if having initiated such suit or action it thereafter
diligently fails to prosecute such suit or action, LGLS shall have the right, but not the
obligation, to bring, defend and maintain any appropriate suit or action for abatement of the
infringement or threatened infringement, or of a misappropriation of LGLS Know-How, GLAXO Know-How
or GS Know-How, at LGLS’s sole expense. If LGLS requests GS to join LGLS as a party in such suit
or action, GS shall execute all papers and perform such other acts as may be reasonably requested
by LGLS, at LGLS’s expense. GS shall have the right to participate in any such suit or action
using independent counsel, at its sole expense. Any amount recovered by LGLS as a result of such
suit or action shall first be applied to reimburse each of the Parties, pro rata, for any costs or
expenses incurred in bringing, defending and maintaining any such action. The balance shall be
divided equally between the Parties. The amount of any recovery, net of the amounts necessary to
reimburse the Parties as provided above shall be considered “Net Sales” for purposes of calculating
annual Net Sales in accordance with Milestones 3 and 4 in Section 10.2, below. If such recovery is
apportioned by the court such that portions thereof are attributed to infringing activity in
different calendar years, or if such apportionment of the recovery can otherwise be readily
ascertained, then such apportionment shall govern as to the calendar year(s) in which Net Sales
shall be deemed to have occurred for purposes of such Milestones. Otherwise, the amount of such
recovery shall be apportioned equally over the number of calendar years in which infringement was
found to have occurred (or in the event of a settlement, over the number of calendar years in which
it was alleged to have occurred).



     8.4 Third Party Claims. In the event a Third Party asserts a cause of action concerning
alleged infringement of the Third Party’s patent by a Party, or in the event a LGLS Patent or GLAXO
Patent is the subject of a legal action by a Third Party seeking declaratory relief, or is subject
to an interference, inter partes reexamination or an opposition proceeding instituted by a Third
Party, the Parties shall confer and determine whether to defend and how best to control the defense
of any such Third Party action. If the Parties disagree whether a defense should be undertaken,
then the party desiring to defend the action or proceeding, if such party has standing, may proceed
with such defense, but shall be under no obligation to do so, and shall pay its own expenses. In
the event the Parties agree that the Third Party action should be defended, such defense shall be
controlled by GS with respect to the Territory and by LGLS with respect to outside of the
Territory. In each such case, the other Party, if it has standing, shall have the right, at its
own expense, to participate in such defense, and to be represented in any such Third Party action
by counsel of its choice at its sole discretion. With respect to any such Third Party action, the
Party entitled to control defense shall also have the right to control settlement of such Third
Party action; provided, however, that no settlement shall be entered into without the written
consent of the other Party, which consent shall not be withheld unreasonably. In any event, the
Party first obtaining knowledge of such Third Party action shall immediately provide the other
Party written notice of such and the related facts in reasonable detail, and the Party involved in
defending any such Third Party action or proceeding, shall keep the other Party reasonably
informed, in writing, of the progress of any such proceeding.



13









 





     8.5 Ownership. Subject to Section 9.2, below, each Party shall have and retain sole and
exclusive title to all inventions, discoveries and know-how which are made, conceived, reduced to
practice or generated solely by its employees or agents in the course of or as a result of this
Agreement. Each Party shall own an equal undivided interest in all such inventions, discoveries
and know-how made, conceived, reduced to practice or generated jointly by the employees or agents
of one Party and the employees or agents of the other Party. Notwithstanding the foregoing,
inventorship of patentable inventions shall be in accordance with applicable patent law, and
ownership of such patentable inventions shall be determined consistent with applicable law
concerning inventorship and inventors’ obligation to assign.



          8.5.1 Patent Filings for Joint Inventions. The Parties as joint owners of any joint invention
shall jointly pay for the prosecution and maintenance of all Patents directed thereto. All
information disclosed to either Party under this Section 8.5.1 shall be deemed to be Confidential
Information of the disclosing Party. In the event that a Party elects not to file or discontinues
the prosecution or maintenance of any Patents directed to a joint invention, then the other Party
may, at its expense, choose to file or continue with the cooperation of the Party choosing not to
proceed. A non-electing Party shall assign the Patents on joint inventions to the other electing
Party, subject to a non-exclusive, royalty-free and irrevocable license to the non-electing Party
under the Patent for the life of the Patent, unless it is determined that such an assignment could
endanger the patent estate of the electing Party.




          8.5.2 Further Assurances. Each party has or shall obtain appropriate written agreements from
all of its respective employees and agents, without limitation and executed at or as of the
commencement of employment or agency, which agreements shall require that all discoveries and
inventions conceived or reduced to practice by any individual as a result of the employment or
agency shall be promptly reported, fully disclosed, and assigned to the Party employing or
otherwise hiring that individual. In the event a patent application is filed directed to the
subject matter of the invention, any such assignment shall be promptly recorded in the appropriate
patent office(s).



33. A new Section 8.6 shall be inserted which states the following:




     8.6 Covenants. In connection with any proceeding subject to Sections 8.3 or 8.4, neither
Party shall enter into any agreement, settlement, or otherwise take any action that results in or
constitutes an admission regarding (i) wrongdoing on the part of the other Party, or (ii) the
validity, enforceability or absence of infringement of any intellectual property owned by the other
Party, without the prior written consent of the affected Party. The Parties shall cooperate in
good faith with each other in connection with any such claim, suit or proceeding and shall keep
each other reasonably informed, in writing, of all material developments in connection with any
such claim, suit or proceeding.


34. Sections l0.3 and 10.4 shall be deleted and revised as follows:




     10.3 Royalty Payments. In addition to the foregoing license fee and milestone payments,
commencing on the second anniversary of the first commercial sale of Product in the Territory, GS
shall, subject to Sections 4.3 and 10.4 pay to LGLS royalties on Net Sales in each calendar year at
the following rates:



14









 





	 	 	 	 	 
	Annual Net Sales	 	Royalty Rate
	on the first $100 million
	 	[***] percent
	over $100 million to $150 million
	 	[***] percent
	over $150 million to $200 million
	 	[***] percent
	over $200 million
	 	[***] percent





The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at a rate of [***]
percent of Net Sales for the use of the GLAXO Patents, the GLAXO Know-how and the Trademarks (the
“GLAXO Royalty”). During the first two years following first commercial sale of Product in the
Territory, GS shall be solely responsible only for payment of the GLAXO Royalty, and all amounts so
due shall be paid in accordance with Sections 10.7-10.11 below. Thereafter (i) GS shall pay
royalties to LGLS at the royalty rate(s) set forth above, and (ii) LGLS shall be solely responsible
for payment of the GLAXO Royalty and shall indemnify GS and hold GS harmless from and against any
claims by GLAXO as a result of such use by GS of the GLAXO Patents.




     10.4 Term of Royalty Obligations. GS’s obligation to make royalty payments pursuant to
Section 10.3 shall commence as provided in Section 10.3 and shall continue until the later of: (i)
the expiration of the last to expire of the LGLS Patents and GLAXO Patents claiming or covering
such Product in such country, and (ii) 10 years after first commercial sale of such Product in such
country. Following the expiration of GS’s royalty obligations, GS shall retain a non-exclusive,
royalty-free right to use, sell and offer for sale Product in the Territory, using LGLS Know-how
and GLAXO Know-how licensed to GS as of the Effective Date and the exclusive right to use the
Trademarks for such purposes. GS shall continue to pay to LGLS a royalty in return for such right
to use the Trademark, as provided in Section 11.4, below.


35. A new Section 13.7.5 shall be inserted, which states the following:




     Obsolete Materials. Upon the end of the Initial Period, GS shall pay for Obsolete Materials
in the possession of LGLS in accordance with the terms of Section 5.4.4 of this Agreement. Upon
the request of GS, LGLS shall deliver such Obsolete Materials to GS and shall transfer the title to
such Obsolete Materials to GS, at GS’s expense. For the removal of doubt, this Section 13.7.5
applies to Obsolete Materials upon the end of the Initial Period and Section 5.4.4 applies to
Obsolete Materials during the Initial Period.


36. Section 13.9 shall be amended to include the following provisions, which shall survive upon
expiration or termination of the License: Sections 7.8 and 7.9.



37. Section 14.4 shall be deleted and revised to state as follows:




     Insurance.



     14.4.1. One week prior to the first delivery of Final Product and for a period of [***] after
the expiration or termination of this Agreement, each Party shall obtain, and thereafter





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




15









 









maintain, at its sole cost and expense, product liability insurance in amounts which are reasonable
and customary in the U.S. pharmaceutical industry for companies of comparable size and activities
in a country or countries in the Territory in which Regulatory Approval for sale of a Product is
obtained, provided that such reasonable and customary product liability insurance is available in
such particular country or countries in the territory. Such product liability insurance shall
insure against all liability arising as a result of activities completed or permitted under this
Agreement (including, without limitation, liability for personal injury, physical injury, and
property damage). The Parties expressly agree that, for the period commencing as of the Effective
Date and ending as of the first anniversary of the Effective Date, the reasonable and customary
amount of product liability insurance shall be construed to be as follows: primary coverage in the
amount of [***]. The Parties further agree that these amounts of coverage shall be re-evaluated on
an annual basis within thirty (30) days prior to the anniversary of the Effective Date, and that
this Section 14.4.1 shall be amended accordingly as necessary. During the Initial Period, GLAXO
shall be named as an additional insured on all policies arising under this Section 14.4.1.




     14.4.2 GS further agrees that it shall obtain and maintain during the Initial Period general
liability insurance in the total coverage amounts of [***], which shall insure against bodily
injury, property damage, personal injury, and advertising injury claims, which are covered under
the policy. LGLS agrees that it shall obtain and maintain during the term of this Agreement
general liability insurance in the minimum primary coverage amount of [***], which shall insure
against bodily injury, property damage, personal injury, and advertising injury claims, which are
covered under the policy. The Parties further agree that these amounts of coverage shall be
re-evaluated on an annual basis within thirty (30) days prior to the anniversary of the Effective
Date, and that this Section 14.4.2 shall be amended accordingly as necessary. During the Initial
Period, GLAXO shall be named as an additional insured on all policies arising under this Section
14.4.2.



     14.4.3 Each Party shall provide written proof of the existence of such insurance to the other
Party promptly upon request.


38. In Section 16.2, add the phrase “, acts of terrorism” after the word “war”.




     Except as is expressly provided herein, the License, along with any and all prior amendments
thereto, shall remain in full force and effect.





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




16









 










     IN WITNESS WHEREOF, the Parties have executed this Agreement in duplicate originals by the
proper officers as of the Amendment Effective Date.



	 	 	 	 	 	 	 	 	 
	GENESOFT PHARMACEUTICALS, INC.	 	 	 	LG LIFE SCIENCES, LTD. INC.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ David B. Singer
	 	 	 	By:
	 	/s/ Heung Joon Yang
	 

	 	 
	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 
	Its:

	 	Chairman and CEO
	 	 	 	Its:
	 	President and CEO
	 

	 	 
	 	 	 	 	 	 





17









 






Schedule 10.2

Quality Agreement




OBJECTIVE OF THE AGREEMENT




This agreement covers the manufacture and control procedures for API production made by LG Life
Sciences (LGLS) for Genesoft Pharmaceuticals Inc. (Genesoft). [***]



	 	 	 	 	 
	[***]

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 

	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 

	 	[***]	 	 
	 

	 	[***]	 	 
	 

	 	[***]	 	 
	 

	 	[***]	 	 
	 

	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 

	 	[***]	 	 
	 

	 	[***]
	 	[***]
	 

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 

	 	[***]
	 	[***]
	 

	 	[***]
	 	[***]








 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




18









 










	 	 	 	 	 
	[***]

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 

	 	[***]	 	 
	 

	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	 

	 	[***]
	 	[***]
	 

	 	[***]	 	 
	 

	 	[***]	 	 
	 

	 	[***]
	 	[***]
	 

	 	[***]	 	 
	 

	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]
	 

	 	[***]	 	 
	[***]

	 	[***]	 	 
	[***]

	 	[***]	 	 
	[***]

	 	[***]
	 	[***]
	[***]

	 	[***]
	 	[***]








 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




19









 









The following table defines the Quality & Technical representatives from both LGLS and Genesoft:




	 	 	 
	LGLS Representative	 	Genesoft Representative
	Name: Mr. Yong-Jae Lee

	 	Mr. Lewis Michaels
	Title: QA Team Head, General Manager

	 	Genesoft Pharmaceuticals, Inc.
	LG Life Sciences, Ltd.

	 	7300 Shoreline Court
	Address: 601 Yongjei-dong, Iksan City

	 	South San Francisco, CA 94080
	Chunbuk-do 570-350, Korea

	 	Tel: (650) 837-1802
	Tel: 82-(0)63-830-4270 (office)

	 	Email: lmichaels@genesoft.com
	82-(0)19-484-1618 (mobile) Fax:
	 	 
	82-(0)63-830-4204
	 	 
	e-mail: yjleeb@lgls.co.kr
	 	 






20









 






Schedule 10.3

Guaranty




     The article comprising each shipment or other delivery hereafter made by LG LIFE SCIENCES,
LTD. (“LGLS”), a corporation organized and existing under the laws of the Republic of Korea, having
its principal place of business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721,
Republic of Korea, to, or in the order of, GENESOFT PHARMACEUTICALS, INC. (“GS”), a Delaware
corporation having its principal place of business at 7300 Shoreline Court, South San Francisco,
CA, USA 94080, is hereby guaranteed, as of the date of such shipment or delivery, to be, on such
date, not adulterated or misbranded within the meaning of the Federal Food, Drug, and Cosmetic Act
(the “Act”), as amended, and not an article which may not, under the provisions of Section 505 or
of the Act, be introduced into interstate commerce.



     This Guaranty shall be governed, construed, and interpreted under the laws of the State of
California, USA, without regard to conflict of laws principles, and shall not be assigned by either
party except upon the prior written consent of the other party or upon the merger or acquisition of
all or part of the assets of GS. This Guaranty shall be binding and inure to the benefit of the
successors and permitted assigns of the Parties, and any assignment not in accordance with this
Guaranty shall be void.



     This Guaranty is signed and executed on this the 27th day of February, 2003 (the “Effective
Date”) and shall remain in effect until the final expiration date of the last of the unexpired
Final Product, which is supplied or delivered to GS by LG, pursuant to the Supply Agreement between
LGLS and SB PHARMCO PUERTO RICO, INC., a corporation organized and existing under the laws of the
Commonwealth of Puerto Rico, having its principal office at Road 172, KM 9.1/Bo. Certenejas, Cidra,
Puerto Rico 00739, dated as of February 26, 2003.



	 	 	 	 	 
	 	 	 
	 	By:  	/s/ Soon-Jae Park
 	 
	 	Printed Name: Soon-Jae Park, Ph.D.	 
	 	Title: Vice President	 
	 	Address: 	LG LIFE SCIENCES, LTD.

LG Twin Tower

20 yoido-dong, Youngdungpo

Seoul, 150-721, Republic of Korea 	 
	 




21









 








AMENDMENT NO. 4 TO LICENSE & OPTION AGREEMENT





     THIS AMENDMENT NO. 4 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 4”) is made and
entered into this 31st day of March, 2005 (the “Amendment No. 4 Effective Date”) by and between
Oscient Pharmaceuticals Corporation (formerly Genome Therapeutics Corporation) (“OSCIENT”), a
Massachusetts corporation, having a principal place of business at 1000 Winter Street, Suite 2200,
Waltham, MA 02451, and LG Life Sciences, LTD (“LGLS”), a corporation organized under the laws of
the Republic of Korea, having a principal place of business at LG Twin Tower, 20 yoido-dong,
Youngdungpo-gu, Seoul, 150-721, Republic of Korea. LGLS and OSCIENT may be referred to herein
individually as a “Party” and collectively as the “Parties”.



W I T N E S S E T H




     WHEREAS, LGLS and GeneSoft Pharmaceuticals, Inc. entered into a certain License and Option
Agreement dated October 22, 2002 and amended said License and Option Agreement by Amendment No. 1
dated November 21, 2002, Amendment No. 2 dated December 6, 2002 and Amendment No. 3 dated October
16, 2003 (as amended, the “License”);



     WHEREAS, GeneSoft merged into GeneSoft Pharmaceuticals, LLC (then Guardian Holdings, LLC
(“Guardian”)) on February 6, 2004 and the benefits of and obligations under the License were
assigned to Guardian and then, Guardian assigned all of its right, title and interest in, to and
under the License to OSCIENT;



     WHEREAS, the Parties desire to amend the License.



     NOW THEREFORE, in consideration of the premises, and other good and valuable consideration,
the sufficiency of which is hereby acknowledged, the Parties agree as follows:


1. A new Section 4.3 (c) shall be added:




4.3 Co-Promotion.



(c) LGLS’s option under subsection (a) above with respect to the United States shall terminate and
no longer be exercisable upon annual Net Sales in the United States reaching $[***].



2. Section 5.2 (iii) shall be deleted in its entirety and replaced with the following:




5.2 Supply Price.




     (iii) The supply price for API provided by LGLS to OSCIENT during the Remaining Period,
shall be equal to [***] percent of LGLS’s Fully Burdened Cost of Manufacture for API supplied
thereunder, which shall in no event [***] $[***] per kg [***] $[***] per kg. In addition, (i) if
total purchases by OSCIENT plus any other purchasers of bulk API is greater than [***] kg in any
calendar year, the $[***] supply price shall be reduced by $[***] per kg for each
additional [***] kg of API purchased in excess of [***] kg in such calendar year by OSCIENT plus
any other purchasers, and (ii) the bulk supply price (including the [***] price) shall be
renegotiated in good faith in the event that OSCIENT purchases more





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




 









 









than [***] kg of API in any twelve (12) month period. In the event that there is an interruption
in LGLS’s supply of API for any reason, which continues uncured for more than [***] days, then
OSCIENT shall have the right to procure an alternative source of supply for the duration of the
interruption (“Second Source Supplier”). Notwithstanding the foregoing, OSCIENT shall only have
the right to procure a Second Source Supplier in the event that the interruption arises with
respect to a supply order quantity, which is less than or equal to [***] percent of the quantity
anticipated by OSCIENT in the most recently updated forecast, immediately preceding the submission
of the supply order. LGLS shall have the opportunity to resume its supply of API upon the
elimination or resolution of the events causing the interruption; provided that, however, LGLS
shall not resume its role as the exclusive supplier until OSCIENT is able to negotiate a
termination of its purchase obligations with the Second Source Supplier. LGLS shall be responsible
for any expenses incurred in excess of the price set forth herein, including any expenses related
to the termination of any agreement with the Second Source Supplier; provided, however, that LGLS
shall not be responsible for such excess expenses to the extent that such interruption is due to
the negligence or malfeasance of OSCIENT.



3. Section 10.2 shall be deleted in its entirety and replaced with the following:



10.2 Milestone Payments. Within 30 days after the achievement of each milestone set forth below,
OSCIENT shall owe a non-refundable milestone payment to LGLS in the amount set forth below. Each
milestone payment shall be due only once, notwithstanding the number of Products actually developed
or commercialized by OSCIENT hereunder. Milestone Payments 2, 3 and 4, when earned by LGLS, shall
be payable in two installments, the first of which shall be payable on the first day of July or the
first day of January (which comes first following the date on which the milestone was earned) and
the second installment due six months thereafter. All other milestone payments shall be due 30
days after the relevant milestone event.




	 	 	 	 	 
	Milestone Event	 	Payment
	1. Upon the signing of this Amendment No. 4.
	 	$	2 million	 
	 
	 	 	 	 
	2. Upon annual Net Sales in the United States reaching $[***].
	 	$	[***]	 
	 
	 	 	 	 
	3. Upon both: (i) approval for the first Additional Indication or approval of an IV formulation of the Product, and (ii)
annual Net Sales in the Territory reaching $[***].
	 	$	[***]	 
	 
	 	 	 	 
	4. Upon both: (i) approval for a second Additional Indication or approval of an IV formulation of the Product, and (ii)
annual Net Sales in the Territory reaching $380 million.
	 	$	[***]	 








 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




-2-









 










	 	 	 	 	 
	Milestone Event	 	Payment
	5. Upon approval of the Product for an Initial Indication in the United Kingdom.
	 	$	[***]	 
	 
	 	 	 	 
	6. Upon approval of the Product for an Initial Indication in the first of Italy, Germany, France, or Spain.
	 	$	[***]	 





As used in this section 10.2, “IV formulation” shall mean a formulation of Product for intravenous
administration.



4. Section 10.3 shall be deleted in its entirety and replaced with the following:



10.3 Royalty Payments. In addition to the foregoing license fee and milestone payments, commencing
on the second anniversary of the first commercial sale of Product in the Territory, OSCIENT shall,
subject to Sections 4.3 and 10.4, pay to LGLS royalties on Net Sales in each calendar year at the
following rates:




	 	 	 	 	 
	Annual Net Sales	 	Royalty Rate
	On the first $100 million
	 	[***] percent
	Over $100 million to $150 million
	 	[***] percent
	Over $150 million to $200 million
	 	[***] percent
	Over $200 million to $300 million
	 	[***] percent
	Over $300 million
	 	[***] percent





The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at a rate of [***]
percent of Net Sales for the use of the GLAXO Patents, the GLAXO Know-how and the Trademarks (the
“GLAXO Royalty”). During the first two years following first commercial sale of Product in the
Territory, OSCIENT shall be solely responsible only for payment of the GLAXO Royalty, and all
amounts so due shall be paid in accordance with Sections 10.7 through 10.11 below. Thereafter (i)
OSCIENT shall pay royalties to LGLS at the royalty rate(s) set forth above, and (ii) LGLS shall be
solely responsible for payment of the GLAXO Royalty and shall indemnify OSCIENT and hold OSCIENT
harmless from and against any claims by GLAXO as a result of such use by OSCIENT of the GLAXO
Patents.




     Except as is expressly provided herein the License shall remain in full force and effect.





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




-3-









 










     IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed by their duly
authorized officers on the Execution Date.



	 	 	 	 	 	 	 	 	 
	OSCIENT PHARMACEUTICALS CORPORATION	 	 	 	LG LIFE SCIENCES LTD.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steven M. Rauscher
	 	 	 	By:
	 	/s/ Heung Joon Yang
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Steven M. Rauscher
	 	 	 	Name:
	 	Heung Joon Yang, Ph.D.
	Title:

	 	Chief Executive Officer & President
	 	 	 	Title:
	 	Chief Executive Officer & President
	 
	 	 	 	 	 	 	 	 
	Date:

	 	3/31/05
	 	 	 	Date:
	 	31/3/05







-4-









 








AMENDMENT No. 5 TO LICENSE & OPTION AGREEMENT




     THIS AMENDMENT No. 5 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 5”) is made and
entered into this February 3, 2006 (the “Amendment No. 5 Effective Date”) by and between Oscient
Pharmaceuticals Corporation (“OSCIENT”), a Massachusetts corporation, having a principal place of
business at 1000 Winter Street, Suite 2200, Waltham, MA 02451, and LG Life Sciences, LTD (“LGLS”),
a corporation organized under the laws of the Republic of Korea, having a principal place of
business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721, Republic of Korea. LGLS
and OSCIENT may be referred to herein individually as a “Party” and collectively as the “Parties”.



W I T N E S S E T H




     WHEREAS, LGLS and Genesoft Pharmaceuticals, Inc. (“Genesoft”) entered into a certain License
and Option Agreement dated October 22, 2002 and amended said License and Option Agreement by
Amendment No. 1 dated November 21, 2002, Amendment No. 2 dated December 6, 2002, Amendment No. 3
dated October 16, 2003 and Amendment No. 4 dated March 31, 2005 (as amended, the “License”);



     WHEREAS, Genesoft merged into Genesoft Pharmaceuticals, LLC (then Guardian Holdings, LLC
(“Guardian”)) on February 6, 2004 and the benefits of and obligations under the License were
assigned to Guardian, and then, Guardian assigned all of its right, title and interest in, to and
under the License to OSCIENT;



     WHEREAS, the Parties desire to amend the License to, among other things, amend the supply
price paid by Oscient and to amend the royalty rate with respect to Product sales in Mexico and
Canada; and



     WHEREAS, the terms used herein with capital initial letters and not otherwise defined shall
have the same meanings as set forth in License.



     NOW THEREFORE, in consideration of the premises, and other good and valuable consideration,
the sufficiency of which is hereby acknowledged, the Parties agree as follows:


1. A new Section 4.3 (d) shall be inserted as follows:




4.3 Co-Promotion.




     (d) (i) Upon OSCIENT entering into a strategic relationship with a Third Party which grants
such Third Party a sublicense to commercialize Product (a “Partnership”) in Mexico within forty
five (45) days from the Amendment No.5 Effective Date, LGLS’ option under subsection 4.3(a) above
with respect to Mexico shall terminate and no longer be exercisable; provided that, the Parties
agree that such 45-day period may be extended by mutual agreement of the Parties.



     (ii) Upon OSCIENT entering into a Partnership in Canada within one hundred twenty (120) days
from the Amendment No. 5 Effective Date, LGLS’ option under subsection 4.3(a) above with respect to
Canada shall terminate and no longer be exercisable; provided that, the Parties agree that such
120-day period may be extended by mutual agreement of the Parties.





 




			
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2. Section 5.1(a)(ii) shall be deleted in its entirety and replaced with the following:




5.1 General.




     (a)(ii) Following the expiration or termination of the Initial Period and until the expiration
or termination of the License (the “Remaining Period”), LGLS shall supply to OSCIENT, and OSCIENT
shall exclusively purchase from LGLS, all of OSCIENT’s requirements of API in bulk form according
to the API Specifications; provided that, notwithstanding anything herein to the contrary,
Oscient’s obligation to exclusively purchase bulk API from LGLS for Final Product or API to be
supplied in Mexico or Canada shall expire on the last to expire of the LGLS Patents and GLAXO
Patents claiming or covering such Product in Mexico or Canada, as the case may be; provided that,
OSCIENT agrees that it shall exclusively purchase from LGLS all requirements of API in bulk for
Mexico and/or Canada, as the case may be, so long as OSCIENT continues to supply API or Final
Product in Mexico or Canada pursuant to a Partnership.


3. Section 5.2 (iii) shall be deleted in its entirety and replaced with the following:




5.2 Supply Price.




     (iii) The supply price for API provided by LGLS to OSCIENT during the Remaining Period, shall
be equal to [***] percent of LGLS’s Fully Burdened Cost of Manufacture for API supplied
thereunder, which shall in no event [***] $[***] per kg [***] $[***] per kg. In addition, if total
purchases by OSCIENT plus any other purchasers of bulk API is greater than [***] kg in any calendar
year, the $[***] supply price shall be reduced by $[***] per kg for each additional [***] kg of
API purchased in excess of [***] kg in such calendar year by OSCIENT plus any other purchasers;
provided however, that in the event OSCIENT purchases more than [***] kg of API in any calendar
year (the first such calendar year, the “Threshold Year”), OSCIENT shall pay LGLS $[***] per kg for
all API purchased during such calendar year. Within thirty (30) days after the end of the
Threshold Year, LGLS shall reimburse OSCIENT the difference between (a) the actual amount paid by
OSCIENT for API purchased during such year and (b) $[***] per kg times the number of kg purchased
for such year. After the Threshold Year, OSCIENT shall continue to pay $[***] per kg unless
OSCIENT purchases less than [***] kg of API during any calendar year. In the event OSCIENT
purchases less than [***] kg of API during such calendar year, OSCIENT shall pay LGLS the
difference between (x) $[***] times the number of kg purchased and (y) the amount paid to LGLS for
API purchased during such calendar year (i.e. $[***] times the number of kg purchased) within
thirty (30) days after the end of such calendar year. In the event that there is an interruption
in LGLS’s supply of API for any reason, which continues uncured for more than [***] days, then
OSCIENT shall have the right to procure an alternative source of supply for the duration of the
interruption (“Second Source Supplier”). Notwithstanding the foregoing, OSCIENT shall only have
the right to procure a Second Source Supplier in the event that the interruption arises with
respect to a supply order quantity, which is less than or equal to [***] percent of the quantity
anticipated by OSCIENT in the most recently updated forecast, immediately preceding the submission
of the supply order. LGLS shall have the opportunity to resume its supply of API upon the
elimination or resolution of the events causing the interruption; provided that, however, LGLS
shall not resume its role as the exclusive supplier until OSCIENT is able to negotiate a
termination of its purchase obligations with the Second Source Supplier; and provided further that
OSCIENT shall use commercially reasonable efforts to enter into an agreement with a Second Source
Supplier





 




			
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that allows for such termination of OSCIENT’s purchase obligations within [***] months of
notice to the Second Source Supplier (provided that, Oscient shall not enter into an agreement with
a Second Source Supplier that requires more than [***] months notice to terminate an agreement
without LGLS’ prior consent, such consent not to be unreasonably withheld or delayed). LGLS shall
be responsible for any expenses incurred in excess of the price set forth herein; provided,
however, that LGLS shall not be responsible for such excess expenses to the extent that such
interruption is due to the negligence or malfeasance of OSCIENT.



4. The first sentence of Section 5.5.5 shall be amended to read as follows:



“Upon the commencement of the Remaining Period, OSCIENT shall provide to LGLS a non-binding
forecast of the quantities of API to be manufactured during the forthcoming [***]-year period for
each country in the Territory, including, without limitation, Mexico and Canada.”



All other parts of Section 5.5.5 shall remain unchanged.



5. Section 9.3 shall be deleted in its entirety and replaced with the following:



9.3 Sub-licensing. OSCIENT may sub-license the license granted to it hereunder on prior notice to
LGLS. Upon prior notice to OSCIENT, LGLS may sub-license the license granted to it with respect to
GS Know-how (including, without limitation, data and information related to the 5-Day CAP trial or
other additional indications for the Product developed by OSCIENT) to Third Parties; provided that,
LGLS may not sub-license its rights to such GS Know-how to any Third Party intending to
commercialize the Product in any country in the Territory or, without OSCIENT’s prior consent, any
country listed on Exhibit A attached hereto.



6. Section 10.2 shall be deleted in its entirety and replaced with the following:



10.2 Milestone Payments. Within 30 days after the achievement of each milestone set forth below,
OSCIENT shall owe a non-refundable milestone payment to LGLS in the amount set forth below. Each
milestone payment shall be due only once, notwithstanding the number of Products actually developed
or commercialized by OSCIENT hereunder. Milestone Payments 1, 2 and 3, when earned by LGLS, shall
be payable in two installments, the first of which shall be payable on the first day of July or the
first day of January (which comes first following the date on which the milestone was earned) and
the second installment due six months thereafter. All other milestone payments shall be due 30
days after the relevant milestone event unless otherwise indicated.




	 	 	 	 	 
	Milestone Event	 	Payment
	1. Upon annual Net Sales in the United States reaching $[***].
	 	$	[***]	 
	 
	 	 	 	 
	2. Upon both: (i) approval for the first Additional Indication or approval of an IV formulation of the Product, and (ii) annual Net
Sales in the Territory reaching $[***].
	 	$	[***]	 








 




			
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Securities and Exchange Commission.




 









 










	 	 	 	 	 
	Milestone Event	 	Payment
	3. Upon both: (i) approval for a second Additional Indication or approval of an IV formulation of the Product, and (ii) annual Net
Sales in the Territory reaching $380 million.
	 	$	[***]	 
	 
	 	 	 	 
	4. Upon approval of the Product for an Initial Indication in the United Kingdom.
	 	$	[***]	 
	 
	 	 	 	 
	5. Upon approval of the Product for an Initial Indication in the first of Italy, Germany, France, or Spain.
	 	$	[***]	 
	 
	 	 	 	 
	6. Upon signing of each Partnership in Mexico.
	 	$	[***]	 
	 
	 	 	 	 
	7. Upon signing of each Partnership in Canada.
	 	$	[***]	 
	 
	 	 	 	 
	8. Upon approval of the Product in Mexico.
	 	$	[***]	 
	 
	 	 	 	 
	9. Upon approval of the Product in Canada, except for any indication approved prior to the Amendment # 5. Effective Date.
	 	$	[***]	 





As used in this Section 10.2, “IV formulation” shall mean a formulation of Product for intravenous
administration.



7. Section 10.3 shall be deleted in its entirety and replaced with the following:



10.3 Royalty Payments. In addition to the foregoing license fee and milestone payments, commencing
on the second anniversary of the first commercial sale of Product in the United States of America,




     (i) OSCIENT shall, subject to Sections 4.3 and 10.4, pay to LGLS royalties on Net Sales in the
Territory, except for (a) any Net Sales in Mexico if OSCIENT enters into a Partnership in Mexico
with a Third Party and (b) any Net Sales in Canada if OSCIENT enters into a Partnership in Canada
with a Third Party, for each calendar year at the following rates:



	 	 	 	 	 
	Annual Net Sales	 	Royalty Rate
	On the first $100 million
	 	[***] percent
	Over $100 million to $150 million
	 	[***] percent
	Over $150 million to $200 million
	 	[***] percent
	Over $200 million to $300 million
	 	[***] percent
	Over $300 million
	 	[***] percent






     (ii) OSCIENT shall, subject to Sections 4.3 and 10.4 and in lieu of the royalty obligations
set forth in Section 10.3(i) above with respect to Net Sales in Mexico and Canada, pay to LGLS (a)
a royalty of [***] % on Net Sales in Mexico for each calendar year if Oscient enters into a
Partnership





 




			
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in Mexico within forty-five (45) days of the Amendment No. 5 Effective Date, and (b) a royalty of
[***] % on Net Sales in Canada for each calendar year if Oscient enters into a Partnership in
Canada within one-hundred twenty (120) days of the Amendment No. 5 Effective Date; provided,
however, that if the Partnership entered into in Mexico or Canada, as the case may be, terminates,
then from and after such termination, the royalties payable in respect of Net Sales in Mexico or
Canada, as the case may be, shall be paid in accordance with clause (i) of this Section 10.3.



The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at a rate of [***]
percent of Net Sales for the use of the GLAXO Patents, the GLAXO Know-how and the Trademarks (the
“GLAXO Royalty”). During the first two years following first commercial sale of Product in the
Territory, OSCIENT shall be solely responsible only for payment of the GLAXO Royalty, and all
amounts so due shall be paid in accordance with Sections 10.7 through 10.11 below. Thereafter (a)
OSCIENT shall pay royalties to LGLS at the royalty rates set forth above, and (b) LGLS shall be
solely responsible for payment of the GLAXO Royalty and shall indemnify OSCIENT and hold OSCIENT
harmless from and against any claims by GLAXO as a result of such use by OSCIENT of the GLAXO
Patents.



8. Section 10.4 shall be deleted in its entirety and replaced with the following:



10.4 Term of Royalty Obligations. OSCIENT’s obligation to make royalty payments pursuant to 10.3
shall commence as provided in Section 10.3 and shall continue until the later of: (i) the
expiration of the last to expire of the LGLS Patents and GLAXO Patents claiming or covering such
Product in such country, and (ii) 10 years after first commercial sale of such Product in such
country; provided however, that, OSCIENT’s obligation to make royalty payments pursuant to 10.3 for
Net Sales in Mexico and Canada shall continue until the later of: (I) the expiration of the last to
expire of the LGLS Patents and GLAXO Patents claiming or covering such Product in Mexico or Canada,
as the case may be, and (II) the period of data exclusivity in Mexico or Canada, as the case may
be. Following the expiration of OSCIENT’s royalty obligations, OSCIENT shall retain a
non-exclusive, royalty-free right to use, sell and offer for sale Product in the Territory, using
LGLS Know-how and GLAXO Know-how licensed to OSCIENT as of the Effective Date and the exclusive
right to use the Trademarks for such purposes. OSCIENT shall continue to pay LGLS a royalty in
return for such right to use the Trademark, as provided in Section 11.4, below.



9. Section 10.8(b) shall be amended to add to the end of the paragraph the following sentence:




     On and after the Threshold Year, this Section 10.8(b) shall be of no force and effect.



10. (i) Sections 1 (as to Section 4.3(d)(i) of the License), 2 (as to Section 5.1(a)(ii) of the
License with respect to supply of Product in Mexico), 6 (as to milestone Nos. 6 and 8 only), 7 (as
to Sections 10.3(i)(a) and 10.3(ii)(a) of the License), and 8 (as to Section 10.4(I) & (II) of the
License (with respect to Mexico)) of this Amendment No. 5 shall become null and void within forty
five (45) days of the Amendment 5 Effective Date unless (i) OSCIENT enters into a Partnership in
Mexico within forty five (45) days of the Amendment 5 Effective Date, or (ii) the Parties mutually
agree to extend such 45-day period.



     (ii) Sections 1 (as to Section 4.3(d)(ii) of the License), 2 (as to Section 5.1(a)(ii) of the
License with respect to supply of Product in Canada), 6 (as to milestone Nos. 7 and 9 only), 7 (as
to Sections 10.3(i)(b) and 10.3(ii)(b) of the License), and 8 (as to Section 10.4(I) & (II) of the
License





 




			
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(with respect to Canada)) of this Amendment No. 5 shall become null and void within one hundred
twenty (120) days of the Amendment 5 Effective Date unless (i) OSCIENT enters into a Partnership in
Canada within one hundred twenty (120) days of the Amendment 5 Effective Date, or (ii) the Parties
mutually agree to extend such 120-day period.



11. Notwithstanding the foregoing or any other provision of this Amendment No. 5, Section 3
(dealing with Section 5.2 Supply Price of the License), Section 5 (dealing with Section 9.3 Sub-
licensing of the License) and Section 9 (dealing with Section 10.8(b) of the License) of this
Amendment No. 5 shall be and remain in full force and effect as of the Amendment No. 5 Effective
Date.



12. Except as is expressly provided herein the License shall remain in full force and effect.



     IN WITNESS WHEREOF, the Parties have caused this Amendment No. 5 to be executed by their duly
authorized officers on the Amendment No. 5 Effective Date.




	 	 	 	 	 	 	 	 	 
	OSCIENT PHARMACEUTICALS CORPORATION	 	 	 	LG LIFE SCIENCES LTD.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steven M. Rauscher
	 	 	 	By:
	 	/s/ In-Chull Kim
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Steven M. Rauscher
	 	 	 	Name:
	 	In-Chull Kim
	Title:

	 	Chief Executive Officer & President
	 	 	 	Title:
	 	Chief Executive Officer & President
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 








 




			
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Securities and Exchange Commission.




 









 










EXHIBIT A




Poland

Czech Republic

Slovakia

Slovenia

Hungary

Estonia

Latvia

Lithuania

Liechtenstein

Malta

Cypress

Romania

Bulgaria

Croatia

Serbia and Montenegro

Bosnia and Herzegovina

Macedonia

Albania





 









 








AMENDMENT NO. 6 TO LICENSE & OPTION AGREEMENT




     THIS AMENDMENT NO. 6 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 6”) is made and entered
into this February 3, 2006 (the “Amendment No 6 Effective Date”) by and between Oscient
Pharmaceuticals Corporation (“OSCIENT”), a Massachusetts corporation, having a principal place of
business at 1000 Winter Street, Suite 2200, Waltham, MA 02451, and LG Life Sciences, LTD (“LGLS”),
a corporation organized under the laws of the Republic of Korea, having a principal place of
business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul, 150-721, Republic of Korea. LGLS
and OSCIENT may be referred to herein individually as a “Party” and collectively as the “Parties”.



W I T N E S S E T H




     WHEREAS, LGLS and Genesoft Pharmaceuticals, Inc. (“Genesoft”) entered into a certain License
and Option Agreement dated October 22, 2002 and amended said License and Option Agreement by
Amendment No. 1 dated November 21, 2002, Amendment No. 2 dated December 6, 2002, Amendment No. 3
dated October 16, 2003, Amendment No. 4 dated March 31, 2005, and Amendment No. 5 dated February 3,
2006 (as amended, the “License”);



     WHEREAS, Genesoft merged into Genesoft Pharmaceuticals, LLC (then Guardian Holdings, LLC
(“Guardian”)) on February 6, 2004 and the benefits of and obligations under the License were
assigned to Guardian, and then, Guardian assigned all of its right, title and interest in, to and
under the License to OSCIENT; and



     WHEREAS, the terms used herein with capital initial letters and not otherwise defined shall
have the same meanings as set forth in License.



     NOW THEREFORE, in consideration of the premises, and other good and valuable consideration,
the sufficiency of which is hereby acknowledged, the Parties agree as follows:


1. Section 9.3 shall be amended to add to the end of the paragraph the following:



In consideration of the right to grant sublicenses granted by LGLS to OSCIENT in this Section 9.3,
OSCIENT agrees to the following:




     (a) within [***] of establishing the date of any Potential Collaboration Meeting (defined
herein) with any Third Party, but in no event later than [***] prior to such Potential
Collaboration Meeting, OSCIENT shall provide to LGLS written notice of such Potential Collaboration
Meeting; provided that if providing LGLS with such notice no later than [***] prior to such
Potential Collaboration Meeting would delay a Potential Collaboration Meeting because a Potential
Collaborator requests a meeting in less than [***] time, OSCIENT shall provide LGLS with as [***].
For purposes of this Agreement, the term “Potential Collaboration Meeting” shall mean any meeting,
teleconference or the like between OSCIENT (and/or any





 




			
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Securities and Exchange Commission.




1









 









agent of OSCIENT) and any Third Party (each a “Potential Collaborator”) (and/or any agent of such
Potential Collaborator) for the purpose of discussing, negotiating or otherwise communicating about
any proposed U.S. sublicense by OSCIENT to such Potential Collaborator under this Section 9.3, or
any U.S. co-promotion or U.S. co-marketing of the Product;




     (b) OSCIENT agrees that LGLS shall have the right to designate two persons, who may be
officers, employees or other agents of LGLS, to attend and observe such Potential Collaboration
Meetings. OSCIENT further agrees to timely provide LGLS written meeting minutes of any such
Potential Collaboration Meetings as well as copies of OSCIENT presentations and presentations by
the Potential Collaborators that are provided to OSCIENT by no later than [***] thereafter, whether
or not LGLS designates any such persons to attend and observe any such Potential Collaboration
Meeting;



     (c) LGLS and any agent engaged by LGLS for purposes of advising LGLS in respect of any such
proposed sublicense to such Potential Collaborator and any co-promotion or co-marketing
arrangements relating thereto shall agree to keep confidential any and all information relating
thereto; and



     (d) nothing in this Section 9.3 shall in any way diminish or adversely affect the co-promotion
rights provided to LGLS under Section 4.3.



Except as is expressly provided herein the License shall remain in full force and effect.



[Remainder of page left intentionally blank]






 




			
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2









 










     IN WITNESS WHEREOF, the Parties have caused this Amendment No. 6 to be executed by their duly
authorized officers on the Amendment No. 6 Effective Date.



	 	 	 	 	 	 	 	 	 
	OSCIENT PHARMACEUTICALS CORPORATION	 	 	 	LG LIFE SCIENCES LTD.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steven M. Rauscher
	 	 	 	By:
	 	/s/ In-Chull Kim
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Steven M. Rauscher
	 	 	 	Name:
	 	In-Chull Kim
	Title:

	 	Chief Executive Officer & President
	 	 	 	Title:
	 	Chief Executive Officer & President
	 
	 	 	 	 	 	 	 	 
	Date:

	 	 	 	 	 	Date:	 	 







3









 








AMENDMENT NO. 7 TO LICENSE & OPTION AGREEMENT




     THIS AMENDMENT NO. 7 TO THE LICENSE & OPTION AGREEMENT (“Amendment No. 7”) is made and
entered into this 27th day of December, 2006 (the “Amendment No. 7 Effective Date”) by
and between Oscient Pharmaceuticals Corporation (“OSCIENT”), a Massachusetts corporation, having
a principal place of business at 1000 Winter Street, Suite 2200, Waltham, Massachusetts 02451, and
LG Life Sciences, LTD (“LGLS”), a corporation organized under the laws of the Republic of Korea,
having a principal place of business at LG Twin Tower, 20 yoido-dong, Youngdungpo-gu, Seoul,
150-721, Republic of Korea. LGLS and OSCIENT may be referred to herein individually as a “Party”
and collectively as the “Parties”.



W I T N E S S E T H




     WHEREAS, LGLS and GeneSoft Pharmaceuticals, Inc. entered into a certain License and Option
Agreement dated October 22, 2002 and amended said License and Option Agreement by Amendment No. 1
dated November 21, 2002, Amendment No. 2 dated December 6, 2002, Amendment No. 3 dated October 16,
2003, Amendment No. 4 dated March 31, 2005, Amendment No. 5 dated February 3, 2006, and Amendment
No. 6 dated February 3, 2006 (as amended, the “License”);



     WHEREAS, Genesoft merged into Genesoft Pharmaceuticals, LLC (then Guardian Holdings, LLC
(“Guardian”)) on February 6, 2004 and the benefits of and obligations under the License were
assigned to Guardian, and then, Guardian assigned all of its right, title and interest in, to and
under the License to OSCIENT;



     WHEREAS, OSCIENT is about to enter into a Partnership agreement with Menarini (as defined
below) for Menarini’s marketing of the Product in the European Territory (as defined below)
immediately after the execution of this Amendment No. 7 based on and in accordance with the
License; and the Parties desire to amend the License to, among other things, provide certain terms
and conditions necessary for such Partnership deal between OSCIENT and Menarini and amend the
supply price, royalty rate and milestones related to sales of the Product; and



     WHEREAS, the terms used herein with capital initial letters and not otherwise defined shall
have the same meanings as set forth in the License.



     NOW THEREFORE, in consideration of the premises, and other good and valuable consideration,
the sufficiency of which is hereby acknowledged, the Parties agree as follows:


1. Section 1.36 shall be deleted in its entirety and replaced with the following:



1.36 “Territory” means the United States of America, Canada, Mexico, France, Germany, the United
Kingdom, Luxembourg, Ireland, Italy, Spain, Portugal, Belgium, the Netherlands, Austria, Greece,
Sweden, Denmark, Finland, Norway, Iceland, Switzerland, Andorra, Monaco, San Marino, Vatican City,
Poland, Czech Republic, Slovakia, Slovenia, Hungary, Estonia, Latvia, Lithuania, Liechtenstein,
Malta, Cyprus, Romania, Bulgaria, Croatia, Serbia and Montenegro, Bosnia and Herzegovina, Albania
and the Former Yugoslav Republic of Macedonia.



2. A new Section 1.46 shall be inserted to define “Centralized Procedure” as follows:






 




			
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1.46 “Centralized Procedure” shall mean the centralized procedure for obtaining a Marketing
Authorization in the European Union as set forth in Regulation (EC) 726/2004.



3. A new Section 1.47 shall be inserted to define “European Territory” as follows:



1.47 “European Territory” means France, Germany, the United Kingdom, Luxembourg, Ireland,
Italy, Spain, Portugal, Belgium, the Netherlands, Austria, Greece, Sweden, Denmark, Finland,
Norway, Iceland, Switzerland, Andorra, Monaco, San Marino, Vatican City, Poland, Czech Republic,
Slovakia, Slovenia, Hungary, Estonia, Latvia, Lithuania, Liechtenstein, Malta, Cyprus, Romania,
Bulgaria, Croatia, Serbia and Montenegro, Bosnia and Herzegovina, Albania and the Former Yugoslav
Republic of Macedonia.



4. A new Section 1.48 shall be inserted to define “Major Countries” as follows:



1.48 “Major Countries” shall mean each of France, Germany, Italy, Spain and the United
Kingdom.



5. A new Section 1.49 shall be inserted to define “Marketing Authorization” as follows:



1.49 “Marketing Authorization” shall mean an authorization issued by the European Medicines
Agency, or any other national, regional, state or local regulatory agency in the European
Territory with the relevant regulatory authority, necessary to market and sell the Product in the
European Territory or in any country in the European Territory.



6. A new Section 1.50 shall be inserted to define “Menarini” as follows:



1.50 “Menarini” means Menarini International Operations Luxembourg SA at Avenue de la Gare,
1, L-1611 Luxembourg GD and any of its Affiliates.



7. Section 2.5 shall be deleted in its entirety and replaced with the following:



2.5 Costs of Development. All Development expenses shall be borne by OSCIENT; provided that, LGLS
shall reimburse OSCIENT for 50% of all amounts paid to Menarini by OSCIENT for all reasonable and
verifiable regulatory development expenses incurred by Menarini in the European Territory; provided
that in no event such reimbursement payments by LGLS shall exceed $[***] in the aggregate. With
respect to any such regulatory development expenses to be reimbursed by LGLS, OSCIENT shall provide
LGLS with a copy of the statement prepared by Menarini setting forth in detail such development
expenses incurred by Menarini in the relevant quarter and proof of payment of such expenses by
OSCIENT, such as receipt or payment slip. LGLS shall reimburse OSCIENT as provided for in this
Section 2.5 within thirty (30) days of its receipt of all such statements and proofs. OSCIENT shall
cause Menarini to keep complete and accurate books and financial records pertaining to such costs
and expenses of regulatory development. LGLS shall have the right, at its discretion, to annually
audit all such books and records of OSCIENT and Menarini upon advance notice to OSCIENT, and
OSCIENT shall duly cooperate with LGLS. OSCIENT shall also cause Menarini to duly cooperate with
LGLS with respect to such audit.



8. A new Section 4.3(d)(iii) shall be inserted as follows:






 




			
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-2-









 










4.3 Co-Promotion.




     (d) (iii) Upon Oscient entering into a Partnership in the European Territory with Menarini,
[***].


9. Section 5.1(a)(ii) shall be deleted in its entirety and replaced with the following:




5.1 General.




     (a) (ii) Following the expiration or termination of the Initial Period and until the
expiration or termination of the License (the “Remaining Period”), LGLS shall supply to OSCIENT,
and OSCIENT shall exclusively purchase from LGLS, all of OSCIENT’s requirements of API; provided
that OSCIENT’s obligation to exclusively purchase API to be supplied in Mexico, Canada or the
European Territory shall expire on the last to expire of the LGLS Patents and GLAXO Patents
claiming or covering such Product in Mexico, Canada or the European Territory, as the case may be.
Notwithstanding anything herein to the contrary, OSCIENT agrees that it shall exclusively purchase
from LGLS all its requirements of API for Mexico, Canada, and/or the European Territory, as the
case may be, so long as and to the extent that OSCIENT continues to supply API or Final Product in
Mexico, Canada or the European Territory irrespective of any expiry of LGLS Patents and GLAXO
Patents.



     LGLS shall not sell and shall procure that its Affiliates, sublicensees and distributors shall
not sell, Final Product or API to any Third Party for use or resale in the European Territory so
long as and to the extent that OSCIENT exclusively purchases from LGLS all its requirements of API
and OSCIENT’s sublicensees and distributors exclusively purchases from OSCIENT all their
requirements of API.


10. A new Section 5.2(iv) shall be inserted as follows:




5.2 Supply Price.




     (iv) Notwithstanding anything to the contrary in Section 5.2(iii), the API supply price to
OSCIENT for use by Menarini or its Affiliates or subcontractors in Finished Product marketed, sold
and distributed in the European Territory shall be $[***] per kg irrespective of the volume of API
purchased by OSCIENT after the grant of Marketing Authorization in at least one country in the
European Territory is obtained. Prior to obtaining the Marketing Authorization in at least one
country in the European Territory, the API supply price to OSCIENT for use by Menarini or its
Affiliates shall be (A) prior to January 1, 2008, the same as the supply price to OSCIENT for the
US, and (B) on or after January 1, 2008, $[***] per kg up to an aggregate of [***] kg with any
additional amounts to be purchased at the then current supply price to OSCIENT for the US.


11. A new Section 5.6.4 (i) shall be inserted as follows:




     (i) OSCIENT acknowledges and agrees that all API for use by Menarini shall be manufactured by
LGLS. OSCIENT shall ensure that all such API shall be delivered to Menarini directly. OSCIENT
shall forward to LGLS all purchase orders for API placed by Menarini at least 90 days prior to the
date upon which LGLS is requested to ship such API. OSCIENT shall use best efforts to ensure that
all API delivered to Menarini shall be used in the European Territory only and that such API shall
not be shipped, distributed or otherwise be used in any way whatsoever and howsoever outside the
European Territory.





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




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12. Section 10.2 shall be deleted in its entirety and replaced with the following:




10.2 Milestone Payments.




     (i) Following the achievement of each milestone set forth below, OSCIENT shall owe a
non-refundable milestone payment to LGLS in the amount and at the times set forth below. Each
milestone payment shall be due only once, notwithstanding the number of Products actually developed
or commercialized by OSCIENT hereunder. Milestone Payments 1, 2 and 3, when earned by LGLS, shall
be payable in two installments, the first of which shall be payable on the first day of July or the
first day of January (which comes first following the date on which the milestone was earned) and
the second installment due six months thereafter. All other milestone payments shall be due 30
days after the relevant milestone event unless otherwise indicated.



	 	 	 	 	 
	Milestone Event	 	Payment
	1. Upon annual Net Sales in the United States reaching $[***].
	 	$	[***]	 
	 
	 	 	 	 
	2. Upon both: (i) approval for the first Additional Indication or approval of an IV formulation of the Product, and (ii) annual Net
Sales in the Territory reaching $[***].
	 	$	[***]	 
	 
	 	 	 	 
	3. Upon both: (i) approval for a second Additional Indication or approval of an IV formulation of the Product, and (ii) annual Net
Sales in the Territory reaching $380 million.
	 	$	[***]	 
	 
	 	 	 	 
	4. Upon approval of the Product in Canada, except for any indication approved prior to the Amendment # 5 Effective Date.
	 	$	[***]	 





As used in this Section 10.2, “IV formulation” shall mean a formulation of Product for intravenous
administration.





	 	(ii)	 	Within thirty (30) days after receipt of any and all signing or license fees,
milestone payments or royalties or any other forms of payments from Menarini or within
sixty (60) days following the achievement of such events pursuant the terms of a
Partnership agreement with Menarini (excluding, for the avoidance of doubt, any payment
with respect to the supply of API), whichever is sooner, OSCIENT shall owe and pay a
non-refundable payment to LGLS in an amount equal to [***] ([***]%) of all such
payments made by Menarini to OSCIENT (except for the signing fee of $[***], the
milestone payments of $[***]M related to the receipt of the Marketing Authorization and
$[***]M related to the achievement of annual sales revenues exceeding $100M, which will
be paid separately in accordance with the payment scheme set forth below in this
Section 10.2(ii)). Attached hereto as Exhibit







 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




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	 	 	 	10.2(ii) is the entire portion of the finally executed Partnership
agreement between OSCIENT and Menarini covering all the signing and license fees,
milestone payments and royalties and all other forms of payments and other payment
terms of the Partnership agreement by and between OSCIENT and Menarini.
	 
	 	 	 	Subject to the preceding paragraph, within thirty (30) days after receipt of the
related payment or within sixty (60) days following the achievement of the following
events pursuant the terms of a Partnership agreement with Menarini, whichever is
sooner, OSCIENT shall pay LGLS:
	 
	 	(a)	 	a non-refundable upfront signing fee payment of $[***] upon the signing
of a Partnership agreement with Menarini with respect to the European Territory;
and
	 
	 	(b)	 	a non-refundable milestone payment of $[***]:






i. in lump sum for obtaining the Marketing Authorization for the Product via the
Centralized Procedure; or




ii. according to the following schedule in case the Marketing Authorization is
obtained on a country-by-country basis (not by Centralized Procedure) in the Major
Countries:



	 	 	 
	Milestone	 	Payment
	Upon obtaining the Marketing Authorization in the United Kingdom

	 	$[***]
	Upon obtaining the Marketing Authorization in France

	 	$[***]
	Upon obtaining the Marketing Authorization in Germany

	 	$[***]
	Upon obtaining the Marketing Authorization in Italy

	 	$[***]
	Upon obtaining the Marketing Authorization in Spain

	 	$[***]







in the event Menarini is able to obtain in at least one country in the Major Countries
the Marketing Authorization meeting the minimum label requirement set forth in the
Partnership agreement between Menarini and OSCIENT (which the entire portion of the
finally executed Partnership agreement between OSCIENT and Menarini covering such minimum
label requirement shall be attached hereto under Exhibit 10.2(ii)); provided that, the
foregoing provision shall not apply and LGLS shall be entitled to the milestone(s)
payment of up to $[***]in accordance with this Section 10.2(ii)(b) if OSCIENT receives
any milestone payments from Menarini related to the grant of the Marketing Authorization
whether or not Menarini obtains in at least one country in the Major Countries the
Marketing Authorization for CAP and either AECB or ABS, and an approved label for the
Product with the minimum criteria set forth in the Partnership agreement as stated in
subsections (I) and (II) herein; and





 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




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	 	(c)	 	a one-time, non-refundable milestone payment of $[***]in lump sum if
Marketing Authorization is obtained in all Major Countries, upon the first
achievement of Net Sales exceeding $100 million in (i) the twelve month period
following the first commercial sale of the Product in any country in the European
Territory or (ii) each successive twelve month period thereafter.




13. Section 10.3 shall deleted in its entirety and replaced with the following:



10.3 Royalty Payments. In addition to the foregoing license fee and milestone payments, commencing
on the second anniversary of the first commercial sale of the Product in the United States of
America,




     (i) OSCIENT shall, subject to Sections 4.3 and 10.4, pay to LGLS royalties on Net Sales in the
Territory, except for (a) any Net Sales in Mexico if OSCIENT enters into a Partnership in Mexico
with a Third Party, (b) any Net Sales in Canada if OSCIENT enters into a Partnership in Canada with
a Third Party, and (c) any Net Sales in the European Territory if OSCIENT enters into a Partnership
in the European Territory with Menarini, for each calendar year at the following rates:



	 	 	 
	Annual Net Sales	 	Royalty Rate
	On the first $100 million

	 	[***] percent
	Over $100 million to $150 million

	 	[***] percent
	Over $150 million to $200 million

	 	[***] percent
	Over $200 million to $300 million

	 	[***] percent
	Over $300 million

	 	[***] percent






     (ii) OSCIENT shall, subject to Sections 4.3 and 10.4 and in lieu of the royalty obligations
set forth in Section 10.3(i) above with respect to Net Sales in Mexico, Canada and the European
Territory, pay to LGLS (a) a royalty of [***] % on Net Sales in Mexico for each calendar year; (b)
a royalty of [***] % on Net Sales in Canada for each calendar year; and (c) a royalty of [***] % on
Net Sales in the European Territory for each calendar year; provided, however, that if the
Partnership entered into in Mexico or Canada or the Partnership entered into with Menarini in the
European Territory, as the case may be, terminates, then from and after such termination the
royalties payable in respect of Net Sales in Mexico, Canada or the European Territory, as the case
may be, shall be paid in accordance with clause (i) of this Section 10.3.


The Parties acknowledge that LGLS has incurred a royalty obligation to GLAXO at a rate of [***]
percent of Net Sales for the use of the GLAXO Patents, the GLAXO Know-how and the Trademarks (the
“GLAXO Royalty”). OSCIENT shall pay royalties to LGLS at the royalty rates set forth above, and
LGLS shall be solely responsible for payment of the GLAXO Royalty and shall indemnify OSCIENT and
hold OSCIENT harmless from and against any claims by GLAXO as a result of such use by OSCIENT of
the GLAXO Patents.



14. Section 10.4 shall be deleted in its entirety and replaced with the following:



10.4 Term of Royalty Obligations. OSCIENT’s obligation to make royalty payments pursuant to 10.3
shall commence as provided in Section 10.3 and shall continue until the later of: (i) the






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




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expiration of the last to expire of the LGLS Patents and GLAXO Patents claiming or covering such
Product in such country, and (ii) 10 years after first commercial sale of such Product in such
country; provided however, that, OSCIENT’s obligation to make royalty payments pursuant to 10.3 for
Net Sales in Mexico, Canada or the European Territory shall continue until the later of: (I) the
expiration of the last to expire of the LGLS Patents and GLAXO Patents claiming or covering such
Product in Mexico, Canada or the European Territory, as the case may be, and (II) the period of
data exclusivity in Mexico, Canada or the European Territory, as the case may be (provided that,
for purposes of clarification, “data exclusivity” in the European Territory shall mean the period
of
data and market exclusivity for the Product in the European Territory provided by Directive
2001/83/EC). Following the expiration of OSCIENT’s royalty obligations, OSCIENT shall retain a
non-exclusive, royalty-free right to use, sell and offer for sale Product in the Territory, using
LGLS Know-how and GLAXO Know-how licensed to OSCIENT as of the Effective Date and the exclusive
right to use the Trademarks for such purposes. OSCIENT shall continue to pay LGLS a royalty in
return for such right to use the Trademark, as provided in Section 11.4 below.



15. A new Section 10.8(c) shall be inserted as follows:



(c) OSCIENT shall keep, and shall require its Affiliates to keep, complete and accurate records of
the latest three (3) years of API shipped and/or supplied to Menarini for sale of Product in the
European Territory. For the purpose of verifying such shipments with regard to OSCIENT’s payment
obligations pursuant to Section 5.2(iv) above, LGLS shall have the right annually, at LGLS’s
expense, to retain an independent certified public accountant selected by LGLS and reasonably
acceptable to OSCIENT, to review such records in the locations(s) where such records are maintained
by OSCIENT and its Affiliates upon reasonable notice and during regular business hours and under
obligations of confidence. Results of such review shall be made available to both LGLS and
OSCIENT.



16. Section 11.4 shall be deleted in its entirety and replaced with the following:



Expiration of the Agreement. Following the expiration of OSCIENT’s royalty obligations as provided
in Section 10.4 above, and for so long as OSCIENT continues to use the Trademark in the use or sale
of the Product, OSCIENT shall pay to LGLS a royalty equal to [***] percent of Net Sales; provided
that, for use of the Trademark in the European Territory after the expiration of OSCIENT’s royalty
obligations in the European Territory, OSCIENT shall pay to LGLS a royalty equal to [***] % percent
of Net Sales in the European Territory (the “Minimum Royalty Amount”) plus [***] % of any amount in
excess of the Minimum Royalty Amount paid by Menarini to OSCIENT for use of the Trademark following
the expiration of OSCIENT’s royalty obligations in the European Territory.



17. Following termination of the License, any sublicense granted by OSCIENT under the LGLS Patents,
LGLS Know-How, GLAXO Patents and GLAXO Know-How (including pursuant to any Partnership) shall
terminate. Following termination of this Amendment No. 7, any sublicense granted by OSCIENT under
the LGLS Patents, LGLS Know-How, GLAXO Patents and GLAXO Know-How (including pursuant to any
Partnership) for the European Territory shall terminate.  






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




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18. OSCIENT represents and warrants that (i) the summary of financial terms set forth in
Schedule 18 attached hereto represent an accurate description of all of the financial terms
of the Partnership agreement between OSCIENT and Menarini; and (ii) its Partnership agreement with
Menarini shall not in any way adversely affect or contravene with the terms and conditions of the
License and this Amendment No. 7 or the rights and obligations of LGLS thereof.



Without limiting the foregoing, OSCIENT agrees to provide LGLS the entire portion of the finally
executed Partnership agreement with Menarini covering the financial terms and the minimum label
criteria as set forth in Section 10.2 above within five (5) days from the Amendment No. 7 Effective
Date, which such part of the finally executed Partnership agreement shall be attached hereto as
Exhibit 10.2(ii) immediately thereafter within such five-day period.



19. This Amendment No. 7 shall automatically become null and void and of no force and effect after
ninety (90) days of the Amendment No. 7 Effective Date, unless (i) OSCIENT enters into a
Partnership agreement with Menarini during such 90-day period, or (b) the Parties mutually agree to
extend such 90-day period.



20. OSCIENT shall timely inform and update LGLS in writing of the process and activities related to
obtaining the Marketing Authorization by Menarini. OSCIENT shall also timely inform and update
LGLS of any material changes or revisions to the Partnership agreement between OSCIENT and
Menarini, including but not limited to the financial terms or termination thereof. LGLS may
terminate this Amendment No. 7 upon notice at its sole discretion in case (i) Menarini fails to
obtain the complete Marketing Authorization in at least one country in the European Territory
within three years from the effective date of the Partnership agreement between OSCIENT and
Menarini and/or (ii) the Partnership agreement between OSCIENT and Menarini is terminated.




[Remainder of page intentionally left blank]




-8-









 







IN WITNESS WHEREOF, the Parties have caused this Amendment No. 7 to be executed by their duly
authorized officers on the Amendment No. 7 Effective Date.




	 	 	 	 	 	 	 	 	 
	OSCIENT PHARMACEUTICALS CORPORATION	 	 	 	LG LIFE SCIENCES, LTD.
	 
	 	 	 	 	 	 	 	 
	By:

	 	/s/ Steven M. Rauscher
	 	 	 	By:
	 	/s/ In-Chull Kim
	 

	 	 
	 	 	 	 	 	 
	Name:

	 	Steven M. Rauscher
	 	 	 	Name:
	 	In-Chull Kim, Ph.D.
	Title:

	 	Chief Executive Officer & President
	 	 	 	Title:
	 	Chief Executive Officer & President
	 
	 	 	 	 	 	 	 	 
	Date:

	 	January 5, 2007
	 	 	 	Date:
	 	Dec. 27th 2006






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Schedule 10(ii)




[***]






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.




-10-









 










Schedule 18




[***]






 




			
	[***]	 	Confidential portions of the exhibit have been omitted and filed separately with the
Securities and Exchange Commission.






-11-