**Exhibit 10.1**

 

*****TextOmitted and Filed Separately**

**CONFIDENTIALTREATMENT REQUESTED**

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

 

**COLLABORATIVERESEARCH AND DEVELOPMENT AND LICENSE AGREEMENT**

 

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

 

**RECITALS**

 

**WHEREAS,** Optimer is abiopharmaceutical company engaged in the discovery and development ofpharmaceutical products using its proprietary carbohydrate synthesistechnology;

 

**WHEREAS,** Cempra is abiopharmaceutical company engaged in the discovery and development of novelpharmaceutical products;

 

**WHEREAS,** Cempra and Optimer desireto enter into a relationship to identify, develop and commercializepharmaceutical products comprising novel Macrolide Antibiotics to treatinfectious diseases.

 

**WHEREAS,** Cempra and Optimer enteredinto a letter agreement dated November 10, 2005 wherein Optimer and Cempraagreed to execute a detailed agreement regarding the synthesis by Optimer ofMacrolide Antibiotics for Cempra; and

 

**WHEREAS,** Optimer is willing tosynthesize Macrolide Antibiotics using its proprietary carbohydrate synthesistechnology, assist Cempra in the development thereof, and is prepared to grantCempra a license under such technology to allow Cempra to develop andcommercialize pharmaceutical products arising from this relationship;

 

**NOW, THEREFORE,** in consideration of theforegoing and the covenants and promises contained in this Agreement, theParties agree as follows:

 

**1.*** ***DEFINITIONS**

 

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

 

**1.2          “ASEANCountries”** means all member nations of the Association ofSoutheast Asian Nations as of the Effective Date.

 

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

 

**1.4          “CempraPatents”** means any Patents, other than Optimer Patents,which are Controlled by Cempra or its Affiliates during the term of thisAgreement and that claim the manufacture, importation, use or sale of MacrolideAntibiotics or Cempra Products.

 

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**1.5          “CempraProduct”** means a pharmaceutical product (including but notlimited to Combination Products or those comprised of one or more TestProducts, Macrolide Antibiotics, or any analogs or derivatives of either of theforegoing) for which the use, sale, or manufacture thereof would, but for thelicenses granted Cempra hereunder, infringe the Optimer Patents in the countryin which such product is sold by Cempra, an Affiliate thereof, or a Third Partysublicensee of either of the foregoing.

 

**1.6          “Collaboration”** means allactivities performed by or on behalf of Optimer or Cempra in the course of theResearch Program with respect to the Development and Commercialization of TestProducts and Cempra Products.

 

**1.7          “CombinationProduct”** means a pharmaceutical product (i) containing (x) inthe case of Cempra, an active pharmaceutical ingredient for which, if includedin a pharmaceutical product as the sole active pharmaceutical ingredient theuse, sale, or manufacture thereof would, but for the licenses granted Cemprahereunder, infringe the Optimer Patents in the country in which such product issold by Cempra, an Affiliate thereof, or a Third Party sublicensee of either ofthe foregoing, or (y) in the case of Optimer, an active pharmaceuticalingredient which (I) contains a Macrolide Antibiotic, Test Product, orderivative or analog of either of the foregoing, (II) is a Cempra Product,or (III) whose manufacture, sale, or use is covered in any ASEAN Countryby a Valid Claim of any Cempra Patent, Joint Invention Patent, or foreigncounterpart of any Optimer Patent; and (ii) one or more otherpharmaceutically active ingredients for which rights are not included in thelicense granted to (x) Cempra under this Agreement, with respect to CempraProducts, or (y) Optimer, with respect to Optimer Products.

 

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

 

**1.9          “Commercialization”** means allactivities that are undertaken after Regulatory Approval of an NDA for aparticular Product and that relate to the commercial marketing and sale of suchProduct including advertising, marketing, promotion, distribution, andPhase 4 Trials.

 

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

 

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

 

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

 

**1.13        “DevelopmentPlan”** has the meaning set forth in Section 4.1.

 

**1.14        “DiligentEfforts**” means the carrying out of obligations or tasks in a manner consistentwith the efforts a Party devotes to research, development or marketing of apharmaceutical product or products of similar market potential, profitpotential or strategic value resulting from its own research efforts, takinginto account technical and regulatory factors, target product profiles, productlabeling, past performance, costs, economic return, the regulatory environmentand competitive market conditions in the therapeutic area, all based onconditions then prevailing, and subject to and in

 

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considerationof, in each case, the resources available to such Party and within such Party’sorganization for such efforts. Diligent Efforts requires that a Party, at aminimum, assign responsibility for such obligations to specific employees, setsand seeks to achieve specific and meaningful objectives for carrying out suchobligations, and consistently makes and implements decisions designed andallocates resources reasonably sufficient to advance progress with respect tosuch objectives.

 

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

 

**(a)**           if the Cempra capital stock to beissued under Section 6.2(a) or (b) is traded on a publicsecurities exchange or through the Nasdaq National Market, the fair marketvalue thereof shall be deemed to be the average of the closing prices of suchsecurity on such exchange over the 30-day period ending three (3) businessdays prior to the date such security was received;

 

**(b)**           if the Cempra capital stock to beissued under Section 6.2(a) or (b) is actively tradedover-the-counter, the fair market value thereof shall be deemed to be theaverage of the closing bid or sale prices (whichever is applicable) over the30-day period ending three (3) business days prior to the date suchsecurity was received; or

 

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

 

**1.16        “FDA**” means theUnited States Food and Drug Administration, or any successor federalagency thereto.

 

**1.17        “Field**” means allhuman and animal diagnostic and therapeutic uses.

 

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

 

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

 

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

 

**1.21        “GoodLaboratory Practices” or “GLP”** means current GoodLaboratory Practices as specified in the United States Code of FederalRegulations at 21 CFR § 58 at the time of testing and all applicableICH guidelines.

 

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

 

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**1.23        “GovernmentalAuthority”** means any court, agency, department or otherinstrumentality of any foreign, federal, state, county, city or other politicalsubdivision.

 

**1.24        “HumanClinical Trial”** means any Phase 1 Trial, Phase 2 Trial,Phase 3 Trial or Phase 4 Trial the subject of which includes a TestProduct or Product.

 

**1.25        “IND”** means anInvestigational New Drug Application filed with the FDA or the equivalentapplication or filing filed with any equivalent agency or government authorityoutside of the United States (including any supra-national agency such asin the European Union) necessary to Commence human clinical trials in suchjurisdiction, and including all regulations at 21 CFR § 312 et. esq.,and equivalent foreign regulations.

 

**1.26        “Information**” meansinformation, results and data of any type whatsoever, including withoutlimitation, databases, inventions, practices, methods, techniques,specifications, formulations, formulae, knowledge, know-how, skill, experience,test data including pharmacological, biological, chemical, biochemical,toxicological and clinical test data, analytical and quality control data,stability data, studies and procedures, and patent and other legal informationor descriptions.

 

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

 

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

 

**1.29        “LetterAgreement”** means the letter agreement between Optimer andCempra dated November 11, 2005.

 

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

 

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

 

**1.32        “NetSales”** means

 

**(a)**           with respect to a Product (subject to subsections (b) and (c) below),the amount received by a Party or its Affiliate or a Third Party sublicenseefor sales of such Product to Third Parties, excluding reasonable sales returns,allowances and rebates actually paid, granted or accrued, including, withoutlimitation, trade, quantity and cash discounts and any other reasonableadjustments actually allowed, including, but not limited to, those granted onaccount of price adjustments (including retroactive price adjustments), billingerrors, rejected goods, damaged or defective goods, recalls, returns, rebates,chargeback rebates, reimbursements or similar payments granted or given towholesalers or other distributors, buying groups, health care insurancecarriers or other institutions, pharmacy benefit management companies, healthmaintenance organizations or other health care organizations, or anygovernmental or regulatory authority or agency (including their purchasersand/or reimbursers), adjustments arising from consumer discount programs,customs or excise duties, tariffs, sales tax,

 

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

 

(b)           in the case ofCombination Products,

 

(i)            ifa Party and/or its Affiliate and/or any Third Party sublicensee of either ofthe foregoing separately sells in such country during such year when it sellssuch Combination Product both (1) one or more Products containing solelyone particular active pharmaceutical ingredient and (2) productscontaining other pharmaceutically active ingredient(s) that are alsocontained in such Combination Product, the Net Sales attributable to suchCombination Product during such year shall be calculated by multiplying actualNet Sales of such Combination Product by the fraction A/(A+B) where: A is suchParty’s (or its Affiliate’s or Third Party sublicensee’s, as applicable)average Net Sales price per daily dose during such year for each Product(s) insuch Combination Product in such country and B is the sum of the average ofsuch Party’s (or its Affiliate’s or Third Party sublicensee’s, as applicable)net sales price per daily dose during such year in such country, for eachproduct(s) containing the other pharmaceutically active ingredient(s) insuch Combination Product (other than the Product);

 

(ii)           ifa Party and/or its Affiliate and/or any Third Party sublicensee of either ofthe foregoing separately sells, in such country during such year when it sellssuch Combination Product, one or more Products containing solely one particularactive pharmaceutical ingredient entity but do not separately sell, in suchcountry, other products containing the other active ingredient(s) that arealso contained in such Combination Product, the Net Sales attributable to suchCombination Product during such year shall be calculated by multiplying the NetSales of such Combination Product by the fraction A/C where: A is theapplicable Party’s (or its Affiliate’s or Third Party sublicensee’s, asapplicable) average Net Sales price per daily dose during such year for eachProduct in such Combination Product in such country, and C is such Party’s (orits Affiliate’s or Third Party sublicensee’s, as applicable) average Net Salesprice per daily dose during such year for the Combination Product in suchcountry; and

 

(iii)          ifa Party and/or its Affiliates and/or their Third Party sublicensees do notseparately in such country during such year sell products containing eachactive pharmaceutical ingredient in the Combination Product, then the Net Salesattributable to such Combination Product may, following mutual agreement of theParties concerning the applicable fair market values, be determined bymultiplying the Net Sales of such Combination Product by the fraction D/(D+E)where D is the fair market value of the portion of the Combination Product thatcontains the Product with a single active pharmaceutical ingredient and E isthe fair market value of the portion of the Combination Product containing theother pharmaceutically active ingredient(s) and the delivery deviceincluded in such Combination Product, as such fair market values are reasonablydetermined by mutual agreement of the Parties in good faith. In the event thatthe Parties are unable to mutually agree upon appropriate fair market valuesfor D and E as set forth herein, such matter may be referred to arbitration asset forth in Section 12.3 below.

 

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

 
|   | Average  percentage            |   |                                     |
|--------|--------------------------------|--------|------------------------------------------|
|   | discount  on a                 | =      | 1 - (X/Y) × 100 |
|   | particular  “bundle” |   |                                     |

 

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whereX equals the total discounted price of a particular “bundle” of products, and Yequals the sum of the undiscounted bona fide list prices of each unit of every productin such “bundle”. The Selling Party shall provide the other Party documentationreasonably supporting such average discount with respect to each “bundle.” If aProduct in a “bundle” is not sold separately, and no bona fide list priceexists for such Product, the parties shall negotiate in good faith a reasonableimputed list price for such Product and Net Sales with respect thereto shall bebased on such imputed list price; provided, however, that in the event that theParties are unable to mutually agree upon appropriate imputed list price as setforth herein, then such matter may be referred to arbitration as set forth in Section 12.3below.

 

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

 

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

 

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

 

**1.36        “OptimerProduct”** means any product (including but not limited toCombination Products) developed and/or commercialized by Optimer in any ASEANCountry that (i) contains a Macrolide Antibiotic, Test Product, orderivative or analog of either of the foregoing, (ii) is a Cempra Product,or (iii) whose manufacture, sale, or use is covered in any ASEAN Countryby a Valid Claim of any Cempra Patent, Joint Invention Patent, or foreigncounterpart of any Optimer Patent. For avoidance of doubt, the partiesexpressly agree that, for purposes of this Agreement (including, but notlimited to, Optimer’s royalty payment obligation set forth in Article 6),Optimer Products shall not include any product which incorporates an18-membered-lactone-ring-based compound as an active pharmaceutical ingredient(e.g., Optimer’s OPT-80) unless such product incorporates an additionalactive pharmaceutical ingredient which itself (or the mechanism of actionof which) independently renders such product an Optimer Product pursuant to theforegoing definition.

 

**1.37        “OptimerTechnology”** means Optimer Patents and Optimer Know-How.

 

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

 

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

 

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

 

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

 

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

 

**1.43        “Product”** means anOptimer Product or Cempra Product, as appropriate.

 

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

 

**1.45        “RegulatoryAuthority”** means any Governmental Authority withresponsibility for granting any licenses or approvals necessary for themarketing and sale of pharmaceutical products including, without limitation,the FDA and any drug regulatory authority of countries of the European Union,and Japan, and where applicable any ethics committee or any equivalentreview board.

 

**1.46        “RegulatoryFiling”** means the NDA, biologic license application (“BLA”), IND, or anyforeign counterparts thereof and any other filings required by regulatoryauthorities relating to the study, manufacture or commercialization ofany Product.

 

**1.47        “ResearchProgram”** means the activities conducted by Optimer andCempra pursuant to the obligations and responsibilities set forth in a WorkPlan and Budget established by the Parties pursuant to this Agreement.

 

**1.48        “ResearchTerm”** means the period commencing on the Effective Date and continuing untilthe earlier of (i) completion by Optimer of the tasks assigned to Optimerin the Work Plan and Budget or (ii) the second anniversary of theEffective Date, subject to any extensions thereof agreed to by the Partiesin writing.

 

**1.49        “RoyaltyTerm”** means, on a country-by-country and Product-by-Product basis:

 

**(a)**           For Cempra Products, the periodcommencing on the First Commercial Sale thereof in a particular country andcontinuing until the later of (a) the last to expire Valid Claim of anOptimer Patent covering the manufacture, use or sale of such Cempra Product insuch country or (b) ten (10) years following the First CommercialSale of such Cempra Product in such country; and

 

**(b)**           For Optimer Products, the periodcommencing on the First Commercial Sale thereof in a particular country andcontinuing until the later of (a) the last to expire Valid Claim of aCempra Patent covering the manufacture, use or sale of such Optimer Product insuch country or (b) ten (10) years following the First CommercialSale of such Optimer Product in such country.

 

**1.50        “SublicensingRevenue”** means net revenue received from Third Partysublicensees, other than royalties or other payments calculated on the basis ofsales of Cempra Products, directly and solely as consideration for Cempra’s orits Affiliates’ sublicensing to Third Parties (other than Cempra Affiliates) ofthe rights to Optimer Patents licensed to Cempra and its Affiliates under thisAgreement, including but not limited to upfront and milestone payments, butexcluding (i) [***]

 

**1.51        “Term”** has themeaning assigned to it in Section 9.1.

 

**1.52        “Territory”** meansworldwide, excluding ASEAN Countries.

 

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**1.53        “TestProduct”** means a Macrolide Antibiotic or derivative oranalog thereof that has been designated by Cempra to be the subject ofDevelopment pursuant to Section 3.4.

 

**1.54        “ThirdParty”** means any entity other than (a) Optimer, (b) Cempra or (c) anAffiliate of either of them.

 

**1.55        “ValidClaim”** means a claim of any pending patent application or any issued,unexpired United States or granted foreign patent within any Patent thathas not been dedicated to the public, disclaimed, abandoned or held invalid orunenforceable by a court or other body of competent jurisdiction from which nofurther appeal can be taken, and that has not been explicitly disclaimed, oradmitted by the Party Controlling such Patent in writing to be invalid orunenforceable or of a scope not covering Products through reissue, disclaimeror otherwise.

 

**1.56        “WorkPlan and Budget”** has the meaning set forth in Section 3.1.

 

**1A.*** ***JOINTSTEERING COMMITTEE**

 

**1A.1*** ***JointSteering Committee.**  Promptlyafter the Effective Date, the Parties shall establish a “Joint SteeringCommittee” as described in this Section 1A. The Joint Steering Committeeshall exist during the Research Term. The Joint Steering Committee shall,subject to applicable provisions of this Agreement concerning the ResearchProgram, Work Plan, and Budget, (i) develop, review, approve, andestablish all aspects of the Work Plan and Budget and, once the initial WorkPlan and Budget have been established, (ii) monitor and oversee theParties’ progress thereunder, advise the Parties with respect thereto, anddevelop, review, and approve any changes or amendments to the Work Plan andBudget, such changes and amendments to be effective upon approval thereof bythe Joint Steering Committee and agreement by (i) Optimer with respect toobligations of Optimer (such agreement not to be unreasonably withheld) or (ii) Cemprawith respect to responsibilities of Cempra, provided that, notwithstanding theforegoing, the Joint Steering Committee shall have no authority to amend thebody of this Agreement. Each party shall indicate in writing within five (5) businessdays of approval by the Joint Steering Committee whether or not it agrees toits proposed obligations or responsibilities, and, if not agreeing to itsproposed obligations or responsibilities, provide its reasonable objectionsthereto. In the absence of such written notice within such five (5) businessday period, a party shall be deemed to have rejected its proposed obligationsor responsibilities, and, in the event Optimer rejects its proposed obligationsor responsibilities (whether by written notice or the absence thereof), Cemprashall be free to pursue alternative solutions therefor. Notwithstandinganything to the contrary in this Agreement, the Joint Steering Committee shallhave no rights or responsibilities, and Cempra shall have no obligations withrespect to the Joint Steering Committee, following the Research Term.

 

**1A.2*** ***Membership.**  The Joint Steering Committee will becomprised of an equal number of representatives from each Party. The exactnumber of such representatives shall be as agreed upon by the Parties, but noevent shall such number be less than two (2) nor more than five (5) foreach Party. Each Party shall provide the other with a list of its initialmembers of the Joint Steering Committee promptly after the Effective Date. EachParty may replace any or all of its representatives on the Joint SteeringCommittee at any time upon written notice to the other Party. Any member of theJoint Steering Committee may designate a substitute to attend and perform thefunctions of that member at any meeting of the Joint Steering Committee. EachParty may, in its reasonable discretion, invite non-member representatives ofsuch Party to attend meetings of the Joint Steering Committee.

 

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

 

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alternatebetween the offices of the Parties or their respective Affiliates, or suchother place as the Parties may agree. The members of the Joint SteeringCommittee also may convene or be polled or consulted from time to time by meansof telecommunications, video conferences, electronic mail or correspondence, asdeemed necessary or appropriate, provided that the Parties hold at least oneface-to-face meeting each year. Each Party shall bear all costs and expensesrelating to its members’ attendance at meetings of the Joint SteeringCommittee.

 

**1A.4*** ***Decision-Making.**  The Joint Steering Committee shall use goodfaith efforts to operate and make decisions by consensus, provided that in theevent the Joint Steering Committee is unable to reach consensus regarding anymatter before the Joint Steering Committee within a reasonable period of timenot to exceed ten (10) business days, Cempra shall have the tie-breakingvote to resolve such deadlock and determine the Joint Steering Committee’sfinal decision regarding such matter, including but not limited to approval ofany Work Plan and Budget, or any changes thereto, consistent with theparameters described below, provided that no Work Plan or Budget shall beeffective without the written agreement of (i) Optimer with respect to anyobligations of Optimer thereunder (such agreement not to be unreasonablywithheld) and (ii) Cempra with respect to any responsibilities of Cemprathereunder (such agreement not to be unreasonably withheld). Each party shallindicate in writing within five (5) business days of approval by the JointSteering Committee whether or not it agrees to its proposed obligations orresponsibilities, and, if not agreeing to its proposed obligations orresponsibilities, provide its reasonable objections thereto. In the absence ofsuch written notice within such five (5) business day period, a partyshall be deemed to have rejected its proposed obligations or responsibilities,and, in the event Optimer rejects its proposed obligations or responsibilities(whether by written notice or the absence thereof), Cempra shall be free topursue alternative solutions therefor.

 

**2.*** ***MANAGEMENTOF THE RESEARCH PROGRAM**

 

**2.1*** ***General.**  The general purpose of the Collaborationdescribed in Sections 2 and 3 of this Agreement is to synthesize,develop and commercialize Macrolide Antibiotics for sale as Cempra Products. Ifand as determined by the Joint Steering Committee, Optimer shall synthesize MacrolideAntibiotics and conduct preliminary research and biological testing on suchMacrolide Antibiotics according to a Work Plan and Budget that has beendeveloped and approved by the Joint Steering Committee and agreed upon byOptimer and Cempra (such agreement not to be unreasonably withheld). Each partyshall indicate in writing within five (5) business days of approval by theJoint Steering Committee whether or not it agrees to the Work Plan or Budgetapproved by the Joint Steering Committee and, if not agreeing thereto, provideits reasonable objections thereto. In the absence of such written notice withinsuch five (5) business day period, a party shall be deemed to have agreedto such Work Plan and Budget. Cempra shall, as determined by the Joint SteeringCommittee, conduct (or have conducted by Third Parties) preclinical andanimal testing on such Macrolide Antibiotics synthesized by Optimer. Based onthe results of such research, the Joint Steering Committee may designatecertain Macrolide Antibiotics as Test Products for preclinical testing andfurther development by Cempra. Cempra shall be solely responsible, at itsexpense, for animal testing, preclinical and clinical development of such TestProducts, including as may be provided for in a Work Plan and Budget approvedby the Joint Steering Committee and agreed upon (i) by Optimer withrespect to Optimer’s obligations thereunder (such agreement not to beunreasonably withheld) and (ii) Cempra with respect to Cempraresponsibilities thereunder. Each party shall indicate in writing within five (5) businessdays of approval by the Joint Steering Committee whether or not it agrees toits proposed obligations or responsibilities, and, if not agreeing to suchobligations or responsibilities, provide its reasonable objections thereto. Inthe absence of such written notice within such five (5) business dayperiod, a party shall be deemed to have rejected its proposed obligations orresponsibilities, and in the event Optimer rejects its proposed obligations orresponsibilities (whether by written notice or the absence thereof), Cemprashall be free to pursue alternative solutions therefor. For so long as Cempraretains its license hereunder, and except as provided for performance by

 

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Optimerunder any Work Plan and Budget, Cempra shall be responsible for the research,Development, manufacturing, marketing and Commercialization of Cempra Products,subject only to the terms and conditions of this Agreement, including withoutlimitation the payments owed to Optimer for such Cempra Products as set forthin Article 6.

 

**2.2*** ***InformationExchange.**  During theResearch Term, Optimer and Cempra shall keep the Joint Steering Committee fullyand regularly informed of their activities (and the activities of theirAffiliates and/or sublicensees) in connection with their conduct of theResearch Program and the Development and Commercialization of Test Products andCempra Products, and shall diligently respond to any other reasonable requestsby the Joint Steering Committee or the other Party for information. Each Partywill provide the Joint Steering Committee (during the Research Term) and theother Party (during the entire term of this Agreement) with formal writtenprogress reports of its activities under this Agreement, no less than twiceper year.

 

**2.3*** ***Independence.**  Subject to the terms of this Agreement andany applicable Work Order and Budget, the activities and resources of eachParty shall be managed by such Party, acting independently and in itsindividual capacity. The relationship between Optimer and Cempra is that ofindependent contractors and neither Party shall have the power to bind orobligate the other Party in any manner, other than as is expressly set forth inthis Agreement.

 

**3.*** ***CONDUCT OFTHE RESEARCH PROGRAM**

 

**3.1*** ***Work Planand Budget.**  The ResearchProgram shall be carried out by Optimer and Cempra according to a written workplan setting forth the obligations of Optimer and responsibilities of Cempra (the “*Work Plan*”) and budget providing forCempra’s funding of Optimer’s obligations thereunder (the “*Budget*”). The Work Plan shall set forth inreasonable detail the obligations of Optimer and responsibilities of Cemprawith respect to the Research Program, including the identity and number ofMacrolide Antibiotics that Optimer shall endeavor to synthesize and formulatefor animal testing, and shall include the desired quantities of such MacrolideAntibiotics, timeframe for delivery, technical specifications (the “*Specifications*”), and the Budget shall setforth the budget for such synthesis and formulation work by Optimer. The JointSteering Committee shall develop an initial Work Plan and Budget and shallsubmit such plan to Optimer and Cempra for review and approval, such approvalnot to be unreasonably withheld, within thirty (30) days following theexecution of this Agreement. In the absence of a party’s written approval of orreasonable objection to the Work Plan and Budget within five (5) businessdays of its submission to the parties by the Joint Steering Committee, a partyshall be deemed to have agreed to such Work Plan and Budget. The Work Plan andBudget may be amended from time to time by the Joint Steering Committee duringthe Research Term, based upon the data obtained in the Research Program or fromCempra’s independent activities, provided such amendments do not violate orcontradict any provision of this Agreement. In the event of an inconsistency ordisagreement between the Work Plan and Budget and this Agreement, the terms ofthis Agreement shall prevail.

 

**3.2*** ***WorkPerformed to Date.**  The Partiesacknowledge that initial research and Macrolide Antibiotics synthesisactivities have been conducted by the Parties pursuant to the Letter Agreement(the “*Initial Research*”).All Initial Research, including any Macrolide Antibiotics, Information,inventions, know-how, data, information, or other intellectual property rightscreated pursuant to the Initial Research, is deemed included within the scopeof this Agreement. No amounts shall be due Optimer by Cempra for the conduct ofthe Initial Research.

 

**3.3*** ***Synthesisof Macrolide Antibiotics and Biological Testing.**  The Joint Steering Committee shall, duringthe Research Term, determine the Macrolide Antibiotics designated for synthesisand Development under this Agreement, and Optimer shall provide its advice andcomment with respect thereto. The Joint Steering Committee shall determinewhich Macrolide Antibiotics will be the subject of synthesis and Development aspart of Optimer’s performance under the Research Program, and

 

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Optimer shall provide itsadvice and comment with respect thereto, provided that Optimer shall have noobligation to perform such synthesis and Development without its consent (suchconsent not to be unreasonably withheld). Optimer shall indicate in writingwithin five (5) business days of approval by the Joint Steering Committeewhether or not it consents, and, if not consenting, provide its reasonableobjections to such obligations. In the absence of such written consent orreasonable objection within such five (5) business day period, Optimershall be deemed to have rejected such obligations and Cempra shall be free toseek alternative solutions therefor. The Joint Steering Committee shall, duringthe Research Term, designate the initial number of Macrolide Antibiotics forsynthesis under this Agreement, provided Optimer shall provide its advice andcomment with respect thereto. Optimer shall, if and as included in the WorkPlan and Budget, use Diligent Efforts to synthesize Macrolide Antibiotics thathave been designated by the Joint Steering Committee for synthesis, to conductbiological testing on such Macrolide Antibiotics, and to provide such MacrolideAntibiotics in reasonable quantities to Cempra as determined by the JointSteering Committee. If and as included in the Work Plan and Budget, Optimershall use Diligent Efforts to synthesize and conduct biological testing withrespect to each Macrolide Antibiotic according to applicable Specifications forsuch Macrolide Antibiotics, and to produce and provide to Cempra a sufficientquantity of each Macrolide Antibiotic to allow Cempra to conduct furtherDevelopment of such Macrolide Antibiotics. Optimer shall use Diligent Effortsto provide additional quantities of each Macrolide Antibiotics to Cempra at Cempra’sreasonable request on an as needed basis. The reasonable, documented directexpense of manufacturing additional quantities of Macrolide Antibiotics will bepaid for by Cempra as set forth in the Work Plan and Budget.

 

**3.4*** ***PreclinicalTesting and Human Clinical Testing.**  Cempra may perform, in its sole discretionand at its own expense, after, during the Research Term, providing reasonableopportunity for advice and comment by the Joint Steering Committee, preclinicaltesting on Macrolide Antibiotics that have been synthesized by Optimer or anyother Cempra Products of Cempra’s choosing. Based on the results of any suchpreclinical testing, the Joint Steering Committee may, subject to the adviceand comment of Cempra and Optimer, determine whether additional MacrolideAntibiotics should be synthesized or developed by Optimer for preclinicaltesting, or whether any existing Macrolide Antibiotics should be reformulatedby Optimer (or a Third Party) for further testing. The Joint SteeringCommittee may, subject to Optimer’s and Cempra’s approval (such approval not tobe unreasonably withheld), amend or revise the applicable Work Plan and Budgetaccordingly to allow for such additional synthesis or reformulation activities.Each party shall indicate in writing within five (5) business days ofapproval by the Joint Steering Committee whether or not it approves of suchamendment or revision, as applicable, and, if not approving thereof, provideits reasonable objections thereto. In the absence of such a written responsefrom a particular party within such five (5) business day period, a partyshall be deemed to have rejected such amendment or revision to the extent itproposes additional obligations or responsibilities for the objecting party,and, in the event Optimer rejects its proposed obligations or responsibilities(whether by written notice or the absence thereof), Cempra shall be free topursue independent solutions with respect to the subject matter of the rejectedamendment or revision. Cempra shall, after, during the Research Term, providingreasonable opportunity for advice and comment by the Joint Steering Committee,have the right to designate one or more of such Macrolide Antibiotics as TestProducts for human clinical testing. In the event that Cempra enrolls a patientfor human clinical testing of any Macrolide Antibiotics prior to formaldesignation of such Macrolide Antibiotics as a Test Product, such MacrolideAntibiotics shall be deemed to have been designated as a Test Product uponenrollment of the first such patient. If a Test Product does not achievedesirable results during Phase 1 Trials, then, if and as requested by theJoint Steering Committee, subject to Optimer’s consent (such consent not to beunreasonably withheld), Optimer shall use Diligent Efforts to reformulate suchTest Product according to specifications established by the Joint SteeringCommittee. Any such reformulation activities shall be reflected in a revisedWork Plan and Budget to be developed and approved by the Joint SteeringCommittee, negotiated in good faith, and agreed

 

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

 

**3.5*** ***Pre-Clinicaland Clinical Supply.**  As may beprovided in any Work Plan and Budget established by the Joint SteeringCommittee and agreed upon by Optimer, Optimer shall use Diligent Efforts inaccordance with such Work Plan and Budget to produce, or have produced, asufficient quantity of each Test Product to enable Cempra to conductpreclinical testing of such Test Products, and to cooperate with Cempra inpreparing formulations, conducting feasibility studies, and facilitating suchtesting. Optimer shall not have any obligation or responsibility for providingclinical supplies of Test Products or Cempra Products.

 

**3.6*** ***Researchand Supply Costs.**  Cempra shallreimburse Optimer for Optimer’s reasonable, documented internal costsassociated with Optimer’s work under the Work Plan and Budget, which shallequal the pro-rated cost of full-time equivalent employees to the extent usedby Optimer in performing its portion of the Research Program. Such cost shall (1) becommercially reasonable based on the applicable employees’ role in performingOptimer’s portion of the Research Program, job title and responsibilities withOptimer, training, education, and expertise, which shall, in each case, bereasonably appropriate for the tasks performed thereby, and (2) not exceedUS$[***] on an annual basis in any event. Cempra shall reimburse Optimer forthe purchasing of key intermediates from Third Parties at Optimer’s cost, whichcost shall be commercially reasonable and included in the Budget. Cempra shallalso reimburse Optimer for commercially reasonable and documented externalout-of-pocket expenses consistent with the Work Plan and Budget that Optimerincurs for performing such work, including without limitation commerciallyreasonable and documented payments to any Third Party manufacturer forproduction of Macrolide Antibiotics, Test Products and/or Cempra Products. Atthe end of each calendar quarter, Optimer shall submit to Cempra an invoicethat sets forth in reasonable detail the internal costs and external expensesOptimer has incurred in performing its obligations under the Work Plan andBudget. Cempra shall remit payment to Optimer within thirty (30) daysfollowing Cempra’s receipt of such invoice. Any disputes arising between theParties related to the amounts invoiced under this Section 3.6 shall beresolved in accordance with Article 12. Notwithstanding anything to thecontrary, (i) Cempra shall not be obligated to pay Optimer any amountswith respect to Optimer’s performance of its obligations under the ResearchProgram except as specifically described in any Budgets established by theJoint Steering Committee, (ii) Optimer shall not incur any Third Partycosts in performing under the Research Program, and Cempra shall not beresponsible for the reimbursement of any such Third Party costs, except asapproved in advance by the Joint Steering Committee, and (iii) Cemprashall not be obligated to reimburse any costs of Optimer incurred in performingits obligations under the Research Program to the extent such costs are coveredby any grant funding provided to Optimer (including but not limited to any SBIRor other government grants).

 

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**3.7*** ***Conduct ofResearch.**  The Partiesshall use Diligent Efforts to conduct their tasks and responsibilities underthe Work Plan and Budget throughout the Research Program. In addition, theParties shall conduct their tasks and responsibilities under the ResearchProgram in compliance in all material respects with the requirements of applicablelaws, rules and regulations and all applicable GLP to attempt to achievetheir objectives consistent with industry standards. Optimer shall usecommercially reasonable efforts to (i) perform in accordance with,maintain, and obtain any awarded, active, or future grants (including but notlimited to any SBIR or other government grants) concerning research ordevelopment related to the research and development of Macrolide Antibiotics,Test Products, and/or Cempra Products (collectively, such grants, “SubjectGrants”), (ii) ensure payment and receipt of all funds to be provided toOptimer under Subject Grants to the extent covering any of Optimer’s costs ofperforming of Optimer’s portion of the Research Program, and (iii) ensurethat (a) all Optimer Improvements, Optimer Know-How, and resultsgenerated, in each case, under the Subject Grants, and all intellectualproperty rights appurtenant to the foregoing (including but not limited toOptimer Patents) shall be owned by Optimer and included in the licenses grantedto Cempra hereunder, subject to any nonexclusive rights the United Statesgovernment may have in any of the foregoing, by operation of law pursuant tothe terms of such Subject Grants.

 

**3.8*** ***Acceptance.**  If, as set forth in the Work Plan, Cempra hasresponsibility for performing quality control and/or quality assurance testingon Macrolide Antibiotics and/or Test Products supplied by Optimer, Cempra shallhave thirty (30) business days following its receipt of a shipment toconfirm that such shipment meets the applicable Specifications. If, as setforth in the Work Plan, Optimer has responsibility for performing qualitycontrol and/or quality assurance testing on Macrolide Antibiotics and/or TestProducts supplied by Optimer, Cempra shall be deemed to have accepted anydelivery of Macrolide Antibiotics and/or Test Products supplied by Optimerunless Cempra gives Optimer written notice of its rejection within fifteen(15) business days of delivery, unless any defect in the MacrolideAntibiotics and/or Test Products could not have been identified by reasonablevisual examination, in which event Cempra shall not be deemed to have acceptedsuch Macrolide Antibiotics and/or Test Products until fifteen(15) business days after the date when such defect could first have beenreasonably identified by Cempra. If Cempra reasonably rejects in whole or inpart any nonconforming shipment at any time following its receipt thereof,Cempra shall provide Optimer written notice of such rejection within theapplicable time period described above. If nonconforming Macrolide Antibioticsor Test Products are delivered to Cempra by Optimer in the course of theResearch Program, Optimer shall, if and as elected by Cempra in its solediscretion (i) use commercially reasonable efforts to replace in a timelymanner the nonconforming Macrolide Antibiotics or Test Products at noadditional cost to Cempra or (ii) refund to Cempra any amounts paid toOptimer with respect to the manufacture or supply of such Macrolide Antibioticsor Test Products.

 

**4.*** ***DEVELOPMENTAND COMMERCIALIZATION**

 

**4.1*** ***DevelopmentPlan; Reports.**  TheDevelopment of Cempra Products shall be governed by a development plandeveloped by Cempra, in consultation with the Joint Steering Committee, subjectto amendment at any time by Cempra, that describes the proposed overall programof Development (the “Development Plan”). Cempra shall engage, at its soleexpense, a Scientific Advisory Board, which shall, during the Research Term,include one representative of Optimer, initially to be Yoshi Ichikawa, Ph.D.,to review and comment on the Development Plan. During the Research Term,Optimer and the Joint Steering Committee shall have the right to comment andmake suggestions with respect to the Development Plan; provided, however, thatCempra shall have the sole right and responsibility for determining theDevelopment Plan for Cempra Products. Each Party shall conduct its Developmentof Products in compliance in all material aspects with the requirements underall applicable laws, rules and regulations, including without limitationapplicable GLP, GCP and GMP. Each Party shall keep the other Party and, duringthe Research Term, the Joint Steering Committee regularly informed on asemiannual basis via summary updates with respect to its material Developmentand Commercialization 

 

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activities and those of itsAffiliates and Third Party sublicensees. Such reports shall be the ConfidentialInformation of a Party and subject to applicable provisions set forth in Article 8.

 

**4.2*** ***RegulatoryMatters.**  Cempra shallhave control of and be responsible for all regulatory applications, filings andcommunications with regulatory authorities regarding Cempra Products, includingobtaining Regulatory Approval of Cempra Products, in any jurisdiction in theTerritory. Cempra shall keep Optimer regularly informed of its efforts andprogress with respect to regulatory matters and approvals on a semiannualbasis. Cempra shall own all the Regulatory Filings it makes and RegulatoryApprovals it obtains. Optimer shall have the right of access to such regulatorydocuments and material for its use in obtaining Regulatory Approval in ASEANCountries (subject to any payment obligations under Sections 6.6 and 6.7).Optimer shall cooperate with Cempra in all such regulatory efforts asreasonably requested by Cempra and provide all reasonable assistance to Cempra.If and as requested by Cempra, Optimer shall be responsible, at the expense ofCempra, which expense shall be reasonable, documented, and agreed upon inadvance by the parties, for preparing and providing to Cempra in a timelymanner all documents and submissions that relate directly to the manufacturingof Cempra Product, as reasonably required for Regulatory Filings and RegulatoryApproval of the Cempra Product in the Territory, including the CMC of any INDor NDA in electronic format, for filing by Cempra.

 

**4.3*** ***Manufactureand Supply.**  With respectto the Territory, and except as may otherwise be specified in the Work Plan andBudget, Section 3.5, or any separate clinical supply agreement enteredinto by the Parties, Cempra shall, as between the Parties, be responsible forthe manufacture of clinical materials for each Cempra Product, and for the commercialsupply of each Cempra Product, and for all costs associated therewith. Cemprashall use Diligent Efforts to make necessary Regulatory Filings to obtain, orcause a Third Party manufacturer to obtain, Regulatory Approval in theTerritory for the manufacture of Cempra Products.

 

**4.4*** ***Developmentand Commercialization Costs.**  Cempra shall be responsible for all costsassociated with its Development and Commercialization of the Cempra Products,including the manufacture, marketing and commercialization of such CempraProducts in the Field and in the Territory, provided that, notwithstanding theforegoing, Cempra’s only obligations to Optimer with respect to any such costsshall solely be as provided for in Section 3 and 4.2, or as otherwiseagreed to by the parties in writing.

 

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

 

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

 

**4.7*** ***DiligentEfforts; Decision Not to Develop.**

 

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

 

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

 

**5.*** ***LICENSESAND RELATED RIGHTS**

 

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

 

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

 

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

 

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

 

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

 

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market one or more OptimerProducts in a given territory shall be deemed a “sublicensee” of Optimerhereunder for such territory

 

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

 

**5.7*** ***Disclosureof Information.**  Uponexecution of this Agreement and thereafter during the term hereof, each partyshall disclose to the other party, in confidence under the terms of Article 8hereof, (a) all relevant Information as shall become available to itrelating to the Macrolide Antibiotics, Test Products and Cempra Products, and (b) allrelevant Information as shall become available to it relating to the safety andefficacy of each Macrolide Antibiotic, Test Product, and Cempra Product to theextent necessary or useful to develop or manufacture a Cempra Product. Optimerwill use reasonable efforts to disclose to Cempra or, if and as requested byCempra, to the FDA all relevant Information in its possession required forCempra to register for sale or obtain approval for sale of eachCempra Product.

 

**5.8*** ***No ImpliedLicenses.**  Other thanthose rights and licenses expressly granted herein, no other rights or licensesare granted or shall be deemed granted under this Agreement byeither Party.

 

**6.*** ***FINANCIALTERMS**

 

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

 

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

 

| **Gross Proceeds to Cempra in Equity Financing** | ** ** | **Percentage of Cempra Common Stock to be Held by Optimer** |
|--------------------------------------------------------------------------------|------------|----------------------------------------------------------------------------------------------------------|
| $[***] to $[***]                                                               |       | [***]%                                                                                                   |
|                                                                           |       |                                                                                                     |
| $[***] to $[***]                                                               |       | [***]%                                                                                                   |
|                                                                           |       |                                                                                                     |
| $[***] to $[***]                                                               |       | [***]%                                                                                                   |
|                                                                           |       |                                                                                                     |
| $[***] to $[***]                                                               |       | [***]%                                                                                                   |
|                                                                           |       |                                                                                                     |
| $[***] or more                                                                 |       | [***]%                                                                                                   |

 

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

 

**6.2*** ***MilestonePayments to Optimer.**

 

**(a)**           Cempra shall pay to Optimera milestone payment (the “*[***]Milestone Payment*”) in the amount of $[***] upon Cempra’s, itsAffiliate’s, or their sublicensee’s [***] (the “*[***] Milestone*”), and the [***] Milestone Paymentshall be payable in cash or Cempra capital stock, as further described below.Cempra shall notify Optimer within thirty (30) days of its determinationthat a [***] Milestone has occurred. Optimer shall indicate in writing, withinten (10) business days of such notice from Cempra, whether it elects the[***] Milestone Payment to be paid in cash or shares of Cempra capital stockhaving a Fair Market Value, as calculated as of the date the [***] Milestone isachieved, equal to the [***] Milestone Payment; in the absence of such electionwithin such ten (10) business day period, Cempra shall be entitled to makesuch election in its sole discretion. The [***] Milestone Payment shall be paid(or, if to be paid in Cempra capital stock, such stock shall be issued) nolater than twenty (20) days after the earlier of (i) the date onwhich Optimer provides its written election, as described above, or (ii) theexpiration of the ten (10) business day period referenced above. Only one[***] Milestone Payment shall be payable by Cempra under this Agreement,regardless of the number of Cempra Products or indications therefor developedby Cempra, its Affiliates, or their sublicensees under this Agreement.

 

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

 

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[***] Milestone Payment; in the absence ofsuch election within such ten (10) business day period, Cempra shall beentitled to make such election in its sole discretion. The initial [***]Milestone Payment shall be paid (or, if to be paid in Cempra capital stock,such stock shall be issued) no later than twenty (20) days after theearlier of (i) the date on which Optimer provides its written election, asdescribed above, or (ii) the expiration of the ten (10) business dayperiod referenced above; all other [***] Milestone Payments shall be paid inimmediately available funds, pursuant to Section 6.9 below, no later thanthirty (30) days following the achievement of such [***] Milestone. Onlyone [***] Milestone Payment shall be payable by Cempra under this Agreementwith respect to each Cempra Product, regardless of the number of indicationstherefor developed by Cempra, its Affiliates, or their sublicensees underthis Agreement.

 

**(c)**           In addition to thePhase 2 Milestone Payments, in the event that (i) Cempra or anAffiliate thereof sublicenses rights for Development and Commercialization of aCempra Product to a Third Party sublicensee and (ii) Cempra, an Affiliate,or such sublicensee completes a Phase 3 Trial of such Cempra Productresulting in data sufficient to support Regulatory Approval of such CempraProduct (the date upon which both of the foregoing have been achieved, the“*Sublicensee Milestone*”), thenCempra shall pay to Optimer (a) the following amounts with respect to eachof the first two (2) Cempra Products to achieve the Sublicensee Milestone:(1) $[***] within thirty (30) days after each such Cempra Productachieves the Sublicensee Milestone (the “*InitialSublicensee Milestone Payments*”) and (2) [***] percent ([***]%)of all Sublicensing Revenue, if any, received in excess of $[***] with respectto each such Cempra Product from the Third Party sublicensee(s) for suchCempra Product (to be paid to Optimer within thirty (30) days ofCempra’s receipt of each applicable payment of Sublicensing Revenue from suchsublicensee(s)) (“*Trailing SublicenseeMilestone Payments*”) and, with respect to each of the subsequent twoCempra Products to achieve the Sublicensee Milestone, (b) $[***] withinthirty (30) days after the date upon which such subsequent Cempra Productachieves the Sublicensee Milestone (“*SubsequentSublicensee Milestone Payments*”; collectively, with all of theforegoing payments described in this subsection (c), the “*Sublicensee Milestone Payments*”). Cemprashall notify Optimer within thirty (30) days of each of the first fouroccurrences of the Sublicensee Milestone.

 

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

 

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

 

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

 

**(e)**           As a condition to theissuance(s) of Cempra capital stock to Optimer pursuant toSections 6.2(a) and/or 6.2(b), as applicable, Optimer shallenter into reasonable or customary agreements (including but not limited tosubscription or purchase agreements) substantially consistent with thoseentered into by other holders of such shares of stock, including but notlimited to investors, as applicable, and which may concern the issuance of suchstock, voting provisions, and/or rights of first refusal and co-sale withrespect to such shares.

 

**6.3*** ***RoyaltyPayments to Optimer.**  For theduration of the applicable Royalty Term for each Cempra Product, Cempra shallpay to Optimer the following royalty payments, subject to adjustment asdescribed in Sections 6.4 and 6.5, based on Net Sales of CempraProducts sold in the Territory by Cempra, its Affiliates, and their Third Partysublicensees:

 

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

 

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

 

As an example of the royaltycalculation contemplated above, if aggregate worldwide Net Sales of CempraProducts by Cempra, its Affiliates, and their Third Party sublicensees in aparticular calendar year total $[***], Cempra shall owe Optimer $[***] underthis Section 6.3 ([***]% × $[***] = $[***]; [***]% of$[***] = $[***]; $[***] + $[***] = $[***]).

 

**6.4*** ***Third PartyRoyalties on Cempra Products.**  In the event that:

 

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

 

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(b)           Cempra, an Affiliatethereof, or any sublicensee of either of the foregoing determines that it iscommercially, reasonably necessary or advisable to pay royalties to a ThirdParty to obtain a license to practice any Third Party’s rights in order tomanufacture, use, Commercialize or Develop a Cempra Product in any givencountry of the Territory (“*Cempra NecessaryLicense*”), or

 

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

 

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

 

**6.5*** ***CempraCompulsory Licenses.**  Should acompulsory license be granted, or be the subject of a possible grant, to aThird Party under the applicable laws of any country in the Territory under theOptimer Patents and/or Optimer Know-How, or to any Cempra Product, the Partyreceiving notice thereof or otherwise becoming aware thereof shall promptlynotify the other Party thereof, including any material information concerningsuch compulsory license, and the applicable royalty rate payable hereunder forsales of Cempra Products in such country will be adjusted to match any lowerroyalty rate granted to such Third Party for such country with respect to thesales of such Cempra Products, subject to any adjustments pursuant to Section 6.4 above.

 

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

 

**6.7*** ***Royaltiesto Cempra.**  For theduration of the applicable Royalty Term for each Optimer Product, Optimer shallpay to Cempra the following royalty payments based on Net Sales of OptimerProducts in ASEAN Countries by Optimer, its Affiliates, and their Third Partysublicensees:

 

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

 

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

 

As an example of the royaltycalculation contemplated above, if aggregate Net Sales of Optimer Products in aparticular calendar year total $[***], Optimer shall owe Cempra $[***] underthis Section 6.7 ([***]% × $[***] = $[***]; [***]% of$[***] = $[***]; $[***] + $[***] = $[***]).

 

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**6.8*** ***Third PartyRoyalties on Optimer Products.**  In the event that:

 

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

 

(b)        Optimer, an Affiliatethereof, or any sublicensee of either of the foregoing determines that it iscommercially, reasonably necessary or advisable to pay royalties to a ThirdParty to obtain a license to practice any Third Party’s rights in order tomanufacture, use, Commercialize or Develop an Optimer Product in any givencountry of the Territory (“*Optimer NecessaryLicense*”), or

 

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

 

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

 

**6.9*** ***OptimerCompulsory Licenses.**  Should acompulsory license be granted, or be the subject of a possible grant, to aThird Party under the applicable laws of any country in the Territory under theCempra Patents and/or Cempra Know-How, or to any Optimer Product, the Partyreceiving notice thereof or otherwise becoming aware thereof shall promptlynotify the other Party thereof, including any material information concerningsuch compulsory license, and the applicable royalty rate payable hereunder forsales of Optimer Products in such country will be adjusted to match any lowerroyalty rate granted to such Third Party for such country with respect to thesales of such Optimer Products, subject to any adjustments pursuant to Section 6.8 above.

 

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

 

**6.11*** ***PaymentMethod.**  Except with respect to anymilestone payments due under Sections 6.2 (a) and (b) that arepaid in Cempra stock in accordance therewith, all payments due under thisAgreement shall be made by bank wire transfer in immediately available funds toan account 

 

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

 

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

 

**6.13*** ***BlockedCurrency.**  In eachcountry where the local currency is blocked and cannot be removed from thecountry under such country’s applicable law, royalties accrued in that countryshall be paid to a Party in the country in local currency by deposit in a localbank designated by such Party, unless the Parties otherwise agree.

 

**6.14*** ***Sublicenses.**  For avoidance of doubt, the Parties agreethat in the event that a Party grants licenses or sublicenses to Third Partiesto sell Products, the licensing (or sublicensing) Party shall usecommercially reasonable efforts to include in such licenses or sublicenses anobligation for the licensee or sublicense to account for and report its salesof Products on a basis reasonably sufficient to enable payment of royaltieshereunder with respect to such sales as if such sales of the licensee orsublicensee were Net Sales of the applicable Party.

 

**6.15*** ***ForeignExchange.**  Conversionof a Party’s Net Sales recorded in local currencies to U.S. dollars willbe performed by such Party in a manner consistent with such Party’s normalpractices used to prepare its audited financial statements for externalreporting purposes, provided that such practices use a widely accepted sourceof published exchange rates. Each Party shall notify the other of theconversion method(s) used by it for such purposes.

 

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

 

**6.17*** ***Records;Audits.**  Each Party shall keep or causeto be kept such records as are required to determine, in a manner consistentwith generally accepted accounting principles in the United States, thesums or credits due under this Agreement, including, but not limited to NetSales. At the request (and expense) of either Party, the other Party andits Affiliates and sublicensees shall permit an independent certified publicaccountant appointed by such Party and reasonably acceptable to the otherParty, at reasonable times not more than once a year and upon reasonablenotice, to examine only those records as may be necessary to determine, withrespect to any calendar year ending not more than three (3) years prior tosuch Party’s request, the correctness or completeness of any royalty report orpayment made under this Agreement. The Party requesting the audit shall bearthe full cost of the performance of any such audit, unless such audit disclosesa variance adverse to the Party requesting the audit of more than five percent(5%) from the amount of the original invoice, report, royalty or 

 

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

 

**7.*** ***IntellectualProperty**

 

**7.1*** ***GeneralPrinciples.**

 

(a)           The Optimer Technologyexisting as of the Effective Date shall, subject to the rights granted underthis Agreement, remain the sole property of Optimer and may be licensed byOptimer for any purpose that is not inconsistent nor in conflict withthis Agreement.

 

(b)           All right, title, andinterest in any and all Know-How or Inventions generated, conceived or reducedto practice by employees, agents or independent contractors of Optimer or itsAffiliates, solely or jointly with employees, agents or independent contractorsof Cempra or any Affiliate thereof, in connection with the performance ofOptimer’s obligations under this Agreement, or that relate to Cempra Productsin any manner, except any such Know-How or Inventions that are generated usinggrant monies provided by the United States government to Optimer and whichare, therefore, subject to the limitations and requirements of such grants withrespect to such intellectual property (collectively, all of the foregoing, “*Optimer Inventions*”), and all right,title, and interest in all intellectual property rights appurtenant thereto,shall vest in Cempra, subject to the terms of the license grant set forth in Article 5and Optimer’s ownership of the Optimer Technology and sole or jointownership (as applicable) of Optimer Improvements. Optimer shall notifyCempra promptly in writing and in reasonable detail of any Optimer Inventions.Optimer hereby assigns all right, title, and interest to Optimer Inventions andall intellectual property rights appurtenant thereto to Cempra, and agrees totake all actions and execute all documents, and to cause its Affiliates, employees,agents, and independent contractors to execute all documents and take allactions, requested by Cempra to effect the purposes of the foregoing. Optimerhereby appoints Cempra as it attorney to effect on its behalf any assignment ofthe Optimer Inventions which Optimer has failed to make to Cempra within7 days in accordance with the terms of this Section with the rightbut not the obligation to do any and all acts and things reasonably necessaryto effect unconditionally such assignment including the right for Cempra toexecute all deeds, documents or instruments and swear any oaths or declarationsin the name of and on behalf of Optimer necessary for such purpose. Cempra’sappointment as attorney under this Section is given to secure Cempra’sinterest in the Optimer Inventions and intellectual property rights appurtenantthereto and to secure the performance of Optimer’s obligations to assign theOptimer Inventions and intellectual property rights appurtenant thereto in theevent of termination and such appointment shall be perpetual and irrevocable,notwithstanding Optimer entering into liquidation, being wound-up or dissolvedor having a receiver, manager, administrator, administrative receiver orsimilar person appointed over any of its assets.

 

(c)           Subject to Section 7.1(d) below,Optimer and Cempra shall each own any inventions conceived solely by its ownemployees or agents, other than those inventions that are Optimer Inventions (“*Other Sole Inventions*”), including but notlimited to (i) Know-How, conceived or reduced to practice during the termof this Agreement or (ii) such inventions generated using grant moniesprovided by the United States government to Optimer and which are,therefore, subject to the limitations and requirements of such grants withrespect to such intellectual property. Subject to Section 7.1(d) below,Cempra and Optimer shall each own an undivided one-half interest in anyinventions conceived jointly by employees or agents of both Cempra and Optimer,other than those inventions that are Optimer Inventions (“*Other Joint Inventions*”), 

 

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

 

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

 

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

 

**7.2*** ***PatentProsecution and Maintenance of Optimer Patents.**  Optimer shall be responsible for, and beobligated to the extent it is commercially reasonable to diligently pursue, orto cause Optimer’s licensors to diligently pursue, the preparation, filing,prosecution (including but not limited to, by conducting interferences,oppositions and reexaminations or other similar proceedings), maintenance(by timely paying all maintenance fees, renewal fees and other applicablefees and costs), and extension of Patents within the Optimer Patents (includingbut not limited to those claiming Optimer’s Other Sole Inventions). Optimerwill regularly advise Cempra of the status of all pending Optimer Patentapplications, including any related hearings or other proceedings, and, atCempra request, will provide Cempra with copies of all documentation concerningsuch applications, including all correspondence to and from any GovernmentalAuthority. Optimer shall consult with and obtain written consent from Cempraprior to abandoning any Optimer Patent, which consent shall not be unreasonablywithheld, delayed, or conditioned. Optimer will solicit Cempra’s advice andreview of such applications and important prosecution matters related theretoin reasonably sufficient time prior to filing thereof, and will take intoaccount Cempra’s reasonable comments related thereto. The costs of prosecutionand maintenance of Optimer Patents shall be borne by Optimer.

 

**7.3*** ***PatentProsecution and Maintenance of Cempra Patents.**  Cempra shall be responsible for, and beobligated to the extent it is commercially reasonable to diligently pursue, orto cause Cempra’s licensors to diligently pursue, the preparation, filing,prosecution (including but not limited to, by conducting interferences,oppositions and reexaminations or other similar proceedings), maintenance(by timely paying all maintenance fees, renewal fees and other applicablefees and costs), and extension of Patents within the Cempra Patents (includingbut not limited to those claiming Cempra’s Other Sole Inventions). Cempra willregularly advise Optimer of the status of all pending Cempra Patentapplications, including any related hearings or other proceedings, and, atOptimer’s request, will provide Optimer with copies of all documentationconcerning such applications, including all correspondence to and from anyGovernmental Authority. Cempra shall consult with and obtain written consentfrom Optimer prior to abandoning any Cempra Patent, which consent shall not beunreasonably withheld, delayed, or conditioned. Cempra will solicit Optimer’sadvice and review of such applications and important prosecution mattersrelated thereto in reasonably sufficient time prior to 

 

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

 

**7.4*** ***PatentProsecution and Maintenance of Patents Claiming Other Joint Inventions.**  Subject to Sections 7.7 and 7.8,for Patents claiming Other Joint Inventions (“*JointInvention Patents*”), Cempra will have, without prejudice toownership, the first right to prepare, file and prosecute such Patentapplications and maintain any resulting Patents; provided, however, that Cempramay request that Optimer undertake such responsibilities upon written notice toOptimer, and Optimer may agree to do so, in its sole discretion. If Optimerdoes not agree to undertake such responsibilities within ten (10) days ofsuch request with respect to any such Patents, Cempra shall not have anyfurther obligations to prosecute or maintain such Patents. Within nine (9) monthsafter the filing date of a Patent application in respect of an Other JointInvention, the Party filing such application will request that the other Partyidentify those non-priority, non-PCT (“foreign”) countries in which the otherParty desires that the filing Party file corresponding Patent applications.Within thirty (30) days after receipt of such request, the other Partywill provide to the filing Party a written list of such foreign countries in whichthe other Party wishes to effect corresponding foreign patent applicationfilings. The Parties will then attempt to agree on the particular countries inwhich such applications will be filed, provided that in the event agreement isnot reached, the issue shall be resolved pursuant to Section 12.3 (“*Designated Foreign Filings*”). Thereafter,the filing Party will effect all such Designated Foreign Filings in a timelymanner. It is presumed unless otherwise agreed in writing by the Parties, thata corresponding PCT application will be filed designating all PCT membercountries. Should the Party filing the priority application not agree to fileor cause to be filed a Designated Foreign Filing, the other Party will have theright to effect such Designated Foreign Filing.

 

Regardless of which Party isresponsible for preparation, prosecution and maintenance of a Joint InventionPatent, the Parties shall share equally all reasonable, documented costs andexpenses incurred in connection with procuring Joint Invention Patents(including entering national phase in all agreed countries), includingapplication preparation, filing fees, prosecution, maintenance and all costsassociated with reexamination, oppositions and interference proceedings. Thefiling Party shall invoice the other Party for such costs and expenses, and theother Party will pay such invoices within thirty (30) daysafter receipt.

 

**7.5*** ***Cooperation.**  The Parties agree to cooperate in thepreparation and prosecution of all Joint Invention Patent applications filedunder Section 7.3, including obtaining and executing necessary powers ofattorney and assignments by the named inventors, providing relevant technicalreports to the filing Party concerning the Other Joint Invention disclosed insuch Joint Invention Patent applications, obtaining execution of such otherdocuments which will be needed in the filing and prosecution of such JointInvention Patent applications, and, as requested, updating each other regardingthe status of such Joint Invention Patent applications. The Parties willreasonably cooperate to obtain any export licenses that might be required forsuch activities.

 

**7.6*** ***Disclosure.**  Each party shall make available to the otherparty in confidence all information in its possession necessary or expedientfor the filing of Patents arising out of such party’s performance under thisAgreement in all countries of the world.

 

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

 

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

 

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If, within [***] monthsof the notice above, Cempra (i) shall have been unsuccessful in persuadingthe alleged infringer to desist, (ii) shall not have brought and shall notbe diligently prosecuting an infringement action, or (iii) has not enteredinto settlement discussions with respect to such infringement, or if Cempranotifies Optimer that it has decided not to undertake any of the foregoingagainst any such alleged infringer, then Optimer shall then have the right tobring suit to enforce such Optimer Patents at its own expense. In any suchlitigation brought by Cempra, Cempra shall have the right to use and sue inOptimer’s name, and Optimer shall cooperate reasonably, as requested by Cempraand at Cempra’s expense (which expense shall be reasonable).

 

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

 

**(c) ******Procedure.**  The Partypursuing or controlling any action against an alleged infringer pursuant to theforegoing (the “*Controlling Party*”)shall be free to enter into a settlement, consent judgment, or other voluntarydisposition of any such action, provided, however, that (i) theControlling Party shall consult with the other Party (the “*Secondary Party*”) prior to entering intoany settlement thereof and (ii) any settlement, consent judgment or othervoluntary disposition of such actions which (1) materially limits thescope, validity, or enforceability of any Optimer Patents (if Optimer isthe Secondary Party) or Patents Controlled by Cempra (if Cempra is theSecondary Party), (2) subjects the Secondary Party to any non-indemnifiedliability or obligation, or (3) admits fault or wrongdoing on the part ofSecondary Party must be approved in writing by Secondary Party, such approval notto be unreasonably withheld. Secondary Party shall provide the ControllingParty notice of its approval or denial of such approval within ten (10) businessdays of any request for such approval by the Controlling Party, provided that (i) inthe event Secondary Party wishes to deny such approval, such notice shallinclude a written description of Secondary Party’s reasonable objections to theproposed settlement, consent judgment, or other voluntary disposition and (ii) SecondaryParty shall be deemed to have approved such proposed settlement, consentjudgment, or other voluntary disposition in the event it fails to provide suchnotice within such ten (10) business day period. Any recovery or damagesreceived by the Controlling Party with respect to the infringement of a Party’srights under this Agreement shall be used first to reimburse the Parties forunreimbursed reasonable, documented expenses incurred in connection with suchaction, and the remainder shall be split [***] ([***]%) to Controlling Partyand [***] percent ([***]%) to Secondary Party. Notwithstanding the foregoing,the Secondary Party, at its expense, shall have the right to be represented bycounsel of its choice in any such proceeding.

 

**7.8*** ***Infringementof Third Party Rights.**

 

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

 

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

 

(b)           As between the parties tothis Agreement, Cempra shall have the first and primary right at its ownexpense to defend, control the defense of, and/or settle any such claim againstCempra, its Affiliates, or its sublicensees in the Territory, using counsel ofits own choice. Cempra shall be free to enter into a settlement, consentjudgment, or other voluntary disposition of such action, provided that anysettlement, consent judgment or other voluntary disposition of such actionswhich (i) materially limits the scope, validity, or enforceability ofpatents included in the Optimer Patents, (ii) subjects Optimer to anynonindemnified liability, or (ii) admits fault or wrongdoing on the partof Optimer must be approved in writing by Cempra, such approval not being unreasonablywithheld. Optimer shall provide Cempra notice of such approval or denial ofsuch approval within ten (10) business days of any request for suchapproval by Cempra, provided that (i) in the event Optimer wishes to denysuch approval, such notice shall include a written description of Optimer’sreasonable objections to the proposed settlement, consent judgment, or othervoluntary disposition and (ii) Optimer shall be deemed to have approved ofsuch proposed settlement, consent judgment, or other voluntary disposition inthe event it fails to provide such notice within such ten (10) businessday period. Optimer agrees to cooperate with Cempra in any reasonable mannerdeemed by Cempra to be necessary in defending any such action. Cempra shallreimburse Optimer for any out of pocket expenses incurred in providing suchassistance. Any recovery or damages received by Cempra in any action orsettlement under this Section 7.7(b) with respect to the rightslicensed to Cempra under this Agreement shall be used first to reimburse theParties for unreimbursed reasonable, documented expenses incurred in connectionwith such action, and the remainder shall be split [***] percent ([***]%) toCempra and [***] percent ([***]%) to Optimer. Notwithstanding the foregoing,either Party, at its expense, shall have the right to be represented by counselof its choice in any such proceeding controlled by the other Party.

 

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

 

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

 

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

 

**8.*** ***CONFIDENTIALITY**

 

**8.1*** ***Treatmentof Confidential Information.**  The Parties agree that during the Term, andfor a period of five (5) years after the end of the Term, a Partyreceiving Confidential Information of the other Party will (a) maintain inconfidence such Confidential Information to the same extent such Partymaintains its own proprietary industrial information of similar kind and value(but at a minimum each Party shall use commercially reasonable efforts), (b) notdisclose such Confidential Information to any Third Party without prior consentof the other Party, and (c) not use such Confidential Information for anypurpose except those permitted by this Agreement.

 

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

 

**(a)**           is publiclydisclosed by the disclosing Party, either before or after it becomes known tothe receiving Party;

 

**(b)**           was known tothe receiving Party, without obligation to keep it confidential, prior to whenit was received from the disclosing Party, as demonstrated by receiving Party’swritten records;

 

**(c)**           is subsequentlydisclosed to the receiving Party without obligation of confidentiality orlimitation on use by a Third Party lawfully in possession thereof withoutobligation to keep it confidential;

 

**(d)**           has beenpublished by a Third Party; or

 

**(e)**           has beenindependently developed by the receiving Party without the aid, application oruse of Confidential Information.

 

**8.3*** ***AuthorizedDisclosure.** Notwithstanding Section 8.1, a Party may disclose ConfidentialInformation belonging to the other Party to the extent such disclosure isnecessary in the following instances:

 

**(a)**           filing orprosecuting Patents pursuant to Article 7;

 

**(b)**           Regulatory Filings;

 

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**(c)**           prosecuting ordefending litigation relating to Macrolide Antibiotics, Test Productsor Products;

 

**(d)**           complying withapplicable laws and governmental regulations; and

 

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

 

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

 

**8.5*** ***Publicity.**  The public announcement of the execution ofthis Agreement is set forth on *Schedule 8.5*hereto. Each Party shall be entitled, in its sole discretion, to make publicannouncements regarding its Development and Commercialization of Products,subject to the other Party’s opportunity to review and comment with respectthereto provided below. In addition, either Party may make a public statement,including in analyst meetings, concerning the Agreement or the progress of theTest Products or Products where such statement is required by law, applicablestock exchange regulation or legal proceedings. In connection with any filingdescribed in the foregoing sentence, such Party shall use commerciallyreasonable efforts to obtain confidential treatment of economic and tradesecret information. In any event, the Parties agree to take all reasonableaction to avoid disclosure of Confidential Information except as permittedhereunder, and shall cooperate with each other with respect to all suchdisclosures. The Party that is required to or has otherwise decided to make apublic statement pursuant permitted under this Section 8.5 will give theother Party reasonable advance notice of the text of any proposed statement sothat the other Party will have the opportunity to comment upon the statement.Either Party may disclose any matter that has previously been publiclydisclosed in accordance with this Section 8.5. Except as described above,neither Party will make any public announcement regarding the terms of orevents related to the Agreement without the prior consent of theother Party.

 

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

 

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**9.*** ***TERM ANDTERMINATION**

 

**9.1*** ***Term.**  This Agreement shall become effective on theEffective Date and shall continue on a Product-by-Product (Cempra Product orOptimer Product, as applicable) and country-by-country basis until the earlierof (1) the expiration of the Royalty Term with respect to the applicableProduct (Cempra Product or Optimer Product, as applicable) in the applicablecountry; or (2) the effective date of termination pursuant to Section 9.2or 9.3 (the “*Term*”).Upon expiration of this Agreement pursuant to clause (1) above withrespect to a particular Product in a particular country, the Parties and theirAffiliates shall have the perpetual, unrestricted, fully-paid, royalty-freeworld-wide right, with rights of sublicense, to make, use, sell, offer forsale, and import such Product in such country.

 

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

 

**9.3*** ***Mutual TerminationRights.**  Either Party will have theright to terminate this Agreement upon the following:

 

**(a)**           It believesthat the other Party is in material breach of this Agreement, in which case thenon-breaching Party may deliver written notice of such material breach to theother Party, such notice to describe in detail the nature of such breach. Theallegedly breaching Party shall have [***] days from receipt of suchnotice to cure such breach. Any such termination shall become effective at theend of such [***] period unless the breaching Party has cured any such breachor default prior to the expiration of such [***] period (or, if such default iscapable of being cured but cannot be cured within such [***]-day period, thebreaching Party has commenced and diligently continued actions to cure suchdefault provided always that, in such instance, such cure must have occurredwithin [***] days after notice thereof was provided to the breaching Partyby the non-breaching Party to remedy such default); or

 

**(b)**           the other Partyis generally unable to meet its debts when due, or makes a general assignmentfor the benefit of its creditors, or there shall have been appointed areceiver, trustee or other custodian for such Party for or a substantial partof its assets, or any case or proceeding shall have been commenced or otheraction taken by or against such Party in bankruptcy or seeking thereorganization, liquidation, dissolution or winding-up of such Party or anyother relief under any bankruptcy, insolvency, reorganization or other similaract or law, and any such event shall have continued for sixty (60) daysundismissed, unstayed, unbonded and undischarged. In such circumstances, theother Party may, upon notice to such Party, terminate this Agreement, such terminationto be effective upon such Party’s receipt of such notice.

 

**9.4*** ***Effects ofTermination.**

 

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

 

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as applicable, for a period of one yearfollowing the Termination Date. Notwithstanding any provision herein to thecontrary, no termination of this Agreement by either Party shall be construedas a termination of any valid sublicense granted by the other Party, itsAffiliates, or its sublicensees with respect to the rights granted under thisAgreement. Upon termination of this Agreement by a Party each sublicense ofrights granted to a Third Party by the other Party shall, to the extent notimposing obligations on the other Party in excess of those contained herein, beautomatically assigned to such Party.

 

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

 

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

 

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

 

**(e)**           Termination of thisAgreement shall not terminate the obligations of a Party to make any paymentsthen owing through the date of termination or the obligations ofconfidentiality imposed on either Party.

 

**(f)**            The remedies set forth inthis Article 9 are not exclusive, and shall not limit any other legal orequitable remedies that are available to the parties.

 

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

 

**10.*** ***REPRESENTATIONSAND WARRANTIES**

 

**10.1*** ***GeneralRepresentations and Warranties.**  Each Party represents and warrants to theother that, as of the date hereof:

 

**(a)**           it is dulyorganized and validly existing under the laws of its state or country ofincorporation, and has full corporate power and authority to enter into thisAgreement and to carry out the provisions hereof;

 

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

 

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

 

**(d)**           it is aware ofno action, suit or inquiry or investigation instituted by any governmentalagency that questions or threatens the validity of this Agreement;

 

**(e)**           all necessaryconsents, approvals and authorizations of all governmental authorities andother Persons required to be obtained by such Party to enter into, or performits obligations under, this Agreement have been obtained (provided, however,that the foregoing shall not be construed as a representation or warrantyconcerning governmental authorizations and non-infringement of intellectualproperty rights of Third Parties disclaimed in Section 10.3 below).

 

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

 

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

 

**(h)**           to the extentany third-party materials are incorporated in the products, such Party hasobtained from such third party rights (if any) reasonably sufficient toenable the such Party to comply with this Agreement.

 

**10.2*** ***OptimerRepresentations and Warranties.**  Optimer represents, warrants, andcovenants that:

 

**(a)**           Optimer hasnot, and during the term of the Agreement will not, grant any right to anyThird Party relating to Optimer Technology which conflicts with the rightsgranted to Cempra hereunder;

 

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

 

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

 

**(d)**           Optimer doesnot have any present knowledge from which it would reasonably conclude that theOptimer Patents are invalid or that their exercise would infringe patent rightsof any Third Party;

 

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

 

**(f)**            To the best ofOptimer’s knowledge, each item included in the Optimer Patents that isregistered, filed or issued under the authority of an appropriate governmentalauthority is and at all times has been in compliance with all legalrequirements applicable thereto, and all filings, payments, and other actionsrequired to be made or taken to maintain such item of Optimer Patents in fullforce and effect have been made by the applicable deadline. Furthermore, (1) nopatent application or patent included in the Optimer Patents has been abandonedor allowed to lapse and (2) no provisional patent application includedtherein has expired without the filing of a nonprovisional patent applicationthat claims the benefit of such provisional patent application.

 

**(g)**           Optimer has, tothe knowledge of Optimer’s executive management, furnished to Cempra alltangible manifestations of the Optimer Technology which Optimer owns orpossesses as of the Effective Date;

 

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

 

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

 

**(j)**            Optimer has noknowledge of any claim pending, threatened, or previously made alleginginfringement or misappropriation of any patent, trade secret, or otherintellectual property right of any Third Party relative to the Optimer Patents,the technology claimed therein, Optimer Know How, Test Products, MacrolideAntibiotics, or Cempra Products; and

 

**(k)**           Optimer is notaware of any third party activities which would constitute misappropriation orinfringement of the Optimer Technology (including but not limited to OptimerPatents);

 

**(l)**            Optimer ownsall right, title, and interest to all Optimer Technology, free and clear of anyliens, claims, and encumbrances of any party, and none of the OptimerTechnology has been obtained by Optimer pursuant to any license or otheragreement with any third party;

 

**(m)**          Optimer doesnot presently own or Control any rights to any trademarks, service marks, tradedress, or similar intellectual property rights with respect to Cempra Productsor Macrolide Antibiotics.

 

**10.3*** ***CempraRepresentations and Warranties.**  Optimer represents, warrants, andcovenants that:

 

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

 

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

 

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interests or another similarinterest that would give the holder the right to convert the interest intoownership, unless the encumbrance is expressly subject to the licensesherein; and

 

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

 

**10.4*** ***DisclaimerConcerning Technology.**  EACHPARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS ORIMPLIED, EXCEPT FOR THOSE SET FORTH IN THIS AGREEMENT, INCLUDING WITHOUTLIMITATION THE WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULARPURPOSE. NOTWITHSTANDING ANYTHING TO THE CONTRARY IN THIS AGREEMENT, (A) BOTHPARTIES ACKNOWLEDGE AND AGREE THAT THE ACTIVITIES TO BE CONDUCTED UNDER THERESEARCH PROGRAM ARE INHERENTLY UNCERTAIN AND, PROVIDED THAT EACH PARTY ENGAGESIN DILIGENT EFFORTS TO PERFORM ITS OBLIGATIONS HEREUNDER, THAT THERE AREOTHERWISE NO ASSURANCES THAT THE PARTIES WILL SUCCESSFULLY SYNTHESIZE MACROLIDEANTIBIOTICS MEETING THE SPECIFICATIONS SET FORTH BY CEMPRA AND OPTIMER JOINTLYOR IDENTIFY A TEST PRODUCT, OR SUCCESSFULLY CONDUCT OTHER ACTIVITIESCONTEMPLATED TO BE PERFORMED IN THE RESEARCH PROGRAM, OR THAT ANY MACROLIDEANTIBIOTICS OR TEST PRODUCT WILL BE SUCCESSFULLY DEVELOPED AND COMMERCIALIZEDBY CEMPRA AS A LICENSED PRODUCT, OR THAT REQUIRED GOVERNMENTAL APPROVALS INCONNECTION WITH THE MANUFACTURE, CLINICAL DEVELOPMENT AND/OR COMMERCIALIZATIONOF MACROLIDE ANTIBIOTICS, TEST PRODUCTS AND/OR LICENSED PRODUCTS CAN OR WILL BEOBTAINED; AND (B) EACH PARTY EXPRESSLY DISCLAIMS ANY REPRESENTATIONS ORWARRANTIES, EXPRESS OR IMPLIED, TO THE CONTRARY.

 

**11.*** ***INDEMNITIES**

 

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

 

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

 

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part of Indemnified Partywill require the prior written consent of such Indemnified Party, provided suchconsent will not be unreasonably withheld), including, at its own expense,employment of legal counsel, and at any time thereafter Indemnifying Party willbe entitled to exercise, on behalf of Indemnified Party, any rights which maymitigate the extent or amount of such Third Party Claim; *provided*, *however*,that if Indemnifying Party has exercised its right to assume control of suchThird Party Claim, Indemnified Party (i) may, in its sole discretion andat its own expense, employ legal counsel to represent it (in addition tothe legal counsel employed by Indemnifying Party) in any such matter, and insuch event legal counsel selected by Indemnified Party will be required toreasonably confer and cooperate with such counsel of Indemnifying Party in suchdefense, compromise or settlement for the purpose of informing and sharinginformation with Indemnifying Party; (ii) will, at Indemnifying Party’sown expense, make available to Indemnifying Party those employees, officers,contractors, and directors of Indemnified Party whose assistance, testimony orpresence is necessary or appropriate to assist Indemnifying Party in evaluatingand in defending any such Third Party Claim; *provided*,*however*, that any such accesswill be conducted in such a manner as not to interfere unreasonably with theoperations of the businesses of Indemnified Party; and (iii) willotherwise fully cooperate with Indemnifying Party and its legal counsel in theinvestigation and defense of such Third Party Claim.

 

**11.3*** ***Exclusionof Damages.**  IN NO EVENTSHALL EITHER PARTY OR ITS AFFILIATES BE LIABLE TO THE OTHER PARTY FOR ANYINDIRECT, INCIDENTAL, SPECIAL, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES,WHETHER BASED UPON A CLAIM OR ACTION OF CONTRACT, WARRANTY, NEGLIGENCE, STRICTLIABILITY OR OTHER TORT, OR OTHERWISE, ARISING OUT OF THIS AGREEMENT, UNLESSSUCH DAMAGES ARE DUE TO THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF THELIABLE PARTY. NOTWITHSTANDING ANYTHING TO THE CONTRARY, THE FOREGOING SHALL NOTBE CONSTRUED TO LIMIT THE INDEMNITY OBLIGATIONS SET FORTH IN SECTION 11.1ABOVE OR EITHER PARTY’S LIABILITY FOR PATENT INFRINGEMENT OR BREACH OFSECTIONS 8 (CONFIDENTIALITY), 7 (INTELLECTUAL PROPERTY), 5.1 (WITH RESPECTTO CEMPRA’S BREACH THEREOF), OR 5.4 (WITH RESPECT TO OPTIMER’S BREACH THEREOF).

 

**12.*** ***DISPUTERESOLUTION**

 

**12.1*** ***Disputes.**  The Parties recognize that disputes as tocertain matters may from time to time arise during the Term that relate toeither Party’s rights and/or obligations hereunder. It is the objective of theParties to facilitate the resolution of disputes arising under this Agreementin an expedient manner by mutual cooperation and without resort to litigationor arbitration. To accomplish this objective, the Parties agree that, in theevent of any disputes, controversies or differences that may arise between theParties, out of or in relation to or in connection with this Agreement, or forthe breach thereof, upon the request of either Party, the Parties agree to meetand discuss in good faith a possible resolution thereof. If the matter is notresolved within thirty (30) days following the request for discussions,either Party may refer the matter to arbitration              in accordance with Section 12.3below. Notwithstanding the foregoing, each Party shall be entitled to seekappropriate injunctive relief in any court of competent jurisdiction (i) topreserve such Party’s rights pending resolution of arbitration proceedingsunder this Agreement, (ii) to avoid irreparable damages, or (iii) withrespect to any matters concerning intellectual property rights orconfidentiality.

 

**12.2*** ***GoverningLaw.**  Resolution of all disputesarising out of or related to this Agreement or the performance, enforcement,breach or termination of this Agreement and any remedies relating thereto,shall be governed by and construed under the substantive laws of the State ofCalifornia, without regard to conflicts of law rules that would providefor application of the law of a jurisdiction outside California.

 

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

 

**13.*** ***MISCELLANEOUS**

 

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

 

**13.2*** ***ForceMajeure.**  Both Partiesshall be excused from the performance of their obligations under this Agreementto the extent that such performance is prevented by force majeure and thenonperforming Party promptly provides notice of the prevention to the otherParty. Such excuse shall be continued so long as the condition constituting forcemajeure continues and the nonperforming Party takes reasonable efforts toremove the condition. For purposes of this Agreement, force majeure shallinclude conditions beyond the control of the Parties, including withoutlimitation, an act of God, voluntary or involuntary compliance with anyregulation, law or order of any government, war, civil commotion, labor strikeor lock-out, epidemic, failure or default of public utilities or commoncarriers, destruction of production facilities or materials by fire,earthquake, storm or like catastrophe; *provided*,*however*, the payment of invoicesdue and owing hereunder shall not be delayed by the payer because of a forcemajeure affecting the payer, unless such force majeure specifically precludesthe payment process.

 

**13.3*** ***Notices.**  Any notices, approvals, or consents requiredor permitted to be given under this Agreement shall be in writing, shallspecifically refer to this Agreement and shall be deemed to have beensufficiently given for all purposes if mailed by first class certified orregistered mail, postage

 

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

 
| For  Optimer: |   | Optimer  Pharmaceuticals, Inc.                 |
|---------------|--------|-----------------------------------------------------|
|          |   | 10110 Sorrento Valley  Rd., Suite C       |
|          |   | San Diego, CA 92121                                 |
|          |   | FEIN: 33-0830300                                    |
|          |   | Fax: (858) 909-0737                            |
|          |   | Attention: Michael N.  Chang, President/CEO         |
|          |   |                                                |
| For  Cempra:  |   | Cempra  Pharmaceuticals Inc.                   |
|          |   | 170 Southport Drive,  Suite 500           |
|          |   | Morrisville, NC 27560                               |
|          |   | Fax: (919) 467-1716                            |
|          |   | Attention: Dr. Prabha  Fenandes, President/CEO |

 

**13.4*** ***United StatesDollars.**  Referencesin this Agreement to “Dollars” or “$” shall mean the legal tender of theUnited States of America.

 

**13.5*** ***No StrictConstruction.**  ThisAgreement has been prepared jointly and shall not be strictly construed againsteither Party.

 

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

 

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

 

**13.8*** ***FurtherActions.**  Each Partyagrees to execute, acknowledge and deliver such further instruments (includingwithout limitation patent assignments), and to do all such other acts, as maybe necessary or appropriate in order to carry out the purposes and intent ofthis Agreement.

 

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

 

**13.10*** ***Headings.**  The headings for each article and section inthis Agreement have been inserted for convenience of reference only and are notintended to limit or expand on the meaning of the language contained in theparticular article or section.

 

**13.11*** ***No Waiver.**  Any delay in enforcing a Party’s rights underthis Agreement or any waiver as to a particular default or other matter shallnot constitute a waiver of such Party’s rights to the future 

 

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

 

**REMAINDER OF PAGE INTENTIONALLY LEFT BLANK**

 

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**IN WITNESS WHEREOF**, the Partieshave executed this Agreement in duplicate originals by their proper officers asof the date and year first above written.

 
| **CEMPRA PHARMACEUTICALS INC.** | ** ** | **OPTIMER PHARMACEUTICALS, INC.** |
|--------------------------------------|------------|----------------------------------------|
| ** **                           | ** ** | ** **                             |
| BY:                                  |       |                                   | BY: |   |
|                                 |       |                                   |   |   |
| NAME:                                |       |                                   | NAME: |   |
|                                 |       |                                   |   |   |
| TITLE:                               |       |                                   | TITLE: |   |

 

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**Schedule 1.35**

 

**Optimer Patents**

 

**Macrolide Patent Estate**

 
| **“Macrolides and Process for Their   Preparation” 8024-006-PR** | ** ** | **(3/10/2003)**                         | ** ** | **Lapsed** | ** ** | **Provisional** | ** ** | **The application has converted to PCT  application, 8024-006-WO.**                                                                                                                                                                                              |
|----------------------------------------------------------------------------------------------------------|------------|-----------------------------------------|------------|------------|------------|-----------------|------------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                     | ** ** | ** **                              |       |       |       |            |       |                                                                                                                                                                                                                                                                                           |
| “Novel Antibacterial  Agents”, 8024-006-WO                                                     | ** ** | **WO2004080381/** 23-Sep-04  (3/5/2004) |       | Published  |       | PCT             |       | The application claims composition of matter comprising 14 membered  macrolide triazole compounds and/or 14 membered macrolide compounds with  novel suger or sugar mimic moieties at C5 position. The PCT application was  published and has entered national phase in US, Europe and Canada. |
|                                                                                                     | ** ** | ** **                              |       |       |       |            |       |                                                                                                                                                                                                                                                                                           |
| 8024-006-US                                                                                              |       | (9/9/2005)                              |       | Pending    |       | US              |       | Notice of Acceptance and Filing Receipt received on 1/12/06. Projected  publication date 5/11/06.                                                                                                                                                                                              |
|                                                                                                     |       |                                    |       |       |       |            |       |                                                                                                                                                                                                                                                                                           |
| 8024-006-CA                                                                                              |       | (12/19/2005)                            |       | Pending    |       | Canada          |       |                                                                                                                                                                                                                                                                                           |
|                                                                                                     |       |                                    |       |       |       |            |       |                                                                                                                                                                                                                                                                                           |
|                                                                                                     |       |                                    |       |       |       |            |       |                                                                                                                                                                                                                                                                                           |
| 8024-006-EP                                                                                              |       | (1/11/2006)                             |       | Pending    |       | Europe          |       |                                                                                                                                                                                                                                                                                           |
|                                                                                                     |       |                                    |       |       |       |            |       |                                                                                                                                                                                                                                                                                           |

 

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**Schedule 6.1(1)**

 

**Subscription Agreement**

 

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

 

**NAME OF PURCHASER:**

**OPTIMER PHARMACEUTICALS INC.**

 

**CEMPRA PHARMACEUTICALS, INC.**

 

***SUBSCRIPTION AGREEMENT***

 

The undersigned (the “Purchaser”)hereby subscribes to and agrees to purchase            sharesof Common Stock (the “Shares”) of Cempra Pharmaceuticals, Inc., a Delawarecorporation (the “Corporation”). The purchase price hereunder shall beconsidered paid in full upon the execution by Purchaser of that certainCollaborative Research and Development and License Agreement dated March 31,2006 (the “License Agreement”) between the Corporation and Purchaser, withconsideration taking the form of the Purchaser’s agreement to perform certainobligations and grant of various intellectual property rights to theCorporation pursuant to such License Agreement.

 

NOW, THEREFORE, for and inconsideration of the mutual covenants contained herein and other good andvaluable consideration, the receipt and sufficiency of which are herebyacknowledged, the parties agree as follows:

 

Section 1.*  StockSubscription.*  The Purchaserhereby subscribes for          sharesof Corporation Common Stock. The Shares are being issued as consideration underthe License Agreement.

 

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

 

(a)           The Purchaser is a residentof the State of California, is a corporation duly organized, validly existingand in good standing under the laws of the State of Delaware, and has all thepower and authority to enter into, and perform its obligations under thisSubscription Agreement.

 

(b)           That the transfer ofsecurities contemplated hereby is made in reliance upon the Purchaser’srepresentation to the Corporation, which by its acceptance hereof the Purchaserhereby confirms, that the Shares to be received by it will be acquired forinvestment for its own account, not as a nominee or agent, and not with a viewto the sale or distribution of any part thereof, and that it has no presentintention of selling, granting participation in, or otherwise distributing thesame. By executing this Subscription Agreement, the Purchaser furtherrepresents that it does not have any contract, undertaking, agreement, orarrangement with any person to sell, transfer or grant participations to suchperson, or to any third person, with respect to any of the Shares.

 

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

 

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

 

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(e)           The Purchaser representsthat it is experienced in evaluating early-stage companies such as theCorporation, is able to fend for itself in the transactions contemplated bythis Agreement, has such knowledge and experience in financial and businessmatters as to be capable of evaluating the merits and risks of its investment,and has the ability to bear the economic risks of its investment. The Purchaserfurther represents that it has had access, during the course of thetransactions and prior to its acquisition of Shares, to all such information asit deemed necessary or appropriate (to the extent the Corporation possessedsuch information or could acquire it without unreasonable effort or expense),and that it has had, during the course of the transactions and prior to itsacquisition of Shares, the opportunity to ask questions of, and receive answersfrom, the Corporation concerning the terms and conditions of the offering andto obtain additional information (to the extent the Corporation possessed suchinformation or could acquire it without unreasonable effort or expense)necessary to verify the accuracy of any information furnished to him or towhich it had access.

 

(f)            The Purchaser understandsthat the Shares may not be sold, transferred or otherwise disposed of withoutregistration under the 1933 Act or an exemption therefrom, and that in theabsence of an effective registration statement covering the Shares or anavailable exemption from registration under the 1933 Act, the Shares must beheld indefinitely. In particular, the Purchaser is aware that the Shares maynot be sold pursuant to Rule 144 promulgated under the 1933 Act unless allof the conditions of that Rule are met. Among the conditions for use of Rule 144is the availability of current information to the public about the Corporation.Such information is not now available and the Corporation has no present plansto make such information available. The Purchaser represents that, in theabsence of an effective registration statement covering the Shares it willsell, transfer, or otherwise dispose of the Shares only in a manner consistentwith its representations set forth herein.

 

(g)           The Purchaser agrees that inno event will it make a transfer or disposition of any of the Shares (otherthan pursuant to an effective registration statement under the 1933 Act or, tothe Corporation’s reasonable satisfaction, pursuant to Rule 144), unlessand until (i) the Purchaser shall have notified the Corporation of theproposed disposition and shall have furnished the Corporation with a statementof the circumstances surrounding the disposition, and (ii) if requested bythe Corporation, at the expense of the Purchaser or transferee, it shall havefurnished to the Corporation an opinion of counsel, reasonably satisfactory tothe Corporation, to the effect that such transfer may be made without registrationunder the 1933 Act.

 

(h)           The Purchaser understandsthat each certificate representing the Shares will be endorsed with a legendsubstantially as follows:

 

“THE SECURITIES REPRESENTEDBY THIS CERTIFICATE HAVE NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933,AS AMENDED, OR APPLICABLE STATE SECURITIES LAWS. THESE SECURITIES HAVE BEENACQUIRED FOR INVESTMENT AND NOT WITH A VIEW TO DISTRIBUTION OR RESALE, AND MAY NOTBE SOLD, MORTGAGED, PLEDGED, HYPOTHECATED OR OTHERWISE TRANSFERRED WITHOUT ANEFFECTIVE REGISTRATION STATEMENT FOR SUCH SECURITIES UNDER THE SECURITIES ACTOF 1933, AS AMENDED, AND ANY APPLICABLE STATE SECURITIES LAWS, OR THEAVAILABILITY OF AN EXEMPTION FROM THE REGISTRATION PROVISIONS OF THE SECURITIESACT OF 1933, AS AMENDED, AND APPLICABLE STATE SECURITIES LAWS.”

 

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

 

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

 

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

 

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

 

(b)           The Corporation has arequisite legal and corporate power to: (i) execute and deliver thisSubscription Agreement; and (ii) to carry out and perform its obligationsunder this Subscription Agreement.

 

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

 

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

 

(d)           [The authorized capitalstock of the Corporation consists of                sharesof Common Stock, of which                sharesare issued and outstanding prior to the sale of the stock contemplatedhereunder. Other than as set forth above and except for the transactionscontemplated by this Agreement and the License Agreement, there are no otheroutstanding options, warrants, rights (including conversion or preemptiverights and rights of first refusal or similar rights) or agreements,orally or in writing, for the purchase or acquisition from the Corporation ofany of the Corporation’s securities.](2)

 

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(2)                               This subsectionshall be subject to revision with respect to issuances made following theEffective Date of the License Agreement as necessary to reflect the facts asthey exist as of such date of such issuances.

 

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

 

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

 

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

 

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

 

Section 5.*  Lock-UpAgreement.*  The Purchaseragrees, in connection with the first registration with the United StatesSecurities and Exchange Commission under the Securities Act of 1933, as 

 

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

 

Section 5.*  Miscellaneous*

 

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

 

5.2*  Survival ofRepresentations, Warranties and Agreements.*  All representations, warranties andagreements made in this Subscription Agreement, or any other instrument ordocument delivered in connection herewith or therewith, shall survive theexecution and delivery hereof or thereof.

 

5.3*  FurtherAssurances.*  All parties agreeto execute any additional documents necessary to carry out the purposes of thisSubscription Agreement.

 

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

 

5.5*  GoverningLaw; Successors and Assigns.* This Subscription Agreement shall be governed by the laws of the Stateof North Carolina. The rights and benefits of this Subscription Agreement shallinure to the benefit of, and be enforceable by, the successors and assigns ofthe parties.

 

[*Remainder of page intentionally left blank*.]

 

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IN WITNESS WHEREOF, theparties have duly executed this Agreement as of this          dayof                 200..

 
| ** ** | **CORPORATION:**                      |
|------------|---------------------------------------|
| ** ** | ** **                            |
| ** ** | **CEMPRA PHARMACEUTICALS, INC.** |
| ** ** | ** **                            |
|       | By:                                   |   |
|       |                                  |   |
|       | Name:                                 |   |
|       |                                  |   |
|       | Title:                                |   |
|       |                                  |   |
| ** ** | **PURCHASER:**                        |
| ** ** | ** **                            | ** ** |
| ** ** | **OPTIMER PHARMACEUTICALS INC.** |
| ** ** | ** **                            |
| ** ** | ** **                            |
| ** ** | ** **                            | ** ** |
|       | Name:                                 |   |
|       |                                  |   |
|       | Title:                                |   |

 

5

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**Schedule 6.1(2)**

**Shareholders Agreement**

 

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**AGREEMENT TO JOIN AS A PARTY TO STOCKHOLDERS AGREEMENT**

**OF CEMPRA PHARMACEUTICALS, INC.**

 

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

 

OPTIMERPHARMACEUTICALS, INC. (the “**NewStockholder**”).

 

***WITNESSETH:***

 

WHEREAS, the Company andcertain holders of capital stock of the Company (the “**Existing Stockholders**”) are parties toStockholders Agreement, dated as of January 11, 2006, a copy of which isattached hereto as *Exhibit A*(the “**Stockholders**”);

 

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

 

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

 

WHEREAS, the New Stockholdermust join as party to the Shareholders Agreement in connection with theirreceipt of the New Shares.

 

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

 

1.             The undersigned NewStockholder hereby joins as party to and thereby agrees to be bound by theterms and conditions of the Stockholders Agreement, effective as of the datehereof.

 

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

 

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

 

4.             This Agreement shall begoverned by and interpreted in accordance with the laws of the State of NorthCarolina.

 

5.             This Agreement may beexecuted in one or more counterparts.

 

*[The Next Page is the Signature Page]*

 

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

 
| ** ** | **OPTIMER PHARMACEUTICALS, INC.** |
|------------|----------------------------------------|
| ** ** | ** **                             |
|       | By:                                    |   |
|       |                                   |   |
|       | Name:                                  |   |
|       |                                   |   |
|       | Title:                                 |   |
|       |                                   |   |
| ** ** | **CEMPRA PHARMACEUTICALS, INC.**  |
| ** ** | ** **                             | ** ** |
|       | By:                                    |   |
|       |                                   |   |
|       | Name:                                  |   |
|       |                                   |   |
|       | Title:                                 |   |

 

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***EXHIBIT A***

 

**Stockholders Agreement**

 

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**CEMPRA PHARMACEUTICALS, INC.**

 

**STOCKHOLDERS AGREEMENT**

 

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

 

**ARTICLE 1 RECITALS**

 

1.1           The Stockholders arecollectively the owners of all the issued and outstanding capital stock of theCompany (the “**Shares**”), asindicated on *Exhibit A*(which shall be amended from time to time to reflect purchases or transfers ofShares).

 

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

 

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

 

In consideration of themutual covenants contained herein, and for other valuable consideration, thereceipt and sufficiency of which is hereby acknowledged, the parties heretoagree as follows:

 

**ARTICLE 2 TRANSFER OF SHARES**

 

2.1*  ProhibitedTransfers.*  No Stockholdershall sell, assign, transfer or dispose of all or any of his/its Shares exceptin compliance with the terms of this Agreement. Notwithstanding anything to thecontrary contained in this Agreement, any Stockholder may transfer without thenecessity of prior approval all or any of his/its Shares by way of gift to hisspouse, to any of his lineal descendants or ancestors, or to any trust for thebenefit of any one or more of such Stockholder, his spouse or his linealdescendants or ancestors. The Company shall not be required to transfer on itsbooks any capital stock transferred in violation hereof or to treat any transfereeof capital stock transferred in violation hereof as an owner or Stockholder.

 

2.2*  Right ofFirst Refusal on Dispositions.*

 

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

 

(b)           If the Company does notpurchase all of the Offered Shares within 30 days after receipt of noticeof an Offer (the “**Option Period**”),then the other Stockholders shall have a 30-day right, beginning on the dayafter the expiration of the Option Period, to purchase all such Offered Shares,on the terms and conditions disclosed in the Offer (the “**Second Option Period**”), on a pro-rata basisbased on the total Shares owned by all Stockholders electing to purchase theOffered Shares. Upon the expiration of the Second Option Period or the expressrejection of the Offer by both the Company and 

 

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

 

2.3*  Right ofParticipation in Sales.*

 

(a)           If at any time a Stockholderdesires to sell any Shares owned by him to a Proposed Transferee, and thoseShares to be transferred have not been purchased by the Company or otherStockholders under Section 2.2, each of the other Stockholders (other thanthose who have elected to purchase Shares pursuant to Section 2.2) shallhave the right to sell to the Proposed Transferee, as a condition to such saleby the Selling Stockholder, at the same price per share and on the same termsand conditions as involved in such sale by the Selling Stockholder, a *pro rata* portion of the amount of Sharesproposed to be sold to the Proposed Transferee. The “*pro rata* portion” of Shares which a Stockholder shall beentitled to sell to the Proposed Transferee shall be that number of Shares asshall equal the number of Offered Shares proposed to be sold to the ProposedTransferee multiplied by a fraction, the numerator of which is the aggregate ofall shares of Common Stock (including shares issuable upon conversion orexercise of Preferred Stock, warrants, options or other convertible securitiesheld by such person) which are then held by the Participating Stockholder (asdefined below), and the denominator of which is the aggregate of all shares ofCommon Stock (including shares issuable upon conversion or exercise ofPreferred Stock warrants, options or other convertible securities) which arethen held by the Selling Stockholder and all Stockholders wishing toparticipate in any sale under this Section 2.3.

 

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

 

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

 

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

 

2.4*  TransfereeRestrictions.*  Any transfereeof capital stock under this Agreement must become a party to this Agreement byexecuting any instruments or documents that may be deemed necessary or 

 

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advisable by counsel to theCompany to make such transferee a party to this Agreement, or such transfershall be deemed null and void. If and when all the capital stock of the SellingStockholder shall have been transferred in accordance with the terms andconditions of this Agreement, such person shall cease to be a Stockholder underthis Agreement.

 

**ARTICLE 3 VOTING OF SHARES**

 

3.1*  Election ofDirectors.*  In any and allelections of directors of the Company (whether at a meeting or by writtenconsent in lieu of a meeting), each Stockholder shall vote or cause to be votedall Shares (as defined in Section 4 below) owned by him or it, or overwhich he or it has voting control, and to otherwise use his or its best effortsto elect:

 

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

 

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

 

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

 

3.3*  Definition ofShares.*  The term “**Shares**” shall mean and include any and allshares of Common Stock and/or shares of Preferred Stock of the Company bywhatever name called, which carry voting rights (including voting rights whicharise by reason of default) and shall include any shares now owned orsubsequently acquired by a Stockholder, however acquired, including withoutlimitation by stock splits and stock dividends.

 

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

 

**ARTICLE 4 TERMINATION AND REVOCATION**

 

4.1*  Termination.*  This Stockholders’ Agreement shall continuein effect as long as at least two of the Stockholders are living or inexistence and own shares of the Company’s capital stock, and shall terminateupon (i) the death of one of the last remaining two Stockholders and theconsummation of the transfer to, and payment for, his shares by the lastremaining Stockholder or the Company, as the case may be, (ii) the closingof the Company’s sale of all or substantially all of its assets or theacquisition of the Company by another entity by means of merger or othertransaction, or (iii) the closing of the Company’s initial public offeringcovering the offer and sale of its Common Stock for the account of the Company.

 

4.2*  Revocation.*  The voting agreements contained herein arecoupled with an interest and may not be revoked, except in accordance with theamendment provisions of Section 5.8 hereof.

 

**ARTICLE 5 MISCELLANEOUS**

 

5.1*  RestrictiveLegend.*  All certificatesrepresenting Shares owned or hereafter acquired by the Stockholders or anypermitted transferee of any Stockholder bound by this Agreement shall have affixedthereto a legend substantially in the following form:

 

THE SHARES OF STOCKREPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO THE TERMS AND PROVISIONS OF ASTOCKHOLDERS AGREEMENT BY AND AMONG THE COMPANY AND ITS STOCKHOLDERS, AND ARETRANSFERABLE ONLY IN ACCORDANCE WITH THE TERMS AND CONDITIONS OF SUCHAGREEMENT. A COPY OF THE STOCKHOLDERS AGREEMENT IS AVAILABLE FOR INSPECTION ATTHE OFFICES OF THE SECRETARY OF THE COMPANY.

 

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5.2*  Action asDirector.*  No party hereto whois or may become a director of the Company either agrees or implies that hewill exercise his actions as a director in any manner other than in accordancewith his considered judgment at such time with respect to the best interests ofthe Company and all of its stockholders.

 

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

 

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

 

5.5*  SpecificEnforcement.*  Each Stockholderexpressly agrees that other Stockholders and the Company may be irreparablydamaged if this Agreement is not specifically enforced. Upon a breach orthreatened breach of the terms, covenants and/or conditions of this Agreementby any Stockholder, the other Stockholders and the Company shall, in additionto all other remedies, each be entitled to apply for a temporary or permanentinjunction, and/or a decree for specific performance, in accordance with the provisionshereof.

 

5.6*  GoverningLaw.*  This Agreement shall begoverned by, and construed and enforced in accordance with, the laws of theState of North Carolina.

 

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

 

5.8* CompleteAgreement; Amendments.*  ThisAgreement constitutes the full and complete agreement of the parties heretowith respect to the subject matter hereof. No amendment, modification ortermination of any provision of this Agreement shall be valid unless in writingand signed by each of the parties hereto.

 

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

 

5.10*  Counterparts.*  This Agreement may be executed in any numberof counterparts, each of which shall constitute one Agreement binding on allthe parties hereto.

 

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

 

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

 

**[THE NEXT PAGE IS THE SIGNATURE PAGE]**

 

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IN WITNESS WHEREOF, theparties have executed this Stockholders Agreement as of the date first abovewritten.

 
| ** ** | **THE COMPANY:**                      |
|------------|---------------------------------------|
| ** ** | ** **                            |
| ** ** | **CEMPRA PHARMACEUTICALS, INC.** |
| ** ** | ** **                            |
|       | By:                                   |   |
|       |                                  |   |
|       | Name:                                 |   |
|       |                                  |   |
|       | Title:                                |   |
|       |                                  |
| ** ** | **THE STOCKHOLDERS:**                 |
| ** ** | ** **                            |
| ** ** | ** **                            | (SEAL) |
| ** ** | ** **                            |   |
| ** ** | ** **                            | (SEAL) |
| ** ** | ** **                            |   |
| ** ** | ** **                            | (SEAL) |
|            |                                       |  |  |

 

5

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***EXHIBIT A***

 

**SCHEDULE OF STOCKHOLDERS**

 

| **Founders** | ** ** | **Number of Shares  of Common Stock** | ** ** |
|--------------|------------|---------------------------------------|------------|
| [***]        |       | [***                                  | ]          |
|         |       |                                  |       |
| [***]        |       | [***                                  | ]          |
|         |       |                                  |       |
| [***]        |       | [***                                  | ]          |
|         |       |                                  |       |
| [***]        |       | [***                                  | ]          |
|         |       |                                  |       |
| TOTAL:       |       | [***                                  | ]          |

 

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**Schedule 8.5**

 

**Press Release**

 

        [LOGO]

 

**FOR IMMEDIATE RELEASE**

 

***Cempra Pharmaceuticals, Inc.***

*Prabhavathi Fernandes,Ph.D.*

*+ 1 919 467 1716*

 

**CEMPRA PHARMACEUTICALS RECEIVES EXCLUSIVE RIGHTS FROM OPTIMERPHARMACEUTICALS FOR ITS MACROLIDE ANTIBACTERIAL PROGRAM**

 

MORRISVILLE, NC April 4,2006 Cempra Pharmaceuticals, Inc. announced that Optimer Pharmaceuticalshas granted to Cempra exclusive worldwide rights (except ASEAN countries) topatents and know-how related to its macrolide/ketolide antibacterial program.Cempra has licensed rights to discover, develop and commercialize drugs basedon the class of compounds called macrolides and ketolides. Optimer will receivean equity position in Cempra, as well as royalties and milestone payments fromany drugs and drug candidates developed and/or co-developed by Cempra. Thelicense includes joint drug discovery and development activities at bothcompanies.

 

Included in the licenseagreement are several pre-clinical compounds in addition to ground-breakingchemistry technology for creating the next generation of macrolides andketolides. Pre-clinical candidates derived from this technology have been shownto possess potent activity against multi-drug resistant *Streptococcus pnuemoniae* and *Streptococcus pyogenes*. The most advancedlead, is orally active with potent efficacy in animal models after once-a-dayadministration. This lead will be initially developed for respiratory tractinfections in adults and children, including sinusitis, pharyngitis, andcommunity acquired mild to moderate pneumonia.

 

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

 

Dr. Michael Chang,President and CEO of Optimer said “Optimer is enthusiastic about thisopportunity to move some of our earlier stage programs forward. Cempra hasrecruited leaders in antibacterial drug discovery and development and bylicensing these macrolides to Cempra, we are enhancing the potential to realizevalue from our macrolide program as we focus our resources on other later stageproducts.”

 

**AboutMacrolide Antibiotics** Macrolides such Clarithromycin, Azithromycin and Telithromycin arefavored by physicians and pediatricians for use in upper and lower respiratorytract infections where the primary pathogens could be *S. pneumoniae, S. aureus, S. pyogenes*, *H. influenzae*, *M. catarrhalis, and Legionella pneumophila*. Macrolides arealso used to treat *Helicobater pylori*gastritis. Many of these pathogens are now resistant to currently availablemacrolides.

 

**AboutOptimer Pharmaceuticals**

 

Optimer Pharmaceuticals, Inc.in San Diego, California (www.optimerpharma.com), a privately heldbiotechnology company and leader in carbohydrate chemistry, has a strongportfolio of late-stage anti-infective products. Older generation antibioticswere mostly derived from natural products and 

 

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

 

**AboutCempra Pharmaceuticals**

 

Cempra Pharmaceuticals, Inc.,located in Morrisville, North Carolina, is a newly founded biotechnologycompany focused on anti-infectives. The company was founded in 2006 byPrabhavathi Fernandes, Ph.D. who was the leading microbiologist forClarithromycin development at Abbott. Cempra is committed to the development ofbest-in-class antibiotics to meet urgent and unmet needs to treat drugresistant bacteria.

 

*This pressrelease contains statements that constitute “forward-looking statements Thesestatements contain information that is not historical fact and are essentiallypredictions and are subject to risks and uncertainties, including risksassociated with our ability to raise capital, the success of pre-clinicalstudies and clinical trials, intellectual property risks, the difficulty ofpredicting FDA filings and approvals, and market acceptance.*

 

# # #

 

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December 31, 2008

 

Optimer Pharmaceuticals, Inc.

10110 Sorrento ValleyRoad, Suite C

San Diego, California92121

 

Attention:  JohnPrunty, Chief Financial Officer

 

CempraPharmaceuticals, Inc. (the “Company”) and Optimer Pharmaceuticals, Inc.(“Optimer”) are parties to that certain Collaborative Research and Developmentand License Agreement dated March 31, 2006 (the “License Agreement”). Pursuant to Sections 6.2(a) and 6.2(b) of that License Agreement,Optimer may elect, upon written request to the Company, that it be paid certainmilestone payments in shares of Cempra capital stock (“Cempra Capital Stock”)rather than in cash, such Cempra Capital Stock having a Fair Market Valuecalculated as of the date the respective milestone is achieved equal to the valueof the milestone payments, as the case may be.  All capitalized terms nototherwise defined in this Letter Agreement shall have the meanings ascribed tothem in the License Agreement.

 

As you may beaware, the Company plans to engage in a reorganization whereby the Company willmerge with Cempra Merger Corp. (“MergeCo”), a Delaware corporation andwholly-owned subsidiary of Cempra Holdings, LLC, a Delaware limited liabilitycompany (the “Holding Company”).  Upon such merger, the separate corporateexistence of MergeCo will terminate, the Company will remain as the survivingentity and the stockholders of the Company will receive units of the HoldingCompany (“Holding Company Units”) in exchange for their shares of CempraCapital Stock (the “Reorganization”).  The rights belonging to eachrespective class or series of Holding Company Units will be essentially thesame as those of the corresponding class or series of Cempra CapitalStock.  Subsequent to the Reorganization, the Company will distribute its sharesof CEM-102 Pharmaceuticals, Inc., the Company’s wholly-owned subsidiarythat holds assets unrelated to the technology licensed under the LicenseAgreement, to the Holding Company (the “Spin-Off”).

 

As a result of theReorganization and Spin-Off, it is currently intended that the equity holdingsfor the combined company will be held, and the ultimate liquidity for thatequity will be realized, at the Holding Company level.  Therefore, theparties find it necessary to modify Sections 1.15, 6.2(a), 6.2(b) and 6.2(e) ofthe License Agreement, which refer to Cempra Capital Stock in the context ofmilestone payments described in Sections 6.2(a) and 6.2(b) of theLicense Agreement, to refer to Holding Company equity.  This letteragreement reflects the parties’ mutual intent to modify those Sections so as touse the term “Holding Company Units” in lieu of “Cempra Capital Stock” in eachphase where used or referenced.  Except as specifically modified herein,the License Agreement shall remain in full force and effect as originallyexecuted.

 

By their executionbelow, the parties agree that, upon the completion of the Reorganization, thereferences to “Cempra Capital Stock” in Sections 1.15, 6.2(a), 6.2(b) and6.2(e) of the License Agreement will be modified to become “HoldingCompany Units” (as defined in this Letter Agreement).  By its executionbelow, the Holding Company agrees to issue Holding Company Units to Optimerwhen, if and as required under the terms of the License Agreement, as modifiedby this Letter Agreement.

 

**[THE NEXT PAGE IS THE SIGNATURE PAGE]**

 

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| **CEMPRA  PHARMACEUTICALS, INC.** | ** **                             | **OPTIMER  PHARMACEUTICALS, INC.** |
|-----------------------------------|----------------------------------------|------------------------------------|
|                              |                                   |                               |
|                              |                                   |                               |
| By:                               | /s/ Prabhavathi  Fernandes             |                               | By: | /s/ John Prunty |
|                              | Prabhavathi Fernandes,  Ph.D.          |                               |   | John Prunty |
|                              | Chief Executive Officer  and President |                               |   | Chief Financial Officer |
|                              |                                   |                               |
|                              |                                   |                               |
| **CEMPRA  HOLDINGS, LLC**         |                                   |                               |
|                              |                                   |                               |
|                              |                                   |                               |
| By:                               | /s/ Prabhavathi  Fernandes             |                               |   |
|                              | Prabhavathi Fernandes,  Ph.D.          |                               |   |
|                              | Chief Executive Officer  and President |                               |   |

 

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