**Exhibit
      10.1**





**CONFIDENTIAL
      TREATMENT REQUESTED. Confidential portions of this document have been redacted
      and have been separately filed with the
      Commission.**


**SUBLICENSE
      AGREEMENT**





**THIS
      SUBLICENSE AGREEMENT** (the
“Agreement”), effective as of this 26th day of September, 2007 (the “Effective
      Date”), by and between KERYX BIOPHARMACEUTICALS, INC., with offices at 750
      Lexington Avenue, New York, NY 10022, U.S.A. (“Keryx” or “Sublicensor”) and
      JAPAN TOBACCO INC., with offices at JT
      Building, 2-1, Toranomon 2-Chome, Minato-ku, Tokyo 105-8422, Japan (“JT”)
      and TORII PHARMACEUTICAL CO., LTD., with
      offices at Torii
      Nihonbashi Bldg., 4-1, Nihonbashi-Honcho 3-chome, Chuo-ku, Tokyo 103-8439,
      Japan  (“TORII”)
      (JT and TORII collectively referred to herein as “Sublicensee”);




**WHEREAS** ,
      Sublicensor acquired an exclusive license under the Patent Rights and Know-How
      to sublicense, develop, have developed, make, have made, use, have used, offer
      to sell, sell, have sold, import and export the Product in the Sublicense
      Territory for all Indications in the Field (all capitalized terms as hereinafter
      defined) pursuant to (i) a License Agreement, dated as of November 7, 2005
      (the
      "Panion License Agreement") by and between Sublicensor and Panion & BF
      Biotech, Inc. (“Panion”) which, in turn, is based upon a Patent License
      Agreement, dated July 20, 2001 as amended pursuant to Amendment No. 1 thereto
      dated as of August 29, 2005 (the "Hsu License Agreement") between Dr. Chen
      Hsing
      Hsu ("Dr. Hsu") and Panion and (ii) an Exclusive License Agreement, dated as
      of
      November 7, 2005 (the "GloboAsia License Agreement") by and between Panion
      and
      GloboAsia, LLC (“GloboAsia”);




**WHEREAS** ,
      Sublicensee is interested in acquiring an exclusive sublicense to the
      Compound and Product
      for all Indications in the Field in the Sublicense Territory;




**WHEREAS** ,
      Sublicensor has the authority and is willing to grant such a sublicense to
      Sublicensee and Sublicensee is willing to accept such sublicense from
      Sublicensor, under the terms and conditions set forth in this
      Agreement.




**NOW
      THEREFORE** ,
      in
      consideration of the mutual promises and covenants set forth herein and other
      good and valuable consideration, the receipt of which is hereby acknowledged,
      the parties hereto agree as follows:


*****Confidential
          Material redacted and filed separately with the Commission.





ARTICLE
      1. DEFINITIONS





As
      used
      in this Agreement, the following terms, whether used in the singular or the
      plural, shall have the following meanings:




1.1  "Affiliate"
      means any corporation or non-corporate business entity, which controls, is
      controlled by, or is under common control with a party to this Agreement. A
      corporation or non-corporate business entity shall be regarded as in control
      of
      another corporation if it owns or directly or indirectly controls at least
      fifty-one percent (51%) of the voting stock of the other corporation, or (i)
      in
      the absence of the ownership of at least fifty-one percent (51%) of the voting
      stock of a corporation, or (ii) in the case of a non-corporate business entity,
      if it possesses, directly or indirectly, the power to direct or cause the
      direction of the management and policies of the corporation or non-corporate
      business entity, as applicable .
      Notwithstanding the foregoing, the Government of Japan and other entities
      controlled by the Government of Japan (other than through Japan Tobacco Inc.)
      are not considered Affiliates of Sublicensee .




1.2  “Combination
      Product” means a Product containing one or more therapeutically active
      ingredients in addition to the Compound.




1.3  "Compound"
      means ferric citrate: FeC 6 H 5 O 7 •
      xH 2 O




1.4  ***** ****


1.5   “Field”
      means the field of nephrology.




1.6  “Follow-on
      Product” means products, other than the Product, which contain ferric ion as an active
      pharmaceutical ingredient for use in the Field, either alone, or in combination
      with one or more therapeutically active ingredients .




1.7   “Improvements”
      means any and all improvements, materials, technical data and information
      whether patented or unpatented, including but not limited to any changes to,
      or
      new therapeutic applications for, the Compound ,
      the
      Product or in the Sublicensor Know-How or Sublicensee Know-How including, but
      not limited to any analogues, or derivatives of the Compound, and changes in
      the
      manufacturing process for the Compound





2


or
      the
      Product which are conceived or reduced to practice during the term of this
      Agreement.


1.8  "Indication"
      means any therapeutic application for a Product (i) for the treatment of
      hyperphosphatemia in end-stage renal disease, and (ii) for all other indications
      covered by the Patent Rights.




1.9  “Initiation”
      means the administration of the first dose to the first patient in a clinical
      trial.




1.10  "Net
      Sales" with respect to any Product means the gross sales (i.e. gross invoice
      prices) of such Product billed by Sublicensee and its sublicensees ,
      if
      any, to Third
      Party customers on all sales of a Product, and exclusive of inter-company
      transfer or sales, less the reasonable and customary deductions from such gross
      sales, including:




(a)
      actual credited allowances to such Third Party customers for spoiled, damaged,
      outdated and returned Product and for retroactive price reductions,


(b)
      the
      amounts of trade, cash discounts and rebates, to the extent such discounts
      and
      rebates were not deducted by Sublicensee at the time of invoice in order to
      arrive at the gross invoice prices,


(c)
      all
      transportation, handling charges and freight insurance, sales taxes, excise
      taxes, use taxes or import/export duties paid, and


(d)
      all
      other reasonable and customary allowances and adjustments actually credited
      to
      customers whether during the specific royalty period or not.




In
      the
      event that the Product(s) is sold as part of a Combination Product, the Net
      Sales of the Product(s), for the purposes of determining royalty payments,
      shall
      be determined by multiplying the Net Sales of Combination Product (as defined
      in
      the standard Net Sales definition) by the fraction, A / (A+B) where A is the
      weighted average sale price of the Product(s) when sold separately in finished
      form (as defined below), and B is the weighted average sale price of the other
      product(s) sold in the Sublicense Territory separately in finished
      form.




In
      the
      event that the weighted average sale price of the Product(s) can be determined
      but the weighted average sale price of the other product(s) in the Sublicense
      Territory cannot be determined, Net Sales for purposes of determining royalty
      payments shall be calculated by multiplying the Net Sales of the Combination
      Product by the fraction A / C where A is the weighted average sale price of
      the
      Product(s) when sold separately in finished form and C is the weighted average
      selling price of the Combination Product.




3


In
      the
      event that the weighted average sale price of the other product(s) in the
      Sublicense Territory can be determined but the weighted average sale price
      of
      the Product cannot be determined, Net Sales for purposes of determining royalty
      payments shall be calculated by multiplying the Net Sales of the Combination
      Product by the following formula: 1 - (B/C) where B is the weighted average
      sale
      price of the other product(s) when sold separately in finished form and C is
      the
      weighted average selling price of the Combination Product.




In
      the
      event that the weighted sale price of both the Product(s) and the other
      product(s) in the Combination Product in the Sublicense Territory cannot be
      determined, the Parties will attempt to agree on an appropriate weighted average
      sale price of both the Product(s) and the other product(s) in the Combination
      Product, and lacking such agreement the Net Sales of the Product(s) shall be
      deemed equal to fifty percent (50%) of the Net Sales of the Combination
      Product.




By
      way of
      example, the parties assume a Combination product “C” consisting of the Product
“A” and the other product “B.” When the weighted average sale prices in the
      Sublicense Territory of A, B and C are 50, 40 and 90, respectively, the parties
      agree that the fraction to be used for Net Sales calculation for determining
      royalty payments shall become as follows:


i)
            in
                case the “50” and ”40” are known, 50/(50+40), i.e.,
                5/9;


ii)
            in
                case the “40” is unknown but “90” is known, 50/90, i.e.,
                5/9;


iii)
            in
                case the “50” is unknown but “90” is known, 1-40/90, i.e., 5/9;
                and


iv)
            in
                case none of those is known, 1/2 unless otherwise agreed between
                the
                parties.




The
      weighted average sale price for a Product, other product(s), or Combination
      Product shall be calculated once each calendar year and such price shall be
      used
      during all applicable royalty reporting periods for the entire calendar year.
      When determining the weighted average sale price of a Product, other product(s),
      or Combination Product, the weighted average sale price shall be calculated
      by
      dividing the sales dollars (translated into U.S. Dollars) by the daily dose
      units of active ingredient sold during the twelve (12) months (or the number
      of
      months sold in a partial calendar year) for the respective Product(s), other
      product(s), or Combination Product. In the initial calendar year, a forecasted
      weighted average sale price will be used for Product(s), other product(s),
      or
      Combination Product. Any over or under payment due to a difference between
      forecasted and actual weighted average sale prices will be paid or credited
      in
      the first royalty payment of the following calendar year.




4


The
      Parties acknowledge that the foregoing determination for Net Sales of
      Combination Products may not be the same as the determination for Net Sales
      of
      Combination Products to be agreed upon between Sublicensor and Panion in
      accordance with the Panion License Agreement. Sublicensor agrees to use its
      commercially reasonable efforts to obtain Panion’s agreement to adopt the terms
      of this Section 1.10 to calculate Net Sales of Combination Products and will
      keep Sublicensee informed of ongoing negotiations concerning the provisions
      for
      Combination Products with Panion. In the event Sublicensor and Panion agree
      upon
      a different determination, Sublicensor shall immediately seek Sublicensee’s
      consent to amend this Section 1.10 to match such determination, which consent
      shall not be unreasonably withheld or delayed.





The
      sale
      of a Product solely for the research or clinical testing of such Product shall
      be excluded from the computation of Net Sales of such Product, provided that
      Sublicensee's sale of the Product was at cost, and such Product was used for
      research or clinical testing.




1.11  "Patent
      Rights" means the patents
      and patent applications set forth in **Exhibit
      1** (which
      shall be updated from time to time by Sublicensor), patents and patent
      applications in which Sublicensor holds rights and which are directed to
      Sublicensor’s interest in Improvements, and any and all patents in which
      Sublicensor holds rights and that may issue from all such patent
      applications, including any and all divisions, continuations,
      continuations-in-part, extensions, substitutions, renewals, registrations,
      supplementary protection certificates, revalidations, reissues or additions
      of
      or to any of the aforesaid patents and patent applications, and any additional
      patents or patent applications to which Sublicensor acquires rights ,
      including rights to license, during
      the term of this Agreement which pertain in any way to the use or manufacture
      of
      the Compound or the Product.




5


1.12  "Product"
      means any
      pharmaceutical products
      that contain the Compound as a therapeutically  active  ingredient either
      alone or in combination with other active ingredients in any
      formulation or presentation .




1.13  “Proprietary
      Information” means all information, including without limitation all Sublicensee
      Know-How, Sublicensor Know-How, Sublicensee Development Data, Sublicensor Development Data and all
      other scientific, clinical, regulatory, marketing, financial and commercial
      information or data, whether communicated in writing, orally or electronically
      which is provided by one party to the other party in connection with this
      Agreement.




1.14  "Registration"
      in relation to any Product means such approvals by a Regulatory Authority in
      a
      country or community or association of countries as may be legally required
      before such Product may be commercialized in such country or community or
      association of countries.




1.15  “Regulatory
      Authority” means the Ministry
      of Health, Labor and Welfare of Japan (hereinafter referred to as the “MHLW”)
      and any other applicable regulatory
      authority in the
      Sublicense Territory involved in granting regulatory approval for the Product.




1.16  “Sublicense
      Territory” means Japan.




1.17  “Sublicensee
      Development Data” means and includes all data relating to the Compound or the
      Product and all chemistry, manufacturing and control data relating to the
      development and manufacture of the Compound or the Product, results of
      pre-clinical and clinical studies and all other documentation containing or
      embodying any pre-clinical, clinical, chemistry, manufacturing and control
      data
      relating to any application for Registrations for a Product, including,
      but not limited to, documents submitted to the Regulatory Authority, which
      is
      generated or acquired by Sublicensee during the term of this
      Agreement.




1.18  “Sublicensee
      Know-How” means all information and materials, including but not limited to,
      discoveries, processes, instructions, formulas, data, inventions, know-how
      and
      trade secrets, patentable or otherwise, which arise out of the development,
      manufacture and commercialization by Sublicensee of the Compound or the Product,
      including, without limitation, Sublicensee Development Data and all
      biological, chemical, pharmacological, toxicological, pharmaceutical, physical,
      analytical, clinical, safety, manufacturing and quality control data and
      information related thereto, and all applications, registrations, licenses
      authorizations, documents, approvals and correspondence relating to the Compound
      or the Product, including without limitation, correspondence submitted to
      Regulatory Authorities, and all information and data contained in Registrations.
      Sublicensee Know-How shall also include Sublicensee’s interest in Improvements.




6


1.19  “Sublicensor
      Development Data” means and includes all data to which Sublicensor has rights
      relating to the Compound or the Product and all chemistry, manufacturing and
      control data relating to the development and manufacture of the Compound or
      the
      Product, results of pre-clinical and clinical studies and all other
      documentation containing or embodying any pre-clinical, clinical, chemistry,
      manufacturing and control data relating to any application for Registrations
      for
      the Product, including,
      but not limited to, documents submitted to the regulatory authorities outside
      the Sublicense Territory, whether
      such Sublicensor Development Data is in existence as of the Effective Date
      or is
      generated or acquired by Sublicensor during the term of this
      Agreement.




1.20  "Sublicensor
      Know-How” means all information and materials to which Sublicensor has rights,
      including but not limited to, discoveries, processes, formulas, instructions,
      data, inventions, know-how and trade secrets, patentable or otherwise, in each
      case, which as of the Effective Date and during the term of this Agreement
      are
      necessary or useful to Sublicensee in connection with the development,
      registration, manufacture, marketing, use or sale of a Product. Sublicensor
      Know-How shall also include without limitation, Sublicensor
      Development Data and all
      biological, chemical, pharmacological, toxicological, pharmaceutical, physical,
      analytical, clinical, safety, manufacturing and quality control data and
      information related thereto, and all applications, registrations, licenses,
      authorizations, documents, approvals and correspondence relating to
      a Compound
      or a Product. Sublicensor Know-How shall also include Sublicensor’s interest in
      Improvements.




1.21  "Third
      Party" means any entity other than Sublicensor or Sublicensee or their
      respective Affiliates.




1.22  "Valid
      Claim" means a claim of an issued and unexpired patent included within the
      Patent Rights which has not been held unenforceable or invalid in the applicable
      jurisdiction by a decision of a court or other governmental agency of competent
      jurisdiction, unappealable or unappealed within the time allowed for appeal,
      and
      which has not been admitted to be invalid or unenforceable through dedication,
      disclaimer or otherwise.





7


ARTICLE
      2. REPRESENTATIONS AND WARRANTIES







2.1  Mutual .
      Each
      party represents and warrants to the other party that it has the full right
      and
      authority to enter into this Agreement, and that, to the best of its knowledge,
      there are no prior agreements, commitments or other obstacles which could
      prevent it from carrying out all of its obligations hereunder.




2.2  Sublicensor .
      Sublicensor represents to Sublicensee that as of the date hereof:




(a)  it
      is the
      exclusive licensee in the Sublicense Territory of the entire right, title and
      interest in and to the Patent Rights, and to the best of its knowledge, there
      are no charges, encumbrances, licenses, options, restrictions, liens, rights
      of
      others, disputes, proceedings or claims relating to, affecting, or limiting
      its
      rights or the rights of Sublicensee under this Agreement other than those
      included in provisions of the Panion License Agreement, the Hsu License
      Agreement and the GloboAsia License Agreement that have been previously
      disclosed to Sublicensee;




(b)  it
      has
      the right , to enter
      into this Agreement and to grant the sublicense granted herein, and there is
      nothi ng
      in any
      Third Party agreement Sublicensor has directly or indirectly entered into as
      of
      the Effective Date, which in any way, will limit the ability of Sublicensor
      to
      perform any and all of the obligations undertaken by Sublicensor hereunder
      other
      than the provisions of the Panion License
      Agreement ,
      the Hsu
      License Agreement and the GloboAsia
      License Agreement that
      have
      been previously disclosed to Sublicensee;




( c )  there is no claim, pending or
      threatened, of
      infringement ,
      interference or invalidity regarding any part or all of the Patent Rights and
      their use as contemplated in this Agreement, and it has no present knowledge
      from which it can be inferred that the Patent Rights are invalid or that their
      exercise would infringe the patent rights of any Third Party ;




( d )  it
      is a
      party to the Panion License Agreement, under which it acquired an exclusive
      license under the Patent Rights and Licensor Know-How (as defined in the Panion
      License Agreement) to sublicense, develop, have developed, make, have made,
      use,
      have used, offer to sell, sell, have sold and import and export the Product
      in
      the Sublicense Territory for all Indications in the Field and that the
      Panion License Agreement remains valid and in effect and has not been amended
      nor has any provision thereof been waived and to its knowledge the Hsu License
      Agreement and GloboAsia License Agreement remain valid and in effect and have
      not been amended;




8


( e )  there
      are
      no other patents owned or licensed by Sublicensor or its Affiliates, other
      than
      the Patent Rights, that would impair Sublicensee’s ability to exercise its
      rights under this Sublicense Agreement and, to its knowledge, there are no
      other
      patents owned or licensed by Third Parties that would impair Sublicensee’s
      ability to exercise its rights under this Sublicense Agreement;




( f )  it
      will
      not enter into any agreement after the Effective Date which will limit its
      ability to perform any and all of the obligations undertaken by Sublicensor
      hereunder ;




(g)  neither
      this Agreement, nor, to its knowledge, any document or piece of Sublicensor
      Development Data, Sublicensor Know-How or Patent Rights contains any untrue
      statement of a material fact or omits to state a material fact necessary in
      order to make the statements contained herein or therein misleading; and




(h)  to
      its
      knowledge, the Patent Rights, including, but not limited to, U.S. Patent No.
      5,753,706 are valid and free from any lien or encumbrances.




2.3  Sublicensee .
      Sublicensee represents to Sublicensor that as of the date hereof:




(a)  it
      has
      the right to enter into this Agreement and to its knowledge, ther e
      is
      nothing in any Third Party agreement Sublicensee has
      entered into as of the Effective Date, which in any way, will limit the ability
      of Sublicensee
      to perform any and all of the obligations undertaken by Sublicensee hereunder,
      and




(b)  neither
      this Agreement, nor, to its knowledge, any document provided to Sublicensor
      in
      connection with the Agreement as of the Effective Date contains any untrue
      statement of a material fact or omits to state a material fact necessary in
      order to make the statements contained herein or therein misleading;
      and




(c)  it
      will
      not enter into any agreement after the Effective Date which will limit its
      ability to perform any and all of the obligations undertaken by Sublicensee
      hereunder.





9


ARTICLE
      3. LICENSE GRANT AND GOVERNANCE





3.1  Grant .
      Subject
      to the terms and conditions of this Agreement, Sublicensor hereby grants to
      Sublicensee an exclusive sublicense ,
      with
      the right to further sublicense to its Affiliates, to
      develop, have developed, make, have made, use, have used, offer to sell, sell,
      have sold, and import and export the Product or the Compound in the Sublicense
      Territory and
      to
      make, manufacture, have made and have manufactured outside the Sublicense
      Territory under
      the
      Sublicensor Know-How, and the Patent Rights for all Indications in the Field.




3.2  Sublicensing . Sublicensee  shall
      be
      entitled to sublicense to third parties the right to manufacture the Product
      or
      the Compound, provided such third party manufacturers are permitted to sell
      only
      to Sublicensee or their Affiliates. Except as expressly permitted under Sections
      3.1 and 3.2, Sublicensee may not grant further sublicenses under this Agreement
      without the written consent of Sublicensor,
      which consent shall not be unreasonably withheld or delayed. For the avoidance
      of doubt, Sublicensor and Sublicensee agree that this Section does not apply
      to
      Third Party distributors and that Sublicensee may contract with Third Party
      distributors without the written consent of Sublicensor.




3.3  Retained
      Rights .
      The
      grant of licenses under Section 3.1 shall not preclude Sublicensor from
      utilizing the Patent Rights and Sublicensor Know-How, and any Improvements
      related thereto, for the purpose of carrying out development and
      commercialization activities relating to the Product in connection with
      Sublicensor’s rights outside of the Sublicense Territory, p rovided,
      however, that Sublicensor shall not sell and shall cause its Affiliates and
      its
      sublicensees not to sell Compound or Product to customers outside the Sublicense
      Territory which Sublicensor, its Affiliate or its sublicensee knows, or has
      reason to know, plan to resell for use in the Sublicense Territory. In
      addition, Sublicensor will not conduct clinical trials of the Compound or
      Product in the Sublicense Territory except upon the prior written consent of
      Sublicensee.




3.4  Sublicense
      Territory .
      Other
      than as permitted by this Article 3, Sublicensee shall not develop, manufacture,
      sell, use, offer for sale or import any Product or Compound outside of the
      Sublicense Territory, without the prior written consent of Sublicensor, which Sublicensor may
      grant or withhold in its sole discretion. Sublicensee shall not sell and shall cause its Affiliates and its sublicensees
      not to sell Compound or Product to customers in the Sublicense Territory which
      Sublicensee, its Affiliate or its sublicensee knows, or has reason to know,
      plan
      to resell for use outside the Sublicense Territory.




10


3.5  Territories
      without Patent Protection . Nothing
      in this Agreement precludes Sublicensee from developing, manufacturing, selling,
      using, offering for sale or importing Product in territories where Patent Rights
      do not exist or have already expired in their entirety. Notwithstanding
      the foregoing, Sublicensee shall not be entitled to use Proprietary Information
      solely owned by Sublicensor outside of the Sublicense Territory other than
      to
      make, manufacture, have made or have manufactured the Product outside the
      Sublicense Territory for sale within the Sublicense Territory.




3.6   Joint
      Steering Committee .
      To
      coordinate the activities under this Agreement, the parties will form a Joint
      Steering Committee (the “JSC”). The JSC will meet on a schedule to be determined
      by parties, but not less than twice yearly, and will be responsible for
      generally sharing information regarding the activities of the parties and shall
      include, without limitation, (a) review of
      non-clinical and toxicology programs to maximize the potential for use in
      multiple territories, (b) periodic updates on the status of the clinical
      development program and sharing of pharmacovigilance information, (c) review
      of
      marketing plans and sales forecasts and the coordination of activities at
      international conferences, (d) coordination
      of marketing activities that have an international component, including medical
      education and promotion, and (e) determining
      cost allocation for joint activities .




Sublicensor
      and Sublicensee shall each appoint one of its members as a JSC co-chair (“JSC
      Co-Chair”). Sublicensor’s JSC Co-Chair shall be chairperson of all the JSC
      meetings. The JSC Co-Chairs shall be jointly responsible for preparing the
      meeting agenda, and Sublicensor’s JSC Co-Chair shall be responsible for
      preparing the first draft of the minutes from such meeting. JSC meeting minutes
      shall be distributed in draft form to the members of the JSC not later than
      thirty (30) days following each JSC meeting, and shall be deemed accepted and
      effective unless the other Party’s JSC Co-Chair has objected to the same in
      writing within thirty (30) days of its receipt of such minutes. Final minutes
      of
      each JSC meeting shall be promptly distributed to the Parties. Each Party shall
      bear its own personnel and travel costs and expenses relating to JSC
      meetings.




11


3.7  Joint
      Development Team .
      The
      parties will form a Joint Development Team (the “JDT”). The JDT will meet
      on a
      schedule to be determined by the parties but not less than twice yearly and
      will
      be responsible for facilitating the exchange of preclinical data, clinical
      data,
      information, materials and results between Sublicensor and Sublicensee and
      for
      consulting on the regulatory development of Product in the Sublicense Territory,
      including regulatory filings relating to manufacture of Product for the Sublicense Territory
      and consultation as to changes in  specifications or other changes for Product in the Sublicense Territory.




3.8  Alliance
      Managers .
      Each
      Party shall designate one (1) alliance manager (the “Alliance Manager”). One of
      the JSC Co-Chairs or JDT Co-Chairs may also serve as the Alliance Manager of
      the
      Party. The Alliance Managers will manage and oversee operational activities
      in
      connection with this Agreement, and will serve as the contact persons concerning
      on-going operations under this Agreement. The Alliance Managers shall promote
      effective communication between the Parties and coordination of the Parties’
activities and responsibilities in furtherance of the development and
      commercialization of Product in the Field in the Sublicense
      Territory.




3.9  Committee
      Decision and Dispute Resolution .
      Sublicensee shall be solely responsible for making final decisions arising
      out
      of the JSC, JDT or such other committee(s) as may be established (“Other
      Committee(s)”). Notwithstanding the foregoing, in the event that Sublicensor has
      a commercially reasonable belief that action to be taken by Sublicensee is
      reasonably likely to have a material adverse impact on its activities, or the
      activities of its sublicensees, outside the Sublicense Territory, Sublicensor
      shall notify Sublicensee of such belief. In case Sublicensee disagrees with
      such
      belief by Sublicensor, and the JSC, JDT or Other Committee fails to reach
      unanimous agreement on such a matter and that disagreement cannot
      be resolved within a
      period
      of fifteen (15) business days following the meeting of the
      JSC,
      JDT or Other
      Committee ,
      the
      matter shall be referred to the Chief Executive Officer of Keryx and to
      the
      President of the JT Pharmaceutical Division for
      discussion and, if not resolved in such manner, shall be subject to
      Arbitration pursuant
      to Article 19.


12
 *****Confidential
            Material redacted and filed separately with the Commission.





ARTICLE
      4. LICENSE FEE; MILESTONE PAYMENTS





4.1  License
      Fee .
      Sublicensee will pay to Sublicensor a non-refundable, non-creditable license
      fee
      of twelve million dollars ($12,000,000) within
      ten (10) business days after the
      Effective Date. In addition, Sublicensee will pay to Sublicensor additional
      non-refundable, non-creditable license fees as follows:




(a)
      Within ten (10) business days following receipt by Sublicensee of
      *****.




(b)
      Within ten (10) business days following receipt by Sublicensee of
      *****.


*****.




4.2  Milestone
      Payments . Sublicensee
      will pay to Sublicensor non-refundable, one-time milestone payments as
      follows:




(a)
      Within thirty (30) days following Initiation of the first Phase II clinical
      trial in the Sublicense Territory: *****;




(b)
      Within thirty (30) days following Initiation of the first Phase III clinical
      trial in the Sublicense Territory: *****;




(c)
      Within thirty (30) days following filing of a first marketing
      approval application to
      MHLW in
      the
      Sublicense Territory :
      seven
      million dollars *****; and




(d) Within
      thirty (30) days following a first marketing approval by
      MHLW for a
      Product in the Sublicense Territory: *****.


For
      the
      purpose of this Agreement, a Phase II clinical trial shall mean that portion
      of
      the Regulatory Authority submission and approval process which provides for
      the
      initial trials of Product on a limited number of patients for the purposes
      of
      determining dose and evaluating safety and efficacy in the proposed therapeutic
      indication and a principal purpose of which is to demonstrate a proof of
      concept, and a Phase III clinical trial shall mean that portion of the
      Regulatory Authority submission and approval process which provides for the
      expanded trials of Product on a large number of patients for the purposes of
      evaluation of the overall benefit-risk relationship and long-term safety of
      the
      proposed therapeutic indication.





13
 *****Confidential
            Material redacted and filed separately with the Commission.




4.3  Sales
      Milestone Payments . Sublicensee
      will pay to Sublicensor the following non-refundable,
      one-time milestone payments as follows:




(a)
      Within sixty (60) days following attainment of annual Net Sales in Japan equal
      to *****.




(b)
      Within sixty (60) days following attainment of annual Net Sales in Japan equal
      to *****.




(c)
      Within sixty (60) days following attainment of annual Net Sales in Japan equal
      to *****.


For
      purposes of this Section 4.3, annual Net Sales shall be calculated on a calendar
      year basis.
      Nothing herein shall preclude multiple milestone payments from being paid in
      a
      given 12-month period if multiple milestones have been reached.




4.4  Limitations .
      It is
      understood and agreed that Sublicensee shall pay the milestone payments set
      forth in Sections 4.2 and 4.3 only with respect to the
      first Indication for
      which
      a Product achieves a particular milestone event, and regardless of the number
      of
      Products which achieve a particular milestone event and
      regardless of the number of times which a particular milestone event is
      achieved .




4.5  Payment
      Method .
      All
      payments of license fees and milestones under this Article 4 shall be made
      by
      wire transfer in the
      United States currency to a designated bank account of Sublicensor.





ARTICLE
      5. ROYALTIES





5.1  Royalties .
      In
      consideration of the sublicense rights granted to Sublicensee hereunder, for
      each Product where the manufacture, use or sale of such Product would but for
      the license granted hereunder, infringe a Valid Claim, Sublicensee
      shall  pay to
      Sublicensor a royalty on their
      respective Net
      Sales, as follows:


14
 *****Confidential
            Material redacted and filed separately with the Commission.




(a) a
      royalty of ***** of
      annual
      Net Sales equal to or less than *****;




(b)
      a
      royalty of ***** of annual Net Sales between *****;




(c)
      a
      royalty of ***** of annual Net Sales in excess of *****.


For
      purposes of this Section 5.1, royalties shall be calculated based on total
      Net
      Sales in any given calendar year. By way of example, if in a given calendar
      year
      Net Sales were forty (40) billion Japanese Yen, then the amount of royalty
      owed
      for that year would be ***** Japanese Yen (calculated as the sum of ***** x
      ***** plus ***** x ***** plus ***** x *****). Notwithstanding the foregoing,
      in
      the event (i) the Panion License Agreement expires before the termination or
      expiration of this Agreement and Sublicensor is no longer required to pay
      royalties to Panion under the Panion License Agreement, the applicable royalty
      percentage to be paid by Sublicensee to Sublicensor under clauses (a), (b)
      and
      (c) of this Section 5.1 shall be reduced to *****, ***** and *****,
      respectively, or (ii) subject to Section 16.3, the Panion License Agreement
      is
      terminated before the termination or expiration of this Agreement, the royalties
      and other amounts to be paid by Sublicensee to Sublicensor shall be reduced
      by
      all royalties and other amounts payable directly by Sublicensee to
      Panion.




5.2  Accrual
      of Royalties .
      No
      royalty shall be payable on a Product made, sold, or used for research
      or clinical testing purposes
      or distributed as samples, provided such samples are sold by Sublicensee at
      cost. No multiple royalty shall be payable because the manufacture, use, or
      sale
      of a Product is covered by more than one Valid Claim.




5.3   Royalty Withheld due
      to Invalid Claims .
      In the
      event that all applicable claims of a patent included within the Patent Rights
      under which Sublicensee is paying a royalty according to Section 5.1 shall
      be
      held invalid or unenforceable by a court of competent jurisdiction in the Sublicense Territory, Sublicensee may withhold payments of royalties which would otherwise
      have been due on Net Sales in the
      Sublicense Territory by
      reason of Sections
      4.3 and 5.1
      until such judgment shall be finally reviewed by an unappealed or unappealable
      decree of a higher court of competent jurisdiction in the Sublicense Territory.
      The Sublicensee shall promptly repay Sublicensor any withheld


royalty
      payments upon
      a
      final adjudication that the applicable claims of a patent included within the
      Patent Rights under which Sublicensee is paying a royalty under Section 5.1
      are
      valid and enforceable. For
      clarification, the aforementioned withheld royalty shall not bear any interest
      thereon.


15
 *****Confidential
            Material redacted and filed separately with the Commission.




5.4  Compulsory
      Licenses .
      If
      Sublicensee is caused to grant a compulsory license to any Third Party with
      respect to a Product in the Sublicense Territory, then the royalty rate to
      be
      paid by Sublicensee on Net Sales due on such Product in that country under
      Section 5.1 shall be reduced to the rate paid by such Third Party compulsory
      Sublicensee on such Product.




5.5  Third
      Party Royalties .
      Sublicensor shall be responsible for payment of third party royalties owed
      on
      sales of Product in the Sublicense Territory with respect to any issued patent
      or patent application that has been published by the applicable patent office
      anywhere in the world prior to and including the date that is two (2) years
      after the Effective Date that are required to secure Freedom to Operate in
      the
      Sublicense Territory. For the purposes of this Agreement, “Freedom to Operate”
shall mean such valid patents that, but for a license, would be infringed by
      the
      development, manufacture, use or sale of a Product for the
      Indication. With
      respect to patents or patent applications that are published by the applicable
      patent office anywhere in the world more than two (2) years after the Effective
      Date that are required to secure Freedom to Operate in the Sublicense Territory,
      then (a) if a license to such patent is limited to the Sublicense Territory,
      then Sublicensor and Sublicensee shall each be responsible for ***** of such
      license fees and royalty obligations; and (b) if a license to such patent
      includes countries outside the Sublicense Territory, then Sublicensor shall
      be
      responsible for ***** of such license fees and royalty obligations and
      Sublicensee shall be responsible for ***** of such license fees and royalty
      obligations. Notwithstanding the foregoing, Sublicensor’s obligation to pay
      Third Party royalties, including, without limitation, royalties owed to Panion,
      shall not exceed the sales milestone payments and royalties to which Sublicensor
      is entitled under Sections 4.3 and 5.1 of this Agreement.


5.6  Withholding Tax .
      If any
      payment due to Sublicensor hereunder is subject to withholding taxes or similar
      governmental charge (“Withholding Tax”) required to be paid or withheld thereon
      by applicable law in Japan, then Sublicensee shall deduct such Withholding
      Tax
      from such payment due Sublicensor hereunder at a rate not to exceed the
      then-prevailing rate provided for in applicable provisions of the Conventions
      between the Governments of the United States and Japan for the Avoidance of
      Double Taxation and the Evasion of Taxes (the “Convention”). Sublicensee shall
      provide Sublicensor, as soon as possible, a certificate evidencing withholding
      or payment of any such Withholding Tax by Sublicensee, its Affiliates or its
      sublicensees for the benefit of Sublicensor. The
      parties understand as of the Effective Date that under the provisions
      of  the
      current Convention,
      payments to Sublicensor under this Agreement are not subject to
      withholding, provided
      that Sublicensor provide Sublicensee with appropriate certificates of residency
      as required by Japanese law .





16


ARTICLE
      6. ROYALTY REPORTS AND ACCOUNTING





6.1  Royalty
      Reports and Currency
      Conversion .
      Beginning with the First Commercial Sale by Sublicensee of a Product in the
      Sublicense Territory, and continuing thereafter during the term of this
      Agreement, Sublicensee shall furnish to Sublicensor a written report covering
      each calendar quarter (the "Reporting Period") showing (a) the calculation
      of
      Net Sales of each Product in the Sublicense Territory during the Reporting
      Period; (b) the royalties, payable in United States Dollars, which shall have
      accrued hereunder in respect of such sales with a summary computation of such
      royalties; (c) withholding taxes, if any required by law to be deducted in
      respect of such sales; and (d) the exchange rates used in determining the amount
      of United States Dollars payable. Royalty
      reports shall be submitted to Sublicensor within forty-five (45) days after
      the
      close of each Reporting Period. Net
      Sales
      and royalties payable shall be expressed in both Japanese Yen and the United
      States Dollars equivalent, calculated using the simple average of the exchange
      rate published in the Wall Street Journal on the last day of each month of
      the
      Reporting Period. Sublicensee shall furnish to Sublicensor appropriate evidence
      of payment of, and itemize any tax, credits or specific amount deducted from
      any
      royalty payment.




6.2  Royalty Payments and
      Records .
      Royalty payments
      shall be made
      by
      wire transfer in United States currency to a designated bank account of
      Sublicensor in the United States and shall be due forty-five (45 )
      days
      after the close of each Reporting Period. Payment of royalties in whole or
      in
      part may be made in advance of such due date. In case no royalty is due for
      any
      given Reporting Period, Sublicensee shall so report to Sublicensor. Sublicensee
      shall keep accurate records for a period of at least three ( 3 )
      years
      in sufficient detail to enable the royalty payable hereunder to be determined
      and confirmed.




17


6.3  Right
      to Audit .
      Upon
      written request of Sublicensor, but not more than  once in each
      calendar year, Sublicensee shall permit an independent public accountant,
      selected by Sublicensor or Panion and acceptable to Sublicensee, which
      acceptance shall not be unreasonably withheld, to have access during normal
      business hours to those records of Sublicensee as may be reasonably necessary
      to
      verify the accuracy of the royalty reports hereunder in respect of any calendar
      year ending not more than thirty-six (36) months prior to the date of such
      request. The report prepared by such independent public accountant, a copy
      of
      which promptly shall be provided to Sublicensee, shall disclose only the amount
      of any underpayment or overpayment of royalties, if any, without disclosure
      of
      or reference to supporting documentation. If such independent accountant's
      report shows any underpayment of royalties, Sublicensee shall remit to
      Sublicensor the amount of such underpayment within thirty (30) days after
      Sublicensee's receipt of such report, and if such underpayment exceeds five
      percent (5%) of the royalty due, Sublicensee shall reimburse Sublicensor for
      its
      reasonable out-of-pocket expenses for the audit, upon submission of supporting
      documentation. Any
      overpayment of royalties shall be creditable against future royalties payable
      in
      subsequent royalty periods, allocated evenly over the next-following two (2)
      royalty periods. In
      the
      event this Agreement is terminated or expires before such overpayment is fully
      credited, Sublicensor shall pay Sublicensee the portion of such overpayment
      not
      credited within one hundred twenty (120) days  after
      the
      date of such termination or expiration.




6.4  Confidentiality
      of Records .
      Sublicensor agrees that all information subject to review under Section 6.3
      shall be deemed the Proprietary Information of Sublicensee.




6.5  Late
      Payment Interest .
      Royalties and other payments required to be paid by Sublicensee pursuant to
      this
      Agreement shall, if overdue, bear interest at the rate equal to two percent
      (2%)
      over the prime rate as quoted by Citibank NA and not to exceed ten percent
      (10%)
      per annum until
      paid. The payment of such interest shall not preclude Sublicensor from
      exercising any other rights it may have because any payment is
      overdue.






18




ARTICLE
      7. CLINICAL, PRE-CLINICAL, REGULATORY




AND
      COMMERCIAL DEVELOPMENT





7.1  Clinical
      and Pre-Clinical Development Program .
      Sublicensee will have sole responsibility for the clinical development of the
      Product in the Sublicense Territory, and shall be solely responsible for all
      costs associated therewith. Sublicensee will have final decision-making
      authority to decide the protocols for all clinical and pre-clinical studies
      to
      be conducted by Sublicensee to support the approval of the Product in the
      Sublicense Territory. Notwithstanding the foregoing, Sublicensee shall consult
      with Sublicensor regarding protocol design for all clinical and pre-clinical
      studies. Sublicensee shall use commercially reasonable best efforts (a) to
      conduct a clinical development program directed to obtaining regulatory approval
      of the Product in the Sublicense Territory (the "Development
      Program") ,
      and (b)
      if, in the opinion of Sublicensee, the results of the Development Program so
      justify, to diligently seek regulatory and pricing approval for such Product
      for
      such Indication. For purposes of this Section, "commercially reasonable best
      efforts" shall mean efforts and timelines consistent with those used by
      Sublicensee in its own priority development projects with its own products
      deemed to have high commercial potential. Preliminary timelines are attached
      hereto as **Exhibit
      3** and
      shall be subject to adjustment in consultation with the JDC.




7.2  Carcinogenicity
      Studies .
      The
      parties  will
      discuss in good faith potential arrangements for a carcinogenicity study,
      including, without limitation, potential cost-sharing mechanisms.




7.3  Regulatory
      Matters .




7.3.1  Assistance
      by Sublicensor .
      Sublicensor shall assist Sublicensee as follows:




(a)  As
      soon
      as practical after the Effective Date, Sublicensor will make available to
      Sublicensee all Sublicensor Know-How in the possession of Sublicensor, and
      will
      cooperate with and provide reasonable assistance to Sublicensee in its
      evaluation of such Sublicensor Know-How. On a continuing basis during the term
      of this Agreement, Sublicensor shall make available to Sublicensee all
      additional Sublicensor Know-How generated ,
      acquired or possessed by
      Sublicensor or any Third Party on behalf of Sublicensor. Sublicensor shall
      provide Sublicensee with a right of reference to all such Sublicensor Know-How
      and Sublicensee shall have the right to include such Sublicensor Know-How in
      any
      of its applications for Registrations. All such Sublicensor Know-How shall
      be
      deemed the Proprietary Information of Sublicensor, and all right, title and
      interest in and to such Sublicensor Know-How shall remain vested in Sublicensor.




19


(b)  In
      the
      event that Sublicensor receives any inquiries or notices from any
      Regulatory Authority which may affect the development and marketing of a Product
      in the Sublicense Territory, Sublicensor shall immediately notify Sublicensee.
      Sublicensor agrees to assist Sublicensee in formulating a response to such
      inquiries, including being available to meet with the Regulatory Authority
      at a
      time and place acceptable to Sublicensor. Sublicensee shall reimburse
      Sublicensor for its reasonable expenses incurred in rendering such assistance,
      upon presentation by Sublicensor of an invoice documenting such
      expenses.




In
      the
      event that Sublicensee receives any inquiries or notices from any Regulatory
      Authority which may affect the development and marketing of a Product in the
      Sublicense Territory, Sublicensee shall immediately notify Sublicensor.
      Sublicensor agrees to assist Sublicensee in formulating a response to such
      inquiries, including being available to meet with the Regulatory Authority
      at a
      time and place acceptable to Sublicensee.




7.3.2  Assistance
      by Sublicensee .




(a)  On
      a
      continuing basis during the term of this Agreement, Sublicensee shall make
      available to Sublicensor all Sublicensee Development Data generated by
      Sublicensee or any Third Party on behalf of Sublicensee. Sublicensee shall
      provide Sublicensor with a right of reference to all such Sublicensee
      Development Data and Sublicensor shall have the right to include such
      Sublicensee Development Data in any of its applications for Registrations
      outside of the Sublicense Territory. All such Sublicensee Development Data
      shall
      be deemed the Proprietary Information of Sublicensee, and all right, title
      and
      interest in and to such Sublicensee Development Data shall remain vested in
      Sublicensee.




20


(b)  In
      the
      event that Sublicensee receives any inquiries from any Regulatory Authority
      which may affect the development and marketing of a Product outside
      of the Sublicense Territory, Sublicensee shall immediately notify Sublicensor.
      Sublicensee agrees to assist Sublicensor in formulating a response to such
      inquiries, including being available to meet with the Regulatory Authority
      at a
      time and place acceptable to Sublicensee, if necessary. Sublicensor shall
      reimburse Sublicensee for its reasonable expenses incurred in rendering such
      assistance, upon presentation by Sublicensee of an invoice documenting such
      expenses.




7.3.3  Registrations .
      Subject
      to the terms and conditions of this Agreement, each application for Registration
      shall be filed in the name of Sublicensee or a designated Affiliate. Sublicensee
      shall own all right, title and interest in and to all applications for
      Registrations and granted Registrations. Sublicensee shall be responsible for
      all disclosures and correspondence to and with the Regulatory Authorities,
      and
      all disclosures and correspondence with any Regulatory Authority involving
      Sublicensor shall be made through Sublicensee. Sublicensee shall keep
      Sublicensor advised of the status of all Registrations and any applications
      for
      Registration.




7.3.4  Exchange
      of Safety Information . The
      Parties shall exchange safety information as per ICH guidelines so that each
      party can meet their regulatory requirements. The parties agree that a detailed
      agreement with respect to the exchange of safety data is to be entered into
      separately. Sublicensor
      shall, at its own cost and expense, assemble, maintain, deploy and make
      available to Sublicensee a database on any and all information on all serious
      adverse events including those collected from its existing and future
      sublicensees, Sublicensee and Panion.




7.4  Commercial
      Matters .
      Subject
      to the provisions
      of Section 3. 9 ,
      Sublicensee shall have sole responsibility for all activities and costs
      associated with marketing, advertising, promoting and selling the Products
      in
      the Sublicense Territory. Sublicensee shall use its commercially reasonable efforts
      to market and sell the Product in the Sublicense Territory, in order to maximize
      Net Sales. Without limiting Sublicensee’s commercially reasonable efforts
      obligation under this Section 7.4, Sublicensee shall (a) apply for all required
      authorizations, including pricing and reimbursement, from Regulatory Authorities
      in the Sublicense Territory as soon as reasonably and commercially practicable
      following completion of all appropriate clinical trials; and (b) make the first
      commercial sale of the Product in the Sublicense Territory as soon as reasonably
      and commercially practicable following the issuance of the marketing
      authorizations required for the manufacturing, distribution, marketing, sale
      and
      use of the Product in the Sublicense Territory and the
      completion of NHI
      (National Health Insurance) price listing .




21


7.5  Indications
      Outside the Field .




7.5.1  In
      the
      event Sublicensor develops, or obtains from Panion, Dr. Hsu or GloboAsia
      relevant rights of, any
      indications or line extensions utilizing the Compound outside
      the Field, Sublicensee shall have a Right of First  Negotiation and
      Right
      of First Refusal (as such terms are defined below) as follows:




(a)  Right
      of First Negotiation .
      If
      Sublicensor (a) conceives of ,
      or
      receives from Panion, Dr. Hsu or GloboAsia relevant rights of, an
      indication or line extension utilizing the Compound outside the Field (a "New
      Development"), and (b) has the right, by license, ownership or otherwise, to
      further license the New
      Development in the Sublicense Territory, then Sublicensor shall provide
      Sublicensee a right of first negotiation (the "Right of First Negotiation")
      as
      follows: (i) Sublicensor shall describe the New Development in writing in
      reasonable detail, and such description shall be protected as Proprietary
      Information under this Agreement (a "Confidential Disclosure"); (ii) Sublicensor
      shall provide the Confidential Disclosure to Sublicensee; and (iii) during
      the
      period commencing upon Sublicensee's receipt of the Confidential Disclosure
      and
      expiring ninety (90) days thereafter (the "Discussion Period"), the parties
      shall discuss in good faith a license and commercialization agreement with
      respect to the New Development in the Sublicense Territory. If
      the
      parties do not reach agreement during the Discussion Period, then the Right
      of
      First Negotiation shall expire, and Sublicensor shall be free to exploit the
      New
      Development on its own, or to market the New Development to others, subject
      to
      Section 7.5.1(b).




22


(b)  Right
      of First Refusal .
      In the
      event Sublicensor receives an offer from any third party to license or
      commercialize a New Development (an "Outside Offer"), Sublicensee shall enjoy
      a
      right of first refusal (the "Right of First Refusal") as follows: Sublicensor
      shall not accept any Outside Offer unless (i) Sublicensor has first provided
      the
      Outside Offer in writing to Sublicensee; and (ii) Sublicensee is provided a
      period of thirty (30) days from its receipt of the Outside Offer to evaluate
      the
      Outside Offer (the "Evaluation Period"). If Sublicensor receives from
      Sublicensee before expiration of the Evaluation Period a written offer that
      meets each of the terms of the Outside Offer or is more advantageous to
      Sublicensor than the Outside Offer (a "Qualifying Sublicensee Offer"), then
      Sublicensor shall either (a) reject the Outside Offer, or (b) accept the
      Qualifying Sublicensee Offer. Sublicensor shall not be obligated to accept
      the
      Qualifying Sublicensee Offer (in which event, the Sublicensor shall not accept
      the Outside Offer). If a Qualifying Sublicensee Offer is not received within
      the
      Evaluation Period, then the Right of First Refusal shall expire, and Sublicensor
      shall be free to accept the Outside Offer.




7.5.2  For
      any
      indications or line extensions developed by Sublicensee utilizing the Compound
      outside the Field, Sublicensor shall have Right of First Negotiation and
      Right of First Refusal similar to those available under Section 7.5.1 to obtain
      a license as follows:




(a)  Right
      of First Negotiation .
      If
      Sublicensee conceives of an indication or line extension utilizing the Compound
      outside the Field, Sublicensee shall provide Sublicensor a Right of First
      Negotiation as follows: (i) Sublicensee shall describe the New Development
      in
      writing in reasonable detail, and such description shall be protected as
      Confidential Disclosure under this Agreement; (ii) Sublicensee shall provide
      the
      Confidential Disclosure to Sublicensor; and (iii) during the period commencing
      upon Sublicensor's receipt of the Confidential Disclosure and expiring ninety
      (90) days thereafter, the parties shall discuss in good faith a license and
      commercialization agreement with respect to the New Development. If the parties
      do not reach agreement during the Discussion Period, then the Right of First
      Negotiation shall expire, and Sublicensee shall be free to exploit the New
      Development on its own, or to market the New Development to others.




23


(b)  Right
      of First Refusal .
      In the
      event Sublicensee receives an Outside Offer to license or commercialize a New
      Development, Sublicensor shall enjoy a Right of First Refusal as follows:
      Sublicensee shall not accept any Outside Offer unless (i) Sublicensee has first
      provided the Outside Offer in writing to Sublicensor; and (ii) Sublicensor
      is
      provided a period of thirty (30) days from its receipt of the Outside Offer
      to
      evaluate the Outside Offer. If Sublicensee receives from Sublicensor before
      expiration of the Evaluation Period a written offer that meets each of the
      terms
      of the Outside Offer or is more advantageous to Sublicensee than the Outside
      Offer (the "Qualifying Sublicensor Offer"), then Sublicensee shall either (a)
      reject the Outside Offer, or (b) accept the Qualifying Sublicensor Offer.
      Sublicensee shall not be obligated to accept the Qualifying Sublicensor Offer
      (in which event, the Sublicensee shall not accept the Outside Offer). If a
      Qualifying Sublicensor Offer is not received within the Evaluation Period,
      then
      the Right of First Refusal shall expire, and Sublicensee shall be free to accept
      the Outside Offer.




7.6  Progress
      Reports .
      On a
      quarterly basis, and within thirty (30) days of the close of each quarter,
      Sublicensee shall provide to Sublicensor a written report of Sublicensee's
      progress and activities in meeting Sublicensee's obligations under this Article
      7 (each a "Progress Report"). Progress Reports shall be in writing, and shall
      set forth, in reasonable detail, relevant information including (i) the status
      of clinical development programs for any Product; (ii) the status of regulatory
      approvals in the Sublicense Territory concerning Products; (iii) the status
      of
      other manufacturing, development and/or commercial activities regarding
      Products, including, without limitation, names of Third Party distributors;
      and
      (iv) any potential new Indications or line extensions. Sublicensee shall
      promptly supplement or clarify such Progress Reports, upon Sublicensor's
      reasonable request.







ARTICLE
      8. PATENT PROSECUTION





24


8.1  Patent
      Prosecution and Maintenance .  For
      the
      purpose of securing for the benefit to Sublicensee the Patent Rights in the
      Sublicense Territory, Sublicensor shall maintain the bridge between Panion,
      Dr.
      Hsu and GloboAsia and Sublicensee by: (i) passing along to Sublicensee any
      and
      all copies of relevant materials received from Panion, Dr. Hsu and GloboAsia
      with respect to prosecution and maintenance of the Patent Rights in the
      Sublicense Territory; and (ii) passing along back to Panion, Dr. Hsu and
      GloboAsia any and all comments, opinions, requests, suggestions and so forth
      received from Sublicensee. Sublicensor shall also pass along to Sublicensee
      any
      relevant rights obtained from Panion, Dr. Hsu or GloboAsia. Sublicensor
      shall use reasonable efforts to prosecute or to obtain from Panion,
      Dr. Hsu and GloboAsia the
      authority to prosecute or to cause the prosecution of the patent applications
      included in the Patent Rights, subject
      to the provisions of Section 8.2(d) to obtain patents thereon, to conduct any
      interference, re-examination, reissue and opposition proceedings, and to
      maintain patents included in the Patent Rights in effect during the term of
      this
      Agreement using outside patent counsel acceptable to Sublicensee. Sublicensor
      shall make reasonably appropriate arrangements to enable Sublicensee to: (i)
      obtain registration under the name of Sublicensee in the Sublicense Territory
      of
      the exclusive license granted to Sublicensee under Section 3.1 of this Agreement
      as a “ *Senyo
      Jisshiken* ”
in
      accordance with Article 77 of the Japanese Patent Law within sixty (60) days
      after issuance or registration of the relevant patents, and (ii) fully secure
      Sublicensee’s right as a primary licensee in the Field in the Sublicense
      Territory until said registration of “ *Senyo
      Jisshiken* .”
      Sublicensor shall regularly consult with Sublicensee and shall keep Sublicensee
      advised of the status of all patent applications and patents relating to the
      Patent Rights by providing Sublicensee with copies of such patent applications
      and patents and copies of all patent office correspondence relating thereto
      including any office actions received by Sublicensor and responses or other
      papers filed by Sublicensor. Sublicensor specifically agrees to provide
      Sublicensee with copies of patent office correspondence in sufficient time
      for
      Sublicensee to review and comment on such correspondence and submit to
      Sublicensor any proposed response thereto. Sublicensor further agrees to provide
      Sublicensee with sufficient time and opportunity, but in no event less than
      ten
      (10) days, to review, comment and consult on all proposed responses to patent
      office correspondence relating to such patent applications and patents.
      Sublicensee agrees that all final decisions regarding the preparation and
      prosecution of such patent applications and patents, reissues, reexaminations,
      interferences and oppositions relating thereto shall be made by Sublicensor
      after consultation with Sublicensee. Notwithstanding the foregoing, Sublicensor
      shall have the right in its sole discretion after consultation with Sublicensee,
      to discontinue the prosecution of any such patent applications or the
      maintenance of any such patents, and Sublicensee shall have the right to assume
      responsibility for the prosecution of such patent applications or the
      maintenance of such patents at its own expense. No royalties shall be payable
      by
      Sublicensee to Sublicensor under Section 5.1 in respect of any such patent
      applications or patents being prosecuted or maintained by Sublicensee until
      Sublicensee has been reimbursed for its out-of-pocket costs of prosecuting
      and
      maintaining such patent applications or patents. If Sublicensor elects
      not to prosecute ,
      and
      Sublicensee elects not to assume, any such
      patent applications or not to maintain any such patents in
      the Sublicense Territory ,
      Sublicensee’s license rights and its obligations under this Agreement, with
      respect to such patent applications and patents in the
      Sublicense Territory  shall
      terminate , without
      affecting its license rights and
      other obligations to pay with
      respect to any other patent applications or patents included in the Patent
      Rights.


25


*****Confidential
      Material redacted and filed separately with the Commission.


8.2  Improvements
      and Use of Development Data .




(a)  Each
      party shall notify the other party promptly of any sole or joint inventions
      directed to Improvements under such party's control. Sublicensee shall own
      all
      right, title and interest in and to Sublicensee solely invented Improvements
      and
      Sublicensor shall own all right, title and interest in and to Sublicensor solely
      invented Improvements. Patent applications and patents directed to jointly
      invented Improvements shall be jointly assigned to and owned by Sublicensee
      and
      Sublicensor .
      Subject
      to the provisions of Article 12 with respect to Follow-on Products, d uring
      the
      term of this Agreement, either party shall have the liberty to freely practice
      Improvements in its respective territories, or license to any third party in
      connection with a sublicense to sell Products, provided that such sublicensees
      agree to share any Improvements with Sublicensor and Sublicensee . In
      the
      event of a termination of this Agreement by Sublicensor for breach by
      Sublicensee or by Sublicensee in the absence of a breach by Sublicensor, then
      Sublicensor’s rights under this Section 8.2 related to Improvements shall
      survive but Sublicensee’s rights shall be terminated and Sublicensor shall have
      a perpetual, exclusive, royalty-free, sublicensable license for the purpose
      of
      commercialization of Product to any patented Improvements solely or jointly
      invented by Sublicensee. If this Agreement is terminated by Sublicensee for
      breach by Sublicensor, then Sublicensor may continue to have the rights set
      forth herein to non-patented Improvements without any consideration therefor
      and
      shall have the option to acquire a license for the use of patented Improvements
      that were solely invented by Sublicensee at a royalty rate of ***** of net
      sales
      of the relevant products which, but for the license, would infringe a valid
      patent owned by Sublicensee. Upon expiration of this Agreement, Sublicensor may
      continue to have the rights set forth herein to non-patented and
      jointly-invented Improvements without any consideration therefor and shall
      have
      the option to acquire an exclusive, except as to Sublicensee, license for the
      use of patented Improvements which
      were solely invented by Sublicensee at
      a
      royalty rate of ***** of net sales of the relevant products which, but for
      the
      license, would infringe a valid patent owned by Sublicensee.  The
      formula for calculating net sales for Sublicensor’s products under this Section
      8.2(a) shall be consistent with the provisions of Section 1.10 of this
      Agreement.




26





(b)  During
      the term of this Agreement, for patent applications and patents relating to
      Improvements invented solely by Sublicensor, the provisions of Section 8.1 shall
      apply.




(c)  Following
      expiration or termination of this Agreement, Sublicensor shall be solely
      responsible, at its sole discretion and expense, for preparing, filing,
      prosecuting and maintaining in such countries where it deems appropriate, patent
      applications and patents relating to Improvements invented solely by Sublicensor
      and for conducting interference, re-examination, reissue and opposition
      proceedings relating to such patent applications and patents.




(d)  During
      the term of this Agreement, Sublicensee shall be responsible, in its sole
      discretion ,
      for
      preparing, filing, prosecuting and maintaining in the
      Sublicense Territory ,
      patent
      applications and patents relating to Improvements invented solely by Sublicensee
      or jointly by Sublicensee and Sublicensor .
      In case
      of Improvements invented jointly by Sublicensee and Sublicensor, the costs
      necessary for preparation, filing, prosecution and maintenance of the
      Improvements shall be equally borne by Sublicensor and Sublicensee .
      Notwithstanding the foregoing, if Sublicensee elects (after consultation with
      Sublicensor) not to prosecute, or to discontinue the prosecution of any patent
      applications concerning joint Improvements, or to discontinue the maintenance
      of
      any patents or patent applications concerning joint Improvements, then (i)
      Sublicensor shall have the right to assume the full responsibility for the
      prosecution of such patent applications or the maintenance of such patents
      and
      patent applications at its own cost and expense, (ii) Sublicensee shall assign
      such patents and patent applications to Sublicensor, and (iii) such patents
      and
      patent applications shall no longer be subject to this Agreement.




27


**** (e)  Following
      expiration or termination of this Agreement, Sublicensee shall be solely
      responsible, in its sole discretion and expense, for preparing, filing,
      prosecuting and maintaining in such
      countries where it deems appropriate ,
      patent
      applications and patents relating to Improvements invented solely by Sublicensee
      and for conducting interference, re-examination, reissue and opposition
      proceedings relating to such patent applications and patents.




(f)  Following
      expiration or termination of this Agreement, the parties shall be jointly
      responsible for preparing, filing, prosecuting and maintaining in such countries
      where the parties jointly agree, patent applications and patents relating to
      Improvements jointly invented by the parties and for conducting interference,
      re-examination, reissue and opposition proceedings relating to such patent
      applications and patents. The parties shall jointly bear all costs relating
      thereto. If one party elects to discontinue the prosecution of any patent
      applications and patents filed pursuant to this Section 8.2 (f),
      or
      not to conduct any further activities with respect to such patent applications
      or patents, the party electing to discontinue any such activities shall assign
      to the other party all right, title and interest in and to such patents or
      patent applications. The party electing to continue such activities shall be
      solely responsible for all costs relating to such activities.




8.3  Trademarks .
      Sublicensee shall be responsible for obtaining and maintaining a trademark
      of
      its choice in the Sublicense Territory at its sole expense. Sublicensee shall own
      such
      trademark. Sublicensee shall submit
      its proposed trademark to the JSC for approval ,
      which
      approval shall not be unreasonably withheld or delayed .


28
 *****Confidential
            Material redacted and filed separately with the Commission.


ARTICLE
      9. INFRINGEMENT





9.1  Infringement
      by a Third Party .  In
      the
      event that either party becomes aware that a Compound or a Product being made,
      used or sold by a Third Party infringes the Patent Rights licensed hereunder,
      such party shall promptly advise the other party of all known facts and
      circumstances relating thereto *.*  To
      the
      extent of their respective ability under Japanese law, Panion (on behalf of
      itself and Dr. Hsu) and Sublicensor
      shall have the first and
      second right ,
      respectively, to
      enforce at its sole
      expense the Patent Rights licensed under this Agreement against infringement
      by
      Third Parties. Sublicensee
      shall reasonably cooperate in any such enforcement and, if necessary, join
      as a
      party therein, at the expense of Sublicensor. Sublicensor shall have the right
      to retain ***** of the proceeds of any such enforcement action. Notwithstanding
      the foregoing, Sublicensee shall have the right to enforce against infringement
      by Third Parties of the Patent Rights licensed hereunder, in the event that
      neither Panion (on behalf of itself and Dr. Hsu) nor Sublicensor exercise its
      right. Sublicensor
      shall make
      all
      necessary arrangements with Panion, Dr. Hsu and GloboAsia for Sublicensee to
      take actions against infringement
      by Third Parties of the Patent Rights licensed hereunder.




9.2  Infringement
      by Sublicensee .
      In the
      event that it is determined by any court of competent jurisdiction that the import, manufacture,
      use or sale of any Product or
      Compound by
      Sublicensee or its sublicensees in accordance with the terms and conditions
      of
      this Agreement infringes, or Sublicensee and Sublicensor reasonably determine
      and agree that the import, manufacture,
      use or sale of such Product or
      Compound is
      likely to infringe, a Third
      Party patent or related intellectual property right in the Sublicense Territory, Sublicensee shall in consultation with Sublicensor use its reasonable
      best efforts to: (i) procure at Sublicensor ’s
      expense a license from such Third Party authorizing Sublicensee to continue
      to import, manufacture,
      use or sell such Product or
      Compound ;
      or (ii)
      modify such Product or Compound
      or its
      manufacture so as to render it
      non-infringing. In the event that neither of the foregoing alternatives is
      reasonably available or commercially feasible, Sublicensee may at its option
      (i)
      either cease the import, manufacture,
      use and sale of such Product or
      Compound for so
      long as and to the extent that such activities are infringing the relevant
      Third
      Party patents, in which case the obligation of Sublicensee hereunder to pay
      royalties shall also cease, or (ii) terminate the rights and licenses granted in
      the
      Sublicense Territory in which the infringement of Third Party patents has occurred or
      is
      likely to occur, in which case the obligation of Sublicensee hereunder to pay
      royalties shall also terminate in
      the
      Sublicense Territory. With regard to damages caused to Sublicensee by a Third
      Party patent or related intellectual property right for which Sublicensor would
      otherwise have been solely responsible for payment of royalties under Section
      5.5, Section 14.2 will apply.




29


ARTICLE
      10. MANUFACTURE & SUPPLY





10.1  Supply
      for Sublicensee’s pre-clinical and clinical activities.




10.1.1  Supply .
      Sublicensor will supply Sublicensee, and Sublicensee will purchase from
      Sublicensor, necessary quantities of Compound, formulated Compound (interim
      product) (if any) and/or Product for Sublicensee’s use in preclinical studies
      and clinical studies (“Development Supplies”) in the Field in the Sublicensee
      Territory until the date on which Sublicensee establishes its own supply of
      Product, whether through Sublicensee’s manufacture or through a Direct Supply
      Agreement with a Third Party as provided in Section 10.2.3 (such end date of
      Sublicensor’s obligation to supply Product shall be hereinafter referred to as
      the “Supply End Date”). Sublicensor may obtain Development Supplies from its
      Third Party contract manufacturers (“Third Party Manufacturers”) that are then
      manufacturing Compound, formulated Compound (interim product) (if any) and/or
      Product for Sublicensor’s or its other licensees' use in its non-clinical
      studies or clinical trials of the Product in the Field outside the Sublicensee
      Territory. Development Supplies provided to Sublicensee shall be manufactured
      in
      the same formulation and to the same specifications as the Compound and/or
      Product such Third Party Manufacturers are supplying to Sublicensor or its
      other
      licensees for use in pre-clinical studies or clinical trials in the United
      States as of the Effective Date or such subsequent date as may be specified
      by
      Sublicensee unless Sublicensee agrees otherwise in writing.


30
 *****Confidential
            Material redacted and filed separately with the Commission.


10.1.2  Purchase
      Price .
      The
      purchase price Sublicensee shall pay Sublicensor for Development Supplies shall
      be ***** for such Development Supplies provided to Sublicensee in accordance
      with this Article 10, and ***** incurred by Sublicensor directly in connection
      with the provision of such Development Supplies (including, e.g., cost of
      Sublicensor staffing necessary to organize such supplies, insurance and taxes,
      if any), without mark-up by Sublicensor. Where possible, Sublicensor shall
      organize production of Development Supplier in a manner to minimize staffing
      costs which must be transmitted to Sublicensee. Sublicensor further agrees
      that
      it will disclose in advance to Sublicensee details of such cost and that such
      cost shall be subject to Sublicensee’s approval, which shall not be unreasonably
      withheld or delayed. Sublicensor shall submit an invoice to Sublicensee
      therefor, and Sublicensee shall pay Sublicensor within thirty (30) days of
      its
      receipt of each such invoice.




10.1.3  Quantity
      and Schedule for Delivery of Development Supplies .
      Sublicensee shall present to Sublicensor in writing, at least quarterly, its
      requirements for Development Supplies for Sublicensee’s pre-clinical and
      clinical development activities sufficiently in advance of initiating
      pre-clinical or clinical studies. Sublicensor will evaluate, using commercially
      reasonable efforts, its capability and the capability of its Third Party
      Suppliers to supply the Development Supplies to Sublicensee in accordance with
      the requested quantities and schedule. Thereupon, the Sublicensor will provide
      to Sublicensee a written commitment schedule to supply the requested Development
      Supplies to Sublicensee. Sublicensee shall not sell any portion of Development
      Supplies provided by Sublicensor under this Section 10.1 to any Third Party
      for
      any purpose. If there are any additional terms and conditions reasonably
      necessary for the provision of Development Supplies by Sublicensor or its
      Affiliates to Sublicensee for pre-clinical and clinical development activities
      in accordance with the pre-clinical and clinical development plan of Sublicensee
      and this Section 10.1, the Parties shall discuss and agree upon them as soon
      as
      reasonably practicable, consistent with this Section 10.1.




31


10.1.4  Sublicensor’s
      Further Obligations .
      For
      Development Supplies, Sublicensor or its Affiliates shall provide (or cause
      its
      Third Party Manufacturer to provide) Sublicensee with the
      following:


(a)  specifications
      of intermediates, as appropriate, and Compound, and testing methods and
      certificates of analysis (“COA”) for the intermediates, as appropriate, and
      Compound;


(b)  specifications
      of formulated Compound (interim product) (if any) or Product, and testing
      methods and COAs for the formulated Compound (interim product) (if any) or
      Product;


(c)  specifications
      of excipients (if any), packaging materials, and testing methods and COAs for
      the excipients (if any), packaging materials used for formulated Compound
      (interim product) (if any) or Product;


(d)  certificate
      of manufacturing (“COM”) or certificate of compliance (“COC”) for intermediates,
      as appropriate, and Compound;


(e)  COC
      for
      formulated Compound (interim product) (if any) and/or Product;


(f)  batch
      records for both intermediates, Compound, formulated Compound (interim product)
      (if any) and Product; and


(g)  TSE
      certificate of Compound and excipients (including capsule shell).




In
      connection with Development Supplies provided by Sublicensor or its Affiliates
      to Sublicensee, one or more separate quality agreements (“Quality Agreement(s)”)
      shall, upon Sublicensee's request, be negotiated in good faith and entered
      into
      by the Parties. Any such Quality Agreement(s) shall be subject to and governed
      by this Article 10 and this Agreement, and shall contain customary terms
      pertaining to the Parties’ obligations with respect to cGMP production, release
      and/or distribution of Product. The quality departments of Sublicensee and
      Sublicensor shall collaboratively prepare such Quality Agreement(s) within
      such
      time period as reasonably requested by Sublicensee. Sublicensor acknowledges
      that Sublicensee has a right to conduct or have a Third Party conduct quality
      tests of Development Supplies to verify that the Development Supplies (including
      their active ingredients) conform to GLP or GMP (as applicable) standards or
      other quality standards and is authorized to disclose Sublicensor Know-How
      to
      such Third Party to the extent necessary for such purpose.




32


10.1.5  Delivery .
      All
      Development Supplies provided by Sublicensor shall be deemed to be delivered
      to
      Sublicensee at the point where Sublicensor delivers such Development Supplies
      to
      the carrier selected by Sublicensee (which shall be the Third Party
      Manufacturer’s facility or Sublicensor’s location), and the title and risk
      thereto shall be simultaneously transferred to Sublicensee. Sublicensee shall
      be
      responsible for all costs of transportation, freight, insurance, customs and
      import formalities pertaining to shipment of Development Supplies to
      Sublicensee.




10.1.6  Specification .
      Specifications for Development Supplies to be delivered pursuant to this Section
      10.1 and (if applicable) the Quality Agreement(s) shall be those approved and
      utilized by Sublicensor and presented to the JDT. To the extent that Sublicensee
      desires to obtain Development Supplies that are manufactured in accordance
      with
      different specifications, Sublicensee may chose to be solely responsible for
      securing such Development Supplies (from Sublicensor’s Third Party Manufacturer
      or otherwise). Development Supplies shall be provided to Sublicensee along
      with
      a COC, relevant batch records and a COA for each shipment.




The
      parties shall duly review and discuss all specifications and CMC controls to
      define the Japanese regulatory requirements for Development Supplies with the
      goal of ensuring that they are fully-compliant with such requirements for
      each stage of Pharmaceutical Development ("CMC Requirements"). Once the Parties
      have agreed on such CMC Requirements, which agreement shall not be unreasonably
      withheld or delayed, Sublicensor will make reasonable efforts, to the extent
      possible within existing technical and commercial constraints, to ensure
      Development Supplies prepared for Sublicensee meet such CMC Requirements. In
      no
      event will Sublicensor deliberately prepare Development Supplies which do not
      meet such requirements or ship such to Sublicensee without Sublicensee's express
      written consent. In the event Development Supplies prepared for Sublicensee
      do
      not meet the CMC Requirements, Sublicensor will notify Sublicensee within two
      business days of such knowledge and the Parties will jointly review and discuss
      the appropriate course of action. As soon as practical after the Effective
      Date,
      the Parties shall establish a joint Quality Agreement for Development supplies
      which Agreement shall be included herein by reference.




33


10.1.7  Audit
      of facilities by Sublicensee. At any
      time during clinical development in the Sublicensee Territory, Sublicensee
      (or
      its designee) shall have the right to audit facilities that manufacture any
      of
      the Development Supplies as well as storage or testing facilities for them.
      Sublicensor shall cooperate and cause each Third Party Manufacturer and/or
      testing facility to cooperate with Sublicensee (or its designee) for such
      audit.


10.1.8  Audit
      of facilities by Regulatory Authority. If
      Regulatory Authority requests an inspection or audit of Sublicensor’s or its
      Third Party Manufacturer's facility and Sublicensee with regard to the
      intermediates, Compound or Product (including a manufacturing, storage or
      testing facility for each) anywhere in the world, Sublicensor shall use good
      faith efforts to cooperate with Sublicensee and Regulatory Authority in
      fulfilling such request (and, if applicable, shall use good faith efforts to
      cause its Third Party Manufacturer to cooperate with Regulatory Authority and
      Sublicensee in fulfilling such requested inspection or audit). Following receipt
      of the inspection or audit observations of the Regulatory Authority (a copy
      of
      which Sublicensor shall promptly provide to Sublicensee), Sublicensor shall
      use
      good faith and reasonable efforts to consult with Sublicensee and prepare the
      response to any such observations, in English.




10.2 Transfer
      of Manufacturing Technology. The
      Parties jointly acknowledge that the activities which are the subject of this
      Section 10.2 are complex, time-consuming, and require good communication to
      execute successfully in a timely manner. Accordingly, at the time Sublicensee
      invokes any of these parts, the parties shall form a Manufacturing Steering
      Team
      to plan and execute the activities. The reasonable commercial efforts of
      Sublicensor cannot make up for lack of adequate planning, task definition,
      and
      advance notice. It is agreed that the Manufacturing Steering Team meetings
      shall
      be held quarterly and its activities shall be governed by Section 3.6.




10.2.1  Transfer
      by Sublicensor .
      At any
      time during the Term of the Agreement, upon reasonable request by Sublicensee
      (through the Alliance Managers), Sublicensor shall provide to Sublicensee copies
      of written documentation pertaining to manufacturing technologies, but only
      to
      the extent that such documentation is necessary for Sublicensee (i) to conduct
      its pre-clinical and clinical development activities or (ii) to make
      arrangements for supply of Compound, formulated Compound (interim product)
      (if
      any) and/or Product for Sublicensee’s use in Phase III clinical trials, and
      commercialization of Product in the Field in the Sublicensee Territory.
      Manufacturing technologies shall include methods of synthesis, manufacturing,
      testing, analysis and formulation of intermediates, Compound, formulated
      Compound (interim product) (if any) or Product, as well as the following items,
      to the extent controlled by Sublicensor:




34


(a)  Methods
      for testing compliance with the specifications for intermediates, Compound,
      and
      additional test methods for stability studies for the intermediates,
      Compound;


(b)  Test
      Methods for the specifications for formulated Compound (interim product) (if
      any) or Product, and additional test methods for stability studies for
      them;


(c)  Manufacturing
      method (including in-process test methods) of Compound, formulated Compound
      (interim product) (if any) and finished Product;


(d)  Specifications
      or other information regarding intermediates, Compound, formulated Compound
      (interim product) (if any) or Product, or starting materials, intermediates,
      reagents, therefor (which shall be provided to Sublicensee by Sublicensor or
      its
      Affiliates or, to the extent practicable, through Third Party Manufactures
      or
      Third Party suppliers of such starting materials, intermediates, or reagents);
      and


(e)  any
      other
      matters related to manufacturing or storage to be agreed on by Manufacturing
      Steering Team.





35


In
      addition, Sublicensor or its Affiliates shall, upon Sublicensee’s reasonable
      request, provide up to sixty (60) hours of hands-on training at Sublicensor’s or
      its Third Party Manufacturer's facility by qualified Sublicensor or its Third
      Party Manufacturers’ technicians without charge, and thereafter, upon
      Sublicensor’s agreement to provide additional hours of hands-on training at
      Sublicensor’s or its Third Party Manufacturer's facility, Sublicensor shall
      provide up to fifty (50) additional hours of such training for which Sublicensee
      shall pay Sublicensor’s qualified technicians at a rate to be agreed, based on
      industry standard, by the Parties, negotiating in good faith. Upon the request
      for training, the Parties shall jointly approve a plan for training including
      timing, objectives, and activities. Sublicensor shall use reasonable commercial
      efforts to ensure the training is completed in accordance with the objectives
      and timing formulated by the Parties. Upon Sublicensee’s reasonable request,
      Sublicensor also shall use good faith efforts to facilitate an interaction
      between Sublicensee and Sublicensor’s Third Party Manufacturers or other Third
      Party suppliers which have supplied or are now supplying starting materials
      to
      Sublicensor, its other licensees or its Third Party Manufacturers, to aid
      Sublicensee in obtaining information regarding intermediates, Compound,
      formulated Compound (interim product) (if any) or Product or starting materials,
      intermediates, and reagents therefor.




10.2.2  Quality
      Agreements with Third Party Suppliers .
      Sublicensor and Sublicensee acknowledge that, pursuant to the Japanese
      Pharmaceutical Affairs Law, certain quality agreements are required to be
      entered into among Sublicensee and each direct or indirect supplier of
      intermediates, Compound, formulated Compound (interim product) (if any) and
      Product (each such agreement, a “Third Party Quality Agreement”), and that such
      Third Party Quality Agreement is required to enable Sublicensee to directly
      control quality matters with respect to intermediates, Compound, formulated
      Compound (interim product) (if any) and Product. The Parties also acknowledge
      that each such Third Party Quality Agreement shall be filed with Regulatory
      Authority at the time of the filing of the market approval for finished Product
      in the Sublicensee Territory. For this purpose, upon request of Sublicensee,
      Sublicensor shall use good faith efforts to reasonably cooperate with
      Sublicensee, and to cause each Third Party Manufacturer or supplier to cooperate
      with Sublicensee, in Sublicensee’s efforts to enter into such Third Party
      Quality Agreements with such Third Party(ies) in a timely manner.




36


10.2.3  Direct
      Supply Agreement with Third Party Manufacturers .
      At any
      time during the period when Sublicensor or its Affiliates is providing
      Development Supplies to Sublicensee, and until Sublicensee has a direct supply
      contract with Third Party contractors, upon reasonable request by Sublicensee,
      Sublicensor agrees to use good faith and reasonable efforts to (i) facilitate
      Sublicensee’s efforts to enter into supply agreements with Sublicensor’s or its
      Affiliates’ Third Party Manufacturers or other Third Party suppliers of
      intermediates, Compound, formulated Compound (interim product) (if any) or
      Product or starting materials, intermediates, or reagents for Development or
      commercial supply purposes (“Direct Supply Agreements”); and (ii) in connection
      with such Direct Supply Agreements, cooperate with Sublicensee to provide
      Sublicensee with reasonable access to pertinent manufacture technologies that
      are necessary for manufacturing intermediates, Compound, formulated Compound
      (interim product) (if any) and/or Product, including the information specified
      in clauses (a) through (g) of Section 10.1.4.




10.2.4  Accreditation .
      Sublicensor and Sublicensee acknowledge that, pursuant to the Japanese
      Pharmaceutical Affairs Law, each foreign manufacturer of medical products with
      respect to each supplier of intermediates, Compound, formulated Compound
      (interim product) (if any) and/or Product, including any test or storage
      facility, for commercial supply is required to be accredited as of the time
      when
      Sublicensee files a marketing approval for Product in the Sublicensee Territory.
      In order to obtain such accreditation, Sublicensor shall use good faith efforts
      to cooperate reasonably with Sublicensee in causing each Third Party
      Manufacturer to apply to Regulatory Authority by themselves or having
      Sublicensee apply on their behalf at least six (6) months prior to Sublicensee’s
      anticipated date for the filing of a marketing approval in Japan.




10.3 Sublicensor shall, in the event it wishes to be supplied with the Compound
      and/or the Product from Sublicensee and/or its Third Party Manufactures, enter
      into discussion with Sublicensee thereon. In case Sublicensee agrees to supply
      to Sublicensor said Compound and/or Product, then the Sections 10.1 and 10.2
      hereinabove shall apply mutatis mutandis.


37
 *****Confidential
            Material redacted and filed separately with the Commission.





ARTICLE
      11. NON-COMPETITION





11.1  Ferric
      Ion Products .
      During
      the Term of this Agreement, Sublicensee shall not develop, make, have made,
      use,
      have used, offer to sell, sell, have sold, import or export a
      product containing ferric ion as the sole active pharmaceutical ingredient ,
      other
      than the Product or a Combination Product, for the
      treatment of hyperphosphatemia in the
      Sublicense Territory.




11.2  Other
      Competing Products .
      For a
      period of ***** from first commercial launch of a Product in the Sublicense
      Territory, Sublicensee shall not offer to sell, sell, or have sold a product,
      other than the Product or a Combination Product, for the treatment of
      hyperphosphatemia in the Sublicense Territory. Nothing in this Section 11.2
      shall prevent Sublicensee from engaging in research and development activities
      for such a product in anticipation of marketing and selling after expiration
      of
      the ***** period. Further, nothing in this Section 11.2 shall relieve
      Sublicensee of their obligations under Article 7 to diligently advance the
      development and commercialization of Products in the Sublicense
      Territory.





ARTICLE
      12. FOLLOW-ON PRODUCTS





12.1  Follow-on
      Products .
      For a
      period of ***** from the Effective Date, Sublicensee will have a right of first
      negotiation to any Follow-on Products which Sublicensor develops or otherwise
      obtains rights to as follows: (i) Following
      completion of the first Phase II clinical study of such Follow-on
      Product, Sublicensor shall describe the Follow-on
      Product in
      writing in reasonable detail, and such description shall be protected as
      Proprietary Information under this Agreement (a "Confidential Disclosure");
      (ii)
      Sublicensor shall provide the Confidential Disclosure to Sublicensee; and (iii)
      during the period commencing upon Sublicensee's receipt of the Confidential
      Disclosure and expiring ***** thereafter (the "Discussion Period"), the parties
      shall discuss in good faith a license and commercialization agreement with
      respect to the Follow-on
      Product in the
      Sublicense Territory. If the parties do not reach agreement during the
      Discussion Period, then the Right of First Negotiation shall expire, and
      Sublicensor shall be free to exploit the Follow-on
      Product on its
      own, or to market the Follow-on
      Product to others, on terms no less favorable to Sublicensor than the final
      terms offered by Sublicensor.
      In the event Sublicensor receives an offer from any third party to license
      or
      commercialize the Follow-on Products (an "Outside Offer"), Sublicensor shall
      promptly so notify to Sublicensee before accepting or rejecting such third
      party
      offer.


38
 *****Confidential
            Material redacted and filed separately with the Commission.




12.2  Other
      Compounds in the Field . For
      a
      period of ***** from the Effective Date, in the event that Sublicensor (a)
      acquires, licenses ,
      obtains
      licenses, or
      develops a compound for use in the Field; and (b) is considering a development
      and/or marketing partner or licensee in the Sublicense Territory, then
      Sublicensor and Sublicensee shall meet (before or at substantially the same
      time
      as Sublicensor meets
      with other potential partners) to discuss in good faith the possibility of
      collaborating in connection with such compound in the Sublicense
      Territory.




ARTICLE
      13. PRICING




13.1  Pricing .
      Sublicensee shall be solely responsible for establishing the price for Products
      in the Sublicense Territory.




13.2  Unexpected
      Events .
      The
      parties acknowledge that the
      economic provisions of this Agreement may be affected by unexpected decisions
      made by pricing authorities in the Sublicense Territory. In the event that
      unexpected decisions by the pricing authority causes Sublicensee
      to have difficulties in continuing development of or marketing Product from
      economic or commercial point of view such as, (a) a
      determination by the NHI to set the price for Product in the Sublicense
      Territory by reference to Caltan (calcium carbonate); or (b) the authority
      forces drastic price cuts for Phosphate Binders; or (c) the authority applies
      flat-sum reimbursement to the treatment of dialysis including Phosphate Binders,
      then the parties agree to meet in good faith to discuss and to determine
      appropriate adjustments to this Sublicense Agreement to address the unexpected
      events, including consideration of any future milestone and royalty obligations
      contained in Articles 4 and 5. In
      the
      event that, after due discussion and consideration under this Section 13.2,
      Sublicensee determines that it is no longer economically viable to commercialize
      the Product, then such a decision not to, or to cease, commercialization shall
      be considered a termination by Sublicensee for purposes of this Agreement and
      the provisions of Article 16 shall apply.




39




ARTICLE
      14. INDEMNIFICATION





14.1  Indemnification
      by Sublicensee .
      Sublicensee agrees to indemnify and hold Sublicensor, its directors, officers,
      employees and agents harmless from and against any liabilities or damages or
      expenses in connection therewith (including reasonable attorneys' fees and
      costs
      and other expenses of litigation) (collectively
      “Claims”) resulting
      from (i) any willful misrepresentation of a material fact or breach of warranty
      by Sublicensee under this Agreement; (ii) any Claim by Third Parties (other
      than
      Claims related to Third Party patent or other intellectual property rights
      in
      the Sublicense Territory or Claims that are the subject of indemnification
      by
      Sublicensor under Section 14.2) arising out of the exercise of Sublicensee’s
      rights under this Agreement or the failure of Sublicensee to perform the
      activities described in Section 3.1 in compliance with all applicable laws,
      rules and regulations, applicable product specifications and handling and
      storage protocols, common practices in the pharmaceutical industry, or
      requirements of this Agreement, the Clinical Supply Agreement or Commercial
      Supply Agreement; (iii) Sublicensee’s gross negligence or willful misconduct (or
      that of its Affiliates, sublicensees, third-party contractors or distributors);
      and (iv) the enforcement by Sublicensor of its indemnification rights against
      Sublicensee under clause (ii) of this Section 14.1 .




14.2  Indemnification
      by Sublicensor .
      Sublicensor hereby agrees to indemnify and hold Sublicensee and its officers,
      directors, employees and agents harmless from and against any liabilities or
      damages or expenses in connection therewith (including reasonable attorneys'
      fees and costs and other expenses of litigation) resulting from (i) any
      willful misrepresentation of a material fact or breach of warranty by
      Sublicensor under this Agreement ;
      (ii)
      manufacture of Compound by Sublicensor or its Affiliate(s) or its third party
      contractor(s), for Sublicensee’s development activities not in compliance with
      the agreed specifications therefor; (iii) the development, testing, manufacture,
      commercialization, use, handling or distribution by or on behalf of Sublicensor
      or Sublicensor’s other sublicensee(s) of the Compound or Product outside the
      Sublicense Territory, including the administration of Compound or Product to
      humans and any product liability Claim arising therefrom (other than a Claim
      that is the subject of indemnification by Sublicensee under Section 14.1(i)
      or
      (iii)); (iv) any Claim arising from the Inherent Nature of the Product; (v)
      Sublicensor’s gross negligence or willful misconduct (or that of its Affiliates,
      sublicensees, third-party contractors or distributors); and (vi) the
      enforcement by Sublicensee of its indemnification rights under this Section
      14.2. For
      purposes of this Article 14, the term “Inherent Nature of the Product” means
      bodily injury caused solely by a design defect in the molecular or chemical
      structure of the Compound and not caused in whole or in part by other factors,
      including, without limitation, manufacture, testing, warning, advertising,
      sale,
      marketing, packaging, alteration or modification, labeling, instructions or
      promotion of the Product, whether that claim is based in tort, contract, fraud
      or any other theory.




40


14.3  Unknown
      Source Product Liability .
      Notwithstanding the foregoing, Sublicensor and Sublicensee shall equally share
      all losses arising from Unknown Source Product Liability in the Sublicense
      Territory. As used in this Section 14.3, “Unknown Source Product Liability”
shall mean any portion of any Third Party claim for product liability that
      does
      not arise from: (i) Sublicensee’s failure to perform the activities described in
      Section 3.1 in compliance with all applicable laws, rules and regulations,
      applicable product specifications and handling and storage protocols, common
      practices in the pharmaceutical industry, or requirements of this Agreement,
      the
      Clinical Supply Agreement or Commercial Supply Agreement; (ii) Sublicensee’s
      gross negligence, or willful misconduct (or
      that
      of its Affiliates, sublicensees, third-party contractors or
      distributors) ;
      or
      (iii) the
      Inherent Nature of the Product .




14.4  Indemnification
      Procedures .
      Each
      indemnified party shall promptly notify the indemnifying party in writing of
      any
      action, claim or liability in respect of which the indemnified party intends
      to
      claim indemnification from the indemnifying party. The indemnified party shall
      permit the indemnifying party, at its discretion, to settle any such action,
      claim or liability, and agrees to the complete control of such defense or
      settlement by the indemnifying party, provided however, that such settlement
      does not adversely affect the rights of the indemnified party hereunder or
      impose any obligations on the indemnified party in addition to those set forth
      herein in order for it to exercise such rights. No such action, claim or
      liability shall be settled by the indemnified party without the prior written
      consent of the indemnifying party, which consent shall not be unreasonably
      withheld or delayed, and the indemnifying party shall not be responsible for
      any
      legal fees or other costs incurred by the indemnified party other than as
      provided herein. The indemnified party and its directors, officers, employees
      and agents shall cooperate fully with the indemnifying party and its legal
      representatives in the investigation and defense of any action, claim or
      liability covered by this indemnification, and shall have the right, but not
      the
      obligation, to be represented by counsel of their own selection and at their
      own
      expense.


41
 *****Confidential
            Material redacted and filed separately with the Commission.




14.5  Limitation
      of Liability .
      Notwithstanding anything to the contrary herein, (i) neither party shall be
      liable to the other party for any indirect, incidental or consequential damages
      arising out of any terms or conditions in this Agreement or with respect to
      the
      performance hereof; and (ii) Sublicensor’s obligation to indemnify Sublicensee
      for claims arising from the Inherent Nature of the Product pursuant to Section
      14.2(iv) and Unknown Source Product Liability pursuant to Section 14.3 shall
      not
      exceed the aggregate sum of *****.




14.6  Survival
      of Representations and Warranties .
      The
      representations and warranties contained in this Agreement shall survive the
      expiration or termination of this Agreement and shall remain in full force
      and
      effect.




ARTICLE
      15. CONFIDENTIALITY





15.1  Treatment
      of Proprietary Information .
      Except
      as otherwise provided in this Article 15, during the term of this Agreement
      and
      for a period of five (5) years following expiration or termination thereof,
      a
      party (the "Receiving Party") will retain in confidence and use only for
      purposes of this Agreement Proprietary Information supplied by or on behalf
      of
      the other party (the "Disclosing Party"). For purposes of this Article 15,
      all
      such Proprietary Information which a Receiving Party is obligated to retain
      in
      confidence shall be disclosed in written form and marked "Confidential" or
      with
      similar designation, or if originally disclosed visually or orally, reduced
      to
      such written form within thirty (30) days of such original
      disclosure.




42


15.2  Right
      to Disclose .
      To the
      extent it is reasonably necessary or appropriate to fulfill its obligations
      or
      exercise its rights under this Agreement or any rights which survive termination
      or expiration hereof, a Receiving Party may disclose Proprietary Information
      to
      its Affiliates, Sublicensees, consultants, agents, outside contractors and
      clinical investigators (collectively the “Representatives”) on condition that
      such Representatives agree (i) to keep the Proprietary Information confidential
      for  at least
      the same time periods and to the same extent as such party is required to keep
      the Proprietary Information confidential and (ii) to use the Proprietary
      Information only for such purposes as the Receiving Party is entitled to use
      the
      Proprietary Information. Each party warrants that each of its Representatives
      to
      whom any Proprietary Information is disclosed shall previously have been
      informed of the confidential nature of the Proprietary Information and shall
      have agreed to be bound by the terms and conditions of confidentiality as set
      forth in this Agreement. The Receiving Party shall ensure that the Proprietary
      Information provided by the Disclosing Party shall not be used or disclosed
      by
      such Representatives except as permitted by this Agreement. The Receiving Party
      shall stand responsible for any breach by its Representatives of the
      confidentiality provisions set forth in this Agreement.




15.3  Release
      From Restrictions .
      The
      obligation not to disclose Proprietary Information shall not apply to any part
      of such Proprietary Information which:




(i)
      is or
      becomes patented, published or otherwise part of the public domain other than
      by
      the unauthorized acts of the Receiving Party or its Affiliates or Sublicensees
      in contravention of this Agreement; or


(ii)
      is
      disclosed to the Receiving Party by a Third Party which did not obtain such
      Proprietary Information directly or indirectly from the Disclosing Party; or


(iii)
      prior to disclosure under this Agreement, was already in the possession of
      the
      Receiving Party as evidenced by its written records, provided such Proprietary
      Information was not obtained, directly or indirectly, from the Disclosing Party;
      or


(iv)
      is
      developed by the Receiving Party independent of Proprietary Information received
      from the Disclosing Party as evidenced by its written records.




15.4  Public
      Domain .
      For the
      purpose of this Agreement, specific information disclosed as part of the
      Proprietary Information shall not be deemed to be in the public domain or in
      the
      prior possession of the Receiving Party merely because it is embraced by more
      general information in the public domain or by more general information in
      the
      prior possession of the Receiving Party.




43


15.5  Ownership
      of Proprietary Information .
      Except
      as otherwise agreed to hereunder, all Proprietary Information disclosed by
      the
      Disclosing Party shall remain the property of the Disclosing Party. In cases
      where return of Proprietary Information is requested according to Article 16
      hereunder, upon the written request of the Disclosing Party (i) all tangible
      Proprietary Information provided by the Disclosing Party (including, but not
      limited to all copies thereof )
      except
      for Proprietary Information consisting of analyses, studies and other documents
      prepared by or for the benefit of the Receiving Party shall be promptly returned
      to the Disclosing Party, and (ii) all portions of such analyses, studies and
      other documents not prepared by or for the benefit of the Receiving Party
      (including all copies thereof and all unused samples of materials provided
      by
      the Disclosing Party) which are within the definition of Proprietary Information
      shall be destroyed, and the Receiving Party shall certify such destruction
      in
      writing to the Disclosing Party. Notwithstanding the foregoing, the Receiving
      Party may retain one copy of the Proprietary Information of the Disclosing
      Party
      in its legal department for the sole purpose of determining its obligations
      hereunder.




15.6  Legal
      Disclosure .
      The
      Receiving Party may disclose the Proprietary Information of the Disclosing
      Party
      to the extent reasonably necessary in prosecuting or defending litigation,
      complying with applicable laws, governmental regulations or court order, or
      otherwise submitting required information to tax or other governmental
      authorities. If the Receiving Party intends to so disclose any such Proprietary
      Information, the Receiving Party shall provide the Disclosing Party prompt
      prior
      notice of such fact so that the Disclosing Party may seek to obtain a protective
      order or other appropriate remedy concerning any disclosure of such Proprietary
      Information. The Receiving Party will reasonably cooperate with the Disclosing
      Party in connection with the Disclosing Party’s efforts to obtain any such order
      or other remedy. If any such order or other remedy does not fully preclude
      the
      disclosure of such Proprietary Information, the Receiving Party will make such
      disclosure only to the extent that such disclosure is legally required and
      will
      use its reasonable efforts to have confidential treatment accorded to the
      disclosed Proprietary Information.




44


15.7  No
      Title .
      Except
      as otherwise expressly set forth in this Agreement, nothing herein shall be
      construed as giving the Receiving Party any right, title and interest in and
      to
      the Proprietary Information of the Disclosing Party.




15.8  Permitted
      Disclosures .




15.8.1  Disclosure
      by Sublicensee .
      Notwithstanding the foregoing, subject to review and comment by Sublicensor,
      Sublicensee may disclose Sublicensor Proprietary Information to the extent
      such
      disclosure is reasonably necessary for (a) the development of the Compound
      or
      the Product, (b) the filing of applications for Registration, (c) the
      commercialization of the Compound or the Product, or (d) the filing or
      prosecution of a patent applications and patents relating to Improvements
      invented solely by Sublicensee or jointly by Sublicensee and Sublicensor.




15.8.2  Disclosure
      by Sublicensor .
      Notwithstanding the foregoing, subject to review and comment by Sublicensee,
      Sublicensor may disclose Sublicensee Proprietary Information to the extent
      such
      disclosure is reasonably necessary for the filing or prosecution of patent
      applications and patents relating to Improvements invented solely by
      Sublicensor.




15.9  Publications .
      Neither
      Party shall submit or present any written or oral publication, any manuscript,
      abstract or other communication which includes data or other information related
      to the Compound or the Products or the Proprietary Information of the other
      Party without first obtaining the prior written consent of the other
      Party.




ARTICLE
      16. TERM AND TERMINATION





16.1  Term .
      Unless
      terminated sooner as provided herein, this Agreement will expire on the last
      day
      to expire of the licensed Patent Rights containing a Valid Claim that, but
      for
      the license granted by Sublicensor to Sublicensee hereunder, would be directly
      infringed by the use or usage of Products as permitted in this Agreement,
      including any period of regulatory exclusivity or patent term extension. Upon
      expiration or termination of this Agreement, the rights and obligation of the
      parties shall cease, except as follows:




45


(i)
      following expiration, Sublicensee shall have a fully paid non-exclusive license
      under Sublicensor Know-How to make, have made, use, have used, offer to sell,
      sell and import the Product in the Sublicensee Territory;


( ii )
      upon
      expiration or termination by either party for any reason, the rights and
      obligations under Articles 2, 6, 10, 14, 15, 16, 19 and 26 and the
      applicable provisions of Section 8.
      2 ;


( iii )
      expiration or termination of this Agreement shall not relieve either party
      of
      any obligations which accrued to that party prior to such expiration or
      termination for any reason; and


( iv )
      any
      cause of action or remedy for breach shall survive the expiration or termination
      of this Agreement.




16.2 Termination
      by Sublicensee .




16.2.1  Termination
      Without Cause .
      Sublicensee may terminate this Agreement without cause at any time upon at
      least
      sixty (60) days prior written notice to Sublicensor if termination occurs prior
      to the receipt of marketing authorization for the Product in the Sublicense
      Territory and upon at least six (6) months prior written notice to Sublicensor
      if termination occurs following receipt of marketing authorization for the
      Product in the Sublicense Territory.




16.2.2  Termination
      for Breach .
      Sublicensee may terminate this Agreement upon or after the breach of any
      material provision of this Agreement by Sublicensor if such breach is not cured
      within sixty (60) days after Sublicensee gives Sublicensor written notice
      thereof.




16.2.3  Termination
      for Insolvency .
      Sublicensee may terminate this Agreement in its entirety for cause upon at
      least
      sixty (60) days prior written notice to Sublicensor upon
      or
      after the bankruptcy, insolvency, dissolution or winding up of Sublicensor
      other
      than for the purpose of reconstruction or amalgamation.




16.3  Termination
      by Sublicensor . Sublicensor
      may terminate this Agreement in its entirety for cause at any time upon at
      least
      sixty (60) days prior written notice to Sublicensee upon the occurrence of
      any
      of the following:




(a)
      upon
      or after the breach of any material provision of this Agreement by Sublicensee
      if such breach is not cured within such sixty (60) day period; or




46


(b )
      upon or
      after the bankruptcy, insolvency, dissolution or winding up of Sublicensee
      other
      than for the purpose of reconstruction or amalgamation.


For
      the
      avoidance of doubt, a failure to make a payment otherwise owed under Article
      4
      or Article 5 that remains uncured for at least sixty (60) days following written
      notice shall be deemed a material breach. Furthermore, Sublicensor agrees that
      it will not voluntarily terminate the Panion License Agreement (or allow such
      agreement to be terminated by Panion), unless Sublicensor maintains its license
      for the Sublicense Territory on terms and conditions no less favorable to
      Sublicensee as in this Agreement or makes arrangements for Sublicensee be
      granted a direct license from Panion with terms and conditions no less favorable
      to Sublicensee as in this Agreement.




16.4  Rights Following Termination .




16.4.1  In
      the
      event of termination of this Agreement by Sublicensor pursuant to Section 16.3
      or by Sublicensee pursuant to Section 16.2.1, Sublicensee will promptly transfer
      and hand over to Sublicensor all Sublicensor Development Data, and
      Sublicensor Know-How p rovided
      to Sublicensee hereunder (subject to the provisions of Section 8.2 with respect
      to Improvements). Each party will return to the other party all copies of the
      Proprietary Information supplied by one party to the other party hereunder,
      except that one copy of such Proprietary Information may be retained by each
      party for archival purposes only, Sublicensee shall promptly take all steps
      necessary to transfer all right, title and interest in any Registration,
      marketing authorizations or other regulatory approvals to Sublicensor. Sublicensor
      shall have the right to use and/or disclose to a Third Party all such
      Sublicensee Development Data and
      Sublicensee Know-How in
      connection with Sublicensor’s effort to market Products in the Sublicense
      Territory or to license to
      such
      Third Party the right to manufacture and sell a Product in the Sublicense
      Territory.




16.4.2  Upon
      expiration of this Agreement or termination of this Agreement pursuant to
      Sections 16.2.2 and 16.2.3, Sublicensee shall
      retain the right to use any Proprietary Information in
      the
      Sublicense Territory without
      any additional payment to
      Sublicensor .




16.5  Disposition
      of Product .
      Upon
      termination of this Agreement by
      Sublicensor ,
      Sublicensee shall provide Sublicensor a written inventory of all Product (in
      the
      form of raw material, work-in-progress and finished goods) in its and its
      sublicensees' possession, and shall have the right to dispose of such Product
      within six (6) months thereafter, subject to fulfillment of the royalty
      obligations relating thereto .




47


16.6 Change
      of Control .
      The
      rights granted to Sublicensee hereunder (including rights to be supplied under
      Article 10 hereunder) will survive any change in Sublicensor’s current
      management or ownership, or business as presently conducted.




16.7  Rights
      in Bankruptcy .
      All
      rights and licenses granted under or pursuant to this Agreement by Sublicensor
      are, and shall otherwise be deemed to be, for purposes of Section 365(n) of
      the
      U.S. Bankruptcy Code, licenses of rights to “intellectual property” as defined
      under Section 101 of the U.S. Bankruptcy Code. The Parties agree that
      Sublicensee, as sublicensee of such rights under this Agreement, shall retain
      and may fully exercise all of its rights and elections under the U.S. Bankruptcy
      Code. The Parties further agree that, in the event of the commencement of a
      bankruptcy proceeding by or against Sublicensor under the U.S. Bankruptcy Code
      that is not dismissed within sixty (60) days of the first date of filing,
      Sublicensor hereby grants to Sublicensee, subject to Sublicensee’s obligations
      under Section 365(n), a right of access and to obtain possession of and to
      benefit from each of the following embodiments to the extent related to
      Sublicensee’s exercise of its license rights to the Compounds and Products in
      the Sublicense Territory in accordance with this Agreement: (i) copies of (or
      complete access to, as appropriate) Sublicensor Development Data necessary
      or
      reasonably useful for Sublicensee to manufacture, develop and/or commercialize
      the Compound and/or Product in the Field in the Sublicense Territory; and (ii)
      any other embodiments of such intellectual property in Sublicensor’s possession
      and control, which, if not already in Sublicensee’s possession, shall be
      promptly delivered to Sublicensee (a) upon Sublicensee’s reasonable written
      request therefor, unless Sublicensor elects to continue to perform all of its
      obligations under this Agreement or (b) if not delivered under clause (a),
      following the rejection of this Agreement by Sublicensor upon Sublicensee’s
      reasonable written request therefor. Recognizing that the embodiments described
      above may be useful or necessary to Sublicensor in connection with its continued
      operation of its business, and that a Third Party may also have a right of
      access to such embodiment under Section 365(n) of the Bankruptcy Code or
      applicable non-bankruptcy law, where there is a fixed or limited quantity of
      any
      tangible item of such embodiment described above, Sublicensee shall be entitled
      to a pro rata portion thereof .





48


ARTICLE
      17. ASSIGNMENT





This
      Agreement may not be assigned or otherwise transferred by either party without
      the written consent of the other party except that either party without such
      consent but with
      a prompt notification in writing to the other party may
      assign or sell the license (i) in connection with the transfer or sale of all
      or
      substantially all of its business assets to a Third Party, or (ii) in the event
      of its merger or consolidation with another company, or (iii) to an Affiliate.
      Any purported assignment in violation of this clause shall be null and void.
      Any
      permitted assignee shall assume all the obligations of its assignor under this
      Agreement. No assignment shall relieve either party of its responsibility for
      the performance of any obligation that such party has accrued hereunder as
      of
      the date of assignment.





ARTICLE
      18 PATENT MARKINGS





Sublicensee
      agrees to mark all Products made, used or sold under the terms of this
      Agreement, or their containers, in accordance with applicable patent marking
      laws.







ARTICLE
      19. ARBITRATION





In
      the
      event any dispute or difference of any kind whatsoever shall arise between
      the
      parties in connection with or arising out of this Agreement or the carrying
      out
      of its obligations, except as provided in Section 3.8(b), it shall first be
      brought to negotiation between the parties and in case no agreement is reached
      within a period of sixty (60) days from the day on which such dispute or
      difference was brought to the attention of the other party, it shall then be
      referred to arbitration. The arbitration shall be conducted in London, United
      Kingdom in English and in accordance with the arbitration rules of International
      Chamber of Commerce. The parties shall request the arbitrators to render award
      within eighteen (18) months. The award shall be final, binding and enforceable
      upon the parties.





49


ARTICLE
      20. PATENT TERM EXTENSION





Sublicensee
      agrees, as exclusive Sublicensee, to apply for and to exercise due diligence
      in
      obtaining an extension of the term of any patent included within the Patent
      Rights under the applicable laws in the Sublicense Territory. Sublicensor agrees
      to execute such documents and take such additional actions as Sublicensee may
      reasonably request in connection therewith. Each party shall bear its own
      expenses in connection with the application for patent term extensions. Sublicensor
      shall make
      all
      necessary arrangements with Panion, Dr. Hsu and GloboAsia for Sublicensee to
      apply for said patent term extensions .





ARTICLE
      21. FORCE MAJEURE





Neither
      party shall be held liable or responsible to the other party nor be deemed
      to
      have defaulted under or breached this Agreement for failure or delay in
      fulfilling or performing any term of this Agreement, other than an obligation
      to
      make a payment, when such failure or delay is caused by or results from fires,
      floods, embargoes, government regulations, prohibitions or interventions, wars,
      acts of war, terrorism, insurrections, riots, civil disobedience, strikes,
      lockouts, acts of God, or any other cause beyond the reasonable control of
      the
      affected party.




ARTICLE
      22. NEGATION OF AGENCY




Nothing
      herein contained shall be deemed to create an agency, joint venture,
      amalgamation, partnership, or similar relationship between Sublicensee and
      Sublicensor. The relationship between the parties established by this Agreement
      is that of independent contractors. Neither party shall have the power to bind,
      obligate, incur any debts or make any commitments for the other party except
      to
      the extent, if at all, specifically provided herein.




50




ARTICLE
      23. PUBLICITY





On
      the
      date of signing this Agreement by both parties (i.e., Effective Date),
      Sublicensor and Sublicensee shall issue the respective press releases attached
      hereto as **Exhibit
      4 (A & B)** announcing the existence of this Agreement. Each party shall give notice to
      the
      other party prior to issuing any press release relating to this Agreement within
      due time to allow for reasonable consideration. The party issuing the press
      release shall give due consideration and weight to any comments or concerns
      raised by the other party. Notwithstanding
      the foregoing, neither party shall issue a press release announcing the
      execution of this Agreement outside of a joint press release which will be
      prepared jointly by the parties.




ARTICLE
      24. FILING OF THE AGREEMENT




To
      the
      extent, if any, that a party concludes in good faith that it is required to
      file
      this Agreement or a notification thereof with any governmental authority,
      including without limitation the U.S. Securities and Exchange Commission in
      accordance with applicable laws and regulations, such party may do so, subject
      to the confidentiality obligations set forth herein, and the other party shall
      cooperate in such filing or notification and shall execute all documents
      reasonably required in connection therewith at the, expense of the requesting
      party. The parties shall promptly inform each other as to the activities or
      inquiries of any such governmental authority relating to this Agreement, and
      shall cooperate, in responding to any request for further information therefrom
      at the expense of the requesting party.







ARTICLE
      25. SEVERABILITY





Each
      party hereby expressly agrees and contracts that it is not the intention of
      either party to violate any public policy, statutory or common laws, rules,
      regulations, treaty or decision of any government agency or executive body
      thereof of any country or community or association of countries. If any word,
      sentence, paragraph, clause or combination thereof in this Agreement is found
      by
      a court or executive body with judicial powers having jurisdiction over this
      Agreement or any of the parties hereto in a final unappealable or unappealed
      order to be in violation of any such provisions in any country or community
      or
      association of countries, such word, sentence, paragraph, clause or combination
      thereof shall be inoperative in such country or community or association of
      countries, and the parties will seek in good faith to amend this Agreement
      in
      order to cure such violation; the remainder of this Agreement shall in any
      event
      remain binding upon the parties hereto.





51


ARTICLE
      26. NOTICES





Any
      notices required or permitted to be given hereunder shall be in writing and
      shall be deemed to have been properly given if delivered in person, or if mailed
      by registered or certified mail (return receipt requested), postage prepaid,
      or
      by recognized courier service, facsimile or e-mail promptly confirmed by first
      class mail, to the addresses given below or such other addresses as may be
      designated in writing by the parties from time to time during the term of this
      Agreement. Any notice sent by
      facsimile or e-mail shall be effective when sent, and any notice sent by
      registered or certified mail or recognized courier service shall be effective
      when mailed.





In
      the
      case of Sublicensor:




Keryx
      Biopharmaceuticals, Inc


750
      Lexington Ave, 20 th Floor


New
      York,
      NY 10022 U.S.A.


Attn:
      Beth F. Levine, General Counsel


Fax:
      1-212-531-5961


Email:
      blevine@keryx.com





In
      the
      case of Sublicensee:





Japan
      Tobacco Inc.


JT
      Building, 2-1, Toranomon 2-Chome


Minato-ku,
      Tokyo 105-8422, Japan


Attn:  Vice
      President, Pharmaceutical Business Development


Fax:  81-3-5572-1449


Email:
      takashi.kamiya@ims.jti.co.jp





52


and


Torii
      Pharmaceutical Co., Ltd.


Torii
      Nihonbashi Bldg., 4-1, Nihonbashi-Honcho 3-chome,


Chuo-ku,
      Tokyo 103-8439, Japan


Attn:  General
      Manager, Business Development Dept.


Fax:  81-3-5203-7334


Email:
      kiyoshi.sato@torii.co.jp





with
      a
      copy to:


Holland
      & Knight LLP


195
      Broadway


New
      York,
      NY 10007 U.S.A.


Attn:
      Neal Beaton, Esq.


Fax:
      1-212-341-7103


Email:
      neal.beaton@hklaw.com








ARTICLE
      27. GOVERNING LAW





This
      Agreement shall be governed by and construed in accordance with the laws of
      the
      State of New York, exclusive of choice-of-law rules.





ARTICLE
      28. AFFILIATES





Each
      party may perform its obligations hereunder personally or through one or more
      Affiliate and shall be responsible for the performance of such obligations,
      and
      any liabilities resulting from such performance. Neither party shall permit
      any
      of its Affiliates to commit any act (including any act of omission) which such
      party is prohibited hereunder from committing directly.





53


ARTICLE
      29. ENTIRE AGREEMENT





This
      Agreement and the Exhibits hereto which are a part hereof, contain the entire
      understanding of the parties with respect to the subject matter hereof. All
      express or implied agreements and understanding, either oral or written,
      heretofore made are expressly merged in and made a part of this Agreement.
      The
      parties hereto may not alter, amend, modify, terminate or waive any of the
      provisions of this Agreement, but only by a written instrument duly executed
      and
      delivered by authorized officers of the parties.





ARTICLE
      30. WAIVER





The
      failure of a party to enforce at any time for any period any of the provisions
      hereof shall not be construed as a waiver of such provisions or of the right
      of
      such party thereafter to enforce each such provision.





ARTICLE
      31. CAPTIONS





The
      captions to the several Articles and Sections hereof are not a part of this
      Agreement, but are merely guides or labels to assist in location and reading
      the
      several Articles and Sections hereof.


54


**IN
      WITNESS HEREOF** ,
      the
      parties have executed this Agreement as of the date set forth
      above.





**KERYX
                BIOPHARMACEUTICALS, INC.**
            
            **JAPAN
                TOBACCO INC.**By:
            /s/Michael
              S. Weiss
            
            By:
            /s/Noriaki
              OkuboMichael
                S. Weiss
            
            
            Noriaki
                OkuboChairman
                and Chief Executive Officer
            
            
            President,
                Pharmaceutical Business




**TORII
                    PHARMACEUTICAL CO., LTD.**By:
              /s/Norihiko
                MatsuoNorihiko
                    MatsuoPresident
                    and Representative Director


55
 *****Confidential
            Material redacted and filed separately with the Commission.






**List
      of Exhibits**




**Exhibit
      1: List of Patent and Patent Applications**




**Exhibit
      2: *******




**Exhibit
      3: Preliminary Timelines for the Development Program**


8
 56




**[** **Exhibit
      1] List of Patent and Patent Applications**







**(Based
      on patent docket received from Michael Stanley, Esq., counsel for Panion &
BF Biotech, Inc. on September 5, 2007)**







**Patent
              Dkt#859
              (KWOK *et
              al*.,
              2004)****DOCKET
                #**
            **MATTER**
            **NOTE****Dkt.
                #859-PCT-JP**
            **FERRIC
                ORGANIC COMPOUNDS, USES THEREOF AND METHODS OF MAKING
                SAME**
            **PENDING**Japanese
                App’l No. 2006-503637, Filed August 18, 2005, National Stage App’l of
                Int’l App’l No. PCT/US2004/004646, filed February 18, 2004, claiming
                priority of U.S. Serial No. 60/447,690, filed February 19, 2003 and
                U.S.
                Serial No. 60/462,684, filed April 15, 2003
            §February
                27, 2006: Received “Notification of Application Number”
              §September
                22, 2006: Publication No.**2006-518391**,
                Publication Date:**August
                10, 2006**
              §April
                25, 2007: Filed “Request for Examination”Inventors:
                David W.K. KWOK and Nikolay Mintchev STOYNOV
              Applicant:
                GloboAsia




**Patent
              Dkt#1092 (HSU,
              1997)****DOCKET
                #**
            **MATTER**
            **NOTE****Dkt.
                #1092-PCT-JP**
            **METHOD
                FOR TREATING RENAL FAILURE**
            **PENDING**Japanese
                App’l No. 10-527705, Filed June 15, 1999, National Stage App’l of Int’l
                App’l No. PCT/US97/20977, filed November 14, 1997, which is a continuation
                of U.S. Serial No. 08/794,328, filed February 3, 1997, and U.S. Serial
                No.
                60/032,745, filed December 16, 1996
            §December
                13, 2006: Received “*Office
                Action 11.13.06*”
              §June
                7, 2007: Filed “*Response
                to Office Action*”Dkt.
                #1092-Z-PCT-JP
              (Divisional)
            Japanese
                App’l No. 2007-133978, filed May 21, 2007 which is a divisional app’l of
                Japanese App’l No. 10-527705, Filed June 15, 1999, National Stage App’l of
                Int’l App’l No. PCT/US97/20977, filed November 14, 1997, which is a
                continuation of U.S. Serial No. 08/794,328, filed February 3, 1997,
                and
                U.S. Serial No. 60/032,745, filed December 16, 1996
            §June
                12, 2007: Received “*Filed
                application*”
              §August
                10, 2007: Received “*Request
                for Examination*”
                and claims need to be*Amended*to
                distinguish from parent patent application.Applicant:
                Chen Hsing HSU




PCT/US2006/032385
      to be added pending receipt of updated docket from Panion.


57
 *****Confidential
            Material redacted and filed separately with the Commission.





**[Exhibit
      2-A] *******











58
 *****Confidential
          Material redacted and filed separately with the Commission.


**[Exhibit
      2-B] *******









59
 *****Confidential
          Material redacted and filed separately with the Commission.


**[Exhibit
      3] Preliminary Timelines for the Development Program**







*****







60