<PAGE>
                                                                    EXHIBIT 10.8


CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY BRACKETS,
HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.

                                LICENSE AGREEMENT

This Agreement is made and entered into this 11th day of July, 2002 (the
"Effective Date") by and between Shionogi & Co., Ltd., a Japanese corporation
having its principal office at 1-8 Doshomachi 3-chome, Chuo-ku, Osaka 541-0045,
Japan ("Shionogi") and Peninsula Pharmaceuticals, Inc., a Delaware corporation
having its principal office at 6540 Kaiser Road, Fremont, CA 94555, USA
("Peninsula"). Peninsula and Shionogi may be referred to herein individually as
a "Party", and collectively as the "Parties".

                                   WITNESSETH:

WHEREAS, Shionogi is engaged in the development and manufacturing of the
chemical compound having its internal code number S-4661, and Peninsula has
evaluated S-4661 under the Non-Disclosure Agreement [*] and the Material
Transfer Agreement [*] (collectively, "Secrecy Agreement");

WHEREAS, Peninsula showed its interest in developing, manufacturing and selling
the S-4661 in the Territory (as hereinafter defined), and the Parties negotiated
in good faith major terms and conditions of a possible license agreement on
S-4661;

WHEREAS, through the due diligence investigations concerning S-4661 conducted by
Peninsula under the Letter of Intent dated [*] between the Parties ("Letter of
Intent") to which the list of major terms and conditions of licensing from
Shionogi to Peninsula are attached, Peninsula is interested in pursuing the
development and commercialization of S-4661 in the Territory and desirous of
obtaining from Shionogi certain license necessary therefor; and

WHEREAS, Shionogi is willing to grant such license to Peninsula under the terms
and conditions set forth hereinafter;

NOW, THEREFORE, in consideration of the covenants contained herein, the Parties
hereto hereby agree as follows;






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ARTICLE 1 DEFINITIONS

As used in this Agreement, the following capitalized terms (the singular may
include the plural and vice versa) shall have the following meanings:

      1.1   "Affiliates" shall mean any company or organization directly or
            indirectly controlling, controlled by, or under common control with
            Peninsula or Shionogi, as the case may be. For this purpose,
            "control" shall mean the power (whether or not normally exercised),
            to direct the management and affairs of the subject corporation or
            entity, directly or indirectly, whether through the ownership of
            voting securities, by contract, or otherwise. In case of a
            corporation, the direct or indirect ownership of fifty percent (50%)
            or more of its outstanding voting securities shall in any case be
            deemed to confer "control".

      1.2   "Controlled" means, with respect to any Information or intellectual
            property right, that the Party owns or has a license to such
            Information or intellectual property right and has the ability to
            grant to the other Party access, a license, or a sublicense to such
            Information or intellectual property right as provided for in the
            Agreement without violating an agreement with or rights of a third
            party.

      1.3   "Compound" shall mean a methylcarbapenem antibiotic compound with
            the molecular formula of C(15)H(24)N(4)O(6)S(2) and the chemical
            name of (+)-(4R,5S,6S)-6-[(1R)-1-hydroxyethyl]-4-methyl-7-oxo-3-
            [[(3S,5S)-5-[(sulfamoylamino)methyl]-3-pyrrolidinyl]thio]-1-
            azabicyclo[3.2.0.]hept-2-ene-2-carboxylic acid, the chemical
            structure of which is shown in Appendix I hereto. The "Compound" may
            also be referred to as S-4661 or Doripenem (designated as
            International Nonproprietary Names for Pharmaceutical Substances;
            INN).

      1.4   "FDA" shall mean the United States Food and Drug Administration or
            any successor thereto having the administrative authority to
            regulate the investigation, development and marketing of human
            pharmaceutical products in the United States.

      1.5   "GMP" shall mean the current good manufacturing practices required
            by the FDA and set forth in the Food, Drug & Cosmetic Act or FDA
            regulations, policies or guidelines in effect at a particular time,
            for the manufacturing and testing of pharmaceutical materials.



                                      -2-
<PAGE>
      1.6   "ICH" shall mean the International Conference on Harmonization of
            Technical Requirements for Registration of Pharmaceuticals for Human
            Use.

      1.7   "Information" shall mean any confidential or proprietary information
            of any kind other than Know-How (as hereinafter defined) that is
            communicated by or on behalf of one Party to the other Party,
            whether orally, in writing or otherwise, under this Agreement.

      1.8   "Know-How" shall mean any scientific or technical information and
            data relating to the Compound and/or the Licensed Product (as
            hereinafter defined) owned and/or Controlled by Shionogi, including
            but not limited to pre-clinical, clinical, manufacturing, and/or
            regulatory documentation, data, information, or reports, which is
            necessary and/or useful for Peninsula's development or
            commercialization of the Licensed Product in the Territory.

      1.9   "Licensed Patents" shall mean (a) patents and patent applications
            listed in Appendix II hereto, including without limitation United
            States Patent Numbers [*] and [*]; (b) any patents issuing on the
            patent applications listed in Appendix II, including without
            limitation Patent Application Number [*]; (c) any additions,
            divisions, continuations, continuations-in-part, extensions,
            reissues, renewals, substitutions, and reexaminations of the patents
            and patent applications in (a) and (b); and (d) counterparts of the
            foregoing patent applications and patents issued by or filed in any
            country or other jurisdiction in the Territory.

      1.10  "Licensed Product" shall mean any pharmaceutical product intended
            for use for the prevention and/or treatment of various bacterial
            infectious diseases, or other appropriate uses, in humans that
            contains the Compound as an active ingredient. As of the Effective
            Date, the Licensed Product shall be considered to be vial-filled
            product containing a 250 mg and/or 500 mg strength of the Compound.

      1.11  "Registration Approval" shall mean, with respect to a country in the
            Territory, all approvals, licenses, registrations, or authorizations
            by an applicable Regulatory Authority (as hereinafter defined)
            necessary to import, commercialize and market the Licensed Product
            in such country, including pricing and reimbursement approval in
            such country.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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      1.12  "Regulatory Authority" shall mean the FDA in the United States, and
            the equivalent regulatory authority or governmental entity having
            the responsibility, jurisdiction, and authority to approve the
            manufacture, use, importation, packaging, labeling, marketing, and
            sale of pharmaceutical products in any country or jurisdiction other
            than the United States.

      1.13  "Specifications" shall mean the specifications set forth in Appendix
            V for the of the Licensed Product, as they may be amended from time
            to time by agreement of the Parties.

      1.14  "Territory" shall mean the United States of America, Canada and
            Mexico.


ARTICLE 2 GRANT OF LICENSE

2.1   License Grant

      Shionogi hereby grants to Peninsula, during the term of this Agreement,
      the sole and exclusive license under the Licensed Patents and Know-How, to
      develop, import, use, market, sell and/or offer for sale Licensed Products
      in the Territory. For the purpose of this Article, the license granted to
      Peninsula hereunder shall not include any right to manufacture the
      Compound. Under the said license, Peninsula shall be permitted to have its
      subcontractors (such as contract research organizations and contract sales
      organizations), distributors (wholesalers), resellers and retailers
      perform the same obligations undertaken by Peninsula under this Agreement.

2.2   Sublicense

      Subject to Article 7 hereof, Peninsula shall have the right to grant
      sublicenses, under the license granted pursuant to Section 2.1 to any
      third parties ("Sublicensees"); provided, however, that in case Peninsula
      is desirous of granting a sublicense to a third party, Peninsula shall
      obtain Shionogi's prior written consent, which consent shall not be
      unreasonably withheld, and shall guarantee that all of its Sublicensees
      will comply with all applicable terms and conditions of this Agreement
      undertaken by Peninsula.



                                      -4-
<PAGE>
2.3   Covenants Regarding Licenses

      Subject to Article 7 hereof, Shionogi hereby covenants and agrees that
      Shionogi and its Affiliates shall not develop, market or sell, or license
      any other party to develop, market or sell, in the Territory any product
      containing the Compound for human use.


ARTICLE 3 DEVELOPMENT

3.1   Shionogi's assistance

      Shionogi shall disclose to Peninsula all available Know-How, including but
      not limited to that set forth in Appendix III hereto, after the Effective
      Date without delay. Any additional Know-How developed or acquired by
      Shionogi thereafter shall be promptly disclosed to Peninsula. Peninsula
      will be free to utilize the Know-How for Peninsula's development and/or
      commercialization of the Licensed Product in the Territory.

3.2   Development Committee

      (a)   Shionogi and Peninsula shall establish a Joint Development Committee
            ("JDC") which will consist of [*] from Shionogi and Peninsula. The
            representatives of each Party may be changed from time to time at
            the discretion of the Party making such change upon written notice
            by the Party to the other.

      (b)   The JDC shall meet periodically, in principle semi-annually, in
            alternating home office locations or via videoconference or
            teleconference, whichever is appropriate. Each Party shall bear its
            costs associated with attendance at the JDC meetings.

      (c)   The JDC shall discuss and decide on the development plan and
            strategy for the development in the Territory of the Licensed
            Product, including [*]. It is agreed by the Parties that the
            underlying concept in establishing such development plan and
            strategy shall be reasonably consistent with that employed by
            Shionogi for the development of the product containing the Compound
            in Japan. Further, the JDC shall review the progress of the
            development activities conducted by Peninsula. Shionogi and
            Peninsula shall make the minutes of the JDC meetings jointly in
            order to confirm the matters discussed and the decision made at the
            JDC meetings.

      (d)   All decisions of the JDC shall be made [*]. In case the JDC cannot
            reach [*] because of the difference in opinions between the Parties,
            such dispute shall be referred to the President of Peninsula and [*]
            of Shionogi, who will meet promptly and use diligent good faith
            efforts to seek a resolution. If the matter is not resolved by such

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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<PAGE>
            executives within [*] days, it shall be resolved according to the
            mechanism set forth in Article 21.

3.3   Development activity

      (a)   Peninsula (or its contractor or Sublicensee) shall use reasonable
            efforts to undertake all development work necessary to obtain
            Registration Approval for the Licensed Product for the Territory at
            its own expense and risk in accordance with the development plan and
            strategy decided by the JDC as if the Licensed Product were
            Peninsula's own product. Further, Peninsula, when commercially and
            financially reasonable, shall conduct development work in accordance
            with ICH guidelines.

      (b)   Promptly after the Effective Date, Peninsula shall prepare a
            preliminary development plan, which contains an estimated time-line
            for clinical studies, the filing of an Investigational New Drug
            ("IND") application and New Drug Application ("NDA"), and a target
            date for the commercial launch of the Licensed Product in [*].
            Within sixty (60) days from the Effective Date, the JDC shall review
            and approve a development plan ("Development Plan") based on the
            preliminary development plan to be prepared by Peninsula. The
            initial Development Plan shall be attached to this Agreement as
            Appendix IV. From time to time during the term of this Agreement,
            the JDC shall review and modify, as appropriate based on development
            results, the Development Plan, and any updates, revisions, or
            modifications to the Development Plan shall be attached to this
            Agreement as Appendix IV, provided, however, that updates, revisions
            or modifications to the Development Plan that are needed due to
            delays caused by Peninsula's negligence or willful misconduct in the
            development work shall not be made unless Shionogi agrees to such
            changes.

      (c)   Peninsula shall provide Shionogi with any synopses of protocols for
            clinical trials relating to the Licensed Product planned by
            Peninsula prior to the initiation thereof in order to provide
            Shionogi with an opportunity to review and comment thereon.
            Peninsula shall reasonably consider Shionogi's comments, provided
            that Peninsula receives such comments no later than [*] days after
            Shionogi receives such synopses. Peninsula shall provide Shionogi
            with copies of all finalized protocols prior to the initiation of
            the applicable study.

      (d)   Peninsula shall inform and report in writing to Shionogi its
            development progress from time to time in order for Shionogi to
            evaluate the development status. If Peninsula files an IND and/or
            NDA with the FDA, Peninsula shall provide Shionogi with a summary of
            such filings submitted to the FDA (including any amendments
            thereto). If Peninsula foresees or becomes aware of any delay of [*]
            months or more in the actual development of the Licensed Product as
            compared with the estimated

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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            timeline set forth in the then-current Development Plan, Peninsula
            shall inform Shionogi of such delay in writing no later than ten
            (10) days after becoming aware of such delay. In the event that
            Peninsula so informs Shionogi, the JDC shall convene a special
            meeting to discuss the reasons and potential countermeasures for
            such delay, and to discuss appropriate revisions to the Development
            Plan. If necessary, the JDC shall amend the Development Plan. If any
            such delay in development is attributable to Peninsula's negligence
            or willful misconduct, Shionogi may terminate this Agreement in
            accordance with Section 17.2 hereof if Peninsula does not initiate
            diligent efforts to address and minimize the delay to Shionogi's
            reasonable satisfaction within [*] days after Shionogi determines
            such delay is attributable to Peninsula's negligence or willful
            misconduct.

      (e)   Subject to applicable laws in the Territory, Peninsula shall provide
            Shionogi with all data, information and documents obtained by
            Peninsula promptly after Peninsula obtains final reports of each
            pre-clinical or clinical study for a Licensed Product and give
            Shionogi reasonable assistance in obtaining registration approval
            for the products containing the Compound outside the Territory.
            Shionogi will be free to utilize such data, information and
            documents to develop and commercialize the products containing the
            Compound in countries outside the Territory. At Peninsula's request,
            Shionogi shall give Peninsula reasonable assistance in obtaining
            Registration Approval in the Territory.

3.4   Shionogi representative(s)' visit

      Upon the request of Shionogi, Peninsula shall allow Shionogi
      representative(s) to attend Peninsula's meetings concerning development of
      the Compound and/or the Licensed Product (including internal meetings and
      meetings with investigators and Regulatory Authorities); provided,
      however, that Shionogi shall obtain Peninsula's approval in advance with
      respect to such attendance of Shionogi representative(s), which approval
      shall not be unreasonably withheld, and that any Shionogi
      representative(s) shall be bound by obligations of confidentiality
      consistent with the obligations contained in Article 16 with respect to
      the information disclosed at such meetings.


ARTICLE 4 FIRST REFUSAL RIGHT FOR EUROPEAN TERRITORY

      Within [*] years from the Effective Date and in the event Shionogi decides
      to seek a partner or grant a license with respect to the Compound and/or
      the Licensed Product in

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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      one or more countries in the European Union ("European Territory"),
      Shionogi shall first provide to Peninsula written notice offering to
      Peninsula the opportunity to enter into the negotiation with Shionogi.
      Peninsula shall have [*] days in which to provide to Shionogi written
      notice that it wishes to enter into negotiations with Shionogi. If
      Peninsula provides such written notice to Shionogi within such [*] day
      period, the Parties shall promptly enter into good faith negotiations for
      reasonable terms and conditions for, and to amend this Agreement to
      include, a license with respect to the Licensed Product in such European
      Territory, and shall negotiate for up to [*] days from the date of
      Peninsula's notice. If Peninsula does not exercise its right of first
      negotiation within the [*] day period or if the Parties fail to execute an
      amendment of this Agreement within the [*] day period, Shionogi shall be
      free to discuss terms and conditions with a third party for the possible
      partnership or license in the European Territory; provided, however, that
      Shionogi shall not grant to a third party any right to negotiate on terms
      and conditions materially more favorable to such third party than the
      terms and conditions last offered by Shionogi to Peninsula without first
      offering such more favorable terms and conditions to Peninsula for
      Peninsula's consideration and possible acceptance.


ARTICLE 5 CONSIDERATION

5.1   Milestone Payment.

      In consideration of the license granted by Shionogi to Peninsula herein,
      Peninsula shall pay Shionogi the following non-refundable, one-time
      payments, which total in the aggregate [*] US dollars (US$ [*]). Such
      payments shall be made upon the first occurrence of each milestone
      specified below:

      i.    Within thirty (30) days of the Effective Date, Peninsula shall pay
            the non-refundable payment of [*] US dollars (US$ [*]) to Shionogi.

      ii.   Upon the first dosing of a human subject with a Licensed Product,
            regardless of geographical location, Peninsula shall pay the
            non-refundable payment of [*] US dollars (US$ [*]) to Shionogi.

      iii.  Upon the acceptance of the first IND by a Regulatory Authority as to
            the Phase II or Phase III clinical study (whichever occurs first) in
            the Territory, Peninsula shall pay the non-refundable payment of [*]
            US dollars (US$ [*]) to Shionogi.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.




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      iv.   Upon submission of the first NDA for a Licensed Product in the
            Territory, Peninsula shall pay the non-refundable payment of [*] US
            dollars (US$ [*]) to Shionogi.

      v.    Upon obtaining Registration Approval of the Licensed Product for the
            first indication from the FDA, Peninsula shall pay the
            non-refundable payment of [*] US dollars (US$ [*]) to Shionogi.

      Peninsula shall inform Shionogi of the occurrence of each milestone event
      set forth in Subsections (ii) to (v) hereof in writing within [*] business
      days after each such occurrence.

      For clarity, the foregoing milestone payments will be made only once as to
      each milestone under this Agreement.

5.2   Delay

      If, due to the negligence or willful misconduct of Peninsula, each
      milestone event stipulated in Subsection 5.1 (iii), (iv) and (v) does not
      occur within [*] after the target dates set forth for such events in the
      then-current Development Plan, the non-refundable milestone payments set
      forth in Subsections (iii), (iv) and (v) of Section 5.1, as applicable,
      shall become due upon the expiration of the applicable [*] period.

5.3   Bank Account

      All milestone payments made by Peninsula to Shionogi under this Article 5
      shall be paid in United States dollars and remitted by wire transfer to
      the following bank account of Shionogi:
<TABLE>
<CAPTION>
       BANK ACCOUNT
       ------------
<S>    <C>              <C>
       Bank Name:       [*]
       Bank Address:    [*]
       Account Name:    Shionogi & Co., Ltd.
       Account No.:     [*]
</TABLE>

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.



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5.4   Tax treaty

      The payments to be made hereunder by Peninsula to Shionogi shall be net
      payments, i.e. without deduction of any bank or transfer charges and any
      taxes, levies or duties levied on such payments in the country of
      Peninsula by any governmental authority, except that Peninsula shall be
      entitled to deduct from the payments to be made to Shionogi the
      withholding tax, if applicable, levied on the payments and shall undertake
      to pay such withholding tax on behalf of Shionogi and shall provide
      Shionogi with a receipt for such payment or other taxation certificate
      without delay following the payment.


ARTICLE 6 MARKETING

6.1   Exchange of Information

      The Parties shall meet periodically, at least once a year, to exchange any
      information and documents each Party possesses or obtains regarding
      marketing of products containing the Compound, including but not limited
      to the marketing plan and/or strategy of each Party. The initial meeting
      shall be held not later than [*] months prior to the anticipated
      commercial launch date of the Licensed Product in the United States.

6.2   Diligent efforts

      Peninsula shall use its diligent efforts in the promotion, marketing and
      sale of the Licensed Product with the goal of maximizing the profit from
      sales of the Licensed Products as early as reasonably practical and
      maintaining such sales as long as commercially reasonable.

6.3   Package insert and promotional materials

      (a)   To assist Peninsula's marketing activities, Shionogi shall provide
            Peninsula with all information useful for the sale and promotion of
            the Licensed Products by Peninsula.

      (b)   To the extent allowable by law, Peninsula shall ensure that all
            Licensed Product packaging, package inserts and significant
            promotional materials associated with the Licensed Products include
            the logo or company name of "Shionogi & Co., Ltd.". Peninsula agrees
            to provide Shionogi with samples of significant written promotional
            materials prior to the actual use thereof in order to obtain
            Shionogi's approval thereon, which approval shall not be
            unreasonably withheld.

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BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


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ARTICLE 7   OPTION FOR COLLABORATION

     In the event Peninsula decides to seek a partner (including the Sublicensee
     stipulated in Section 2.2 hereof) for the development and/or the marketing
     of the Compound and/or the Licensed Product for the Territory (a
     "Collaboration"), Peninsula shall first provide to Shionogi written notice
     offering to Shionogi the opportunity to enter into such Collaboration.
     Shionogi shall have [*] days in which to provide to Peninsula written
     notice that it wishes to enter into negotiations with Peninsula for such
     Collaboration. If Shionogi provides such written notice to Peninsula within
     such [*] day period, the Parties shall promptly enter into good faith
     negotiations for reasonable terms and conditions for and to execute a
     Collaboration Agreement, and shall negotiate for up to [*] days from the
     date of Shionogi's notice. If Shionogi does not exercise its right of first
     negotiation within the [*] day period or if the Parties fail to execute the
     Collaboration Agreement within the [*] day period, Peninsula shall be free
     to discuss terms and conditions with a third party for entering into such
     Collaboration, provided however that Peninsula shall not grant to a third
     party any right or sublicense to enter into such Collaboration on terms and
     conditions materially more favorable to such third party than the terms and
     conditions last offered by Peninsula to Shionogi without first offering
     such more favorable terms and conditions to Shionogi for Shionogi's
     consideration and possible acceptance.

ARTICLE 8 CLINICAL SUPPLY

8.1  Supply of the Clinical Sample

     Shionogi shall manufacture or have manufactured and supply to Peninsula
     Peninsula's entire requirements of the Licensed Products which contain a
     250 mg and/or 500 mg strength of the Compound for Phase I, Phase II, and
     Phase III clinical studies for and in the Territory ("Clinical Sample").
     The Parties hereby acknowledge that, prior to the Effective Date, Peninsula
     has placed an initial purchase order for [*], 250 mg strength vials of
     Clinical Samples. Shionogi hereby agrees to manufacture or have
     manufactured and supply such quantity of Clinical Samples to Peninsula no
     later than [*] or such other date as the Parties may mutually agree.

8.2 Quality Control and Quality Control Audits

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      Shionogi shall maintain (or cause to be maintained) a quality control and
      testing program consistent with then-current [*] ("[*]"), as applicable,
      to ensure that the Clinical Samples supplied to Peninsula conform to the
      Specifications (the "Quality Control Procedures").

8.3 Records and Samples.

      Shionogi shall maintain (or cause to be maintained) complete, accurate,
      and authentic accounts, notes, data, and records pertaining to its
      manufacture, processing, Quality Control Procedure test results, and
      packaging of the Clinical Samples in accordance with [*].

8.4 Delivery

      The Clinical Samples ordered shall be delivered [*] (Incoterms 2000). Each
      shipment of the Clinical Samples shall be accompanied by a certificate of
      analysis (i) confirming that Shionogi (or its contract manufacturer)
      followed the Quality Control Procedures (as defined in Section 8.2) for
      the testing of such Clinical Samples, (ii) containing the quality control
      test results, and (iii) confirming that the Clinical Samples supplied to
      Peninsula conform to the Specifications (the "Certificate of Analysis").

8.5 Supply Price

       Shionogi shall supply to Peninsula the first [*] vials of 250 mg strength
       Clinical Samples [*] to Peninsula ([*]). Each subsequent vial of 250 mg
       strength Clinical Samples supplied to Peninsula hereunder shall be at a
       price equal to [*] per vial ([*]/vial). The price for 500 mg strength
       Clinical Samples supplied to Peninsula hereunder shall be separately
       agreed upon by the Parties. All payments for the supply of the Clinical
       Samples by Shionogi shall be made in [*] and Shionogi shall deliver to
       Peninsula such Clinical Samples after Shionogi confirms the remittance
       for each shipment made by Peninsula to the bank account of Shionogi
       designated in Section 5.3.

8.6 Acceptance and Rejection of Clinical Samples

(a)      All Clinical Samples supplied to Peninsula hereunder shall conform to
         the Specifications and shall be manufactured in compliance with [*].
         Promptly after Peninsula or its designee receives the Clinical Samples
         supplied by Shionogi, Peninsula or its designee shall conduct an
         initial acceptance test to detect visible defects (such as broken or
         crushed vials) and to discover any shortfalls in the quantity

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         delivered within thirty (30) days after delivery of the Clinical
         Samples to the delivery destination set forth in the applicable
         purchase order. If as a result of such initial acceptance test,
         Peninsula discovers Clinical Samples that are defective or do not
         conform to the Specifications ("Defective Products"), or any shortage
         of Clinical Samples with respect to the quantity delivered, Peninsula
         shall notify Shionogi in writing, which notice shall identify in
         reasonable detail the nature of the defect or shortage.

(b)      If Peninsula discovers that Clinical Samples are Defective Products and
         that the nature of such defect could not have been discovered by
         performing the initial acceptance test of the Clinical Samples set
         forth in Section 8.6(a) within thirty (30) days after delivery of the
         Clinical Samples, Peninsula may revoke its acceptance of such Defective
         Products by providing written notice to Shionogi of such revocation.
         Such notice shall identify in reasonable detail the nature of the
         defect and shall be provided within thirty (30) days of determining the
         existence of the defect but no later than [*] months after the delivery
         of the Clinical Samples.

(c)      If it is determined that any non-conformity with the Specifications
         and/or shortage of quantity is attributable to Shionogi after
         Shionogi's confirmation of the notice together with relative
         information supplied by Peninsula under Section 8.6(a) or 8.6(b),
         Shionogi shall, at Peninsula's option and at Shionogi's expense, refund
         Peninsula for the amount paid for such Defective Products under Section
         8.5, replace such Defective Products or make up the shortage in
         quantities of Clinical Samples, as applicable, as soon as reasonably
         possible.

(d)      If Shionogi disagrees with Peninsula's claim that certain Clinical
         Samples are Defective Products, the Parties will first use good faith
         efforts to settle such dispute within thirty (30) days of Peninsula's
         notice of such defects; if they are unable to do so within such time
         period, the dispute will be resolved by a mutually acceptable
         independent third party tester after analysis of the relevant Clinical
         Samples. Such third party tester shall determine whether such Clinical
         Samples are defective, and the Parties agree that such tester's
         determination shall be final, binding, and determinative as to whether
         such Clinical Samples are Defective Products. The Party against whom
         the third party tester rules shall bear all costs of the third party
         testing.

ARTICLE 9 COMMERCIAL SUPPLY

9.1 Commercial Supply of the Licensed Products

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(a)      It is a common intention of the Parties, as of the Effective Date, that
         Shionogi will manufacture or have manufactured and supply to Peninsula,
         and Peninsula will purchase exclusively from Shionogi, Peninsula's
         entire requirements of the Licensed Products (in final form and in
         compliance with GMP) for commercial sale by Peninsula in the Territory.
         Promptly after the Effective Date, the Parties shall discuss and
         negotiate in good faith the terms and conditions for such supply of the
         Licensed Products, which terms shall be commercially reasonable and
         typical for transactions of this type; provided, however, that the
         price per 250 mg vial of Licensed Product for commercial sale shall be
         [*]. Further, the Parties shall discuss an appropriate form of the
         Compound (i.e., bulk Compound or nude vial) to be supplied to
         Peninsula, if necessary. The Parties shall use diligent efforts to
         enter into an agreement governing the terms and conditions of
         Shionogi's supply of Peninsula's requirements of Licensed Products for
         commercial sale by the Target Date (as hereinafter defined).

(b)      [*].

(c)      [*].

9.2 [*]

         Peninsula and Shionogi agree to discuss in good faith an appropriate
         mechanism by which the supply price per 250 mg and/or 500 mg vial of
         Licensed Product for commercial sale will be [*] of Licensed Products
         purchased by Peninsula.

9.3 Target Date

         The Parties shall make their reasonable best efforts to conclude the
         agreement setting forth the result of discussions stipulated in
         Sections 9.1 and 9.2 by [*] or such other date to be mutually agreed by
         the Parties ("Target Date"). If, despite serious and faithful
         discussion and good faith efforts, the Parties are unable to enter into
         such agreement by the Target Date, such dispute shall be referred to
         the President of Peninsula and the [*] of Shionogi or other appropriate
         officer of Shionogi who shall meet promptly and use good faith and
         diligent efforts for final resolution.

ARTICLE 10 SALES REPORT

         Peninsula shall submit to Shionogi a detailed sales report on a
         quarterly and country by country basis, including the number of
         Licensed Products sold during each month of such quarter to customers,
         no later than [*] days after the end of each calendar quarter.

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ARTICLE 11. SERIOUS ADVERSE DRUG REACTION REPORTING.

         Peninsula shall be responsible for receiving, investigating, and
         documenting all serious adverse drug reactions relating to the use of
         the Licensed Products which require reporting to appropriate Regulatory
         Authorities. Peninsula will be solely responsible for filing all
         post-marketing reports of such serious adverse drug reactions required
         by Regulatory Authorities, or as required by applicable laws or
         regulations. During the term of this Agreement, in the event that each
         Party receives a report of a serious adverse drug reaction relating to
         the use of a Licensed Product anywhere in the world, it shall
         immediately notify the other in writing. The Parties shall periodically
         exchange a summary of all serious adverse drug reactions of Licensed
         Products during the term of this Agreement and shall separately agree
         on detailed procedure for exchanging and reporting the information.

ARTICLE 12 INTELLECTUAL PROPERTY RIGHTS

12.1 Representation and Warranty.

         UNLESS OTHERWISE PROVIDED HEREIN, SHIONOGI MAKES NO REPRESENTATIONS AND
         WARRANTS, EITHER EXPRESS OR IMPLIED, WITH RESPECT TO THE COMPOUND
         AND/OR THE LICENSED PRODUCT, INCLUDING BUT NOT LIMITED TO ANY
         WARRANTIES OF VALIDITY OR ENFORCEABILITY OF THE LICENSED PATENTS,
         NON-INFRINGEMENT OF ANY THIRD PARTY'S PATENT OR THE NON-EXISTENCE OF
         ANY INFRINGEMENT OF THE LICENSED PATENTS IN THE TERRITORY.

12.2 Prosecution and Maintenance.

         During the term of this Agreement, Shionogi, [*], shall use diligent,
         good faith efforts to file, prosecute and maintain any patent
         applications and patents within the Licensed Patents. Shionogi shall
         use reasonable best efforts to extend the term of the Licensed Patents
         covering the Compound and/or the Licensed Product and Peninsula shall
         cooperate with Shionogi in obtaining such extension. Shionogi shall
         keep Peninsula continually informed of such prosecution efforts and
         shall reasonably consider Peninsula's comments on such prosecution.

12.3 Infringement.

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(a)      In the event that a Party becomes aware of any alleged or threatened
         infringement of the Licensed Patents in the Territory, such Party shall
         promptly notify the other Party in writing. Shionogi shall have the
         right, but not the obligation, at its discretion and expense, to
         enforce the Licensed Patents against such infringement, and to defend
         the Licensed Patents against any claims of invalidity or
         unenforceability in the Territory. Peninsula shall give Shionogi all
         reasonable information and assistance with respect to such enforcement.
         Except as set forth in Section 12.3(b), any damages or remuneration
         received as a result of such action shall be [*] after reimbursing for
         the costs and expenses incurred by Peninsula for its assistance.

(b)      Peninsula shall have the right, but not the obligation, at its
         discretion and expense, to join in such action and seek damages for its
         lost profits caused by such infringement. Any damages or remuneration
         received as a result of such action shall be applied first to reimburse
         each Party for the costs and expenses incurred in such action. Any
         remaining amount of such damages or remuneration shall be allocated by
         the Parties [*] of the Parties.

(c)      If Shionogi does not take any legal action for any reason with respect
         to such infringement within one hundred twenty (120) days following
         Peninsula's notification, Peninsula shall have the right to bring any
         appropriate suit or action against the infringer at Peninsula's
         expense. Shionogi shall give Peninsula all reasonable information and
         assistance with respect to such infringement. Any damages or
         remuneration received as a result of such action shall be [*] after
         reimbursing any cost and expenses incurred by Shionogi for its
         assistance.

12.4 Generic compound

         If any of the patents included within the Licensed Patents are held
         invalid or unenforceable, and as a result, a generic version of the
         Licensed Product enters the pharmaceutical market in the Territory and
         the volume share of such generic version equals or exceeds [*] percent
         or more of the total sales of all Licensed Products in a country in the
         Territory during the term of this Agreement, Shionogi and Peninsula
         will negotiate in good faith a revision of financial conditions to be
         agreed by the Parties in accordance with Article 9.

12.5  Inventions.

(a)      If any inventions (an "Invention") are made pursuant to work conducted
         under this Agreement, such Invention shall belong to the Party making
         the Invention and such Party shall have the right to file, prosecute
         and maintain patent applications and patents covering Inventions made
         solely by that Party.


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(b)      If Shionogi makes an Invention that is necessary or useful for
         Peninsula to develop, import, use, market or sell the Licensed Product,
         such Invention shall be included in the definition of the Know-How or
         the Licensed Patents, as the case may be, and shall be added to
         Appendix II hereto promptly after Shionogi files patent applications
         relating to such Invention.

(c)      If Peninsula makes an Invention that is necessary or useful for
         Shionogi to develop, import, use, market or sell the Licensed Product
         outside the Territory, Peninsula shall grant to Shionogi [*] license
         with a right to grant sublicenses under the patents claiming such
         Invention solely for use in using, manufacturing, developing and
         commercializing the Licensed Product outside the Territory.

(d)      If the Invention is jointly made by the Parties, Shionogi and Peninsula
         shall determine in good faith whether or not patent applications should
         be filed concerning such jointly-owned Invention and which Party shall
         be responsible for filing and prosecuting any patent applications
         filed. The Parties shall share the costs in filing any patent
         applications, obtaining and maintaining any patents covering the joint
         Invention.

ARTICLE 13 TRADEMARK

         The Licensed Products sold in the Territory shall bear a trademark
         ("Trademark") chosen and owned by Peninsula. Peninsula, at its
         reasonable discretion, may use the trademark (if any) owned by Shionogi
         for the marketing of the Licensed Products (the "Shionogi Trademark")
         for so long as Peninsula markets the Licensed Products. If Peninsula
         desires to use the Shionogi Trademark, then to the extent legally
         permitted, Shionogi shall grant the right to use the Shionogi Trademark
         for such purpose free of charge during the term of this Agreement. The
         Licensed Products sold in the Territory shall bear the Shionogi name or
         logo (the "Marks"), as provided in Subsection 6.3(b), and Shionogi
         grants Peninsula the right to use the Marks to the extent necessary for
         Peninsula to fulfill the obligations set forth in Subsection 6.3(b)
         applicable to the Licensed Products sold in the Territory. Peninsula
         will have no obligation to pay royalties for such use of the Marks and
         Shionogi Trademark during the term the Agreement. If Shionogi desires
         to use the Trademark owned or Controlled by Peninsula to market
         products containing the Compound outside the Territory, then to the
         extent legally permitted, Peninsula shall grant the right to use the
         Trademark for such purpose free of charge for so long as Shionogi (or
         its licensee) markets and sells any products containing the Compound
         outside the Territory. Shionogi shall not use the


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         Trademark outside the scope of this Agreement and shall use the
         Trademark in accordance with Peninsula's then-current reasonable
         trademark guidelines, if any, as provided to Shionogi in writing in
         advance of any such use as they may be updated from time to time by
         Peninsula, or alternatively, with Peninsula's prior written approval
         for such use.

ARTICLE 14 INDEMNIFICATION

14.1 Indemnification by Shionogi.

         Shionogi shall indemnify, defend and hold Peninsula and Peninsula's
         Affiliates and Sublicensees harmless from and against any and all
         liabilities, demands, damages, losses, costs, expenses or money
         judgments (including reasonable attorney's fees and expenses of
         litigation) arising or resulting from any claims made or suits which
         arise or result from (i) the manufacture and/or supply of the Licensed
         Product by or under the control of Shionogi, (ii) the breach of any
         obligations or warranties hereunder by Shionogi, (iii) the intentional
         act or omission or the negligence of Shionogi, or (iv) the use of the
         Trademark in connection with the marketing and/or sale of products
         containing the Compound outside the Territory, unless such liabilities,
         demands, damages, losses, costs, expenses or money judgments arise or
         result from the intentional act or omission or the negligence of
         Peninsula. Such indemnity shall not apply to the extent that Peninsula
         has an indemnity obligation for such claim pursuant to Section 14.2, or
         if Peninsula fails to comply with the indemnification procedures set
         forth in Section 14.3.

14.2 Indemnification by Peninsula.

         Peninsula shall indemnify and hold Shionogi and its Affiliates harmless
         from and against any and all liabilities, demands, damages, losses,
         costs, expenses or money judgments (including reasonable attorney's
         fees and expenses of litigation) arising or resulting from any claims
         made or suits which arise or result from (i) Peninsula's development,
         distribution, marketing and promotion of the Licensed Product in and
         for the Territory, (ii) Peninsula's exploitation or use of the Licensed
         Patents, Know-How or Marks, (iii) the breach of any obligations
         hereunder by Peninsula or (iv) the intentional act or omission or the
         negligence of Peninsula unless such liabilities, demands, damages,
         losses, costs, expenses or money judgments arise or result from the
         intentional act or omission or the negligence of Shionogi. Such
         indemnity shall not apply to the extent that Shionogi has an indemnity
         obligation for such claim pursuant to


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         Section 14.1, or if Shionogi fails to comply with the indemnification
         procedures set forth in Section 14.3.

14.3 Control of Defense.

         If either Party is entitled to indemnification under this Article 14
         (the "Indemnified Party"), it shall give written notice to the Party
         providing indemnification (the "Indemnifying Party") of any claims that
         may be subject to indemnification promptly after learning of such
         claims, and the Indemnifying Party shall assume the defense of such
         claims with counsel reasonably satisfactory to the Indemnified Party.
         If such defense is assumed by the Indemnifying Party with counsel so
         selected, the Indemnifying Party shall not be subject to any liability
         for any settlement of such claims made by the Indemnified Party without
         the Indemnifying Party's consent (but such consent shall not be
         unreasonably withheld or delayed), and shall not be obligated to pay
         the fees and expenses of any separate counsel retained by the
         Indemnified Party with respect to such claims.

ARTICLE 15  NON-COMPETITION

         Peninsula shall not distribute, sell, market or promote, during the
         term of this Agreement, any [*] other than the Licensed Product in the
         Territory.

ARTICLE 16  CONFIDENTIALITY AND LIMITATION-ON-USE

16.1 Obligation

         Except to the extent expressly authorized by this Agreement, during the
         term of this Agreement and for a period of five (5) years after
         termination or expiration of this Agreement, each Party agrees to keep
         Information and/or Know-How received from the other Party (including
         the information received from the other Party under the Secrecy
         Agreement or Letter of Intent) (collectively "Confidential
         Information") confidential and not to disclose the same to any third
         party without the prior written consent of the other Party except as
         otherwise permitted in this Article 16, and to use the other Party's
         Confidential Information only for the purpose of this Agreement.

         The obligations set forth above do not apply to the following
         Confidential Information that the receiving Party can demonstrate by
         competent written proof:


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         (i)      is or becomes publicly known through no fault of the receiving
                  Party,

         (ii)     is already known to the receiving Party, other than under an
                  obligation of confidentiality, prior to disclosure by the
                  disclosing Party as evidenced by the business records of the
                  receiving Party,

         (iii)    is learned by the receiving Party from a third party under no
                  obligations of confidentiality with respect thereto; or

         (iv)     is developed independently by employees of the receiving Party
                  who had no access to the Confidential Information.

16.2 Authorized Disclosure.

         Each Party may disclose Confidential Information received from the
         other Party to the extent such disclosure is reasonably necessary for
         the following reasons:

         (a)      filing or prosecuting the Licensed Patents;

         (b)      regulatory filings to the Regulatory Authorities;

         (c)      prosecuting or defending litigation;

         (d)      complying with applicable governmental regulations;

         (e)      conducting pre-clinical or clinical trials of the Licensed
                  Product in the Territory; and

         (f)      disclosure to Affiliates, Sublicensees, advisors, consultants,
                  contract research organizations or other persons or entities
                  who agree to be bound by similar terms of confidentiality and
                  limitation-on-use obligations set forth in Section 16.1
                  hereof.

         Notwithstanding the foregoing, in the event a Party is required to make
         a disclosure of the other Party's Confidential Information pursuant to
         this Section 16.2 it will, except where impracticable, give reasonable
         advance notice to the other Party of such disclosure and use best
         efforts to secure confidential treatment of, or obtain a protection
         order or other similar order for, such information. In any event, the
         Parties agree to take all reasonable action to avoid disclosure of
         confidential information hereunder.

ARTICLE 17 TERM AND TERMINATION

17.1  Term

         This Agreement will become effective as of the Effective Date and
         continue to be effective until the later of (a) [*] the last to expire
         of the Licensed Patents owned or


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         Controlled by Shionogi, or (b) [*] years after the first commercial
         launch of the Licensed Product in the Territory on a country-by-country
         basis.

17.2 Right to Terminate of Shionogi

         Shionogi has the right to terminate this Agreement as follows:

         (a)      If Peninsula fails to achieve the milestones set forth in the
                  then-current Development Plan for first [*] for [*] as to the
                  [*] and/or [*] or [*] for the Licensed Product by [*] months
                  or more and such delay is attributable to Peninsula's
                  negligence or willful misconduct, Shionogi shall provide
                  written notice to Peninsula of such material failure. If
                  Peninsula does not initiate diligent efforts to address and
                  minimize the delay to Shionogi's reasonable satisfaction
                  within [*] days after the date on which it receives notice of
                  failure, Shionogi shall have the right to terminate on written
                  notice,

         (b)      If there occurs a change in control in Peninsula and (i) the
                  acquiring company elects [*] and/or [*] the Compound and/or
                  the Licensed Product or (ii) the acquiring company is
                  developing and/or marketing any [*],

         (c)      In the event Peninsula materially breaches any of the
                  provisions of this Agreement and fails to remedy such breach
                  within [*] days after receiving notice thereof from Shionogi
                  (except as provided in subsection (a) above), or

         (d)      On written notice, in the event Peninsula commences
                  liquidation proceedings, is subject to an assignment for the
                  benefit of creditors, or ceases to carry on its business in
                  the normal course.

17.3 Right to Terminate of Peninsula

         Peninsula has the right to terminate this Agreement:

         (a)      In the event Peninsula determines that it is [*] to pursue the
                  development, launch or sale of the Licensed Product due to
                  [*], and/or [*], including but not limited to [*] the Compound
                  and/or the Licensed Product and the [*] of the Licensed
                  Product, Peninsula may provide written notice to Shionogi of
                  such determination, together with competent information
                  thereof (the "Determination Notice") and have serious
                  discussions with Shionogi. Peninsula may terminate effective
                  upon written notice [*] days after Shionogi's receipt of the
                  Determination Notice,

         (b)      In the event Shionogi materially breaches any of the
                  provisions of this Agreement and fails to remedy such breach
                  within [*] days after receiving notice thereof from Peninsula,
                  or


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         (c)      Upon [*] days' written notice in the event Shionogi commences
                  liquidation proceedings, is subject to an assignment for the
                  benefit of creditors, or ceases to carry on its business in
                  the normal course.

17.4 Expiration of this Agreement

         Upon expiration of this Agreement pursuant to Section 17.1 hereof:

         (a)      Peninsula's obligation to purchase from Shionogi, and
                  Shionogi's obligation to sell to Peninsula Licensed Products
                  will cease; provided, however, that either Party shall not be
                  relieved from performing any obligations accrued prior to the
                  date this Agreement terminates. If Peninsula desires to
                  continue purchasing the Licensed Product from Shionogi after
                  the expiration of this Agreement, the Parties shall negotiate
                  in good faith the terms and conditions therefor.

         (b)      Peninsula's license will revert to a perpetual, irrevocable,
                  non-exclusive, royalty-free license with regard to the use of
                  Know-How. If Peninsula has been using the Shionogi Trademark
                  and desires to continue using such trademark after the
                  expiration of this Agreement, the Parties will enter into a
                  trademark license agreement covering use of the Shionogi
                  Trademark under mutually agreed conditions.

17.5 Early termination of this Agreement

         Upon early termination of this Agreement pursuant to Section 17.2 or
         Subsection 17.3(a):

         (a)      Peninsula shall immediately cease to develop, distribute,
                  market and promote the Licensed Product and shall destroy or
                  return to Shionogi all Peninsula's inventory stock of the
                  Licensed Product at the time of termination in accordance with
                  Shionogi's instruction.

         (b)      Peninsula shall return any Know-How received from Shionogi
                  under this Agreement.

         (c)      Peninsula shall transfer and/or cause to transfer to Shionogi
                  or Shionogi's designee(s) the [*], with Shionogi [*] Peninsula
                  for [*] in connection with such transfer.

17.6 Damages

         Termination of this Agreement by the non-breaching Party shall in no
         way affect or limit such non-breaching Party's right to claim against
         the breaching Party for any damages arising out of the breach of this
         Agreement.

         NEITHER PARTY SHALL BE LIABLE TO THE OTHER PARTY FOR ANY SPECIAL,
         INCIDENTAL, OR CONSEQUENTIAL DAMAGES (INCLUDING LOSS OF PROFITS)
         ARISING OUT OF THIS AGREEMENT. NOTWITHSTANDING


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         THE FOREGOING, NOTHING IN THIS SECTION 17.6 IS INTENDED TO LIMIT OR
         RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY UNDER
         ARTICLE 14, OR DAMAGES AVAILABLE FOR BREACH UNDER ARTICLE 16.

17.7 Survival

         Any provisions of Article, Sections or Subsections 3.3(e), 12.1, 12.3,
         12.5, 14, 16, 17.6, and 17.7 of this Agreement shall survive the
         termination or expiration of this Agreement.

ARTICLE 18 FORCE MAJEURE

         Each Party shall be excused from the performance of its obligations
         under this Agreement to the extent that such performance is prevented
         by force majeure, i.e. any events beyond the reasonable control of the
         Party which shall include, but not be restricted to, fire, flood,
         earthquake, explosion, riot, strike, lockout, war and regulations of
         any governmental authority. The affected Party shall promptly provide
         notice of such force majeure to the other Party. Such excuse of
         performance shall continue for so long as the condition constituting
         force majeure continues and solely to the extent the inability to
         perform is caused by such condition, and provided that the affected
         Party takes reasonable efforts to avoid the affects of such condition
         and to perform if possible. Notwithstanding the foregoing, a force
         majeure condition shall not excuse Peninsula for making any payments
         owed hereunder, unless such force majeure event actually prevents
         Peninsula's ability to make such payment. Either Party shall notify the
         other Party promptly in the event of any indications of any force
         majeure conditions occurring and shall discuss the effect of such
         conditions on this Agreement and the measures to be taken. Each Party
         shall use its best efforts to reasonably avoid or restrict any
         detrimental effects in connection with such incidents.

ARTICLE 19 PUBLIC ANNOUNCEMENT

         Either Party shall be free to make a public announcement regarding the
         existence of this Agreement but not the terms and conditions hereof. If
         a Party wishes to make a public announcement regarding the terms and
         conditions of this Agreement, such Party shall provide the other Party
         with a copy of any proposed announcement text or other


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         relevant information proposed to be published at least sixty (60) days
         prior to the scheduled publication date for the other Party to review
         and comment.

ARTICLE 20 MISCELLANEOUS

20.1 Notice

         Any notice or other communication required or permitted under this
         Agreement shall be in writing, in English, addressed to the appropriate
         Party at the address given on the first page of this Agreement or to
         such other address as may be specified by a Party in accordance with
         this Section 20.1, and shall be deemed to have been duly given (a) when
         received, if hand-delivered, sent by a reputable overnight service, or
         by facsimile (provided that such facsimile is later confirmed in
         writing) or, (b) five (5) business days after mailing, if placed in the
         mail for delivery by registered or certified mail, return receipt
         requested, postage prepaid.

20.2 Entire Agreement/Amendments

         This Agreement including the Appendices attached hereto and made a part
         hereof embodies the entire agreement between the Parties concerning the
         subject matter hereof, and all prior representations, warranties or
         agreements relating hereto are hereby terminated and shall be of no
         force or effect whatsoever. No amendment, change, modification nor
         alteration of the terms and conditions of this Agreement shall be
         binding upon either party unless in writing and signed by the Parties.

20.3  Assignment

         This Agreement is personal in its nature and neither Party shall assign
         any right or obligation hereunder, except those expressly provided
         herein, without the prior written consent of the other Party.
         Notwithstanding the foregoing, subject to Subsection 17.2 (b), either
         Party may assign this Agreement to its successor in interest in
         connection with any merger, acquisition, reorganization, consolidation
         or sale of all or substantially all of the assets of the business to
         which this relates. This Agreement shall be binding upon and, subject
         to the terms of the foregoing sentence, inure to the benefit of the
         Parties' successors, and permitted assigns.

20.4  Severability


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         In case any provision in this Agreement shall be held to be invalid,
         illegal, or unenforceable, the validity, legality, and enforceability
         of the remaining provision hereof shall not in any way be affected or
         impaired thereby.

20.5  Relationship of the Parties.

         This Agreement shall not constitute any Party the legal representative
         or agent of the other, nor shall any Party have the right or authority
         to assume, create, or incur any third-party liability or obligation of
         any kind, either express or implied, against, in the name of, or on
         behalf of the other except as expressly set forth in this Agreement.

20.6  Headings.

         The headings contained in this Agreement have been added for
         convenience only and shall not affect the construction, meaning or
         interpretation of this Agreement or any of its terms and conditions.

20.7  Counterparts.

         This Agreement may be executed in one or more counterparts, each of
         which shall be an original and all of which shall constitute together
         the same document.

20.8  Export Control.

         This Agreement is made subject to any restrictions concerning the
         export of products or technical information from the United States of
         America or other countries which may be imposed upon or related to
         Shionogi or Peninsula from time to time. Each Party agrees that it will
         not export, directly or indirectly, any technical information acquired
         from the other Party under this Agreement or any products using such
         technical information to a location or in a manner that at the time of
         export requires an export license or other governmental approval,
         without first obtaining the written consent to do so from the
         appropriate agency or other governmental entity.

ARTICLE 21   GOVERNING LAW AND DISPUTE RESOLUTION

21.1  Governing Law

         This Agreement shall be interpreted and construed in accordance with
         the laws of the State of New York, without reference to the principles
         of conflict of laws. This Agreement was prepared in the English
         language, which language shall govern the interpretation of and any
         dispute regarding the terms of the Agreement.


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21.2 Dispute Resolution.

(a)   Any controversies, disputes, or claims arising between in the Parties in
      connection with this Agreement that the Parties are unable otherwise to
      resolve shall be referred to the President of Peninsula and the [*] of
      Shionogi or other appropriate officer of Shionogi appointed by Shionogi,
      who shall promptly meet and use good faith, diligent efforts to seek to
      resolve the matter. If such officers are unable to resolve a matter
      presented to them under the preceding sentence within [*] days of
      referral, and if such dispute relates to scientific or technical issues,
      the Parties shall mutually agree upon an independent third party with an
      appropriate scientific background to resolve such dispute. Such
      independent third party's decision shall be binding on the Parties. All
      other disputes that the officers are unable to resolve shall be referred
      to arbitration in accordance with Subsection 21.2(b).

(b)   Any controversy or disputes or claims arising between the Parties in
      connection with this Agreement which are not scientific or technical and
      have not been settled by the officers of the Parties under Subsection
      21.2(a) shall be finally settled under the Rules of Arbitration of the
      International Chamber of Commerce in Paris, France, by one or more
      arbitrators appointed in accordance with said Rules. The arbitration shall
      be held in San Francisco (the United States) if requested by Shionogi, or
      in Osaka (Japan) if requested by Peninsula. Any award or decision made in
      such arbitration shall be final and binding upon the Parties.


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


                                      -26-
<PAGE>
IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
by their respective duly authorized officers as of the Effective Date.

For and on behalf of                             For and on behalf of
Shionogi & Co., Ltd.                             Peninsula Pharmaceuticals, Inc.



/s/ Reiji Takeda                                 /s/ Paul F. Truex
------------------------------                   ------------------------------
Name: Reiji Takeda                               Name: Paul F. Truex
Title: Director and General Manager              Title: President
Date: July 11, 2002                              Date: July 11, 2002
     -------------------------                       --------------------------


                                      -27-
<PAGE>
                                                                      Appendix I

[Chemical formula of the Compound]

                                    [GRAPHIC]


                                      -28-
<PAGE>
                                                                     Appendix II

[List of Licensed Patents]


UNITED STATES

<TABLE>
<CAPTION>
                         Patent No. or
                        Application No.                      Expiry date*
                        ---------------                      ------------
<S>                                                          <C>
                              [*]                                 [*]
                              [*]                                 [*]
                              [*]                                 [*]
                              [*]                                 [*]
                              [*]                                 [*]
</TABLE>

CANADA

<TABLE>
<CAPTION>
                         Patent No. or
                        Application No.                      Expiry date*
                        ---------------                      ------------
<S>                                                          <C>
                              [*]                                 [*]
                              [*]                                 [*]
                              [*]                                 [*]
                              [*]                                 [*]
</TABLE>

MEXICO

<TABLE>
<CAPTION>
                         Patent No. or
                        Application No.                      Expiry date*
                        ---------------                      ------------
<S>                                                          <C>
                              [*]                                 [*]
                              [*]                                 [*]
</TABLE>

* Original term without extension


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


                                      -29-
<PAGE>
                                                                    Appendix III

I.       [*]
II.      [*]
III.     [*]
IV.      [*]
V.       [*]
VI.      [*]
VII.     [*]


[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


                                      -30-
<PAGE>
                                                                     Appendix IV

[Development Plan to be separately attached]


                                      -31-
<PAGE>
                                                                      Appendix V

[Specifications of the Licensed Product]

<TABLE>
<CAPTION>
                        Test                                              Acceptance Limits
                        ----                                              -----------------
<S>                                                   <C>
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
[*]                                                   [*]
</TABLE>

[ * ] = CERTAIN CONFIDENTIAL INFORMATION CONTAINED IN THIS DOCUMENT, MARKED BY
BRACKETS, HAS BEEN OMITTED AND FILED SEPARATELY WITH THE SECURITIES AND EXCHANGE
COMMISSION PURSUANT TO RULE 406 OF THE SECURITIES ACT OF 1933, AS AMENDED.


                                      -32-