<PAGE>

                                                                   EXHIBIT 10.15

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.

                                   AGREEMENT

         THIS AGREEMENT is made as of the 30th day of September, 2003 (the
"Effective Date") by and between Takeda Chemical Industries, Ltd., with its head
office at 1-1, Doshomachi 4-chome, Chuo-ku, Osaka 540-8645, Japan (hereinafter
called "TAKEDA"), and Peninsula Pharmaceuticals, Inc., with its head office at
1701 Harbor Bay Parkway, Alameda, CA 94502, USA (hereinafter called
"PENINSULA").

                                WITNESSETH THAT:

         WHEREAS, TAKEDA has been developing the Compound (as hereinafter
defined) and owns certain Information (as hereinafter defined), Manufacturing
Know-How (as hereinafter defined) and Patents (as hereinafter defined) which
cover the Compound as well as the Product (as hereinafter defined); and

         WHEREAS, PENINSULA desires to obtain a license from TAKEDA to import
the Compound, process the Compound into the Product and develop and sell the
Product in the Territory (as hereinafter defined) under the Information and the
Patents;

         WHEREAS, TAKEDA is willing to comply with such desire of PENINSULA;

         NOW, THEREFORE, the parties hereto agree as follows:

                                   ARTICLE 1

                                  DEFINITIONS

         The following terms whenever used in this Agreement shall have the
following meanings:

         1.1      "Lot" shall mean a specific quantity of the Compound that is
intended to have uniform character and quality, within the specified limits set
forth in the Specifications, and is produced as one lot with the intention of
being quality controlled and released as a single lot.

         1.2      "cGMP" shall mean the current good manufacturing practices
required by the FDA and set forth in the FD&C Act, or FDA regulations, policies
or guidelines in effect at a particular time, for the manufacturing and testing
of pharmaceutical materials, and any other laws or regulations applicable to the
manufacturing and testing of pharmaceutical materials in a country or
jurisdiction in the Territory.

         1.3      "Compound" shall mean: (i) the water-soluble prodrug
(6R,7R)-7-((Z)-2-(ethoxyimino-2-[5-(phosphonoamino)-1,2,4-thiadiazol-3-yl]
acetyl)amino)-3-[4-(1-methyl-4-pyridino)-1,3-thiazol-2-yl]thio-8-oxo-5-thia-1-
azabicyclo[4.2.0]oct-2-ene-2-carboxylate acetic acid solvate and coded by TAKEDA
internally as TAK-599, or (ii) the semisynthesized cephalosporin compound coded
by TAKEDA internally as T-91825.

                                       1
<PAGE>

         1.4      "Confidential Information" shall mean all confidential or
proprietary information relating to the Compound and/or the Product including,
without limitation, research, development, manufacturing, marketing, financial,
personnel, sales, and other business and technical information, compositions,
inventions, discoveries, processes, methods, formulae, procedures, protocols,
techniques, data, plans, the Specifications, and quality control procedures,
whether in oral, written, graphic, or electronic form. Confidential information
relating to the Compound and/or the Product that was disclosed to PENINSULA by
TAKEDA prior to the Effective Date shall be also deemed TAKEDA's Confidential
Information hereunder.

         1.5      "Controlled" shall mean, with respect to any patent,
Information, Manufacturing Know-How or other intellectual property right, that
the party owns or has a license to such patent, Information, Manufacturing
Know-How or other intellectual property right and has the ability, as of the
applicable time, to grant to the other party access, a license, or a sublicense
to such patent, Information, Manufacturing Know-How or other intellectual
property right as provided for in this Agreement without violating an agreement
with or rights of a third party.

         1.6      "Development Work" shall mean the conduct of pre-clinical and
clinical trials, the compilation of the dossier concerning the Compound and/or
the Product and the conduct of other work necessary or useful for obtaining
Registration by or on behalf of PENINSULA.

         1.7      "Drug Master File" or "DMF" shall mean a Drug Master File
maintained with the FDA, or a filing with a Regulatory Authority outside the
United States serving a purpose equivalent to that of a Drug Master File in the
United States, such that manufacturing information may be filed by a
manufacturer in such country in a manner that remains confidential from the
holder of the remaining portions of the Registration maintained with the FDA and
the equivalent thereof, if any, in jurisdictions outside the United States.

         1.8      "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.

         1.9      "FD&C Act" means the United States Food, Drug and Cosmetic
Act, as amended, and any regulations promulgated thereunder.

         1.10     "IND" shall mean an Investigational New Drug Application as
defined in the FD&C Act and applicable regulations promulgated thereunder by the
FDA, or the equivalent application to the equivalent agency in any other country
or jurisdiction in the Territory, the filing of which is necessary to commence
clinical testing of a pharmaceutical product in humans.

         1.11     "Information" shall mean all data, results and information
(other than the Manufacturing Know-How) relating to the Compound and/or the
Product, or the use of the Compound and/or the Product, or processing the
Compound into the Product including, without limitation, pre-clinical, clinical,
and/or regulatory documentation, data, information, and reports, if any, that
are Controlled by TAKEDA during the term of the Agreement and are necessary or
useful for PENINSULA to evaluate, develop, register, formulate, fill and finish,
sell and market Products in the Territory.

                                       2
<PAGE>

         1.12     "Intermediate Manufacturing Cost" shall mean either (a) [ * ]
percent ([ * ]%) of the actual, reasonable out-of-pocket costs incurred by
TAKEDA to obtain intermediates required for the manufacture of the Compound from
a third party manufacturer, or (b) [ * ] percent ([ * ]%) of the actual
out-of-pocket costs incurred, paid or borne by TAKEDA to manufacture, quality
check and supply intermediates required for the manufacture of the Compound to
PENINSULA. It is understood that TAKEDA may elect to entrust the manufacture,
quality check and/or supply of the Compound to a Third Party Manufacturer(s) and
in such event, all the reasonable consideration for such entrustment to be paid
by TAKEDA to such Third Party Manufacturer(s) for the manufacture of such
intermediates supplied to PENINSULA shall be included in the Intermediate
Manufacturing Cost. "Intermediate Manufacturing Cost" may include the actual
purchase price of raw materials, insurance payments, and any payment to third
party(ies) by TAKEDA to obtain a license under such third party's patent or
other intellectual property rights without which license the manufacture of such
intermediate would constitute an infringement of such patents or other
intellectual property rights, if any, provided that any such consideration is
commercially reasonable.

         1.13     "Major Market Country" shall mean the United States of
America, the United Kingdom, France, Germany, Italy, Spain, Austria and
Switzerland, to the extent such countries are included in the Territory.

         1.14     "Compound Manufacturing Cost" shall mean the actual
out-of-pocket costs incurred, paid or borne by TAKEDA to manufacture, quality
check and supply the Compound to PENINSULA. It is understood that TAKEDA may
elect to entrust the manufacture, quality check and/or supply of the Compound to
a Third Party Manufacturer(s) and in such event, all the reasonable
consideration for such entrustment to be paid by TAKEDA to such Third Party
Manufacturer(s) for the manufacture of the Compound supplied to PENINSULA shall
be included in the Compound Manufacturing Cost. "Compound Manufacturing Cost"
may include the actual purchase price of raw materials, insurance payments, and
any payment to third party(ies) by TAKEDA to obtain a license under such third
party's patent or other intellectual property rights without which license the
manufacture of the Compound would constitute an infringement of such patents or
other intellectual property rights, if any, provided that any such consideration
is commercially reasonable.

         1.15     "Product Manufacturing Cost" shall mean, with respect to a
particular Product sold by PENINSULA (or its Affiliate or sublicensee)
hereunder, the sum of: (a) either (i) [ * ] purchase price of the Compound from
TAKEDA, if the Compound in such Product was purchased from TAKEDA, or (ii) [ * ]
percent ([ * ]%) of the actual out-of-pocket costs incurred, paid or borne by
PENINSULA in the manufacture and quality check of the Compound, if PENINSULA
manufactures or has a third party manufacture on its behalf the Compound
included in such Product; plus (b) [ * ] percent ([ * ]%) of the actual
out-of-pocket costs incurred, paid or borne by PENINSULA to process the Compound
into and package the Product and quality check (or have a third party contractor
perform such processing and packaging). "Product Manufacturing Cost" in
subclause (b) above may include [ * ]% of the actual purchase price of any raw
materials other than the Compound and insurance payments relating thereto,
provided that any such consideration is commercially reasonable. It is
understood that any payment to third party(ies) by PENINSULA to obtain a license
under such third party's patent or other intellectual property rights without
which license the above mentioned manufacturing, processing or packaging would
constitute an infringement of such patents or other intellectual property
rights, which shall be treated pursuant to Section 3.4, if


[ * ] = 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.

                                       3
<PAGE>

any, shall not be included in the Product Manufacturing Cost. For clarity, the
term "Product Manufacturing Cost" shall not include any royalty paid by
PENINSULA to TAKEDA under Section 3.3 or to any Third Party.

         1.16     "Manufacturing Know-How" shall mean all technical know-how and
information relating to the manufacture of the Compound and all intermediates
thereof that are Controlled by TAKEDA during the term of this Agreement and that
are necessary or useful for PENINSULA to manufacture the Compound and all
intermediates thereof.

         1.17     "NDA" shall mean a New Drug Application, as defined in the
FD&C Act, and applicable regulations promulgated thereunder by the FDA, or the
equivalent application to the equivalent agency in any other regulatory
jurisdiction in the Territory, to obtain approval or authorization to commence
marketing and sales of a pharmaceutical product.

         1.18     "Net Sales" shall mean the gross amount received by PENINSULA
and its sublicensees for sales of Compounds and/or Products to unaffiliated
third parties that are not sublicensees of the selling party, less the following
deductions or allowances:

                  (a)      reasonable trade, quantity, or cash discounts or
rebates, chargebacks, commissions, Medicaid/Medicare rebates and allowances;

                  (b)      sales, use, value added, inventory, and excise taxes,
import and customs duties, tariffs and any other similar taxes, duties, tariffs
or other governmental charges (but excluding income taxes) directly imposed on
the sales of the Product;

                  (c)      reasonable freight, insurance, packaging costs and
other transportation charges; and

                  (d)      amounts actually repaid or credits taken by reason of
rejections, outdating, defects or returns or because of retroactive price
reductions or due to recalls or government laws or regulations requiring
rebates.

         1.19     "NHI Price Listing" shall mean the listing of the Product in
the reimbursement list of a national health insurance system in a particular
country or jurisdiction in the Territory, any approval with regard to the
selling price of the Product, and the like in such country or jurisdiction.

         1.20     "Patents" shall mean all patent applications and patents
anywhere in the Territory that are Controlled by TAKEDA during the term of the
Agreement and that claim, cover, or disclose the composition of matter of, or
the method of making or using, the Compound or Product, or any intermediate used
in making the Compound, including all patent applications listed in Schedule I
attached hereto, all patents arising from any such applications, and any
additions, divisions, continuations, continuations in part, substitutions,
extensions, renewals, reissues, reexaminations, registrations, revalidations,
and the like of any of the foregoing.

         1.21     "Product" shall mean a pharmaceutical preparation in any
formulation in final packaged form suitable for sale which contains a Compound
as an active ingredient.

                                       4
<PAGE>

         1.22     "Registration" shall mean all permissions, licenses,
registrations, approvals, or authorizations by an applicable Regulatory
Authority in a particular country or jurisdiction in the Territory required for
the import of the Compound, the processing of the Compound into the Product and
the marketing and sale of the Product in such country or jurisdiction.

         1.23     "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.

         1.24     "Results" shall mean all the data and information that is
produced as a result of the Development Work.

         1.25     "Specifications" shall mean the specifications and testing
methods of the Compound as set forth in Schedule II attached hereto. Schedule
II may be modified by mutual agreement between the parties hereto from time to
time during the term of this Agreement.

         1.26     "Territory" shall mean all countries and territories worldwide
except for Japan and those Option Countries (if any) that are excluded from the
Territory pursuant to Section 2.3.

         1.27     "Option Countries" shall mean all countries and territories
set forth in Schedule VII attached hereto.

         1.28     "Third Party Manufacturer" shall mean any entity other than
TAKEDA that is contracted by TAKEDA to manufacture, quality check and/or supply
the Compound and/or Intermediates supplied to PENINSULA hereunder, in part or in
whole.

         1.29     "Valid Claim" means a claim of an issued patent within the
Patents that has not (a) expired or been canceled, (b) been declared invalid by
an unreversed and unappealable decision of a court or other appropriate body of
competent jurisdiction, (c) been admitted to be invalid or unenforceable through
reissue, disclaimer, or otherwise, or (d) been abandoned.

         1.30     "Year" shall mean each consecutive twelve (12) month period
from April 1 to March 31.

                                   ARTICLE 2

                                GRANT OF LICENSE

         2.1      TAKEDA hereby grants to PENINSULA and PENINSULA hereby accepts
an exclusive license throughout the Territory under the Information and the
Patents, to develop and obtain the Registration for the Compound and/or Product
in the Territory, to import the Compound and/or Product in the Territory, to
process the Compound into the Product in the Territory, to use the Compound
and/or the Product and to sell the Product in the Territory. TAKEDA retains all
rights with regard to the Compound and/or the Product in Japan and in those
Option Countries (if any) that TAKEDA and PENINSULA agree to exclude from the
Territory pursuant to Section 2.3 (Japan and those Option Countries, if any,
that are excluded from the Territory are hereinafter collectively referred to as
the "TAKEDA Territory"). Solely for the purpose of developing and obtaining the
Registration for the Compound and/or Product in the TAKEDA Territory or selling
the Compound and/or Product in the TAKEDA Territory,

                                       5
<PAGE>

TAKEDA retains the right to, or to cause any third party to, import the Compound
and/or the Product, process the Compound into the Product, and use the Compound
and/or Product in the Territory. Takeda also retains the worldwide right to
manufacture and cause any third party to manufacture the Compound.

         2.2      PENINSULA shall have the right to grant to third parties
sublicenses under the license granted to PENINSULA in Section 2.1 subject to and
pursuant to Section 2.4.

         2.3      Subject to the provisions of this Section 2.3, PENINSULA
hereby grants to TAKEDA an exclusive option to negotiate for the right to
develop, offer for sale and/or sell the Product in the Option Countries by
itself or through any third party (the "Option"). Such Option shall be
exercisable solely as set forth in this Section 2.3. Within thirty (30) days
after the earlier of (a) the date on which any of the [ * ] clinical studies in
countries in [ * ] or [ * ] have been completed in relation to the Product
(i.e., the date on which the summary of the results is finalized based on the
completed analysis of such [ * ] clinical study of the Product last completed in
the Territory) or, (b) on which any of the [ * ] studies in relation to the
Product in the Territory have been initiated (i.e., the earlier of (i) the date
on which a protocol for [ * ] clinical studies has been submitted to the FDA in
the USA, or (ii) the date on which PENINSULA submits any documents, such as a
clinical trial exemption, to a Regulatory Authority in the Territory in order to
commence [ * ] clinical studies), PENINSULA shall inform TAKEDA of such event in
writing and shall provide to TAKEDA all the final reports then available for
those [ * ] and other clinical studies of the Product that have been completed.
For the purpose of this Section 2.3, a final report of a [ * ] clinical study
means a final report of a [ * ] clinical study or, if such final report is not
then available, the draft thereof. TAKEDA shall have a period of [ * ] ([ * ])
days after its receipt of the above notice and all the final reports then
available of [ * ] and of other clinical studies completed in relation to the
Product from PENINSULA, which may from time to time be extended upon mutual
agreement of the Parties (the "Option Notice Period"), in which to inform
PENINSULA in writing that it exercises the Option and the specific Option
Countries for which TAKEDA is exercising the Option. If TAKEDA exercises the
Option in writing within the Option Notice Period, TAKEDA and PENINSULA shall,
for a period of up to [ * ] ([ * ]) days from the date on which TAKEDA exercises
the Option (the "Option Negotiation Period"), in good faith negotiate the terms
and conditions of an agreement covering the applicable Option Countries (which
agreement would provide, if applicable, that such Option Countries are
thereafter excluded from the Territory and included in the TAKEDA Territory
thereafter or that PENINSULA shall grant TAKEDA a sublicense, with the right to
grant further sublicenses through multiple tiers of sublicensees, to develop,
offer for sale and/or sell the Product in the applicable Option Countries). If
TAKEDA does not exercise the Option with respect to any or all of the Option
Countries in accordance with the provisions of this Section 2.3 during the
Option Notice Period, TAKEDA's Option with respect to such Option Countries, for
which the Option was not exercised, shall expire and PENINSULA shall have the
right to develop, offer for sale, and/or sell the Product in such Option
Countries and/or grant sublicenses to one or more third parties to develop,
offer for sale, and/or sell the Product in such Option Countries. If TAKEDA
exercises the Option with respect to specific Option Countries during the Option
Notice Period but TAKEDA and PENINSULA fail to execute an agreement covering
such Option Countries prior to the expiration of the Option Negotiation Period,
then PENINSULA may develop, offer for sale, and/or sell the Product in such
Option Countries and may grant rights to one or more third parties to develop,
offer for sale, distribute and/or sell the Product in one or more of such Option
Countries; provided, however, that for a period of [ * ] from the date of
expiration of the Option


[ * ] = 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.

                                       6
<PAGE>

Negotiation Period, PENINSULA shall not enter into an agreement with any third
party with respect to such Option Countries unless the terms and conditions of
such agreement, when taken as a whole, are better in PENINSULA's reasonable
judgement for PENINSULA than the terms and conditions last offered by PENINSULA
to TAKEDA during the Option Negotiation Period, without first offering such
terms to TAKEDA for TAKEDA's consideration and possible acceptance. If TAKEDA
does not elect to enter into an agreement with PENINSULA on such better terms to
TAKEDA within [ * ] days after the date on which PENINSULA offers such terms to
TAKEDA, then PENINSULA shall have the right to enter into an agreement on such
terms with a third party.

         2.4      In addition to Section 2.3, if PENINSULA elects not to develop
and/or sell the Product by itself in a country(ies) of the Territory and decides
to seek a third party sublicensee or distributor to develop and/or sell the
Product in such country(ies), PENINSULA shall first provide to TAKEDA written
notice offering to TAKEDA the opportunity to develop and/or sell the Product as
PENINSULA's sublicensee or distributor in such country(ies). Notwithstanding the
foregoing, if any of such country(ies) are Option Countries with respect to
which TAKEDA exercised the Option under Section 2.3 during the Option Notice
Period but TAKEDA and PENINSULA failed to execute an agreement covering such
Option Countries prior to the expiration of the Option Negotiation Period,
PENINSULA shall not be required to provide to TAKEDA written notice offering to
TAKEDA the opportunity to develop and/or sell the Product as PENINSULA's
sublicensee or distributor in such Option Countries except as may be required
under Section 2.3. TAKEDA shall inform PENINSULA of its interest in such an
opportunity within [ * ] days after its receipt of the applicable written offer
(the "Notice Period"). If TAKEDA informs PENINSULA in writing within the Notice
Period that TAKEDA is interested in developing, offering for sale and/or selling
Products in such country(ies) or distributing the Product in such country(ies),
as applicable, by itself or through any third party, TAKEDA and PENINSULA shall
in good faith negotiate the terms and conditions of an agreement covering such
country(ies) (which agreement would provide, if applicable, that TAKEDA would
have the right to determine the sales price for and to promote Products in such
country(ies)) for up to [ * ] days from the date of TAKEDA's notice expressing
such interest (the "Negotiation Period"). If TAKEDA does not inform PENINSULA of
its interest in distributing the Product or developing, offering for sale and/or
selling the Products in such country(ies), as applicable, during the Notice
Period, or if TAKEDA and PENINSULA fail to execute an agreement covering such
country(ies) within the Negotiation Period, then PENINSULA may grant rights to
one or more third parties to develop, offer for sale, distribute and/or sell the
Product in such country(ies), as applicable; provided, however, that if TAKEDA
informed PENINSULA of its interest in a particular opportunity set forth in a
Notice during the applicable Notice Period but PENINSULA and TAKEDA were unable
to execute an agreement related to such opportunity within the Negotiation
Period, PENINSULA shall not enter into an agreement with any third party with
respect to such opportunity on terms and conditions that, when taken as a whole,
are better to such third party than the terms and conditions last offered by
PENINSULA to TAKEDA during the Negotiation Period without first offering such
terms to TAKEDA for TAKEDA's consideration and possible acceptance. If TAKEDA
does not elect to enter into an agreement with PENINSULA on such better terms to
TAKEDA within [ * ] days after the date on which PENINSULA offers such terms to
TAKEDA, then PENINSULA shall have the right to enter into an agreement on such
terms with a third party. PENINSULA shall inform TAKEDA of the names of its
third party distributor(s) and/or sublicensee(s) and obtain TAKEDA's prior
written consent, which consent shall not be unreasonably withheld, impose upon
the distributor(s) and/or


[ * ] = 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.

                                       7
<PAGE>

sublicensee(s) all applicable obligations which PENINSULA undertakes hereunder
and be responsible for the performance by the distributor(s) and/or
sublicensee(s) of such obligations.

         2.5      Each party covenants that during the term of this Agreement,
it will not develop, market or sell, and will not grant to any third party any
rights to develop, market or sell, any [ * ] product other than the Product in
the Territory (such product, a "Competitive Product"). Notwithstanding the
foregoing, TAKEDA shall have the right to develop, market, offer for sale or
sell a Competitive Product in the Territory provided that such Competitive
Product does not result from TAKEDA's (or its Affiliate's) own internal research
or discovery program, and instead such Competitive Product is discovered and
developed initially by a third party, and TAKEDA subsequently obtains, by
license from, as a result of a merger with or acquisition of, such third party
or otherwise, rights to develop, market, offer for sale or sell such Competitive
Product.

                                    ARTICLE 3

                                  CONSIDERATION

         3.1      As part of the consideration for the license granted by TAKEDA
hereunder, PENINSULA shall pay the following one-time milestone payments to
TAKEDA in U.S. Dollars upon the first occurrence of each of the following
events:

<TABLE>
<CAPTION>
                 MILESTONE EVENT                                     MILESTONE PAYMENT
                 ---------------                                     -----------------
<S>                                                                  <C>
Execution of the Agreement                                               US $500,000

Commencement of the first Phase III clinical study of the                US $[ * ]
Product (First administration for the first patient) in the
first country or jurisdiction in the Territory

First submission of an NDA in the first country or                       US $[ * ]
jurisdiction in the Territory

Obtaining the first Registration of the Product in the first             US $[ * ]
country or jurisdiction in the Territory

TOTAL POSSIBLE MILESTONE PAYMENTS:                                       US $[ * ]
</TABLE>

PENINSULA shall notify TAKEDA in writing upon its achievement of each milestone
event, and shall make each milestone payment payable hereunder no later than
[ * ] days from the date on which the applicable milestone event is achieved.

         3.2      For each half Year period ending September 30 and March 31,
PENINSULA shall send to TAKEDA a report in such a form as reasonably specified
by TAKEDA setting forth, on a country-by-country basis, the quantities of the
Product sold by PENINSULA and its sublicensees in the Territory during the
applicable half Year period, the Net Sales, and the


[ * ] = 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.

                                       8
<PAGE>

amount of royalties owed to TAKEDA under Section 3.3 hereof for such half Year,
within [ * ] days after the close of the applicable half Year period.

         3.3      As part of the consideration for the license granted by TAKEDA
hereunder, and subject to any applicable reductions and offsets under Sections
3.4 and 3.5, PENINSULA shall pay to TAKEDA royalties as a percentage of the
annual Net Sales of the Product sold in the Territory by PENINSULA in each Year,
according to the applicable royalty rates set forth below. Such royalty payments
shall be paid not later than [ * ] days after the end of each half Year with
respect to Net Sales in such half Year. For each country in the Territory,
PENINSULA shall pay TAKEDA royalties on a country-by-country basis for the
period commencing on the date of the first commercial sale of the Product by
PENINSULA or its sublicensee in such country and ending on the later of (i) the
[ * ] anniversary of the first commercial sale of the Product in such country,
and (ii) [ * ] of the last to expire Valid Claim in such country that claims the
composition of matter of such Product or the method of using such Product.

                  (a)      For Net Sales in those countries and jurisdictions in
the Territory in which PENINSULA has obtained Registration of the Product having
an approved indication for the treatment of infections due to MRSA (such
countries, the "MRSA Countries"), the royalties shall be a percentage of such
Net Sales in those countries and jurisdictions, with the royalty rate determined
based on the aggregate amount of Net Sales in the MRSA Countries during the
applicable calendar year as of the date of the applicable sale, according to the
following schedule:

<TABLE>
<CAPTION>
Royalty Rate                Annual Net Sales in the MRSA Countries
------------                --------------------------------------
<S>                         <C>
  [ * ]%                        Up to US $[ * ]
  [ * ]%                        Over US $[ * ] up to US $[ * ]
  [ * ]%                        Over US $[ * ] up to US $[ * ]
  [ * ]%                        Over US $[ * ]
</TABLE>

For the avoidance of doubt, the aggregate annual Net Sales for any given Year
shall be reset to zero upon the beginning of the subsequent Year for purposes of
applying the applicable royalty rate.

                  (b)      For Net Sales in those countries and jurisdictions in
the Territory in which PENINSULA has not obtained Registration for the Product
in such countries or jurisdictions having an approved indication for the
treatment of infections due to MRSA (such countries, the "Adjusted Countries"),
the royalties shall be [ * ] percent ([ * ]%) of the Net Sales in those
countries and jurisdictions.

         By way of example, if the aggregate Net Sales achieved in a particular
first half Year is US $[ * ] million for MRSA Countries and US $[ * ] million
for Adjusted Countries, and in the second half Year is US $[ * ] million for
MRSA Countries and US $[ * ] million for Adjusted Countries, and assuming for
purposes of this example that any reductions and offsets under Section 3.4 and
3.5 are not applicable, the amount payable hereunder for such sales in the first


[ * ] = 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.

                                       9
<PAGE>

half Year will be equal to the sum of (US $[ * ] million x [ * ]%) + (US $[ * ]
million x [ * ]%) + (US $[ * ] million x [ * ]%) + (US $[ * ] million x [ * ]%),
i.e., $[ * ] million, and the amount payable hereunder for the second half Year
will be equal to the aggregate of (US $[ * ] million x [ * ]%) + (US $[ * ]
million x [ * ]%) + (US $[ * ] million x [ * ]%), i.e., $[ * ] million.

         3.4      Subject to the limit set forth in Section 3.6, if PENINSULA
obtains a license or other similar right under any patent or patent application
owned or controlled by a third party in the Territory that claims or covers all
or any part of the composition of matter of, method of making, or method of
using the Product, pursuant to Section 15.3, then [ * ] percent ([ * ]%) of the
royalties due to such third party shall be offset against the amount of
royalties otherwise owed to TAKEDA pursuant to Section 3.3 after the application
of Section 3.5. In addition, if PENINSULA is required to pay any settlements or
damages to a third party under Section 15.3, then [ * ] percent ([ * ]%) of the
amount of such settlements or damages paid by PENINSULA shall be offset against
the amount of royalties otherwise owed to TAKEDA pursuant to Section 3.3 after
the application of Section 3.5, subject to the limit set forth in Section 3.6,
until such time as PENINSULA has offset an amount equal to [ * ] percent ([ *
]%) of the amount of such settlements or damages.

         3.5      Subject to the limit set forth in Section 3.6, if the Product
Manufacturing Cost exceeds [ * ] percent ([ * ]%) of the Net Sales of the
Product in a certain half Year, the royalty rate payable to TAKEDA on Net Sales
of such Product under Section 3.3 shall be reduced by [ * ] for each [ * ] that
the Product Manufacturing Cost exceeds [ * ] percent ([ * ]%) of the Net Sales
of such Product. PENINSULA agrees to use all commercially reasonable efforts to
reduce the aspects of Product Manufacturing Cost that are within its control.
For example, if Product Manufacturing Cost is equal to [ * ] percent ([ * ]%) of
Net Sales of such Product in a certain half Year, the royalty rate payable to
TAKEDA on Net Sales of such Product under Section 3.3 shall be reduced by [ * ]
(i.e., if the rate otherwise applicable under Section 3.3 is [ * ] percent ([ *
]%), the royalty rate would be reduced to [ * ] percent ([ * ]%)). If the
above-mentioned reduction is applicable, PENINSULA shall explain, if requested
in writing by TAKEDA, the rationale of such reduction together with a summary of
the relevant records supporting the calculation of the reduction.

         3.6      Notwithstanding anything in this Agreement to the contrary, in
no event shall the amount of royalties payable to TAKEDA hereunder on Net Sales
of Products in the Territory, after giving effect to applicable offsets or
reductions under Sections 3.4, 3.5 or 15.3 of this Agreement, be reduced by more
than [ * ] percent ([ * ]%) of the amount otherwise owed for any particular
reporting period.

         3.7      Income tax on the payments made to TAKEDA under Sections 3.1,
3.3, 7.3 and 7.6 hereof shall be borne by TAKEDA. PENINSULA shall deduct
mandatory withholding tax (if any) and shall pay such tax on behalf of TAKEDA,
and shall immediately send to TAKEDA a certified receipt for such payment issued
by the applicable taxing authority.

         3.8      Net Sales outside the United States shall be first determined
in the currency of the country in which they are earned and shall be converted
each half Year into an amount in U.S. Dollars using the rate of exchange
reported by Citibank in New York City as of the close of the last business day
of such half Year in which such royalty is due.

         3.9      PENINSULA shall keep accurate records of sales of the Product
and Product Manufacturing Cost in sufficient detail to permit TAKEDA to confirm
the accuracy of


[ * ] = 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.

                                       10
<PAGE>

calculations of all payments made under Section 3. Once per Year, TAKEDA, at its
expense, may have an independent public accountant reasonably acceptable to
PENINSULA audit any and all account books and related records or documents
possessed by PENINSULA concerning the sale of the Product and Product
Manufacturing Cost, upon at least thirty (30) days notice and during normal
business hours, for the purpose of verifying the accuracy of royalty payments
made under Section 3. If the accountant finds a discrepancy of more than five
percent (5%) for the period audited, PENINSULA shall bear the reasonable costs
and expenses for such audit. For the above purpose, PENINSULA shall keep such
account books and their relating records or documents for five (5) years after
the end of the half Year concerned.

         3.10     TAKEDA shall not be obligated to refund payments made by
PENINSULA under this Agreement once received for any reason, including but not
limited to, invalidation of any claim(s) of the Patents. However, it is
understood that the foregoing sentence shall not be interpreted to limit the
damages available to PENINSULA in the event of an uncured breach of this
Agreement by TAKEDA (but subject to Section 13.8).

                                   ARTICLE 4

                            DISCLOSURE OF INFORMATION

         4.1      On the Effective Date, TAKEDA shall disclose to PENINSULA
and/or cause its appointee to disclose to PENINSULA in English the Information
set forth in the attached Schedule IV. In addition, TAKEDA shall promptly
disclose to PENINSULA in English any additional Information developed or
acquired and Controlled by TAKEDA during the term of this Agreement, if any.
PENINSULA may use all Information solely for the purposes contemplated under
this Agreement. If a Regulatory Authority in any jurisdiction or country of the
Territory requires PENINSULA to provide information which is not available to
TAKEDA and/or PENINSULA, both parties shall meet and agree on how to comply with
such requirement, provided, however, that such information shall be, except
otherwise agreed by the parties, generated by PENINSULA through the Development
Work and TAKEDA shall not be obligated to generate such information.

                                   ARTICLE 5

                                DEVELOPMENT WORK

         5.1      TAKEDA and PENINSULA shall establish a joint committee
(hereinafter called "JC") which will discuss and decide upon the development
plan and strategy for the Product in the Territory, and will coordinate the
development activities undertaken by PENINSULA for the Product with the
development activities undertaken by TAKEDA to generate data necessary to obtain
Registration of the Product in the TAKEDA Territory. The JC shall be comprised
of an equal number of members from TAKEDA and PENINSULA, which number of members
shall initially be a total of four (4), and will meet semi-annually at
alternating home office locations, or such other locations as the parties agree,
or by teleconference. Each party shall bear its own costs associated with
attendance at JC meetings. The JC shall keep minutes of all JC meetings in order
to confirm the matters discussed and the decisions reached at such meetings. If
the JC is unable to agree on a development plan or strategy for the Product, the
senior management of TAKEDA and PENINSULA shall discuss the issue in attempt to
resolve the dispute. However, if the parties are unable to resolve such dispute,
PENINSULA shall have the right to make all final decisions regarding the

                                       11
<PAGE>

development plan and strategy for the Product in the Territory; provided that
for clarity TAKEDA shall have the right to make final decisions regarding the
manufacture of the Compound and any other development work conducted by TAKEDA,
if any, except as otherwise expressly provided in this Agreement with respect to
Compound supplied to PENINSULA. The JC may discuss and decide upon other issues
with regard to the Compound and/or the Product that the parties mutually agree
to have decided by the JC.

         5.2      TAKEDA acknowledges and agrees that it shall use diligent
efforts to conduct and complete, at its expense and pursuant to protocols
determined by the JC, the preclinical studies of the Compound as described in
the attached Schedule V (the "Studies"), within the time frame for such studies
set forth in Schedule V, which Studies are reasonably anticipated to be required
by Regulatory Authorities in both the Territory and Japan in order for the
Compound to be approved for use in human clinical trials. For clarity, TAKEDA
shall have no obligation under this Agreement to conduct any preclinical studies
of the Compound other than the Studies and TAKEDA's obligation is to conduct the
Studies pursuant to the protocol to be separately determined by JC. It is
understood that TAKEDA makes no warranties with respect to the Studies,
including without limitation a warranty that PENINSULA will be able to
successfully develop the Compound using the results of the Studies. However, if
reasonably requested by PENINSULA, TAKEDA shall use diligent efforts to conduct
any additional preclinical studies on the Compound that are required by any
Regulatory Authority in the Territory at PENINSULA's expense. TAKEDA shall
disclose to PENINSULA in English all Information resulting from the Studies and
any other preclinical studies conducted by TAKEDA under this Section 5.2
promptly after the completion of such studies. Except as otherwise provided
above, PENINSULA shall be responsible for conducting, at PENINSULA's expense,
any additional preclinical and clinical studies, as Development Work, that are
required by Regulatory Authorities in the Territory, that are not Studies.

         5.3      Upon PENINSULA's reasonable request and to the extent that
TAKEDA has available inventory of Compound on the Effective Date, TAKEDA shall
promptly supply to PENINSULA that quantity of Compound necessary to conduct the
following preclinical studies of the Compound: (a) [ * ] study of the Compound [
* ], (b) [ * ] study of the Compound [ * ], and (c) [ * ] study of the Compound
[ * ]. All Compound supplied to PENINSULA by TAKEDA under this Section 5.3 shall
be supplied [ * ] to PENINSULA. Promptly after the Effective Date, the Parties
shall determine the specific quantity of Compound to be supplied by TAKEDA, the
delivery date for such Compound, and other details for such supply.

         5.4      PENINSULA shall undertake the Development Work as soon as
possible necessary to obtain the Registration for the Major Market Countries
promptly. In addition, PENINSULA shall use commercially reasonable efforts to
undertake Development Work necessary to obtain Registration in such other
countries in the Territory where PENINSULA elects to do so based on its sound
business judgment in light of the economic opportunities for sales of the
Product in such other countries. PENINSULA will report to TAKEDA on its
development progress, including without limitation its decision to seek
Registration in certain country(ies), from time to time, but no less frequently
than semi-annually in order for TAKEDA to confirm the status of development of
the Product.

         5.5      The Development Work shall be conducted by PENINSULA at its
sole cost, risk and responsibility. Upon the request of TAKEDA and at TAKEDA's
expense, PENINSULA shall allow TAKEDA representative(s), approved in advance by
PENINSULA, such approval not to be unreasonably withheld, to attend PENINSULA's
meetings concerning development


[ * ] = 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.

                                       12
<PAGE>

and/or marketing of the Product (including internal meetings and meetings with
investigators). All TAKEDA representatives that attend such meetings shall be
bound by obligations of confidentiality consistent with the obligations
contained in Article 14.

         5.6      PENINSULA shall use commercially reasonable efforts to conduct
all Development Work and compile the Results in accordance with ICH guidelines
so that the Results may be accepted by Regulatory Authorities in the TAKEDA
Territory. PENINSULA shall, free of charge and without delay, provide TAKEDA
with all the Results in English. TAKEDA shall have the right to use, and cause
any third parties who have a license under the Patents and Manufacturing
Know-How to develop, manufacture, or commercialize the Compound and/or the
Product in the TAKEDA Territory to use, the Results to develop, manufacture,
offer for sale or sell the Product in the TAKEDA Territory, including without
limitation to pursue Registration in the TAKEDA Territory, free of charge,
subject to the rights granted to PENINSULA hereunder. In addition, for the
limited purpose of evaluating and determining its interest for the Option
Countries as set forth in Section 2.3, TAKEDA shall have the right to use and
cause any third party who is the candidate company to develop, offer for sale
and/or sell the Product in the Option Countries, to use the Results and any
other information which would be necessary or useful for such purpose.

                                   ARTICLE 6

                       REGULATORY ISSUES AND REGISTRATION

         6.1      TAKEDA or its Third Party Manufacturer may, at its sole
discretion, prepare and file DMFs covering the manufacture of the Compound. If
TAKEDA or its Third Party Manufacturer files DMFs covering the manufacture of
the Compound, TAKEDA shall maintain, or shall cause its Third Party Manufacturer
to maintain, such DMFs including, without limitation, amending and updating such
DMFs, as required by applicable Regulatory Authorities. If any Regulatory
Authority deems a DMF prepared and filed by TAKEDA or its Third Party
Manufacturer to be deficient, TAKEDA shall take, or shall cause its Third Party
Manufacturer to take, all reasonable actions necessary to remedy such
deficiencies as soon as practicable, provided, however, that at any time and at
its sole discretion, TAKEDA shall have the right, upon written notice to
PENINSULA, to elect to give up remedying such deficiencies and cease supplying
the Compound to PENINSULA. PENINSULA shall have the right to elect, as a sole
and exclusive remedy for TAKEDA's decision to give up remedying such
deficiencies and cease supplying Compound to PENINSULA, to either (a) terminate
this Agreement pursuant to Section 17.3, or (b) manufacture, or have a third
party manufacture on PENINSULA's behalf, the Compound, in which event the
provisions of Sections 7.15 below shall apply. During the term of this
Agreement, TAKEDA grants, and shall cause its Third Party Manufacturers to
grant, to PENINSULA and its sublicensees a right of reference to such DMFs for
the purpose of preparing, filing, or maintaining INDs, NDAs, and other
regulatory filings relating to the Compound and/or the Product in the Territory.
TAKEDA shall obtain PENINSULA's prior written approval, not to be unreasonably
withheld, before it or its Third Party Manufacturer makes any material changes
to any DMF covering the manufacture of the Compound.

         6.2      PENINSULA (or its Affiliate or sublicensee) shall use all
commercially reasonable efforts to apply for and obtain Registration in each
Major Market Country as soon as reasonably possible, but in accordance with the
timeline established by the JC under Section 5.1. Notwithstanding the foregoing,
PENINSULA's obligation under this Section 6.2 is

                                       13
<PAGE>

contingent upon TAKEDA fulfilling its obligations under Sections 5.2, 5.3, 6.3,
and Article 7 so long as TAKEDA is supplying Compound to PENINSULA under this
Agreement. In addition, PENINSULA shall use commercially reasonable efforts to
apply for and obtain Registration in such other countries in the Territory where
PENINSULA elects to do so based on its sound business judgment in light of the
economic opportunities for sales of the Product in such other countries. After
obtaining Registration in each country in the Territory, PENINSULA shall submit
an application for the NHI Price Listing in each such country as soon as
possible, if necessary for the marketing and sale of the Product in such
country.

         6.3      PENINSULA shall have the sole responsibility hereunder to
apply for, obtain, and maintain Registrations in the Territory. All the expenses
necessary for applying for, obtaining, securing and maintaining Registrations in
the Territory shall be borne by PENINSULA. At PENINSULA's request, TAKEDA shall
cooperate in the preparation and maintenance of all regulatory filings for
Products filed by PENINSULA, including, without limitation, preparing all
sections of INDs that are applicable to the manufacturing activities of TAKEDA
or its Third Party Manufacturer (such as the Chemistry, Manufacturing and
Controls portions of INDs and NDAs) or to preclinical data generated by TAKEDA.
In addition, TAKEDA shall provide all reasonable assistance and cooperation to
assist PENINSULA to apply for, obtain, and maintain Registrations including,
without limitation, permitting inspection by Regulatory Authorities of TAKEDA's
manufacturing facilities or the facilities of all Third Party Manufacturers
manufacturing Compound or intermediates supplied to PENINSULA under Article 7 so
long as TAKEDA is supplying Compound to PENINSULA under this Agreement.
PENINSULA shall bear all of TAKEDA's or Third Party manufactures' reasonable
out-of-pocket costs incurred in providing such assistance and cooperation to
PENINSULA.

         6.4      Immediately after filing an application for Registration and
obtaining the Registration in a country or jurisdiction in the Territory,
PENINSULA shall notify TAKEDA of the dates and numbers of the application for
such Registration and the resulting Registration and at the same time shall send
to TAKEDA photostat copies of the certificates of the Registration.

         6.5      If PENINSULA fails to fulfill its obligations under Section
6.2 in accordance with the timeline established by the JC under Section 5.1,
PENINSULA shall provide to TAKEDA written notice of such failure, including a
detailed description of the basis for PENINSULA's belief that such failure has
occurred. In such event, the parties shall discuss and agree upon what steps
should be taken by PENINSULA in order to fulfill its obligations under Section
6.2 including a commercially reasonable period of time for PENINSULA to fulfill
such obligations (if the parties cannot agree on such time period, an
independent research and development organization located in the Territory with
good reputation in the pharmaceutical industry to be mutually agreed upon shall
establish a commercially reasonable time period). Thereafter, PENINSULA shall
use best efforts to take such steps in order to fulfill its obligations under
Section 6.2 within the period of time agreed to by the parties. If PENINSULA
fails to use best efforts to take such steps to obtain Registration in a
particular Major Market Country within the time period agreed to by the parties,
TAKEDA may eliminate such country from the definitions of "Territory" and "Major
Market Country", and in such event PENINSULA shall have no further rights or
obligations hereunder to market and sell the Product in such country.

                                       14
<PAGE>

         6.6      After the Effective Date and upon the request of PENINSULA,
PENINSULA, TAKEDA, and its Third Party Manufacturer, if applicable, shall enter
into a mutually agreeable written quality memorandum (the "Quality Memorandum")
that sets forth the parties' respective responsibilities related to the Compound
and Product and contains detailed procedures and guidelines for handling
regulatory matters and responding to customer questions and complaints related
to Products, as reasonably needed to comply with requirements of any Regulatory
Authority in the Territory and/or good clinical and marketing practices. To the
extent applicable, such Quality Memorandum shall also address other issues
related to the supply of the Compound to PENINSULA under Article 7. The parties
acknowledge and agree that the Quality Memorandum will need to be updated on an
ongoing basis to the extent necessary.

         6.7      TAKEDA shall, and will ensure that its Third Party
Manufacturer shall, conduct quality control and testing of the Compound
consistent with cGMP to ensure that the Compound supplied to PENINSULA under
Article 7 conforms to the Specifications. TAKEDA shall, and will ensure that its
Third Party Manufacturer shall, perform quality quality assurance review,
approval, and Lot release as set forth in the Quality Memorandum prior to
shipping each shipment of Compound to PENINSULA to ensure that the Compound
delivered to PENINSULA complies with the Specifications, cGMP, all other
applicable requirements of Regulatory Authorities, and all applicable laws and
regulations. With respect to the Compound supplied under Article 7, PENINSULA
may, at its expense and upon reasonable notice and during normal business hours,
conduct appropriate review and inspection (including of all documentation and
applicable facilities) related to such quality control and testing program, to
verify the adherence of TAKEDA and/or its Third Party Manufacturer, as
applicable, to the foregoing requirements, to assess compliance with cGMP, and
to discuss all related manufacturing issues, if any.

         6.8      If modifications to the Specifications are recommended or
required by a Regulatory Authority in the Territory, PENINSULA shall notify
TAKEDA and the parties shall discuss in good faith and agree upon the best way
to implement such modifications. If requested by PENINSULA, TAKEDA shall, and
will ensure that its Third Party Manufacturer shall, implement such
modifications, but PENINSULA shall bear the expense of implementing such
modifications. If TAKEDA desires to modify the Specifications and/or change some
items relating to the manufacture of the Compound, including without limitation
the manufacturing site, which would result in modifying the Registration by
PENINSULA, and such modification and/or change is not recommended or required by
a Regulatory Authority in the Territory, TAKEDA and its Third Party Manufacturer
shall not change the Specifications and/or such items without PENINSULA's prior
written approval, and TAKEDA shall bear the expense of implementing such
modification. If PENINSULA desires to modify the Specifications and such
modification is not recommended or required by a Regulatory Authority in the
Territory, TAKEDA shall use all commercially reasonable efforts to, and will use
commercially reasonable efforts to ensure that its Third Party Manufacturer
shall, implement such modification, but PENINSULA shall bear the cost of
implementing such modification.

         6.9      PENINSULA shall be responsible for receiving, investigating,
and documenting all serious adverse drug reactions relating to the use of the
Products which require reporting to appropriate Regulatory Authorities in the
Territory. PENINSULA will be solely responsible for filing all post-marketing
reports of such serious adverse drug reactions required by

                                       15
<PAGE>

Regulatory Authorities in the Territory, or as required by applicable laws or
regulations. During the term of this Agreement and at any time thereafter, in
the event that a party receives a report of a serious adverse drug reaction
relating to the use of a Product anywhere in the world, it shall notify the
other in writing as soon as practicable, but in no event more than 24 hours
after becoming aware of such adverse drug reaction. The parties shall
periodically exchange a summary of all serious adverse drug reactions of
Products during the term of this Agreement and any and all other information
that becomes available regarding the post-marketing surveillance of the Product.
The scope and mechanisms for the exchange and of the treatment of such
information shall be provided for in "Standard Operating Procedure (SOP) For
International Post-Marketing Surveillance" attached hereto as Schedule III, as
it may be amended and updated from time to time as agreed by the parties.

                                   ARTICLE 7

                                 CLINICAL SUPPLY

         7.1      Until and unless TAKEDA determines to cease supplying the
Compound pursuant to Sections 6.1 or 7.4, TAKEDA shall, upon the request of
PENINSULA and under the terms and conditions of this Article 7, provide
PENINSULA with sufficient quantities of the Compound meeting the Specifications
to the extent reasonably required by PENINSULA in order to conduct the
Development Work. PENINSULA shall use the Compound supplied under this Article 7
solely for conducting the Development Work and shall not use the same for any
other purpose without the prior written consent of TAKEDA.

         7.2      PENINSULA desires to have TAKEDA supply to PENINSULA [ * ] of
Compound meeting the Specifications, for PENINSULA's use in performing
Development Work, such supply desired to be completed as soon as possible and in
any event within [ * ] months after the Effective Date (the "Delivery Date").
PENINSULA understands that TAKEDA does not currently have sufficient inventory
of the Compound to provide such quantity to PENINSULA. PENINSULA has submitted a
purchase order for [ * ] of Compound for delivery no later than the Delivery
Date. TAKEDA shall use all commercially reasonable efforts to manufacture and/or
have a Third Party Manufacturer manufacture and supply at least [ * ] of
Compound meeting the Specifications to PENINSULA by the Delivery Date. TAKEDA
shall supply to PENINSULA the entire amount of Compound produced by TAKEDA
and/or its Third Party Manufacturer as a result of the manufacturing activities
under this Section 7.2, for the price set forth in Section 7.3. If TAKEDA is
unable to supply at least [ * ] of Compound to PENINSULA by the Delivery Date,
but is able to supply at least [ * ] of the Compound, TAKEDA shall nonetheless
supply to PENINSULA as much of the Compound as it is able to (i.e., at least [ *
]), and PENINSULA shall purchase and take delivery of such quantity of Compound
manufactured and supplied by TAKEDA by the Delivery Date. TAKEDA's obligation to
supply to PENINSULA between [ * ] of Compound by the Delivery Date shall be
referred to herein as the "Supply Obligation". If TAKEDA, despite using its all
commercially reasonable efforts to do so, is unable to satisfy its Supply
Obligation, PENINSULA shall elect to either (a) accept such quantity of the
Compound as TAKEDA is able to supply by the Delivery Date, in full satisfaction
of the Supply Obligation, subject to the price reduction in Section 7.3, or (b)
cancel the purchase order and reject all quantities of Compound delivered by
TAKEDA, if any, in which event PENINSULA shall have no payment obligation to
TAKEDA under Section 7.3 and TAKEDA shall have no further obligation to supply
Compound to PENINSULA under this Article 7. In addition, if TAKEDA is unable to
satisfy the Supply Obligation, PENINSULA shall, at its option, have the right,
as a sole and

[ * ] = 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.


                                       16
<PAGE>

exclusive remedy for TAKEDA's inability to satisfy the Supply Obligation, to (a)
terminate this Agreement pursuant to Section 17.3, (b) manufacture, or have a
third party manufacture on PENINSULA's behalf, the Compound, in which event the
provisions of Section 7.15 below shall apply, or (c) if PENINSULA elects to
accept the quantity of the Compound delivered by TAKEDA in full satisfaction of
the Supply Obligation subject to the price reduction in Section 7.3, proceed to
order from TAKEDA additional quantities of Compound in accordance with Section
7.5.

         7.3      The supply price for the Compound supplied by TAKEDA pursuant
to Section 7.2 shall be a total of US $1,200,000 regardless of the actual
quantity delivered so long as the total quantity delivered is at least [ * ]. If
the actual quantity of Compound delivered by the Delivery Date is less than [ *
] of Compound, the supply price shall be an amount equal to $[ * ] of Compound
actually delivered to PENINSULA. PENINSULA has provided TAKEDA with a letter of
credit from [ * ] entitling TAKEDA to receive payment for the actual quantity of
Compound delivered to PENINSULA in accordance with this Section 7.3 and Section
7.9 upon delivery and acceptance thereof so that TAKEDA will immediately
commence activities to satisfy its supply obligations under Section 7.2.
Promptly after the Effective Date, PENINSULA shall use best efforts to cancel
the letter of credit with [ * ] and instead establish a comparable letter of
credit with [ * ], or such other bank as the parties may agree. TAKEDA agrees to
provide a letter of cancellation to [ * ] releasing [ * ] from the letter of
credit established for TAKEDA's benefit. TAKEDA further agrees that upon
reasonable request from PENINSULA, TAKEDA may provide other documents which will
enable PENINSULA to cancel the letter of credit from [ * ] as soon as possible,
but in no event shall TAKEDA be obliged to provide any documents or perform any
acts through which TAKEDA may be held to bear any duty or liability in this
relation.

         7.4      PENINSULA and TAKEDA agree that TAKEDA is currently planning
to have a Third Party Manufacturer manufacture the Compound to be supplied to
PENINSULA under this Article 7, but TAKEDA may, at its sole discretion and at
any time after TAKEDA has satisfied its Supply Obligation under Section 7.2,
elect to cease supplying the Compound to PENINSULA based on any additional
orders, and subject to the following. If TAKEDA makes such election, TAKEDA
shall notify PENINSULA of such decision in writing immediately, and TAKEDA
shall, notwithstanding such election, remain obligated to deliver all amounts of
Compound that were the subject of firm orders by PENINSULA submitted to TAKEDA
in accordance with Section 7.5 prior to such notice from TAKEDA. PENINSULA shall
have the right to elect, as a sole and exclusive remedy for TAKEDA's decision to
cease supplying Compound to PENINSULA, to either (a) terminate this Agreement
pursuant to Section 17.3, or (b) manufacture, or have a third party manufacture
on PENINSULA's behalf, the Compound, in which event the provisions of Sections
7.15 and 7.16 below shall apply.

         7.5      PENINSULA shall provide to TAKEDA firm orders of its
requirements of the Compound for Development Work as soon as possible, and from
time to time thereafter if any additional clinical supplies are needed. If
requested by TAKEDA [ * ] prior to delivery of the Compound covered by any such
firm order, PENINSULA shall provide to TAKEDA a letter of credit from [ * ], or
such other bank as the parties may agree entitling TAKEDA to receive payment for
the actual quantity of Compound delivered to PENINSULA pursuant to such firm
order in accordance with this Section 7.5 and Section 7.9 upon delivery and
acceptance thereof. Subject to Section 7.4, TAKEDA shall be required to fulfill
such firm orders for Compound within [ * ] months of the date of the order;
PENINSULA may, in any firm order, request a

[ * ] = 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.


                                       17
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delivery date sooner than (but in any event no sooner than [ * ] months of the
date of the order) such required delivery date, and TAKEDA shall use
commercially reasonable efforts to deliver the ordered quantity of Compound by
such requested date. In addition, PENINSULA may reduce, by sending TAKEDA a
written notice describing in reasonable detail the reason thereof during the [ *
] from the subject firm order, the ordered quantity by up to [ * ] percent ([ *
]%), as a result of which PENINSULA shall purchase [ * ]% to [ * ]% of the
original order (provided that TAKEDA has not already satisfied more than [ * ]%
of such original order prior to any such reduction in the order).
Notwithstanding the foregoing, the provisions of Section 7.2 (rather than this
Section 7.5) shall apply to the initial [ * ] of Compound ordered by PENINSULA
for delivery to PENINSULA by the Delivery Date.

         7.6      The supply price for all quantities of Compound supplied by
TAKEDA to PENINSULA hereunder (other than those quantities of Compound supplied
as part of TAKEDA's Supply Obligation) for the conduct of Development Work shall
be equal to [ * ] percent ([ * ]%) of TAKEDA's actual Compound Manufacturing
Cost (the "Price"). TAKEDA shall use all commercially reasonable efforts to
determine if there are means to reduce the Compound Manufacturing Cost, and
shall consult with PENINSULA regarding any such means or other suggestions for
reducing such Compound Manufacturing Cost, including anticipated costs for
implementing such means to reduce the Compound Manufacturing Cost and the
expected reduction in the Compound Manufacturing Cost. If PENINSULA agrees [ * ]
the implementation of any such cost reduction means, TAKEDA (or its Third Party
Manufacturer) shall implement such agreed means, and PENINSULA shall [ * ]
TAKEDA for [ * ] implementing such cost reduction means, and all resulting
reductions in the Compound Manufacturing Cost shall be applied to reduce the
supply price of the Compound. TAKEDA shall invoice PENINSULA the Price for each
shipment of Compound delivered to PENINSULA hereunder, and PENINSULA shall pay
such invoice not later than [ * ] days after delivery of the applicable
Compound, subject to Section 7.9. TAKEDA shall keep, and shall require all Third
Party Manufacturers to keep, accurate records in sufficient detail concerning
the Compound Manufacturing Cost and, if applicable, the Intermediate
Manufacturing Cost. Once per year, PENINSULA may have examined at TAKEDA, by an
independent public accountant, any and all account books and related records or
documents possessed by TAKEDA and its Third Party Manufacturer(s) related to the
Compound Manufacturing Cost and, if applicable, the Intermediate Manufacturing
Cost, for the purpose of verifying the accuracy of the Price paid by PENINSULA
under this Section 7.6 and, if applicable, the Intermediate Manufacturing Cost
paid by PENINSULA under Section 7.15(d). For the above purpose, TAKEDA shall
keep, and shall require its Third Party Manufacturers to keep, such account
books and related records or documents for five (5) years after the delivery
date concerned. In case such accountant finds a discrepancy of more than five
percent (5%), TAKEDA shall bear the reasonable costs and expenses of such audit,
and shall reimburse to PENINSULA the amount of the overpayment made by PENINSULA
to TAKEDA.

         7.7      All Compound supplied to PENINSULA by TAKEDA under this
Article 7 shall be delivered to PENINSULA [ * ] (Incoterms 2000) at one of the
following Major Market Country airports designated by PENINSULA in its purchase
orders: Chicago O'Hare International Airport, London Heathrow International
Airport, Charles de Gaulle Paris International Airport, Frankfurt International
Airport, Barajas Madrid International Airport, Zurich Kloten International
Airport, Vienna International Airport, or Milano Malpensa Airport (the "Delivery
Place"). Title to the Compound shall pass from TAKEDA to PENINSULA at such time
as it has been delivered to the first carrier for transportation to the named
place of

[ * ] = 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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destination, and risk of loss of the Compound shall pass from TAKEDA to
PENINSULA once the Compound [ * ]. Each shipment of Compound shall be
accompanied by a certificate of analysis (a) confirming that TAKEDA and/or its
Third Party Manufacturer conducted quality control and testing of the Compound
consistent with cGMP to ensure that the Compound conforms to the Specifications
as required under Section 6.7, (b) containing the quality control and quality
assurance test results for the Compound in such shipment, (c) certifying that
each Batch of Compound in such shipment was manufactured in accordance with
cGMP, and (d) confirming that the Compound in such shipment conforms to the
Specifications. TAKEDA agrees to store Compound to be supplied to PENINSULA in a
secure area and under appropriate product label storage conditions to ensure
that such Compound conforms to the Specifications at the time of delivery to
PENINSULA. TAKEDA shall pack the Compound for shipment in a commercially
reasonable manner that assures that such Compound will meet the Specifications
upon delivery to PENINSULA.

         7.8      TAKEDA shall ensure that all Compound supplied to PENINSULA
hereunder shall be manufactured in compliance with cGMP, all other applicable
requirements of Regulatory Authorities, and applicable laws and regulations,
including, without limitation, all applicable laws and regulations relating to
the transportation, storage, use, handling and disposal of hazardous materials
used to manufacture Compound of the countries and jurisdictions where PENINSULA
is selling the Product. TAKEDA, at its expense, shall obtain and maintain,
and/or shall ensure that its Third Party Manufacturer obtain and maintain, for
so long as TAKEDA is supplying Compound to PENINSULA hereunder, all facility
licenses and government permits, including without limitation health, safety,
and environmental permits, necessary for the conduct of the actions and
procedures undertaken to manufacture and supply the Compound for importation and
sale in the Territory. For so long as TAKEDA is supplying Compound to PENINSULA
under this Agreement, TAKEDA shall promptly notify PENINSULA in writing if
TAKEDA and/or its Third Party Manufacturer receives any citations with respect
to its manufacturing facilities, including, without limitation, FDA Form 483s or
warning letters, or if TAKEDA and/or its Third Party Manufacturer becomes
subject to an FDA consent decree or other action of a Regulatory Authority
impacting the manufacture of Compound by TAKEDA or its Third Party Manufacturer
under this Agreement.

         7.9      Upon receipt of the Compound, PENINSULA shall examine the
appearance and the quantity of the Compound supplied, and test samples thereof
in accordance with testing methods agreed upon by the parties in the Quality
Memorandum. Within thirty (30) days after receipt of a shipment of Compound,
PENINSULA may reject the Compound if it is (a) damaged in appearance, (b) not
manufactured in compliance with cGMP, (c) adulterated, or (d) not in conformance
with the Specifications ("Defective Compound"), or may notify TAKEDA of any
shortage of Compound with respect to the quantity delivered by giving written
notice to TAKEDA, which notice shall identify in reasonable detail the nature of
the defect or shortage. PENINSULA shall have no payment obligation to TAKEDA
with respect to such shortage of Compound or amount of Defective Compound
rejected, unless and until any such Compound has been replaced pursuant to
Section 7.11 or any dispute regarding whether such Compound is defective is
resolved in TAKEDA's favor pursuant to Section 7.12. If PENINSULA does not give
such notice to TAKEDA within such 30-day period, PENINSULA will be deemed to
have accepted the Compound and to have released TAKEDA from any claim with
respect to such Defective Compound, subject to Section 7.10, and except for
Product Liability Claims from PENINSULA's (or its Affiliate's or sublicensee's)
customers, which shall be handled pursuant to Section 13.4, and PENINSULA shall
promptly execute and deliver to TAKEDA an

[ * ] = 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>

acceptance certificate substantially in the form of Exhibit A attached hereto
and incorporated by reference herein (an "Acceptance Certificate").

         7.10     If, after acceptance as provided in Section 7.9 above,
PENINSULA discovers that any of the Compound supplied to PENINSULA is Defective
Compound, and the nature of such defect is such that it could not reasonably
have been discovered by testing samples thereof in accordance with the agreed
testing methods within the 30-day testing period under Section 7.9, PENINSULA
may revoke its acceptance of such Defective Compound by providing the above
written notice to TAKEDA of such revocation promptly after discovering such
defect, but in no event later than one year after the date such Compound was
delivered to PENINSULA. Such notice shall identify in reasonable detail the
nature of the defect.

         7.11     Subject to Section 7.13, if the Compound supplied by TAKEDA
pursuant to Section 7.2 is Defective Compound, PENINSULA may reject such
Compound within thirty (30) days after receipt of delivery thereof, and TAKEDA
shall refund PENINSULA for the amount paid by PENINSULA under Section 7.3 for
such Defective Compound. In such event, the amount of such Defective Compound
shall not be included in the amount used to determine whether TAKEDA has
satisfied the Supply Obligation. Subject to Section 7.12, if the Compound
supplied by TAKEDA pursuant to Section 7.5 is Defective Compound, or TAKEDA did
not supply all amount of Compound ordered, TAKEDA shall, as soon as practicable,
make up for any shortage in the quantity of Compound delivered to PENINSULA, or
replace Defective Compound with Compound that meets the warranty in Section 12.2
below, as applicable, and shall be entitled to invoice PENINSULA for the
applicable supply price for such replacement Compound upon delivery.

         7.12     Any dispute arising between TAKEDA and PENINSULA concerning
whether a shipment of Compound is Defective Compound that cannot be settled by
the parties hereto in good faith within thirty (30) days of PENINSULA's notice
of defect shall be submitted to an independent test organization located in the
Territory with good reputation in the pharmaceutical industry to be mutually
agreed upon. Such independent test organization shall determine whether the
applicable Compound is Defective Compound, and the parties agree that the
decision of said expert shall be final and binding on TAKEDA and PENINSULA. The
party against whom the expert rules shall bear all fees and expenses of the
expert relating to said dispute.

         7.13     TAKEDA shall promptly notify PENINSULA if it discovers that
any Compound supplied to PENINSULA might be Defective Compound. Such notice
shall identify in reasonable detail the nature of the defect, the Lot of such
Defective Compound, and the basis for TAKEDA's determination as to the nature of
the defect.

         7.14     If TAKEDA is unable, at any time, to supply PENINSULA on a
timely basis with the entire quantity of Compound ordered by PENINSULA in
accordance with Section 7.5 for any reason, including by reason of Force Majeure
under Article 16, TAKEDA shall immediately notify PENINSULA of such inability to
supply and the estimated extent of such inability (including delay time and the
quantity of Compound involved), and shall use good faith diligent efforts to
cure the supply problem as soon as possible. If a supply problem occurs to the
extent that, at any particular time, Compound that has been ordered by PENINSULA
pursuant to Section 7.5 is more than [ * ] days (or, in case caused by Force
Majeure, more than [ * ] days) past due according to the scheduled delivery
dates in the applicable orders (a "Supply Disruption"), then PENINSULA and
TAKEDA will discuss the Supply Disruption and seek all

[ * ] = 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>

appropriate means of resolution. TAKEDA will use best efforts to resolve the
Supply Disruption. For the duration of a Supply Disruption, TAKEDA shall [ * ]
PENINSULA all Compound in [ * ] or [ * ], intended for use by [ * ] for
development [ * ], if any, until such time as the Supply Disruption has been
resolved. If the Supply Disruption is not cured entirely (that is, all past due
quantities of Compound on order are delivered to PENINSULA) within [ * ] days of
the beginning of the Supply Disruption, then PENINSULA shall have the right, as
a sole and exclusive remedy for the Supply Disruption, to elect to (i) terminate
this Agreement pursuant to Section 17.3 or (ii) manufacture, or have a third
party manufacturer manufacture on PENINSULA's behalf, the Compound. If PENINSULA
so elects to manufacture or have a third party manufacturer manufacture the
Compound, then the provisions of Sections 7.15 below shall apply.

         7.15     If PENINSULA elects to manufacture, or have a third party
manufacturer manufacture on PENINSULA's behalf, the Compound as permitted under
Sections 6.1, 7.2, 7.4 or 7.14, the following shall apply:

                  (a)      TAKEDA is deemed automatically to grant to PENINSULA
a license under the Information, Manufacturing Know-How and Patents to make and
have made the Compound and all intermediates thereof in the Territory without
any additional consideration to TAKEDA;

                  (b)      TAKEDA shall disclose to PENINSULA all Manufacturing
Know-How and any other information, data and know-how relating to the
manufacture of the Compound and all intermediates thereof Controlled by TAKEDA,
and PENINSULA may purchase some or all of its requirements of the Compound from
any third party manufacturer and/or manufacture by itself the Compound and may
use such information to do so; if there is any other information, data and
know-how relating to the manufacture of the Compound and/or any intermediates
thereof that is in the possession of TAKEDA or its Third Party Manufacturer, but
is not Controlled by TAKEDA, then TAKEDA shall use commercially reasonable
efforts to secure access and rights to such information, data and know-how so
that it Controls the same and can disclose same to PENINSULA for its use under
this Section 7.15;

                  (c)      TAKEDA shall promptly provide, at such times and
locations as may reasonably be requested by PENINSULA, reasonable, diligent and
good faith cooperation to enable PENINSULA to establish such manufacturing
capability, including, without limitation, assisting in qualifying PENINSULA or
its designated third party manufacturer to manufacture Compound and all
intermediates thereof;

                  (d)      TAKEDA shall assist PENINSULA with identifying a
third party that will be able to supply PENINSULA with those intermediates
required for the manufacture of Compound. TAKEDA shall assist PENINSULA if
PENINSULA desires the assignment of current agreement(s) between TAKEDA and
Third Party Manufacturer(s) with regard to the manufacture of the Compound, or
in enabling PENINSULA to enter into its own agreement with such party; provided,
however, that TAKEDA shall not be obligated to assign such agreement(s). In any
event, TAKEDA will, if requested by PENINSULA, use all commercially reasonable
efforts to continue to supply, to the extent it is able from its inventory or
otherwise, PENINSULA with PENINSULA's requirements of intermediates for use to
manufacture the Compound on commercially reasonable terms and conditions that
are consistent with the terms and conditions for the supply of Compound to
PENINSULA hereunder until such time as PENINSULA is able to obtain its
requirements of such intermediates from a third party

[ * ] = 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>

manufacturer. PENINSULA shall pay TAKEDA its Intermediate Manufacturing Cost for
intermediates supplied to PENINSULA hereunder, provided that TAKEDA ensures that
such intermediates (i) conform to the specifications therefor, (ii) are
manufactured in accordance with all applicable laws and regulations, and (iii)
have free, clear, and marketable title at the time of delivery to PENINSULA.

                  (e)      if TAKEDA desires to purchase the Compound and/or the
Product from PENINSULA in order to sell the Product outside the Territory,
PENINSULA shall use reasonable efforts to comply with TAKEDA's desire under such
terms and conditions as are separately determined by the mutual agreement of the
parties;

                  (f)      Any obligation of TAKEDA, including under Sections
6.1, 6.6, 6.7, 6.8, and Articles 7 and 8, to supply to PENINSULA any further
amounts of Compound shall terminate, and PENINSULA shall not have any further
right to compel TAKEDA to manufacture and supply the Compound as set forth
therein, except for the surviving obligations under Section 7.16 below (if
applicable); and

                  (g)      subsections (a) through (f) above and Sections 7.16
and 7.17 below are PENINSULA's sole and exclusive remedy for (i) TAKEDA's
election to not remedy deficiencies in the DMF and ceasing to supply Compound
under Section 6.1, (ii) TAKEDA's inability to satisfy the Supply Obligation
under Section 7.2, (iii) TAKEDA's election to cease supplying Compound under
Section 7.4, or (iv) for a Supply Disruption under Section 7.14, and in each
case PENINSULA shall have no right to demand from TAKEDA any compensation
therefor.

         7.16     If PENINSULA elects to manufacture, or have a third party
manufacturer manufacture on PENINSULA's behalf, the Compound as permitted under
Section 7.4, and upon written request of PENINSULA, TAKEDA shall use best
efforts to continue to supply Compound to PENINSULA hereunder until at least [ *
] months after the date on which TAKEDA provides written notice to PENINSULA
that it is electing to cease supplying the Compound to PENINSULA or until
PENINSULA establishes new manufacturing capacity that is able to manufacture
PENINSULA's total requirements of cGMP Compound meeting Specifications,
whichever comes earlier (such period, the "Wind-Down Period"). After the
expiration of the Wind-Down Period, and provided that TAKEDA has complied with
its obligations under Section 7.15, TAKEDA shall have no further obligation to
supply Compound to PENINSULA hereunder.

         7.17     If PENINSULA elects to manufacture, or have a third party
manufacturer manufacture on PENINSULA's behalf, the Compound because of a Supply
Disruption under Section 7.14, PENINSULA shall have the right, both during and
after the Supply Disruption, to continue to order and obtain from TAKEDA (on a
non-exclusive basis) supply of Compound up to TAKEDA's reasonable ability to
supply such Compound from its inventory or otherwise. TAKEDA shall use best
efforts to supply such Compound to PENINSULA. However, PENINSULA acknowledges
and agrees that under certain circumstances, i.e., Supply Disruptions that are
caused by reason of Force Majeure or Supply Disruptions resulting from the
failure of TAKEDA's Third Party Manufacturer to supply Compound ordered by
TAKEDA, TAKEDA may not have the ability to supply any Compound to PENINSULA. For
so long as such circumstances exist, TAKEDA shall not be deemed to have breached
its obligation to supply Compound to PENINSULA under this Section 7.17, provided
that

[ * ] = 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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TAKEDA continues to use best efforts to supply Compound to PENINSULA as soon as
practicable.

                                   ARTICLE 8

                               COMMERCIAL SUPPLY

         8.1      Except as otherwise set forth in Section 8.2, TAKEDA shall
supply and deliver to PENINSULA or TAKEDA shall cause its appointee to supply
and deliver to PENINSULA, and PENINSULA shall purchase and take delivery of,
PENINSULA's entire requirements of the Compound for processing into Products for
commercial sale. The parties shall negotiate in good faith and enter into a
commercial supply agreement setting forth the terms and conditions for such
commercial supply of the Compound, which terms shall include the terms set forth
in this Section 8.1 (the "Supply Agreement"). The parties shall commence such
negotiation when PENINSULA enters into Phase III clinical trials. Such Supply
Agreement shall contain terms that are commercially reasonable and typical for
transactions of this type, and shall incorporate the following guiding
principles:

                  (a)      SUPPLY OBLIGATION. During the term of the Supply
Agreement, TAKEDA shall manufacture, or have a Third Party Manufacturer
manufacture, and supply to PENINSULA all PENINSULA's requirements of Compound
for processing into Products for commercial sale in the Territory as set forth
in purchase orders submitted by PENINSULA;

                  (b)      SUPPLY PRICE. The price of the Compound supplied to
PENINSULA under the Supply Agreement shall be negotiated in good faith and
determined by the parties hereto to be equivalent to [ * ] percent ([ * ]%) of
the Compound Manufacturing Cost, provided, however, that such transfer price
shall not in any event exceed US $[ * ] of Compound; TAKEDA shall, at
PENINSULA's cost, use best efforts to reduce the Compound Manufacturing Cost as
much as practicable and shall consult with PENINSULA regarding suggestions for
reducing such Compound Manufacturing Cost;

                  (c)      FORECASTING AND ORDERING. The Supply Agreement shall
contain a mechanism by which PENINSULA shall provide to TAKEDA rolling forecasts
of its estimated requirements of Compound, and a portion of each such forecast
shall represent a binding commitment on PENINSULA to purchase, and on TAKEDA to
supply, the quantity of Compound set forth in such portion of each forecast. The
Supply Agreement shall also include a mechanism by which PENINSULA shall provide
to TAKEDA purchase orders for Compound in accordance with the forecasts, and the
permitted delivery dates for Compound set forth in such orders shall incorporate
an appropriate lead time based on the time required by TAKEDA to manufacture
Compound. PENINSULA shall be able to increase or decrease the quantity of
Compound to be ordered in such purchase orders from the quantity of Compound set
forth in the applicable binding forecast by a certain percentage of the
forecasted quantity of Compound;

                  (d)      INABILITY/ CEASE TO SUPPLY. The Supply Agreement
shall address the consequences if TAKEDA is unable to supply PENINSULA on a
timely basis with PENINSULA's requirements of Compound, or if TAKEDA elects to
cease supplying the Compound to PENINSULA, and shall contain provisions, as a
sole and exclusive remedy therefor, similar to those set forth in Sections 7.4,
7.14, 7.15, 7.16, and 7.17 of this Agreement;

[ * ] = 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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                  (e)      QUALITY MEMORANDUM. Recalls, market withdrawals,
corrections and field alert reporting of Products, responding to customer
questions and complaints related to Products sold in the Territory shall be the
responsibility of PENINSULA and the procedures and guidelines for such matters
and other issues related to the supply of the Compound to PENINSULA shall be
addressed in a separate quality memorandum entered into by the parties
including, without limitation, procedures and guidelines for Lot release,
quality control and quality assurance testing, and acceptance testing;

                  (f)      TERM AND TERMINATION. Unless the parties otherwise
agree, the term of the Supply Agreement shall be equal to the term of this
Agreement, subject to typical rights for early termination in appropriate
circumstances.

                  (g)      OTHER TERMS. The Supply Agreement shall contain other
terms that shall be identical, or substantially similar to, Sections 6.7, 6.8,
7.7, 7.8, 7.9, 7.10, 7.11, 7.12, 7.13, 7.14, 7.15, 7.16, 7.17 and 12.2(a), and
Articles 13, 14, and 18 of this Agreement. In addition, under the Supply
Agreement PENINSULA shall have audit rights to confirm the accuracy of the
amount of the Compound Manufacturing Cost similar to PENINSULA's audit rights
under Section 7.6 of this Agreement.

         8.2      Notwithstanding Section 8.1, at any time prior to the date on
which PENINSULA commences Phase III clinical trials of the Product, TAKEDA shall
have the right, upon written notice to PENINSULA, to elect not to supply
PENINSULA's entire requirements of the Compound for processing into Products for
commercial sale as set forth in Article 7, in which event the parties shall not
be required to enter into a Supply Agreement under Section 8.1.

                                   ARTICLE 9

                            PROCESSING AND PACKAGING

         9.1      PENINSULA shall procure its requirements of materials other
than the Compound which are necessary for processing the Compound into the
Product at its own responsibility and expense.

         9.2      PENINSULA shall prepare or have prepared, at its own expense,
packaging materials, labels and insert brochures of the Product for use in the
Territory, purchasing necessary materials from a source or sources selected by
PENINSULA. PENINSULA shall provide to TAKEDA the descriptions of such packaging
materials, labels and insert brochures therein and designs thereof. PENINSULA
shall be responsible for obtaining from Regulatory Authorities in the Territory
all approvals of the packaging materials, labels and insert brochures of the
Product that are necessary to secure and/or maintain the Registration.

                                   ARTICLE 10

                         SALE OF THE PRODUCT AND REPORT

         10.1     PENINSULA or its sublicensees or distributors shall make the
first commercial sale of the Product in each country of the Territory within [ *
] months after achieving the NHI Price Listing in such country (if applicable),
provided, however, that PENINSULA shall do so

[ * ] = 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>

within [ * ] months after obtaining the Registration in each country of the
Territory where the achievement of the NHI Price Listing is not required for the
marketing of the Product.

         10.2     Subject to Section 2.4, PENINSULA shall determine the selling
price of the Product in each country of the Territory at its discretion, but in
accordance with any applicable local laws or regulations.

         10.3     The introduction, advertisement and sales promotion of the
Product shall be made at PENINSULA's own expense and PENINSULA shall use
commercially reasonable efforts to maximize the sales of the Product. Upon
reasonable request of TAKEDA and to the extent permitted by applicable laws and
regulations, PENINSULA shall inform TAKEDA of its plans of its promotional and
sales activities for the Product and any other related information reasonably
requested by TAKEDA.

         10.4     As a part of promotional and sales activities, and at
PENINSULA's sole discretion, PENINSULA may carry out those Phase IIIb and Phase
IV clinical studies in the Territory at its expense and responsibility that are
commercially appropriate and in accordance with the protocol prepared by
PENINSULA and approved by TAKEDA, which approval shall not unreasonably
withheld. PENINSULA shall from time to time make available to TAKEDA, for
TAKEDA's use in connection with the development and commercialization of
Products outside the Territory, all results obtained from such clinical studies
free of charge (other than reimbursement for copying and shipping charges).

         10.5     Upon TAKEDA's reasonable request, and to the extent permitted
by applicable laws and regulations, PENINSULA shall send to TAKEDA samples of
the Product, all packaging materials and other printed materials, including
promotional materials, for the Product at TAKEDA's expense. Should TAKEDA find
any defects in such samples, TAKEDA shall inform PENINSULA of such defects
immediately and PENISULA shall remove such defects at its own expense and
responsibility.

         10.6     During the term of this Agreement, PENINSULA shall use
reasonable efforts to disclose to TAKEDA medical and other technical information
that PENINSULA may gain relating directly to the Product, and TAKEDA shall have
the right to use, and cause any third parties who have a license under the
Patents and Manufacturing Know-How to develop, manufacture, or commercialize the
Compound and/or the Product in the TAKEDA Territory to use, such information
solely to develop, manufacture, offer for sale or sell the Product in the TAKEDA
Territory, including without limitation to pursue Registration in the TAKEDA
Territory, free of charge, subject to the rights granted to PENINSULA hereunder.

                                   ARTICLE 11

                        USE OF TAKEDA'S NAME; TRADEMARKS

         11.1     Subject to the laws and regulations in the Territory and
except as otherwise requested by TAKEDA, PENINSULA shall include the company
name of TAKEDA as the licensor on all packaging materials and other printed
materials, including promotional materials, for the Product in the Territory
(the "Mark"). TAKEDA hereby grants to PENINSULA the right to use the Mark to the
extent necessary for PENINSULA to fulfill the

[ * ] = 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.


                                       25
<PAGE>

obligations set forth in this Section 11.1 applicable to the Products sold in
the Territory. PENINSULA will have no obligation to pay royalties for such use
of the Mark during the term the Agreement.

         11.2     The Products sold in the Territory shall bear one or more
trademarks chosen and owned by PENINSULA. PENINSULA shall disclose to TAKEDA the
trademarks PENINSULA intends to use on the Product prior to filing its NDA
covering the Product and any changes thereof.

                                   ARTICLE 12

                                   WARRANTIES

         12.1     Each party warrants the following:

                  (a)      such party is duly organized and validly existing
under the laws of the state and/or nation of its organization and has full
corporate power and authority to enter into this Agreement and to carry out the
provisions hereof;

                  (b)      such party is duly authorized to execute and deliver
this Agreement and to perform its obligations hereunder. The person executing
this Agreement on such party's behalf has been duly authorized to do so by all
requisite corporate action; and

                  (c)      this Agreement is a legal and valid obligation
binding upon the parties and enforceable in accordance with its terms, subject
to applicable bankruptcy, insolvency, fraudulent transfer, moratorium or other
laws affecting the enforcement of creditors' rights and to general principles of
equity. The execution, delivery and performance of this Agreement by each party
does not conflict with any agreement, instrument or understanding, oral or
written, to which it is a party or by which it may be bound, nor does it violate
any material law or regulation of any court, governmental body or administrative
or other agency having jurisdiction over it.

         12.2     TAKEDA warrants to PENINSULA that:

                  (a)      all of the Compound supplied to PENINSULA under
Section 5.3 or Article 7: (i) conforms to the Specifications, (ii) is
manufactured in accordance with cGMP and all other applicable laws and
regulations, (iii) shall have free, clear, and marketable title at the time of
delivery to PENINSULA, and (iv) shall not be adulterated or misbranded within
the meaning of the FD&C Act, and shall not be an article that may not, under the
provisions of Sections 404 and 505 of the FD&C Act, be introduced into
interstate commerce, at the time of such delivery;

                  (b)      as of the Effective Date, TAKEDA has not received any
citations with respect to its manufacturing facilities, including without
limitation FDA Form 483s or warning letters, and is not currently subject to an
FDA consent decree or other action of a Regulatory Authority impacting the
manufacture of the Compound to be supplied by TAKEDA under Article 7;

                                       26
<PAGE>

                  (c)      to TAKEDA's knowledge as of the Effective Date,
PENINSULA's practice of the Patents or manufacture, importation, use or sale of
the Compound or Product in the Territory will not infringe the intellectual
property rights of a third party patent;

                  (d)      to TAKEDA's knowledge as of the Effective Date, the
manufacture of the Compound and the intermediates thereof using the
Manufacturing Know-How that exists as of the Effective Date, or the related
importation by PENINSULA of the resulting Compound and/or Products into the
Territory will not infringe or misappropriate the intellectual property rights
of a third party patent;

                  (e)      the Patents licensed to PENINSULA hereunder are all
the patents and/or patent applications owned by or licensed to TAKEDA (or any of
its Affiliates) as of the Effective Date in the Territory that claim or cover
the Compound, the Product, any intermediates used in making the Compound, or the
use of the Compound or the Product;

                  (f)      to TAKEDA's knowledge as of the Effective Date, there
are no facts or circumstances which would render any patent or patent
application within the Patents in the Territory invalid or unenforceable;

                  (g)      there is no interference action, opposition, reissue
or reexamination proceeding, or any intellectual property litigation pending
before any patent office or court concerning any Patents as of the Effective
Date in the Territory, and there is no litigation proceeding pending before any
court concerning the Compound or any Product as of the Effective Date;

                  (h)      Neither TAKEDA nor any of its Affiliates have granted
to any third party any licenses or other rights to use or practice the Patents
in any manner relating to use, importation, offering for sale or sale of the
Compound or Product anywhere in the Territory in any manner that would conflict
with PENINSULA's rights granted herein, and TAKEDA has full legal rights and
authority to grant PENINSULA the license and other rights granted in this
Agreement; and

                  (i)      to TAKEDA's knowledge as of the Effective Date, the
manufacturing activities to be undertaken by TAKEDA and/or its Third Party
Manufacturer hereunder to make the Compound supplied to PENINSULA hereunder and
the related importation by PENINSULA of the Compound and/or Products into the
Territory will not infringe any intellectual property rights of any third party.

         12.3     EXCEPT AS EXPRESSLY STATED IN THIS AGREEMENT, NO
REPRESENTATION OR WARRANTY WHATSOEVER, WHETHER EXPRESS OR IMPLIED, INCLUDING
ALL IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR ANY PURPOSE, IS MADE
OR GIVEN BY OR ON BEHALF OF PENINSULA OR TAKEDA. ALL SUCH OTHER REPRESENTATIONS
AND WARRANTIES, WHETHER ARISING BY OPERATION OF LAW OR OTHERWISE, ARE HEREBY
EXPRESSLY EXCLUDED.

                                   ARTICLE 13

                      INDEMNIFICATION AND PRODUCT LIABILITY

                                       27
<PAGE>

         13.1     Notwithstanding anything herein to the contrary, product
liability issues with regard to the Compound and/or the Product shall be, as
between the parties, exclusively governed by Section 13.4.

         13.2     PENINSULA shall be responsible for, and shall indemnify, hold
harmless and defend TAKEDA, TAKEDA's Third Party Manufacturer, and their
officers, employees and agents against any and all third party claims, suits,
losses, damages, costs, fees (including reasonable attorneys' fees) and expenses
(collectively "Claims") resulting from or arising out of (a) the Development
Work performed by PENINSULA to obtain the Registration; (b) the processing, use
and/or sale of the Compound or Product by PENINSULA or its distributor or
sublicensee; (c) the negligence, recklessness, or willful misconduct of
PENINSULA or its officers, directors, employees, distributor, sublicensee or
agents; or (d) PENINSULA's breach of its obligations, representations, or
warranties under this Agreement. Notwithstanding the foregoing, PENINSULA's
indemnification obligations under this Section 13.2 shall not apply to Product
Liability Claims (as defined in Section 13.4), which claims are addressed in
Section 13.4. In addition, PENINSULA's indemnification obligations under this
Section 13.2 shall not apply if TAKEDA fails to comply with the indemnification
procedures in Section 13.5, or to the extent that a Claim arises out of or
results from (i) the negligence, recklessness, or willful misconduct of TAKEDA,
its Third Party Manufacturer, or the officers, directors, employees, or agents
of TAKEDA or its Third Party Manufacturer; (ii) TAKEDA's breach of its
obligations, representations, or warranties under this Agreement; or (iii)
manufacturing defects resulting from the manufacture of the Compound by TAKEDA
or its Third Party Manufacturer hereunder.

         13.3     TAKEDA shall be responsible for, and shall indemnify, hold
harmless and defend PENINSULA, its officers, employees and agents against any
and all Claims resulting from or arising out of (a) the negligence,
recklessness, or willful misconduct of TAKEDA, its Third Party Manufacturer, or
the officers, directors, employees, or agents of TAKEDA or its Third Party
Manufacturer; (b) TAKEDA's breach of its obligations, representations, or
warranties under this Agreement; (c) manufacturing defects resulting from the
manufacture of the Compound by TAKEDA or its Third Party Manufacturer hereunder;
or (d) the development of the Compound and/or the Product by TAKEDA or its
sublicensee or distributor, the importation and sale of the Compound and/or the
Product in the TAKEDA Territory by TAKEDA or its sublicensee or distributor, or
the use of the Compound and/or the Product in the TAKEDA Territory.
Notwithstanding the foregoing, TAKEDA's indemnification obligations under this
Section 13.3 shall not apply to Product Liability Claims (as defined in Section
13.4), which claims are addressed in Section 13.4. In addition, such indemnity
shall not apply if PENINSULA fails to comply with the indemnification procedures
in Section 13.5, or to the extent that a Claim arises out of or results from (i)
the Development Work performed by PENINSULA for obtaining the Registration, (ii)
the processing, use and/or sale of the Compound and/or the Product by PENINSULA
or PENINSULA's distributor, customers or sublicensees; (iii) the negligence,
recklessness, or willful misconduct of PENINSULA or its officers, directors,
employees, distributor, sublicensee or agents; or (iv) PENINSULA's breach of its
obligations, representations, or warranties under this Agreement.

         13.4     PENINSULA shall be responsible for, and shall indemnify, hold
harmless and defend TAKEDA, its Third Party Manufacturer, and their officers,
employees and agents against any and all third party claims, suits, losses,
damages, costs, fees (including reasonable attorneys' fees) and expenses with
respect to death or injury to any person ("Product Liability

                                       28
<PAGE>

Claims") arising out of or resulting from the use of the Compound and/or the
Product by PENINSULA's customers. Notwithstanding the foregoing, such indemnity
shall not apply if TAKEDA fails to comply with the indemnification procedures in
Section 13.5, or to the extent that a Product Liability Claim arises out of or
results from (a) the negligence, recklessness, or willful misconduct of TAKEDA,
its Third Party Manufacturer, or the officers, directors, employees, or agents
of TAKEDA or its Third Party Manufacturer; (b) TAKEDA's breach of its
obligations, representations, or warranties under this Agreement; or (c)
manufacturing defects resulting from the manufacture of the Compound by TAKEDA
or a Third Party Manufacturer hereunder.

         13.5     Each party's indemnity obligations as provided for in this
Article 13 shall be conditioned upon the following:

                  (a)      the party entitled to indemnification for a Claim or
Product Liability Claim (the "Indemnified Party") providing prompt (where
practicable, within fifteen (15) days after the receipt thereof ) notice of such
Claim or Product Liability Claim to the party providing indemnification (the
"Indemnifying Party");

                  (b)      the Indemnified Party reasonably cooperating with the
Indemnifying Party in the defense of such Claim or Product Liability Claim; and

                  (c)      the Indemnified Party's agreement not to compromise
or otherwise settle any such claims without the Indemnifying Party's prior
written consent, which consent shall not be unreasonably withheld.

         13.6     Upon receiving prompt notice of a Claim or Product Liability
Claim, the Indemnifying Party shall assume the defense of such Claim or Product
Liability Claim with counsel reasonably satisfactory to the Indemnified Party.
Each party shall, at its expense, secure and maintain insurance coverage in
amounts sufficient to cover its indemnification obligations hereunder and shall,
upon the other party's request, deliver to the other party a copy of such
insurance policy.

         13.7     NEITHER PARTY SHALL BE LIABLE TO THE OTHER FOR ANY SPECIAL,
CONSEQUENTIAL, INCIDENTAL, OR INDIRECT DAMAGES ARISING FROM OR RELATING TO ANY
BREACH OF THIS AGREEMENT, REGARDLESS OF ANY NOTICE OF THE POSSIBILITY OF SUCH
DAMAGES. NOTWITHSTANDING THE FOREGOING, NOTHING IN THIS SECTION 13.7 IS INTENDED
TO LIMIT OR RESTRICT THE INDEMNIFICATION RIGHTS OR OBLIGATIONS OF ANY PARTY
UNDER ARTICLE 13, OR DAMAGES AVAILABLE FOR A BREACH OF CONFIDENTIALITY
OBLIGATIONS IN ARTICLE 14.

         13.8     Notwithstanding anything to the contrary in this Agreement,
and in addition to the limitations in Section 13.7, neither party will be liable
to the other party for a claim brought by such other party under this Agreement
(other than indemnification with regard to any third party claim under Article
13 or for a breach of confidentiality obligations in Article 14) in an amount
that exceeds, in the aggregate, the amount which [ * ]. For clarity, this
Section 13.8 is not intended to limit or restrict the indemnification rights or
obligations of any party with regard to any third party claim under Article 13
or damages available to a party for a breach of confidentiality obligations in
Article 14.

[ * ] = 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>

                                   ARTICLE 14

                                     SECRECY

         14.1     Except to the extent expressly authorized by this Agreement or
otherwise agreed to in writing by the parties, each party agrees that, for the
term of this Agreement and for seven (7) years thereafter, it shall keep
confidential and shall not publish or otherwise disclose and shall not use for
any purpose other than as provided for in this Agreement any Confidential
Information furnished to it by the other party pursuant to this Agreement,
except that the foregoing shall not apply to any information for which the
receiving party can demonstrate, by competent proof, that it:

                  (a)      was already known to the receiving party, other than
under an obligation of confidentiality, at the time of disclosure by the other
party;

                  (b)      was generally available to the public or otherwise
part of the public domain at the time of its disclosure to the receiving party;

                  (c)      later became part of the public domain through no act
or omission of the receiving party;

                  (d)      was disclosed to the receiving party without
obligations of confidentiality with respect thereto, by a third party who had no
obligation to the disclosing party not to disclose such information to others;
or

                  (e)      was independently developed by employees of either
party who were unaware of and did not have access to Confidential Information
disclosed by either party.

         14.2     Each party may disclose Confidential Information disclosed to
it by the other party to the extent such disclosure is reasonably necessary for
the following reasons:

                  (a)      for regulatory filings, including filings with the
U.S. Securities Exchange Commission, and filings with Regulatory Authorities
permitted hereunder;

                  (b)      prosecuting or defending litigation; and

                  (c)      complying with applicable governmental regulations,
court orders, and legal requirements.

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 14.2 it will, except where impracticable, give reasonable advance notice
to the other party of such disclosure and use reasonable efforts to cooperate
with the disclosing party's efforts to secure confidential treatment of such
information. In any event, each party agrees to take all reasonable actions to
avoid any unauthorized use or disclosure of Confidential Information of the
other party hereunder.

         14.3     Notwithstanding the provisions of Section 14.1 hereinabove,
PENINSULA may disclose TAKEDA's Confidential Information to its officers and
employees, sublicensees, advisors, consultants, its distributors in each country
of the Territory, and Regulatory

                                       30
<PAGE>

Authorities in the Territory, provided, however, that PENINSULA shall use
commercially reasonable efforts to impose upon such discloses obligations of
confidentiality and non-use at least equivalent in scope to those set forth in
Sections 14.1 and 14.2.

         14.4     The Parties agree to that each Party may issue the agreed
Press Release in the form attached as Schedule VI, after the Effective Date.

                                   ARTICLE 15

                                     PATENTS

         15.1     During the term of this Agreement, TAKEDA, at its cost and
expense, shall use diligent, good faith efforts to file, prosecute and maintain
the Patents having claims that cover composition of matter of or method of
manufacturing or using the Compound or Product in Major Market Countries and
other countries where PENINSULA is developing or selling the Product. TAKEDA
shall use reasonable efforts to extend the term of the Patents covering the
Compound and/or the Product or its use in the countries in the Territory where
PENINSULA (or its Affiliate or sublicensee or distributor) is selling the
Product, and in such other countries as TAKEDA may in its discretion select, and
PENINSULA shall cooperate with TAKEDA in obtaining such extension, provided,
however, that the external expenses for such procedures shall be borne by
TAKEDA. TAKEDA shall provide to PENINSULA, and PENINSULA shall be entitled to
review and comment upon, all documents to be filed or received from the
applicable patent offices relating to the prosecution of the Patents, and other
correspondence relating to such prosecution efforts to the extent that the
Patents directly relate to the Compound or the Product. TAKEDA shall reasonably
consider PENINSULA's reasonable comments regarding such prosecution.

         15.2     PENINSULA shall notify TAKEDA of any infringement or possible
infringement of the Patents in the Territory by a third party promptly after it
becomes aware of such infringement. TAKEDA and PENINSULA shall consult together
in order to determine the appropriate action to be taken for elimination of any
infringement of the Patents, in order to protect both parties' interests.
PENINSULA shall have the primary right, but not the obligation, to institute,
prosecute and control any action or proceeding with respect to such infringement
(an "Enforcement Action"), at its own expense, by counsel of its choice and
approved by TAKEDA, which approval shall not be withheld unreasonably, including
any declaratory judgment action arising from such infringement. TAKEDA shall
provide reasonable assistance and cooperation to PENINSULA at its own expense
and may, at its sole discretion, at its own expense, by counsel of its choice
and at any time, join in such Enforcement Action. If PENINSULA elects not to
institute an Enforcement Action within 120 days after it has notice of the
infringement, TAKEDA shall have the right to institute an Enforcement Action at
its own expense unless PENINSULA provides a reasonable business reason for not
instituting such Enforcement Action, and PENINSULA shall provide reasonable
assistance and cooperation to TAKEDA in connection with such Enforcement Action
at its own expense. All damages, settlement amounts or costs recovered in
connection with an Enforcement Action shall first be allocated to reimburse the
parties for their expenses in connection with such Enforcement Action, and the
remainder of such damages, settlement amounts or costs shall be [ * ].
Notwithstanding the foregoing, if the Patent is found or adjudicated invalid or
unenforceable in or as a result of the Enforcement Action taken by PENINSULA,
PENINSULA shall have the primary right, but not the obligation, to appeal such
adjudication or findings, or take any other procedure to secure the validity or
enforceability of


[ * ] = 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.


                                       31
<PAGE>

the Patent (such appeal or other procedures are hereinafter collectively
referred to as the "Appeal"), at its own expense, by counsel of its choice and
approved by TAKEDA, which approval shall not be withheld unreasonably. TAKEDA
shall provide reasonable assistance and cooperation to PENINSULA at its own
expense and may, at its sole discretion, at its own expense, by counsel of its
choice and at any time, join in such Appeal, if possible. If PENINSULA does not
prosecute the Appeal immediately, TAKEDA may prosecute the Appeal at its own
expense, by counsel of its choice, and PENINSULA shall provide reasonable
assistance and cooperation to TAKEDA in connection with such Appeal at its own
expense. If TAKEDA is not entitled to prosecute the Appeal, PENINSULA shall
prosecute the Appeal upon TAKEDA's request to do so at TAKEDA's expense. All
damages, settlement amounts or costs recovered in connection with an Appeal
shall first be allocated to reimburse the parties for their expenses in
connection with such Appeal, and the remainder of such damages, settlement
amounts or costs shall be [ * ]. Any final decision with regard to the Appeal,
including the decision whether or not the Appeal is maintained, shall be made by
TAKEDA at its sole and absolute discretion.

         15.3     In the event of any claim, threat or suit by a third party
against PENINSULA and/or TAKEDA alleging that the import, formulation and/or
sale of the Compound and/or the Product in the Territory infringes any patents
or other intellectual property rights of such third party, each party hereto
shall inform the other party of such claim, threat or suit, and PENINSULA and
TAKEDA shall defend in close cooperation with each other against such claim,
threat or suit or settlement thereof and shall not settle such claim, threat or
suit without the prior written consent of the other party, which consent shall
not be unreasonably withheldprovided, however, PENINSULA shall reserve the final
control of the defense against such claim, threat or suit or settlement thereof
in the Territory; provided, further, that PENINSULA shall not in such case
settle such claim, threat or suit in a manner that may adversely affect TAKEDA's
interest in the Patents, Compound or Product, including without limitation the
validity of Patents, without the prior written consent of TAKEDA, which consent
shall not be unreasonably withheld. Each party shall bear its own internal costs
incurred by it in connection with such legal proceedings. The reasonable
out-of-pocket costs incurred by PENINSULA and/or TAKEDA in connection with such
legal proceedings and the amount of settlements or damages awarded to a third
party as a result of the suit for infringement by PENINSULA and/or TAKEDA of
such third party's patents or other intellectual property rights or settlement
thereof shall be borne by PENINSULA, provided, however, that pursuant to Section
3.4, PENINSULA shall be entitled to offset [ * ] of the amount of settlements or
damages paid by PENINSULA to a third party under this Section 15.3 against any
royalties owed to TAKEDA under Article 3, subject to Section 3.6. In addition,
if PENINSULA believes that a patent or patent application owned or controlled by
a third party in the Territory may claim or cover the composition of matter of,
method of making, or method of using the Compound, and PENINSULA intends to seek
a license from such third party under such patent or patent application,
PENINSULA shall first notify TAKEDA in writing of such intention, and if
requested by TAKEDA, shall meet with TAKEDA promptly and discuss in good faith
the reasons for PENINSULA seeking such license and the consideration that
PENINSULA intends to offer for such license, and PENINSULA shall consider in
good faith TAKEDA's reasonable comments with respect to such situation.
PENINSULA shall not obtain such license without the prior written consent of
TAKEDA, which consent shall not be unreasonably withheld. It is understood that
in the communication pursuant to this Section 15.3, either party shall not be
required to disclose any specific information that is covered by the
attorney-client privilege.


[ * ] = 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
<PAGE>

         15.4     Nothing in this Agreement shall be construed as:

                  (a)      a warranty or representation by TAKEDA of the
validity or scope of any of the Patents;

                  (b)      a warranty or a representation by TAKEDA that
anything made, used, sold or otherwise disposed of under any license granted
hereunder is or shall be free from infringement of patents or other property
rights of third parties; or

                  (c)      an agreement by TAKEDA to bring or prosecute actions
or suits against third parties for infringement of the Patents.

                                   ARTICLE 16

                                  FORCE MAJEURE

If either party is rendered unable to fulfill wholly or in part any part of its
obligations under this Agreement by reason of Force Majeure, such party shall
forthwith give to the other party a written notice briefly describing the
circumstances causing such inability, and, thereupon, to the extent that the
party giving such notice is unable to fulfill such obligations by reason of such
circumstances, such obligations shall be suspended during, but no longer than,
the continuance of such circumstances and provided that the party claiming force
majeure has exerted and continues diligently to exert all commercially
rea,,sonable efforts to overcome the same. "Force Majeure" means conditions
beyond the control of the parties, including without limitation, civil
commotion, terrorist act, failure or default of public utilities or common
carriers, destruction of production facilities or materials by fire, earthquake,
storm or like catastrophe, war, strikes, lockouts, riot, or epidemic diseases,
or Act of God. In the event of Force Majeure, the other party has no right to
seek damages in connection with the affected party's inability to perform its
obligations under this Agreement as a result of Force Majeure. If a Force
Majeure event preventing a party's performance hereunder continues for more than
[ * ] consecutive months, both parties shall in good faith negotiate and decide
how to cope with the situation.

                                   ARTICLE 17

                              TERM AND TERMINATION

         17.1     This Agreement shall be effective as of the Effective Date
and, unless sooner terminated by mutual agreement or in accordance with other
provisions herein, shall remain in effect as long as PENINSULA's royalty
obligations exist. The provisions of Sections 3.9, 3.10, 6.9, 7.6, 17.1, 17.4,
17.5, 17.6, 18.2, 18.4, 18.6, 18.9, and 18.10, and Article 13 shall survive
termination or expiration of this Agreement. In addition, any payment obligation
that has accrued prior to such termination or expiration, including without
limitation pursuant to Sections 3.1, 3.3, and 7.3, if any, shall survive such
termination or expiration. The provisions of Article 14 shall survive
termination or expiration of this Agreement for seven (7) years. The license
granted to PENINSULA under Section 2.1 shall survive the expiration of this
Agreement, but shall, as of the date of expiration of the Agreement and unless
sooner terminated, be converted from a royalty-bearing license to a fully-paid
and royalty-free license.

         17.2     Either party may terminate this Agreement by a registered
letter to the other party effective upon the other party's receipt of such
notice in the following cases:


[ * ] = 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>

                  (a)      if the other party, after receiving written notice
identifying a material breach of this Agreement (including failure by PENINSULA
to pay on time the amounts owed under Article 3 or 7), fails to cure such breach
within [ * ] days (in case of failure by PENINSULA to pay on time the amounts
owed under Article 3 or 7, [ * ]) from the date of such notice; or

                  (b)      in case of the filing by the other party of a
petition in bankruptcy or insolvency, or in case of the filing by the other
party of any petition or answer seeking reorganization, readjustment, or
rearrangement of the business of the other party under any law or any government
regulation relating to bankruptcy or insolvency, or in case of the appointment
of a receiver for all or substantially all of the property of the other party,
or in case of the making by the other party of any assignment or attempted
assignment for the benefit of creditors, or in case of the institution by the
other party of any proceedings for the liquidation or winding up of its
business, or for the termination of its corporate charter; or

                  (c)      if a substantial change occurs in the shareholding of
PENINSULA and consequently, fifty percent (50%) or more of the voting shares of
PENINSULA come to be owned or controlled directly or indirectly by a person or
entity who is not a controlling shareholder of PENINSULA on the Effective Date.

         It is understood that TAKEDA's failure to satisfy its Supply Obligation
pursuant to Section 7.2, TAKEDA's decision to cease manufacturing the Compound
pursuant to Section 6.1 or 7.4, or TAKEDA's inability to cure a Supply
Disruption caused by a Force Majeure event, shall not constitute a material
breach under subclause (a) above, but shall be treated pursuant to the following
Section 17.3.

         17.3     PENINSULA may terminate this Agreement as follows:

                  (a)      upon written notice if TAKEDA elects to cease trying
to remedy a DMF deficiency and thus cease supplying the Compound to PENINSULA as
permitted under Section 6.1;

                  (b)      upon written notice if PENINSULA cancels its order
for [ * ] of Compound as permitted under Section 7.2;

                  (c)      upon written notice if TAKEDA elects to cease
manufacturing, or having a Third Party Manufacturer manufacture, Compound under
Section 7.4;

                  (d)      upon written notice if Supply Disruption is not cured
within [ * ] days as permitted under Section 7.14; or

                  (e)      if PENINSULA determines that it is not [ * ] to
pursue the development, launch or sale of the Product due to [ * ] and/or [ * ],
including but not limited to [ * ] the Compound and/or the Product, [ * ]
issues, PENINSULA may provide written notice to TAKEDA of such determination,
together with competent information thereof and have serious discussions with
TAKEDA regarding what steps to take in regards to the problem. PENINSULA may
then terminate this Agreement effective upon written notice [ * ] days.

[ * ] = 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.

                                       34
<PAGE>

         It is understood that PENINSULA shall have no right to demand from
TAKEDA any compensation for the termination of this Agreement pursuant to above
subsections (a), (b), (c), (d) (but only if the applicable Supply Disruption is
caused by a Force Majeure event) and (e).

         17.4     Upon the termination of this Agreement for any reason,
PENINSULA shall no longer make any use of the license granted by TAKEDA
hereunder and shall promptly return to TAKEDA any and all data and information
furnished by TAKEDA so far, including, but not limited to, the Information and
the Manufacturing Know-How. If the Agreement is terminated for any reason other
than for TAKEDA's uncured material breach of the Agreement or financial
insolvency, PENINSULA shall, at TAKEDA's request, transfer to TAKEDA or its
designee the Registration or the application therefor and any and all the data
and information so far obtained by PENINSULA, including the Results, if any, or
otherwise assist TAKEDA so that TAKEDA may take over the development and/or
commercialization of the Product, provided, however, if sublicensee(s) of
PENINSULA that are not in breach of their sublicense agreements, under which
PENINSULA has imposed such sublicensee(s) all applicable obligations which
PENINSULA undertakes hereunder, elect to continue the development and/or
commercialization of the Product, TAKEDA shall assume such sublicense agreements
as direct licenses from TAKEDA to such sublicensee(s), provided, however, that
TAKEDA shall not be obligated to assume any obligations under such agreements
that are in excess of the obligations of TAKEDA under this Agreement, unless
TAKEDA agrees otherwise in its sole discretion. If the transfer of the
Registration or the application therefor is prohibited by applicable laws or if
TAKEDA does not require PENINSULA to make such transfer, PENINSULA shall,
without requiring any compensation from TAKEDA, abandon and waive the
Registration or the application therefor in the Territory.

         17.5     Disposal of the Compound, goods in process and the Product in
PENINSULA's stock on the day of termination shall be made in the following
manner in accordance with TAKEDA's direction:

                  (a)      if TAKEDA consents, which consent shall not be
unreasonably withheld, PENINSULA may manufacture the Product using such Compound
and/or such goods in process and may sell the Product in the Territory at its
regular commercial conditions and only for the term of [ * ] months after such
termination, subject to PENINSULA's agreement to strictly observe the terms and
conditions contained in this Agreement including the obligation to pay royalties
in accordance with Article 3 hereof; and

                  (b)      if so requested by TAKEDA, PENINSULA shall, at any
time after [ * ] months post-termination, sell to TAKEDA any remaining portion
of its stock of Compound and/or Product (but only that portion of the stock that
has some shelf life remaining and meets the Specifications), at a price to be
negotiated and decided by the parties hereto, which price shall not be higher
than the [ * ] and/or [ * ] (as applicable).

         In any case, PENINSULA shall destroy all stock which does not meet the
Specifications at PENINSULA's expense and responsibility without requiring
TAKEDA to pay any compensation therefor.

         17.6     Without prejudice to the remedies for the breach of this
Agreement which have already accrued before the expiration of this Agreement,
the expiration or termination of this Agreement itself under this Article 17
shall not entitle either party to any compensation whatsoever based solely on
the fact of such expiration or termination.

[ * ] = 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.

                                       35
<PAGE>

                                   ARTICLE 18

                                  MISCELLANEOUS

         18.1     ASSIGNMENT. This Agreement or any of the rights or obligations
created under this Agreement shall not be assignable by either party hereto
without the prior written consent of the other party, except that each party may
assign this Agreement to its successor in interest pursuant to a merger,
acquisition, reorganization, consolidation or sale of all or substantially all
of the assets of the business to which this Agreement relates. Any attempted
assignment that does not comply with the requirements of this Section 18.1 shall
be null and void. This Agreement shall be binding upon each of the parties,
their successors and permitted assigns.

         18.2     SEVERABILITY. If any provision or provisions of this Agreement
shall, to any extent, be held to be invalid or unenforceable by a court of
competent jurisdiction, the remainder of this Agreement shall not be affected
thereby and shall be valid and enforceable to the fullest extent permitted by
law. However, in case such invalidation or unenforceability injures the rights
and interests of either party, the parties hereto shall renegotiate this
Agreement in good faith to replace any invalid or unenforceable provision with a
valid and enforceable one such that the objectives contemplated by the parties
when entering this Agreement may be realized.

         18.3     ENTIRETY OF AGREEMENT; MODIFICATION. This Agreement
constitutes the entire, final and complete agreement and understanding between
the parties, and replaces and supersedes all prior discussions and agreements
between them with respect to the subject matter hereof. No modification or
amendment to this Agreement shall be valid or binding upon the parties hereto
unless made in writing and duly executed on behalf of each of the parties
hereto.

         18.4     OFFICIAL TEXT AND GOVERNING LAW. The English version of this
Agreement subscribed and executed by the parties hereto shall be the official
text, and this Agreement shall be governed by and interpreted in accordance with
the laws of the State of New York without giving effect to any choice of law
principles that would require the application of the laws of a different state
or country.

         18.5     NOTICE. Any notice required to be given by either party in
connection with this Agreement shall be given in the English language by prepaid
airmail, cable, international express delivery service, or facsimile addressed
to the other party at its principal office first above written, and shall be
deemed to have been given for all purposes (a) when received, if sent by cable
or international express delivery service, (b) seven (7) business days after
mailing, if mailed by airmail, or (c) when received by recipient, if sent by
facsimile transmission with electronic confirmation of transmission if
transmission is confirmed during the recipient's normal business hours, or
otherwise on the recipient's next business day.

         18.6     DISPUTE RESOLUTION/ARBITRATION. If the parties are unable to
resolve a dispute arising under this Agreement (other than a dispute arising
under Section 5.1) within thirty (30) days after such dispute is first
identified by either party in writing to the other, the parties shall refer such
dispute to the senior management of TAKEDA and PENINSULA for attempted
resolution by good faith negotiations within thirty (30) days after such notice
is received. If the senior management of TAKEDA and PENINSULA are not able to
resolve such dispute within such thirty (30) day period, such dispute shall be
finally settled under the Rules of Conciliation and Arbitration of the
International Chamber of Commerce by one or more arbitrators

                                       36
<PAGE>

appointed in accordance with the Rules. The award rendered shall be final and
binding upon both parties. Such arbitration shall be held in Osaka, Japan if it
is initiated by PENINSULA and in San Francisco, California, USA if initiated by
TAKEDA.

         18.7     CONSTRUCTION. This Agreement has been prepared jointly and
shall not be strictly construed against either party. Ambiguities, if any, in
this Agreement shall not be construed against any party, without regard to which
party may be deemed to have authored the ambiguous provision. The headings of
each Article in this Agreement have been inserted for convenience of reference
only and are not intended to limit or expand on the meaning of the language
contained in the particular article or section.

         18.8     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.

         18.9     WAIVER. Any delay in enforcing a party's rights under this
Agreement or any waiver as to a particular default or other matter shall not
constitute a waiver of such party's rights to the future enforcement of its
rights under this Agreement unless such party provides an express written and
signed waiver as to a particular matter for a particular period of time.

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

         IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed by their duly authorized officers in duplicate as of the Effective
Date.

TAKEDA CHEMICAL INDUSTRIES, LTD.

/s/ Saburo Hamanaka
---------------------------------
Name: Saburo Hamanaka
Title: Corporate Officer
       General Manager
       Division of Americas

PENINSULA PHARMACEUTICALS, INC.

/s/ Paul F. Truex
---------------------------------
Name: Paul F. Truex
Title: President & CEO

                                       37
<PAGE>
\
                                   SCHEDULE I

<TABLE>
<CAPTION>
TAKEDA'S                         APPLICATION        PATENT NO.       EXPIRATION
CASE NO.          COUNTRY       (FILING DATE)      (ISSUE DATE)         DATE
<S>               <C>           <C>                <C>               <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.


                                       38
<PAGE>

                                   SCHEDULE II

TENTATIVE COMPOUND SPECIFICATIONS

<TABLE>
<CAPTION>
Item                                                Criteria
-------------------------------------------------------------
<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.


                                       39
<PAGE>

                                  SCHEDULE III

Standard Operating Procedure (SOP) For International Post-Marketing
Surveillance:

(TO BE ATTACHED)

                                       40
<PAGE>

                                   SCHEDULE IV

                                PRECLINICAL ITEMS

MICROBIOLOGY

         1. [ * ]
         2. [ * ]
         3. [ * ]
         4. [ * ]
         5. [ * ]

BIOANALYTICAL METHODS

         1. [ * ]
         2. [ * ]
         3. [ * ]

PHARMACOKINETICS AND ADME

         1. [ * ]
         2. [ * ]
         3. [ * ]
         4. [ * ]
         5. [ * ]
         6. [ * ]

TOXICOLOGY

         1. [ * ]

CHEMISTRY, MANUFACTURING AND CONTROL

         1. [ * ]
         2. [ * ]
         3. [ * ]
         4. [ * ]
         5. [ * ]


[ * ] = 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.

                                       41
<PAGE>

         6. [ * ]
         7. [ * ]
         8. [ * ]

PRODUCT AND FORMULATION DEVELOPMENT

         1. [ * ]
         2. [ * ]
         3. [ * ]
         4. [ * ]
         5. [ * ]
         6. [ * ]
         7. [ * ]


[ * ] = 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.

                                       42
<PAGE>

                                   SCHEDULE V

                               PRECLINICAL STUDIES

<TABLE>
<CAPTION>
Study Title               Term                     Note
---------------------------------------------------------
<S>                       <C>                      <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.

                                       43
<PAGE>

                                   SCHEDULE VI

                           FORM OF JOINT PRESS RELEASE

(To be attached)

                                       44
<PAGE>

                                  SCHEDULE VII

                                OPTION COUNTRIES

Option Countries shall mean any and/or all of the following countries:

All countries in Central America (i.e., all countries south of Mexico and north
of Colombia),

All countries in South America (i.e., all countries in the South American
continent from Colombia in the north to Chile in the south), Spain, Portugal.

All Eastern European, CIS, and Middle Eastern countries set forth in the
schedule below

<TABLE>
<CAPTION>
  EASTERN EUROPE                  CIS                       MIDDLE EAST
--------------------------------------------------------------------------
<S>                             <C>                         <C>
Republic of Albania             Armenia                     Saudi Arabia
--------------------------------------------------------------------------
Bosnia-Herzegovina              Azerbaijan                  U.A.E.
--------------------------------------------------------------------------
Republic of Bulgaria            Georgia                     Oman
--------------------------------------------------------------------------
Republic of Estonia             Kazakhstan                  Yemen
--------------------------------------------------------------------------
Republic of Croatia             Kyrgyzstan                  Qatar
--------------------------------------------------------------------------
Republic of Latvia              Moldova                     Bahrain
--------------------------------------------------------------------------
Republic of Lithuania           Russia                      Kuwait
--------------------------------------------------------------------------
Macedonia                       Tajikistan                  Jordan
--------------------------------------------------------------------------
Republic of Poland              Turkmenistan                Israel
--------------------------------------------------------------------------
Yugoslavia                      Ukraine                     Turkey
--------------------------------------------------------------------------
Romania                         Uzbekistan                  Cyprus
--------------------------------------------------------------------------
Republic of Slovenia            Belarus                     Iraq
--------------------------------------------------------------------------
Republic of Slovakia                                        Iran
--------------------------------------------------------------------------
Czech Federal Republic                                      Afghanistan
--------------------------------------------------------------------------
Republic of Hungary                                         Egypt
--------------------------------------------------------------------------
                                                            Palestine
--------------------------------------------------------------------------
                                                            Lebanon
--------------------------------------------------------------------------
                                                            Syria
--------------------------------------------------------------------------
</TABLE>

                                       45
<PAGE>

                                    EXHIBIT A

                         PENINSULA PHARMACEUTICALS, INC.

                             ACCEPTANCE CERTIFICATE

         _____________ hereby certifies that [s/]he is the duly authorized and
         elected _______________ of PENINSULA PHARMACEUTICALS, INC., a
         ___________ corporation (the "COMPANY"), and further certifies that:

         1.       This Acceptance Certificate is executed and delivered pursuant
to Section 7.9 of that certain Agreement by and between the Company and Takeda
Chemical Industries, Ltd., a corporation organized under the laws of [Japan]
("TAKEDA") dated ___________, 2003 (the "AGREEMENT"). Capitalized terms used but
not otherwise defined herein shall have the meanings given them in the
Agreement.

         2.       The Company hereby acknowledges receipt of [quantity] of
Compound from Takeda on [date] and accepts the delivery thereof. Pursuant to the
terms of Section 7.3 of the Agreement, the Company authorizes payment in the
amount of $________ to Takeda.

         3.       The execution and delivery of this Acceptance Certificate
shall not be deemed to be a waiver or modification of any other term or
condition of the Agreement or of any other instrument or agreement referred to
therein or to prejudice any right or remedy which the Company may now have or
may have in the future under or in connection with the Agreement or any
instrument or agreement referred to therein.

         IN WITNESS the undersigned has executed this Acceptance Certificate on
behalf of the Company as of [date].

                                              __________________________________
                                              [PRINTED NAME]
                                              [Title]

[ * ] = 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.

                                       46