Document:

RUSSIAN
      TRANSLATION OMITTED

      
        

      

    

    Agreement
      for Ampoule Irradiation Testing in 2006-2007
      between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
      December 28, 2007

    
      

    

    

    AGREEMENT
      FOR AMPOULE IRRADIATION TESTING IN 2006-2007

    

    

    THIS
      AGREEMENT FOR AMPOULE IRRADIATION TESTING IN 2006-2007 (this
“Agreement”) is made as of December 28, 2007 (the “Effective Date”), by and
      between THORIUM POWER, INC.,a Delaware
      corporation, having its principal offices in McLean, VA, United States of
      America (“Thorium Power”), and the RUSSIAN RESEARCH CENTRE KURCHATOV
      INSTITUTE, a Russian Federation federal state institution, having its
      principal offices at Kurchatov Square, 1, Moscow, Russia 123182 (“Kurchatov
      Institute”) (individually a “Party” or collectively the “Parties”).

    

    RECITALS

    

    
      	A.	
              Thorium
                Power has conceived, developed and has a proprietary interest in
                certain
                thorium-based fuel technology that is compatible with existing
                uranium-fueled Light Water Reactors (“LWR”) while retaining significant
                advantages in lower fuel cycle costs and ease in waste disposal and
                which
                can have a positive effect in the field of non-proliferation of nuclear
                weapons while allowing the continuation of the development of commercial
                nuclear energy in the world; 

            

    

    

    
      	B.	
              Thorium
                Power has conceived, developed and has a proprietary interest in
                certain
                thorium-based fuel technology that will allow for the effective and
                safe
                disposition of separated reactor-grade plutonium (civilian or spent
                fuel-derived plutonium) in existing or new nuclear power reactors.
                It can
                also be used to effectively dispose of excess weapons-grade
                plutonium;

            

    

    

    
      	C.	
              Kurchatov
                Institute has extensive experience with the research, testing and
                evaluation involving nuclear fuel and nuclear reactor facilities
                and
                systems, including systems for the use, storage and disposition of
                nuclear
                fuel; 

            

    

    

    
      	D.	
              Thorium
                Power and Kurchatov Institute have been cooperating pursuant to (i)
                Protocol, dated October 20, 1994, (ii) Cooperative Research and
                Development Agreements CRADA No. BNL-C-96-02, CRADA No. BNL-C-98-15
                and
                CRADA No. BNL-C-01-6 (the “CRADAs”); and (iii) a Collaborative Research
                Agreement, dated August 6, 2002 (the “2002
                Agreement”);

            

    

    

    
      	E.	
              Kurchatov
                Institute also conducted technical and economic investigation of
                Thorium
                Power’s fuel technology relating to disposition of excess weapons-grade
                plutonium pursuant to an agreement with UT-Battelle, LLC acting under
                its
                contract with the DOE of the Management & Operation of the Oak Ridge
                National Laboratory (Work Release K1WR18BSC under General Order Agreement
                85B99398V) (the “Oak Ridge Agreement”);

            

    

    

    
      	F.	
              Thorium
                Power financed ampoule irradiation testing of Thorium Power designed
                uranium-zirconium and thorium-uranium fuel samples in the IR-8 research
                reactor at Kurchatov Institute from 2002 to 2005 under the 2002
                Agreement;

            

    

    

    
      	G.	
              In
                2006 and 2007, at its own expense, Kurchatov Institute continued
                conducting irradiation testing of one ampoule device with
                uranium-zirconium seed fuel samples and two ampoule devices with
                thorium-uranium blanket fuel samples in the IR-8 research reactor
                (the
                “2006-2007 Irradiation Testing Program”). The description of the 2006-2007
                Irradiation Testing Program is provided in Exhibit 1 attached hereto;
                

            

    

    

    
      
         

      

      
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      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    
      	H.	
              Thorium
                Power desires to compensate Kurchatov Institute for the irradiation
                testing activities in the 2006-2007 Irradiation Testing Program and
                to
                acquire all of the corresponding test data and other technical data
                generated in the program. 

            

    

     

    NOW,
      THEREFORE, in consideration of the premises and mutual covenants contained
      herein and intending to be legally bound hereby, Thorium Power and Kurchatov
      Institute agree as follows:

    

    
      	1.	
              TRANSFER
                OF IRRADIATION TESTING DATA; ASSIGNMENT OF TECHNICAL
                DATA

            

    

     

    
      	
            	1.1.	
              Consideration.
                In consideration of $410,000.00 (Four Hundred Ten Thousand US Dollars),
                Kurchatov Institute hereby transfers all of the test data generated
                in the
                course of the 2006-2007 Irradiation Testing Program and assigns all
                the
                Technical Data associated with the 2006-2007 Irradiation Testing
                Program
                (as defined in Article 1.3 herein) to Thorium Power and provides
                access to
                Thorium Power and its affiliates to the information and documentation
                specified in Exhibit 4 of this Agreement for audit purposes. The
                entire
                amount of consideration is due and payable to Kurchatov Institute
                within
                thirty (30) business days from the date of transfer by Kurchatov
                Institute
                to Thorium Power of all of the Technical Data as contemplated hereunder
                and Kurchatov Institute has complied with other provisions set forth
                in
                this Agreement, including submission to Thorium Power of copies of
                approvals and permits specified in Article 3 of this Agreement. The
                payment to Kurchatov Institute shall be sent by wire transfer pursuant
                to
                the following wire transfer
                instructions:

            

    

     

    RUSSIAN
      RESEARCH CENTRE “KURCHATOV INSTITUTE”, KURCHATOV SQ, MOSCOW 123182,
      RUSSIA

    ACCT
      NO
      40502840138200200011 

    BENEFICIARY
      BANK: SAVINGS BANK OF THE RUSSIAN FEDERATION (KRASNOPRESNENSKOE BRANCH ? 1569)
      MOSCOW, RUSSIA

    SWIFT:
      SABR RU MM

    

    CORRESPONDENT
      BANK OF SAVINGS BANK OF THE RUSSIAN FEDERANION:

    BANK
      OF
      NEW YORK,

    NEW
      YORK,
      NY, USA

    SWIFT:
      IRVT US 3N

    ACCOUNT
      OF SAVIGS BANK OF THE RASSIAN FEDERATION WITH CORRESPONDENT BANK:

    890-0057-610

    

    TECHNICAL
      DATA SHOULD BE SENT ON CONDITION CPT WASHINGTON

    

    
      	
            	1.2.	
              Assignment
                by Kurchatov Institute. Kurchatov Institute hereby sells, assigns,
                conveys
                and transfers to Thorium Power (as well as its successors and assigns)
                the
                entire worldwide right, title and interest in and to the Technical
                Data.
                Kurchatov Institute hereby expressly agrees not to use, in any manner,
                the
                work product hereunder or exercise any rights associated therewith
                without
                the express written approval by Thorium Power.

            

    

     

    
      
         

      

      
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      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

      

    

     

    
      	
            	1.3.	
              Definition
                of Technical Data. For purposes of this Agreement, “Technical Data” means
                any and all technical data, specified in Exhibit 2 hereto.
                

            

    

     

    
      	
            	1.4.	
              Covenants.
                Kurchatov Institute hereby covenants and agrees as
                follows:

            

    

     

    
      	A.	
              As
                a result of the Technical Data rights assignment herunder, (i) Thorium
                Power is the sole owner of the entire right, title and interest in
                and to
                the Technical Data; and (ii) without limitation, the Technical Data
                rights
                will be held and enjoyed by Thorium Power no less fully and exclusively
                as
                they would have been by Kurchatov Institute had such assignment and
                transfer not been made;

            

    

     

    
      	B.	
              The
                assignment and licensing of the respective Technical Data rights
                by
                Kurchatov Institute shall be performed to the extent not prohibited
                by the
                Russian Law in a form required under the applicable law without payment
                of
                any additional consideration. The same rule shall apply to early
                termination or further prolongation of the licenses. The term of
                each
                license with respect to any of the Technical Data rights shall be
                subject
                to limitations as established by the applicable law;
                

            

    

     

    
      	C.	
              Kurchatov
                Institute has not and will not enter into an agreement with a third
                party
                that conflicts with this Agreement. To the extent that any subsequent
                agreement between Kurchatov Institute and a third party conflicts
                with the
                assignment of the Technical Data rights, Kurchatov Institute agrees
                that
                the terms of this Agreement will supersede the terms of such
                agreement;

            

    

     

    
      	D.	
              Any
                facts, circumstances or notices regarding any of the Technical Data
                rights
                shall be promptly communicated and delivered to Thorium Power;
                and

            

    

     

    
      	E.	
              Kurchatov
                Institute shall assist Thorium Power to the best of its ability in
                the
                protection of Thorium Power’s Technical Data rights. For that purpose,
                Kurchatov Institute shall testify in any legal proceedings, sign
                all
                papers, execute all applications, divisionals, continuations,
                continuations-in-part, reissues, renewals, extensions and additions
                thereof and counterparts thereto, make all rightful oaths and generally
                aid Thorium Power (as well as its successors and assigns), with expenses
                reasonably incurred to be borne by Thorium Power (except those expenses
                which relate in any way to any breach of this assignment, which expenses
                shall be borne by Kurchatov Institute), in obtaining and enforcing
                proper
                protection and access (in the reasonable discretion of Thorium Power)
                for
                and to the Technical Data rights.

            

    

     

    
      	
            	1.5.	
              Request.
                Kurchatov Institute does hereby authorize and request that any and
                all
                Technical Data rights which may be granted upon the Technical Data
                be
                issued to Thorium Power as assignee of the entire interest therein.
                The
                assignment of the respective Technical Data rights by the respective
                right-holder shall be performed to the extent not prohibited by the
                Russian Law, in a form required by Russian Law, without payment of
                any
                additional consideration to Kurchatov Institute.
                

            

    

     

    
      
         

      

      
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      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007 

      
        

      

       

    

    
      	
            	1.6.	
              Notice
                and Assistance Regarding Patent and Copyright Infringement. Kurchatov
                Institute shall report to Thorium Power promptly and in reasonable
                written
                detail, each notice or claim of patent or copyright infringement,
                or any
                other infringement related to Technical Data rights and (or) intellectual
                property rights based on the performance of this Agreement of which
                Kurchatov Institute has knowledge and shall furnish to Thorium Power,
                at
                the expense of Thorium Power, when requested by Thorium Power, all
                evidence and information in possession of Kurchatov Institute pertaining
                to such claim or any resulting
                suit.

            

    

     

    
      	2.	
              CONFIDENTIALITY
                AND COMMERCIAL SECRET

            

    

     

    
      	
            	2.1.	
              Obligation
                of Confidentiality and Non-Use. Kurchatov Institute acknowledges
                and
                agrees that it owes a duty to Thorium Power to maintain in strict
                confidence all Confidential Information and Commercial Secret Information
                (as defined below) provided to, learned or developed by Kurchatov
                Institute in connection with the performance of the 2006-2007 Irradiation
                Testing Program either by Kurchatov Institute or its subcontractors.
                Kurchatov Institute shall take all steps reasonably necessary to
                prevent
                the unauthorized disclosure or dissemination of such Confidential
                Information or Commercial Secret Information for any reason and to
                any
                person or entity, except with the prior written consent of Thorium
                Power.
                In addition, Kurchatov Institute shall not use or copy any such
                Confidential Information or Commercial Secret Information, or authorize
                or
                permit others to use any such Confidential Information or Commercial
                Secret Information, for any purposes other than in connection with
                performance of the Services hereunder. Notwithstanding the foregoing,
                Kurchatov Institute may disclose such Confidential Information or
                Commercial Secret Information to those officers, employees, advisors
                and
                consultants of Kurchatov Institute (each, a “Representative,” and
                collectively, “Representatives”) who have a need to know such information
                in connection with performance of services under this Agreement;
                provided
                that each Representative, prior to such disclosure, is informed by
                Kurchatov Institute of the confidential nature of such information
                and of
                the confidentiality obligations imposed on Kurchatov Institute under
                this
                Agreement, and signs a written undertaking confirming his or its
                agreement
                to treat it confidentially. Kurchatov Institute shall be responsible
                for
                any and all breaches of the provisions of this Article 2 (Confidentiality
                and Commercial Secret) by its Representatives. The Parties acknowledge
                that Kurchatov Institute intends to engage [REDACTED] as Thorium
                Power’s
                representative to download and process the test data generated during
                the
                performance of the 2006-2007 Irradiation Testing Program. As used
                herein,
                “steps reasonably necessary” means, at a minimum, the steps that Kurchatov
                Institute takes to protect its own, similarly confidential or proprietary
                information, which steps shall not be less than a reasonable standard
                of
                care, and in the case of Commercial Secret Information shall include
                maintaining an up to date list of the Commercial Secret Information
                (the
                “List”), establishing a procedure for handling of such information and
                controlling compliance therewith, marking or labeling such information
                with the words ‘Commercial Secret’ and the name of Thorium Power and its
                location, and requiring conclusion of a confidentiality agreement
                in the
                form of Exhibit 3 by any person who shall have or is likely to have
                access
                to such information. At the discretion of Thorium Power, all or any
                part
                of the Confidential Information may become subject to a requirement
                that
                it be classified and protected as ‘Commercial Secret Information’
                information within the meaning of Russian
                law.

            

    

     

    
      
         

      

      
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      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    

    
      	
            	2.2	
              Obligation
                to Inform. Upon learning of any actual or threatened unauthorized
                disclosure or use of the Thorium Power’s Confidential Information or
                Commercial Secret Information by it or a third party, Kurchatov Institute
                promptly shall provide Thorium Power with notice
                thereof.

            

    

     

    
      	
            	2.3	
              Definition
                of Confidential Information and Commercial Secret Information. The
                term
                “Confidential Information” shall mean this Agreement and all trade
                secrets, data, know-how, technical data or other information and
                materials, business strategies, plans and procedures, business
                information, proprietary information, of Thorium Power, as well as
                any
                other information and materials that are deemed confidential or
                proprietary to or by Thorium Power (including, without limitation,
                all
                information and materials of Thorium Power’s customers and their other
                consultants). The term ‘Commercial Secret Information’ shall have the
                meaning established under Russian law. Protocols of irradiation testing
                shall be deemed to be Commercial Secret Information and shall be
                treated
                as such. At the same time, Commercial Secret Information excludes
                the
                following three documents relating to the 2006-2007 Irradiation Testing
                Program that were issued prior to the Effective Date of this Agreement
                and
                were not marked as Commercial Secret Information: (a) Safety analysis,
                (2)
                Technical solutions, and (3) Procedures for performing irradiation
                testing. The above three documents are deemed to be Confidential
                Information. Kurchatov Institute shall provide to Thorium Power copies
                of
                the above three documents simultaneously with the Technical Data
                specified
                in Exhibit 4. 

            

    

     

    
      	
            	2.4	
              Exceptions
                to Confidential Information. Notwithstanding the foregoing paragraph,
                “Confidential Information” shall not include any information or materials
                that: (a) are or become known to the general public through no act
                or
                omission of Kurchatov Institute or any other person with an obligation
                of
                confidentiality to Thorium Power or any of Thorium’s customers, or (b) are
                required to be disclosed pursuant to applicable law (provided, however,
                that prior to any disclosure of Confidential Information as required
                by
                applicable law, Kurchatov Institute shall advise Thorium Power of
                such
                required disclosure promptly upon learning thereof and shall cooperate
                with Thorium Power and Thorium Power’s customers in order to afford them a
                reasonable opportunity to contest or limit such
                disclosure).

            

    

     

    
      	
            	2.5	
              Return
                or Destruction of Confidential Information. Upon the termination
                or
                expiration of this Agreement, or at any other time upon the written
                request of Thorium Power, Kurchatov Institute shall promptly return
                to
                Thorium Power or, at Thorium Power’s option, destroy all Confidential
                Information and Commercial Secret Information pursuant to Exhibit
                2 in
                Kurchatov Institute’s possession or control, together with all copies,
                summaries and analyses thereof, regardless of the format in which
                such
                information exists or is stored. Within five (5) business days following
                the expiration or early termination of this Agreement, or any written
                request as set forth above, Kurchatov Institute shall provide Thorium
                Power with a written certification of Kurchatov Institute’s compliance
                with the provisions of this
                paragraph.

            

    

     

    
      
         

      

      
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      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    

    
      	
            	2.6	
              The
                provisions of this Article 2 concerning confidentiality and Commercial
                Secret information shall survive the termination of this Agreement
                and the
                agreements envisioned hereby, and the liquidation and reorganization
                of
                the parties hereto. Kurchatov Institute and any agent thereof including
                subcontractors shall be responsible for any and all damages connected
                with
                the unauthorized disclosure of Confidential or Commercial Secret
                Information.

            

    

     

    
      	3.	
              OBTAINING
                APPROVALS AND PERMITS

            

    

     

    
      	
            	3.1.	
              Kurchatov
                Institute hereby agrees to obtain any and all necessary approvals
                and/or
                permits that may be required under Russian laws and regulations in
                order
                (i) to assign Technical Data rights as envisioned by Article 1 hereof;
                (ii) to transfer the work product created hereunder to Thorium Power;
                and
                (iii) to carry out any other activities pursuant to this Agreement.
                Kurchatov Institute shall promptly provide to Thorium Power full
                and
                accurate copies of such approvals and
                permits.

            

    

     

    
      	
            	3.2.	
              Kurchatov
                Institute hereby agrees to apply for and obtain a permit and/or approval
                from the relevant Russian Federation export control authority in
                connection with the proposed transfer to Thorium Power of the technical
                documentation (including on magnetic media) created hereunder. Kurchatov
                Institute shall promptly forward to Thorium Power full and complete
                copies
                of such approvals and permits.

            

    

     

    
      	
            	3.3.	
              Kurchatov
                Institute hereby agrees to obtain any other permits and/or approvals
                that
                may be required to perform this
                Agreement.

            

    

     

    
      	
            	3.4.	
              In
                the event that Kurchatov Institute fails to obtain permits and/or
                approvals set forth in this Article 3, Thorium Power shall be entitled,
                at
                its election, (a) to suspend performance until such time as the permits
                and approvals have been obtained and copies supplied to Thorium Power,
                or
                (b) to terminate this Agreement. In no event shall Thorium Power
                be
                obligated to make any payments to Kurchatov Institute hereunder,
                including
                without limitation pursuant to Article 1.1 hereof, unless and until
                all
                such permits and approvals shall have been obtained and a copy supplied
                to
                Thorium Power. 

            

    

    

    
      	4.	
              DISCLAIMERS
                AND LIMITATIONS OF LIABILITY

            

    

     

    
      	
            	4.1.	
              Disclaimer
                of Consequential Damages. Neither Party shall be liable to the other
                Party
                hereto for any consequential, incidental, indirect, special, punitive
                or
                exemplary damages suffered or incurred by such other Party in connection
                with a breach or alleged breach of this Agreement, even if such other
                Party has been advised of the possibility of such damages. Consequential
                damages shall include, without limitation, lost profits, lost savings,
                lost business or lost goodwill, loss of nuclear material, loss of
                accountability of nuclear material, or unavailability of facilities.
                The
                provisions of this Article 4.1 shall apply to the full extent permitted
                by
                law whether such a claim is based on tort (regardless of the degree
                of
                fault or negligence), warranty, breach of contract, strict liability
                or
                otherwise, and shall survive the cancellation, expiration or termination
                of this Agreement, as well as the fulfillment of the obligations
                of the
                Parties hereunder and shall apply notwithstanding any other provisions
                of
                this Agreement.

            

    

     

    
      
         

      

      
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      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    

    
      	
            	4.2.	
              Acknowledgement.
                The Parties hereto, having been advised by legal counsel, acknowledge
                and
                agree that they are sophisticated parties in all matters relating
                to this
                Agreement and that the foregoing disclaimer and limitation of liability
                represent bargained-for allocations of risk, and that the economics,
                terms
                and conditions of this Agreement reflect such
                allocations.

            

    

    

    
      	5.	
              REPRESENTATIONS
                AND WARRANTIES 

            

    

    
      KurchatovInstitute
        represents and warrants to Thorium Power: (a) that Kurchatov Institute has
        the
        right, power and authority to enter into this Agreement and to perform Kurchatov
        Institute’s obligations hereunder, that Kurchatov Institute has obtained any
        internal approvals or approvals of its owner as may be required by law to
        permit
        conclusion of this Agreement, and that Kurchatov Institute’s performance
        hereunder will not breach any other agreement or understanding by which
        Kurchatov Institute is bound; (b) that the services performed by Kurchatov
        Institute hereunder will be of professional quality, consistent with
        generally-accepted industry standards and expectations for work of a similar
        nature; and (c) that the services provided to Thorium Power hereunder will
        not
        infringe or misappropriate the patent, copyright, trademark, trade secret
        or
        other intellectual property rights of any third party. 

    

     

    
      	6.	
              COMPLIANCE
                WITH LAWS

            

    

     

    
      	
            	6.1	
              Kurchatov
                Institute shall comply, and shall be responsible for ensuring that
                its
                employees and consultants comply, with all applicable laws in their
                performance of its services pursuant to this Agreement. Without limiting
                the generality of the foregoing, Kurchatov Institute further agrees
                that
                it will take no action, and it will ensure that its employees and
                contractors take no action, that would violate the Foreign Corrupt
                Practices Act of 1977, as amended, or any other similar U.S. or foreign
                law, or that would create any liability for Thorium Power under any
                such
                law. Kurchatov Institute further understands that materials and
                information resulting from the performance of this Agreement may
                be
                subject to U.S. and Russian export control laws and that Kurchatov
                Institute is responsible for its compliance with such laws. Kurchatov
                Institute shall be responsible for developing an internal compliance
                program to ensure compliance by it and its employees and contractors
                with
                all applicable laws.

            

    

    

    
      	
            	6.2	
              Thorium
                Power agrees and covenants that the export product and products made
                using
                the Technical Data:

            

    

    

    
      	
            	a.	
              Shall
                not be used for production of nuclear weapons and other devices or
                any
                other military purpose;

            

    

     

    
      	
            	b.	
              Shall
                be safeguarded using methods of physical protection at the level
                not less
                than that recommended by the International Atomic Energy
                Agency;

            

    

     

    
      	
               

            	c.	
              Shall
                be re-exported or transferred from the jurisdiction of the receiving
                country to any other country only upon the receipt of prior approval
                from
                the Russian Agency for Atomic Energy
                (Rosatom).

            

    

     

    
      
         

      

      
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      RUSSIAN
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      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    

    
      	7.	
              CHOICE
                OF LAW

            

    

     

    This
      Contract shall be governed by, and construed in accordance with, the substantive
      laws of England without reference to its conflict of laws rules.

    

    
      	8.	
              EQUITABLE
                RELIEF

            

    

     

    Kurchatov
      Institute hereby acknowledges and agrees that damages at law may be an
      inadequate remedy for any breach of Kurchatov Institute’s obligations under
      Article 1 (Transfer of Irradiation Testing Data; Assignment of Technical Data
      rights), or Article 2 (Confidentiality and Commercial Secret). Accordingly,
      Kurchatov Institute agrees that Thorium Power will be entitled to such
      temporary, preliminary and permanent injunctive relief as may be necessary
      to
      remedy or limit such breach, without the necessity of proving actual damages
      or
      posting any bond or other security, and including specific performance of such
      obligations and an order enjoining Kurchatov Institute from the continuation
      of,
      or from any threatened, breach of such obligations. The rights set forth in
      this
      paragraph shall be in addition to, and not in lieu of, any other rights which
      Thorium Power may have at law or in equity.

    

    
      	9.	
              AUDIT
                RIGHTS 

            

    

     

    Kurchatov
      Institute will during ordinary business hours and upon reasonable notice give
      Thorium Power and Thorium Power’s representatives access to information and
      documentation set forth in Exhibit 4.

     

    
      	10.	
              HEADINGS

            

    

     

    The
      headings used in this Agreement are included for convenience only and are not
      to
      be used in construing or interpreting this Agreement.

    

    
      	11.	
              NOTICES

            

    

     

    Any
      notices required or permitted to be sent hereunder shall be delivered personally
      or mailed, certified mail, return receipt requested, or delivered by courier
      service to the following addresses, or such other address as any Party hereto
      designates by written notice to the other Party. Provided, however, a
      transmission per telefax or email shall be sufficient and shall be deemed to
      be
      properly served when the telefax or email is received if the signed original
      notice is received by the recipient within seven (7) calendar days
      thereafter.

    

    IF
      TO
      THORIUM POWER:

    

    Thorium
      Power, Inc.

    8300
      Greensboro Drive, Suite 800

    McLean,
      VA 22102 USA

    United
      States of America

    Attention:
      Andrey Mushakov 

    Executive
      Vice President

    Telephone:
      +1.703.918.4919

    Fax
      +1.202.318.2502

    E-Mail:
      mushakov@thoriumpower.com

     

    
      
         

      

      
        Page
          8 of 18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

      

    

    IF
      TO
      KURCHATOV INSTITUTE:

    

    RRC
      “Kurchatov Institute”

    Kurchatov
      Square, 1

    Moscow,
      Russia 123182

    Attention:
      Vladimir Kochetkov

    Tel:+499 196
      99 97

    Email:
      kvp@kiae.ru

    

    
      	12.	
              AMENDMENTS
                OR MODIFICATIONS

            

    

     

    This
      Agreement may not be released, discharged, amended or modified in any manner
      except by an instrument in writing signed by the Party or Parties to be
      bound.

    

    
      	13.	
              FORCE
                MAJEURE

            

    

     

    Neither
      Party shall be liable to the other for delays or failures in performing its
      obligations under this Agreement due directly or indirectly to any act
      reasonably beyond the control of such Party, including but not limited to:
      (i)
      acts of God; (ii) acts (including failures to act or delays in acting) of
      any governmental authority (de jure or de facto), or governmental priorities;
      (iii) accidents or disruptions such as wars (declared or undeclared),
      riots, revolutions, world disturbance, fires, floods, earthquakes, storms,
      sabotage, nuclear incidents, epidemics; or (iv) strikes, labor disputes,
      labor difficulties. The foregoing shall apply even though any of such causes
      exists at the time of this Agreement or occurs after a Party’s performance is
      delayed or otherwise hindered for other causes. In the event of any delay or
      failure excused by this Article 13 (Force Majeure), the Party whose performance
      is delayed shall as soon as practical (1) notify the other Party, (2) take
      all
      reasonable steps to minimize the delay and rectify any failure to perform and
      (3) specify the revised performance date. In the event of such delay, the time
      of performance shall be extended for a period equal to the time lost by reason
      of the delay. If the delay exists for more than six (6) months the Party that
      is
      not subject to delay shall be entitled to terminate this Agreement without
      liability.

    

    
      	14.	
              COUNTERPARTS

            

    

     

    This
      Agreement shall be executed in two original copies in Russian and English.
      At
      the same time, this Agreement may be executed in any number of counterparts,
      each of which shall be an original as against any Party whose signature appears
      thereon, but all of which together constitute but one and the same instrument.
      

    

    
      	15.	
              NO
                THIRD-PARTY BENEFICIARIES 

            

    

     

    Except
      as
      expressly stated herein, nothing in this Agreement is intended to confer
      benefits, rights or remedies unto any third party other than the Parties hereto
      or their permitted successors and assigns. 

    

    
      	16.	
              REPRODUCTION
                OF DOCUMENTS

            

    

     

    This
      Agreement and all documents relating hereto, including, but not limited to,
      (i)
      consents, waivers, amendments and modifications which may hereafter be executed
      and (ii) certificates and other information previously or hereafter furnished,
      may be reproduced by any photographic, photostatic, microfilm, optical disk,
      micro-card, miniature photographic or other similar process. The Parties agree
      that any such reproduction shall be admissible in evidence as the original
      itself in any judicial or administrative proceeding, whether or not the original
      is in existence and whether or not such reproduction was made by a Party in
      the
      regular course of business, and that any enlargement, facsimile or further
      reproduction of such reproduction shall likewise be admissible in
      evidence.

     

    
      
         

      

      
        Page
          9 of 18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    

    
      	17.	
              SURVIVAL

            

    

     

    The
      following listed Articles shall continue and survive the expiration or
      termination of this Agreement: Article 1 (Transfer of Irradiation Testing Data;
      Assignment of Technical Data rights), Article 2 (Confidentiality and Commercial
      Secret), Article 4 (Disclaimers and Limitations of Liability), Article 5
      (Representations and Warranties), Article 6 (Compliance with Laws) and Article
      8
      (Equitable Relief). 

    

    
      	18.	
              SEVERABILITY

            

    

     

    Any
      provisions of this Agreement which are determined to be invalid or unenforceable
      in any jurisdiction shall be ineffective to the extent of such invalidity or
      unenforceability in such jurisdiction, without rendering invalid or
      unenforceable the remaining provisions of this Agreement or affecting the
      validity or enforceability of such provisions in any other jurisdiction. If
      a
      court of competent jurisdiction declares any provision of this Agreement to
      be
      invalid or unenforceable, the Parties hereto shall request that such court
      reduce the scope, duration, or area of the provision, delete specific words
      or
      phrases from the provision, or to replace the provision with a provision that
      is
      valid and enforceable and that comes closest to expressing the original
      intention of the Parties hereto, and this Agreement shall be enforceable as
      so
      modified in the jurisdiction in which the provision was declared invalid or
      unenforceable.

    

    
      	19.	
              TERM.
                

            

    

     

    The
      term
      of this Agreement shall commence on the Effective Date and continue thereafter
      until August 31, 2008 unless terminated early pursuant to Article 20 of this
      Agreement.

     

    
      	20.	
              TERMINATION

            

    

     

    This
      Agreement may be terminated by either Party by giving thirty (30) calendar
      days’
prior written notice of termination to the other Party. 

    
      	
              21.

            	
              DISPUTE
                RESOLUTION

            

    

     

    Any
      dispute, controversy or claim arising out of or in connection with this
      Agreement, or the breach, termination or invalidity thereof (hereinafter
      referred to as “Dispute”), shall be settled by the Parties by means of good
      faith negotiations. Where such good faith negotiations fail within thirty (30)
      days following submission by one Party of a notice of a Dispute to the other
      Party, the Dispute shall be finally settled by arbitration in accordance with
      the Rules of the Arbitration Institute of the Stockholm Chamber of Commerce.
      The
      arbitral tribunal shall be composed of three (3) arbitrators. The place of
      arbitration shall be Stockholm, Sweden. The language to be used in the arbitral
      proceedings shall be English. The arbitration award shall be final and binding
      upon the Parties, their successors and assigns.

    

      
        	22.	
                MISCELLANEOUS

              

      

    

     

    
      	
            	22.1.	
              Independent
                Contractor Status. Kurchatov Institute shall not be considered an
                employee
                of Thorium Power and shall not be entitled to participate in or receive
                any benefits or rights as an employee of Thorium Power under any
                employee
                benefit and welfare plans, including, without limitation, employee
                insurance, pension, savings and security plans (each, a “Plan”). In
                addition, even if Kurchatov Institute’s status is ultimately
                recharacterized by a third party to constitute employee status, Kurchatov
                Institute shall not be eligible to participate in or receive any
                benefits
                or rights as an employee of Thorium Power under any Plan unless and
                until
                Thorium Power consents to such eligibility in writing. Without limiting
                the generality of the foregoing, Kurchatov Institute shall not be
                considered an employee of Thorium Power for purposes of any state
                or
                federal laws relating to unemployment insurance, social security,
                workers
                compensation or any regulations which may impute any obligation or
                liability to Thorium Power reason of an employment relationship.
                Kurchatov
                Institute agrees to pay all income, payroll, and other taxes or levies
                imposed by any governmental authority on any compensation that Kurchatov
                Institute receives under this Agreement. Kurchatov Institute shall
                indemnify, defend and hold harmless Thorium Power and its officers
                and
                employees from and against any and all losses, damages, liabilities,
                obligations, judgments, penalties, fines, awards, costs, expenses
                and
                disbursements (including without limitation, the costs, expenses
                and
                disbursements, as and when incurred, of investigating, preparing
                or
                defending any claim, action, suit, proceeding or investigation) suffered
                or incurred by Thorium Power as a result of any allegation that Kurchatov
                Institute is an employee of Thorium Power by virtue of performing
                any work
                for or on behalf of Thorium Power hereunder or otherwise. This Agreement
                shall not be construed as authority for Kurchatov Institute to act
                as
                Thorium Power’s agent or in any other similar capacity, or to make
                commitments of any kind for the account of or on behalf of Thorium
                Power,
                and Kurchatov Institute shall not take any action suggesting
                otherwise.

            

    

     

    
      
         

      

      
        Page
          10 of
          18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    

    
      	
            	22.2.	
              Assignment.
                Kurchatov Institute recognizes that Thorium Power desires to obtain
                these
                Services for the reasons stated in the Recitals above, and that this
                Agreement is non-transferable. Therefore, Kurchatov Institute may
                not
                assign or transfer this Agreement or any of its rights or obligations
                created hereunder, by operation of law or otherwise, without the
                prior
                written consent of Thorium Power. 

            

    

     

    
      	
              23.

            	
              CONTRACT
                CONSTRUCTION

            

    

     

    
      	
               

            	23.1.	
              Contract
                Construction. For purposes of contract construction, or otherwise,
                this
                Agreement is the product of negotiation and neither Party to it shall
                be
                deemed to be the drafter of this Agreement or any part
                thereof.

            

    

     

    
      	
               

               

            	23.2.	
              Entire
                Agreement. Except as otherwise expressly set forth in this Agreement,
                those documents expressly referred to herein, embody the complete
                agreement and understanding among the Parties, and cancels and supersedes
                any related previous understanding or agreement, whether written
                or oral.
                Notwithstanding the foregoing and for the avoidance of doubt, this
                Section
                23.2 shall not apply to any provisions of that certain Collaborative
                Research Agreement by and between Thorium Power and Kurchatov Institute
                dated August 6, 2002, as amended (the "CRA") that, by their terms,
                survive
                the expiration and termination of the CRA, as provided in Section
                19
                thereof.

            

    

     

    
      	24.	
              LANGUAGE

            

    

     

    This
      Agreement is made in English and Russian. The English and the Russian versions
      of this Agreement are deemed to be identical. If there is any inconsistency
      between the English version and the Russian version, the English version shall
      prevail. 

    [signature
      page follows]

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        Page
          11 of
          18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

      

    

    

    IN
      WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed
      and delivered as of the Effective Date by their duly authorized
      representatives:

    

    

    Thorium
      Power, Inc.

    

    

    By:
      _____________________________________

    

    Name: Andrey
      Mushakov

    Title: Executive
      Vice President

     

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        Page
          12 of
          18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 

      
        

      

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

      

    

    

    Exhibit
      1

    

    Description
      of the 2006-2007 Irradiation Testing Program Parameters and Testing
      Data

    

    [REDACTED]

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        Page
          13 of
          18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

         

      

    

    Exhibit
      2

    

    Assigned
      Technical Data relating to the 2006-2007 Irradiation Testing
      Program

    

    [REDACTED]

     

     

     

     

     

     

     

     

     

     

    
      
         

      

      
        Page
          14 of
          18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

      

    

    Exhibit
      3

    

    

    Acknowledgement

    I
      hereby
      acknowledge that Confidential Information and Commercial Secret Information
      is
      being provided to [name of consultant or subcontractor] pursuant to the terms
      and restrictions of the Collaborative Research Agreement by and between Thorium
      Power, Inc. and RRC “Kurchatov Institute Institute” dated December 28, 2007, and
      I agree not to use or reveal or otherwise communicate to anyone any information
      disclosed to me by Kurchatov Institute Institute. I hereby submit to the
      jurisdiction of the courts of the Stockholm Chamber of Commerce for purposes
      of
      enforcement of this Agreement.

    
 

    
      
        	
                Dated:

              	
                 

              	 	
                Signature:
                  

              	
                 

              
	 	 	 	
                Name:

              	
                 

              
	 	 	 	
                Company:

              	
                 

              
	 	 	 	
                Address:

              	
                 

              

      

    

     

     

     

     

     

     

     

     

     

     

    
 

    
      
         

      

      
        Page
          15 of
          18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

      

    

     

    Exhibit
      4

     

    Information
      and documentation relating to the 2006-2007 Irradiation Testing Program
      accessible by Thorium Power or its representatives for audit purposes pursuant
      to Article 9 of this Agreement

    

    [REDACTED]

     

    
      
         

      

      
        Page
          16 of
          18

        
          

        

      

      
         

      

    

    
      RUSSIAN
        TRANSLATION OMITTED 
        
          

        

      Agreement
        for Ampoule Irradiation Testing in 2006-2007
        between Thorium Power, Inc. and RRC “Kurchatov Institute Institute” dated
        December 28, 2007

        
          

        

      

    

     

    Exhibit
      5

     

    The
      form of protocol

    Results
      for testing of trial blanket and seed rods in channels of the IR-8 research
      reactor

    

    [REDACTED]

     

    
      
         

      

      
        Page
          17 of
          18Exhibit
      10.1

    

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

    

    SUBLICENSE
      AGREEMENT

    

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        1

        
          

        

      

      
        
        

      

    

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

    

    ARTICLE
      1. DEFINITIONS

    

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

     

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

     

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

     

    1.3 "Compound"
      means ferric citrate: FeC6H5O7•
      xH2O
      

     

    1.4 ***** 

     

    1.5  “Field”
      means the field of nephrology.

     

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

     

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

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

    
      	 	
              i)

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

            

    

    
      	 	
              ii)

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

            

    

    
      	 	
              iii)

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

            

    

    
      	 	
              iv)

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

            

    

     

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

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

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

    

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

     

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

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

    1.16 “Sublicense
      Territory” means Japan.

     

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

     

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

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    ARTICLE
      2. REPRESENTATIONS AND WARRANTIES

    

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

     

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

     

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

     

    (b) it
      has
      the right,
      to enter
      into this Agreement and to grant the sublicense granted herein,
      and
      there is
      nothing
      in any
      Third Party agreement Sublicensor has directly or indirectly entered into as
      of
      the Effective Date, which in any way, will limit the ability of Sublicensor
      to
      perform any and all of the obligations undertaken by Sublicensor hereunder
      other
      than the provisions of the Panion
      License
      Agreement,
      the Hsu
      License Agreement
      and the
GloboAsia
      License Agreement that
      have
      been previously disclosed to Sublicensee;

     

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

     

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

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    ARTICLE
      3. LICENSE GRANT AND GOVERNANCE

    

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

     

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

     

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

     

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

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

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

     

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

     

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

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

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

     

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

     

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

    
      
        
        

      

      
        12

        
          

        

      

      
        
        

      

    

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

     

    ARTICLE
      4. LICENSE FEE; MILESTONE PAYMENTS

    

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

     

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

     

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

     

    *****.

     

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

     

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

     

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

     

    (c)
      Within thirty (30) days following filing of a first
      marketing
      approval application to
      MHLW
in
      the
      Sublicense Territory:
      seven
      million dollars ($7,000,000); and

     

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

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

    
      
        
        

      

      
        13

        
          

        

      

      
        
        

      

    

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

    

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

     

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

     

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

     

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

     

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

     

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

     

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

    

    ARTICLE
      5. ROYALTIES

    

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

    
      
        
        

      

      
        14

        
          

        

      

      
        
        

      

    

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

    

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

     

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

     

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

     

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

     

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

     

    5.3  Royalty
      Withheld
      due
      to Invalid Claims.
      In the
      event that all applicable claims of a patent included within the Patent Rights
      under which Sublicensee is paying a royalty according to Section 5.1 shall
      be
      held invalid or unenforceable by a court of competent jurisdiction in
the
      Sublicense
      Territory, Sublicensee may withhold payments of royalties which would otherwise
      have been due on Net Sales in the
      Sublicense Territory
      by
      reason of Sections
      4.3 and
      5.1
      until such judgment shall be finally reviewed by an unappealed or unappealable
      decree of a higher court of competent jurisdiction in the Sublicense Territory.
      The Sublicensee shall promptly repay Sublicensor any withheld royalty
      payments upon
      a
      final adjudication that the applicable claims of a patent included within the
      Patent Rights under which Sublicensee is paying a royalty under Section 5.1
      are
      valid and enforceable. For
      clarification, the aforementioned withheld royalty shall not bear any interest
      thereon.

    
      
        
        

      

      
        15

        
          

        

      

      
        
        

      

    

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

    

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

     

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

    
      
        
        

      

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

    

    ARTICLE
      6. ROYALTY REPORTS AND ACCOUNTING

    

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

    
      
        
        

      

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

     

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

     

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

     

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

    
      
        
        

      

      
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    ARTICLE
      7. CLINICAL, PRE-CLINICAL, REGULATORY

     

    AND
      COMMERCIAL DEVELOPMENT

    

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

     

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

     

    7.3 Regulatory
      Matters.
      

     

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

    
      
        
        

      

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

     

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

     

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

     

    7.3.2 Assistance
      by Sublicensee.
      

     

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

    
      
        
        

      

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

     

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

     

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

    
      
        
        

      

      
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    7.4 Commercial
      Matters.
      Subject
      to the provisions
      of Section
      3.9,
      Sublicensee shall have sole responsibility for all activities and costs
      associated with marketing, advertising, promoting and selling the Products
      in
      the Sublicense Territory. Sublicensee shall use its commercially reasonable
      efforts
      to market and sell the Product in the Sublicense Territory, in order to maximize
      Net Sales. Without limiting Sublicensee’s commercially reasonable efforts
      obligation under this Section 7.4, Sublicensee shall (a) apply for all required
      authorizations, including pricing and reimbursement, from Regulatory Authorities
      in the Sublicense Territory as soon as reasonably and commercially practicable
      following completion of all appropriate clinical trials; and (b) make the first
      commercial sale of the Product in the Sublicense Territory as soon as reasonably
      and commercially practicable following the issuance of the marketing
      authorizations required for the manufacturing, distribution, marketing, sale
      and
      use of the Product in the Sublicense Territory and
      the
      completion of NHI
      (National Health Insurance) price listing.

     

    7.5 Indications
      Outside the Field.
      

     

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

     

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

    
      
        
        

      

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

     

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

     

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

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

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

     

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

    
      
        
        

      

      
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    ARTICLE
      8. PATENT PROSECUTION

    

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

    
      
        
        

      

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

     

    8.2 Improvements
      and Use of Development Data.
      

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

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

     

    
      
        
        

      

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

    

     

    ARTICLE
      9. INFRINGEMENT

    

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

     

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

    
      
        
        

      

      
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    ARTICLE
      10. MANUFACTURE & SUPPLY

    

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

     

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

    
      
        
        

      

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

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

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

    
      
        
        

      

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

     

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

     

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

    
      
        
        

      

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

    

    ARTICLE
      11. NON-COMPETITION

    

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

     

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

    

    ARTICLE
      12. FOLLOW-ON PRODUCTS

    

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

    
      
        
        

      

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

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

     

    ARTICLE
      13. PRICING

     

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

     

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

    
      
        
        

      

      
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    ARTICLE
      14. INDEMNIFICATION

     

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

     

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

    
      
        
        

      

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

     

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

    
      
        
        

      

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

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

     

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

     

    ARTICLE
      15. CONFIDENTIALITY

    

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

    
      
        
        

      

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

     

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

     

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

     

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

     

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

     

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

     

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

    
      
        
        

      

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

     

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

    
      
        
        

      

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

     

    15.8 Permitted
      Disclosures.
      

     

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

     

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

     

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

    

    ARTICLE
      16. TERM AND TERMINATION

    

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

    
      
        
        

      

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

     

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

     

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

     

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

     

    16.2 Termination
      by Sublicensee.
      

     

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

     

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

     

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

     

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

     

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

     

    
      
        
        

      

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

     

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

     

    16.4 Rights
      Following Termination.
      

     

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

     

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

     

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

    
      
        
        

      

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

     

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

    
      
        
        

      

      
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    ARTICLE
      17. ASSIGNMENT

    

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

    

    ARTICLE
      18 PATENT MARKINGS

    

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

     

    ARTICLE
      19. ARBITRATION

    

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

    
      
        
        

      

      
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    ARTICLE
      20. PATENT TERM EXTENSION

    

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

    

    ARTICLE
      21. FORCE MAJEURE

    

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

     

    ARTICLE
      22. NEGATION OF AGENCY

     

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

    
      
        
        

      

      
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    ARTICLE
      23. PUBLICITY

    

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

     

    ARTICLE
      24. FILING OF THE AGREEMENT

     

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

    
      
        
        

      

      
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    ARTICLE
      25. SEVERABILITY

    

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

    

    ARTICLE
      26. NOTICES

    

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

    

    In
      the
      case of Sublicensor:

     

    Keryx
      Biopharmaceuticals, Inc

    750
      Lexington Ave, 20th
      Floor

    New
      York,
      NY 10022 U.S.A.

    Attn:
      Beth F. Levine, General Counsel

    Fax:
      1-212-531-5961

    Email:
      blevine@keryx.com

    

    In
      the
      case of Sublicensee:   

     

    Japan
      Tobacco Inc.

    JT
      Building, 2-1, Toranomon 2-Chome

    Minato-ku,
      Tokyo 105-8422, Japan

    Attn:
       Vice
      President, Pharmaceutical Business Development

    Fax:
       81-3-5572-1449

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

    
      
        
        

      

      
        52

        
          

        

      

      
        
        

      

    

    

    and

     

    Torii
      Pharmaceutical Co., Ltd.

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

    Chuo-ku,
      Tokyo 103-8439, Japan

    Attn:
       General
      Manager, Business Development Dept.

    Fax: 81-3-5203-7334 

    Email:
      kiyoshi.sato@torii.co.jp

    

    with
      a
      copy to:

     

    Holland
      & Knight LLP

    195
      Broadway

    New
      York,
      NY 10007 U.S.A.

    Attn:
      Neal Beaton, Esq.

             
      Fax: 1-212-341-7103 

             
      Email: neal.beaton@hklaw.com

    

    ARTICLE
      27. GOVERNING LAW

    

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

    

    ARTICLE
      28. AFFILIATES

    

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

    
      
        
        

      

      
        53

        
          

        

      

      
        
        

      

    

    ARTICLE
      29. ENTIRE AGREEMENT

    

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

    

    ARTICLE
      30. WAIVER

    

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

    

    ARTICLE
      31. CAPTIONS

    

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

    
      
        
        

      

      
        54

        
          

        

      

      
        
        

      

    

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

    

    
      	
              KERYX
                BIOPHARMACEUTICALS, INC. 

            	 	
              JAPAN
                TOBACCO INC.

            
	
               

            	 	
               

            	
               

            
	
              By:  
                

            	
              /s/
                Michael S. Weiss

            	 	
              By:  
                

            	
              /s/
                Noriaki Okubo

            
	
               

            	
              Michael
                S. Weiss

            	 	
               

            	
              Noriaki
                Okubo

            
	
               

            	
              Chairman
                and Chief Executive Officer

            	 	
               

            	
              President,
                Pharmaceutical Business

            

    

     

    
      	
              TORII
                PHARMACEUTICAL CO., LTD.

            
	
               
                 

            
	
              By:  
                

            	
              /s/
                Norihiko Matsuo

            
	
               

            	
              Norihiko
                Matsuo

            
	
               

            	
              President
                and Representative Director

            

    

    
      
        
        

      

      
        55

        
          

        

      

      
        
        

      

    

    

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

    

     

    List
      of Exhibits

     

    Exhibit
      1: List of Patent and Patent Applications

     

    Exhibit
      2: *****

     

    Exhibit
      3: Preliminary Timelines for the Development Program

    
      
        
        

      

      
        56

        
          

        

      

      
        
        

      

    

     

    [Exhibit
      1] List of Patent and Patent Applications

    

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

    

    Patent
      Dkt#859 (KWOK et
      al.,
      2004) 
      
        

      

    

    
      	
              DOCKET
                #

            	 	
              MATTER

            	 	
              NOTE

            
	
              Dkt.
                #859-PCT-JP

            	 	
              FERRIC
                ORGANIC COMPOUNDS, USES THEREOF AND METHODS OF MAKING
                SAME

            	 	
              PENDING

            
	 	 	
              Japanese
                App’l No. 2006-503637, Filed August 18, 2005, National Stage App’l of
                Int’l App’l No. PCT/US2004/004646, filed February 18, 2004, claiming
                priority of U.S. Serial No. 60/447,690, filed February 19, 2003 and
                U.S.
                Serial No. 60/462,684, filed April 15, 2003

            	 	
              § February
                27, 2006:

                
                Received  

                
                “Notification of 

                 Application
                

                 
                Number”

              § September
                22, 2006: 

                 Publication
                No.

                
                2006-518391,
                

                
                Publication Date: 

                
                August 10, 2006

              § April
                25, 2007: Filed 

                 
                “Request for 

                  Examination”

            
	 	 	
              Inventors:
                David W.K. KWOK and Nikolay Mintchev STOYNOV

              Applicant:
                GloboAsia

            	 	 

    

     

    Patent
      Dkt#1092 (HSU, 1997) 
      
        

      

    

    
      	
              DOCKET
                #

            	 	
              MATTER

            	 	
              NOTE

            
	
              Dkt.
                #1092-PCT-JP

            	 	
              METHOD
                FOR TREATING RENAL FAILURE

            	 	
              PENDING

            
	 	 	
              Japanese
                App’l No. 10-527705, Filed June 15, 1999, National Stage App’l of Int’l
                App’l No. PCT/US97/20977, filed November 14, 1997, which is a continuation
                of U.S. Serial No. 08/794,328, filed February 3, 1997, and U.S. Serial
                No.
                60/032,745, filed December 16, 1996

            	 	
              § December
                13, 2006: 

                
                Received “Office
                

                
                Action 11.13.06”

              § June
                7, 2007: Filed 

                
                “Response
                to 

                
                Office Action”

            
	
               

              Dkt.
                #1092-Z-PCT-JP

              (Divisional)

            	 	
               

              Japanese
                App’l No. 2007-133978, filed May 21, 2007 which is a divisional app’l of
                Japanese App’l No. 10-527705, Filed June 15, 1999, National Stage App’l of
                Int’l App’l No. PCT/US97/20977, filed November 14, 1997, which is a
                continuation of U.S. Serial No. 08/794,328, filed February 3, 1997,
                and
                U.S. Serial No. 60/032,745, filed December 16, 1996 Applicant: Chen
                Hsing
                HSU

            	 	
               

              § June
                12, 2007: 

                
                Received “Filed
                

                
                application”

              § August
                10, 2007: 

                 
                Received “Request
                

                  
                for Examination”
                and 

                 
                claims need 

                  to
                be
                Amended
                to

                 
                distinguish from

                  parent
                patent 

                 
                application.

            

    

     

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

    
      
        
        

      

      
        57

        
          

        

      

      
        
        

      

    

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

    [Exhibit
      2-A] *****

    
      
        
        

      

      
        58

        
          

        

      

      
        
        

      

    

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

    [Exhibit
      2-B] *****

    
      
        
        

      

      
        59

        
          

        

      

      
        
        

      

    

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

    [Exhibit
      3] Preliminary Timelines for the Development Program

    

    *****

    
      
        
        

      

      
        60

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