Document:

Exhibit 10.1

 

OPTIMER PHARMACEUTICALS, INC.

 

AMENDED AND RESTATED SEVERANCE BENEFIT PLAN

 

Section 1.              INTRODUCTION.

 

The
Optimer Pharmaceuticals, Inc. Amended
and Restated Severance Benefit Plan (the “Plan”)
was established effective May 5, 2010 (the “Effective
Date”) and amends and restates in its entirety the Optimer
Pharmaceuticals, Inc. Severance Benefit Plan established effective
October 2, 2008 (the “Prior Plan”).  The purpose of the Plan is to provide for the
payment of severance benefits to certain eligible employees of Optimer
Pharmaceuticals, Inc. (the “Company”) whose employment with the Company is terminated in a covered
termination and who meet the eligibility criteria set forth in Section 2(a)
below.  This document constitutes the
written instrument under which the Plan is maintained and supersedes any prior
plan or practice of the Company or any written agreement between the Company
and any employee that provides for payments or benefits in the event of
termination of employment or a change in control of the Company, including but
not limited to the Prior Plan, except to the extent such written agreement
expressly contemplates that such persons are eligible to receive benefits
additional to or in lieu of those provided under the Plan.  This Plan document also is the Summary Plan
Description for the Plan.

 

Section 2.              ELIGIBILITY
FOR BENEFITS.

 

(a)           General
Rules.  Subject to the requirements set
forth in this Section, the Company will grant severance benefits under the Plan
to Eligible Employees.

 

(1)           Definition
of “Eligible Employee.”  For
purposes of this Plan, an Eligible Employee is a full-time or a part-time
regular hire employee of the Company who is notified by the Company in writing
that he or she is eligible for participation in the Plan and (i) whose
employment is terminated in a Covered Termination (as defined further in
Section 2(c) below) provided that the employee has been continuously employed
by the Company for at least one hundred eighty (180) days; or (ii) who is
selected by the Plan Administrator in its sole discretion to receive the
benefits set forth herein.  The
determination of whether an employee is an Eligible Employee shall be made by
the Company, in its sole discretion, and such determination shall be binding
and conclusive on all persons.  For
purposes of this Plan, part-time employees are those regular hire employees who
are regularly scheduled to work more than twenty (20) hours per week but less
than a full-time work schedule.  Regular
hire employees working twenty (20) hours per week or less and temporary
employees are not eligible for severance benefits under the Plan.

 

(2)           In order to be
eligible to receive any benefits under the Plan, an Eligible Employee who is
terminated in a Covered Termination must remain on the job until his or her
date of termination as scheduled by the Company, which may not exceed thirty
(30) days from the date of any notification of termination.

 

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(3)           In order to be
eligible to receive any benefits under the Plan, an Eligible Employee also must
execute a general waiver and release in substantially the form attached hereto
as Exhibit A, Exhibit B or Exhibit C, as appropriate, and such release must
become effective in accordance with its terms. 
The Company, in its discretion, may modify the form of the required
release to comply with applicable law and shall determine the form of the
required release, which may be incorporated into a termination agreement or
other agreement with the Eligible Employee.

 

(b)           Exceptions
to Benefit Entitlement.  An
employee, including an employee who otherwise is an Eligible Employee, will not
receive benefits under the Plan (or will receive reduced benefits under the
Plan) in the following circumstances, as determined by the Company in its sole
discretion:

 

(1)           The employee
has executed an individually negotiated employment contract or agreement with
the Company relating to severance benefits that is in effect on his or her
termination date, in which case such employee’s severance benefit, if any,
shall be governed by the terms of such individually negotiated employment
contract or agreement and shall be governed by this Plan only to the extent
that the reduction pursuant to Section 3(c) below does not entirely eliminate
benefits under this Plan.

 

(2)           The employee
voluntarily terminates employment with the Company for any reason not
constituting a Constructive Termination. 
Voluntary terminations include, but are not limited to, resignation,
retirement or failure to return from a leave of absence on the scheduled date.

 

(3)           The employee is
offered an identical or substantially equivalent or comparable position with
the Company or an affiliate of the Company. 
For purposes of the foregoing, a “substantially equivalent or comparable
position” is one that offers the employee substantially the same level of
responsibility and compensation and does not require a relocation of the
employee’s place of employment by more than thirty (30) miles from its previous
location.

 

(4)           The employee is
offered immediate reemployment by a successor to the Company or an affiliate of the Company or by a
purchaser of its assets, as the case may be, following a change in ownership of
the Company or a sale of substantially all of the assets of a division or
business unit of the Company.  For
purposes of the foregoing, “immediate reemployment” means that the employee’s
employment with the successor to the Company or an affiliate of the Company or the purchaser of its assets, as
the case may be, results in uninterrupted employment such that the employee
does not incur a lapse in pay as a result of the change in ownership of the
Company or the sale of its assets.

 

(5)           The employee is
rehired by the Company or an affiliate of the Company prior to the date
benefits under the Plan are scheduled to commence.

 

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(6)           The employee
does not confirm in writing that he or she is and shall remain subject to the
Company’s Proprietary Information and Inventions Agreement, including the
failure to sign a termination statement under such Agreement.

 

(7)           Following
notification of involuntary termination by the Company, the employee does not
satisfactorily perform his or her assigned job duties until the date set by the
Company for the termination of employment.

 

(8)           The employee
terminates employment due to the employee’s death or Disability.

 

(c)           Definitions:
 For purposes of this Plan, the
following terms shall have the meanings set forth below:

 

(1)           “Base Salary” means the Eligible
Employee’s base pay (excluding incentive pay, premium pay, commissions,
overtime, bonuses and other forms of variable compensation), at the rate in
effect during the last regularly scheduled payroll period immediately preceding
the Eligible Employee’s termination date. 
For any Eligible Employees that are regular part-time employees, “Base
Salary” shall mean the pro-rata equivalent of the Eligible Employee’s base pay
which reflects the part-time status of the Eligible Employee.

 

(2)           “Cause” for termination of employment
means a termination resulting from the occurrence of any of the following
events that has a material negative impact on the business or reputation of the
Company:

 

(i)            the employee’s attempted
commission of, or participation in, a fraud or act of dishonesty against the
Company;

 

(ii)           the employee’s intentional,
material violation of any contract or agreement between the employee and the
Company or of any statutory duty owed to the Company;

 

(iii)         the employee’s unauthorized
use or disclosure of the Company’s confidential information or trade secrets;

 

(iv)          an employee’s intentional
refusal or intentional failure to act in accordance with any lawful and proper
direction or order of his or her superiors;

 

(v)           an employee’s habitual neglect
of the duties of employment;

 

(vi)          an employee’s indictment,
charge, or conviction of a felony or any crime involving moral turpitude, or
participation in any act of theft or dishonesty; or

 

(vii)        the employee’s gross
misconduct.

 

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(3)           “Change of Control” means any of the
following events:

 

(i)            a sale, lease or disposition
of all or substantially all of the assets of the Company; or;

 

(ii)           a merger or consolidation
(in a single transaction or a series of related transactions) of the Company
with or into any other corporation or corporations or other entity, or any
other corporate reorganization, where the stockholders of the Corporation
immediately prior to such event do not retain more than fifty percent (50%) of
the voting power of and interest in the successor entity (excluding any
transactions if the primary purpose of the transaction is to obtain financing
from new or existing investors).

 

The
Board shall have the right to determine whether a Change of Control has
occurred in accordance with the foregoing definition, and its determination
shall be final, binding and conclusive on all persons.

 

(4)           “Constructive Termination” means the
occurrence of one or more of the following events, provided that the Eligible
Employee has first provided written notice to the Company within 90 days of the
first such occurrence of such condition specifying the event(s) constituting
Constructive Termination and specifying that the Eligible Employee intends to
terminate employment not earlier than 30 days after providing such notice, and
the Company (or surviving corporation) has not cured such event(s) within 30
days (or such longer period as may be specified by the Eligible Employee in
such notice) after such written notice is received by the Company (the “Cure Period”), and the Eligible
Employee resigns within 30 days following the end of the Cure Period:

 

(i)            a material diminution in the
Eligible Employee’s authority, duties or responsibilities; or

 

(ii)           the relocation by the
Company of the principle place for the rendering of the Eligible Employee’s
services hereunder to a location that requires a one-way increase in the
Eligible Employee’s driving distance of more than 45 miles; or

 

(iii)         a material reduction by the Company
of annual base compensation, which reduction is not applicable to all of the
Company’s senior executive employees.

 

However,
none of the foregoing will constitute a Constructive Termination to the extent
mutually agreed upon in advance of the occurrence thereof by the Eligible
Employee.

 

(5)           “Covered Termination” means (i) an
involuntary termination of an employee’s employment by the Company other than
for Cause or (ii) a Constructive Termination by an Eligible Employee who is the
CEO or a Company Officer.  A Covered
Termination does not include a termination of employment resulting from such
Eligible Employee’s resignation for any reason not constituting a Constructive
Termination, or due to the Eligible Employee’s death or Disability.

 

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(6)           “Disability”
means the employee is prevented from performing his duties hereunder by
reason of any physical or mental incapacity that results in the employee’s
satisfaction of all requirements necessary to receive benefits under the
Company’s long-term disability plan due to a total disability.  If the Company has no long-term disability
plan in place, “Disability” shall mean a physical or mental disability or
infirmity of the employee, as determined by a physician of recognized standing
selected by the Company, that prevents (or, in the opinion of such physician,
is reasonably expected to prevent) the normal performance of his duties as an
employee of the Company for any continuous period of 180 days, or for 180 days
during any one 12-month period.

 

(7)           “Equity Award” means any stock
option, restricted stock, restricted stock unit, or other equity award to
acquire shares of the Company’s stock. 
Notwithstanding the foregoing, for all purposes of the Plan “Equity Award”
does not include any equity award issued under or held in any plan that is
intended to be qualified under Section 401(a) of the Internal Revenue Code.

 

(8)           “Non-Performance Vesting Equity Award”
means at any given time an Equity Award that is not a Performance Vesting
Equity Award.

 

(9)           “Performance Vesting Equity Award”
means at any given time an Equity Award listed on Appendix C hereto (as may be
amended from time to time by the Company) for which the vesting commencement is
subject to the attainment of performance goals that have not been attained at
such time so that the vesting commencement date for such Equity Award has not
yet occurred.

 

(10)         “Year of Service” means each complete year of
employment in which an Eligible Employee has been employed by the Company.  For purposes of this definition, a year of
employment shall be a 365 day period (or 366 day period in case of a leap year)
that, for the first year of employment, commences on the Eligible Employee’s
date of hire and that, for any subsequent year, commences on an anniversary of
that hire date.  A Year of Service shall
include any leave of absence period that was approved by the Company.

 

Section 3.              AMOUNT
OF BENEFIT.

 

(a)           Severance
Benefits.  Subject to
the exceptions set forth in Section 2(b), Severance benefits under the Plan, if
any, shall be provided to Eligible Employees described in Section 2(a) as
follows:

 

(i)            Eligible Employees that have
less than one Year of Service at the time of the Covered Termination shall
receive the severance benefits described on Appendix A attached hereto.

 

(ii)           Eligible Employees that have
one or more Years of Service at the time of the Covered Termination shall
receive the severance benefits described on Appendix B attached hereto.

 

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(iii)         Severance benefits shall be
provided to an Eligible Employee either under Appendix A or Appendix B, as
applicable, but not both.

 

(b)           Additional
Benefits.  Notwithstanding
the foregoing, the Company may, in its sole discretion, provide benefits in
addition to those benefits set forth in Section 3(a) to Eligible Employees and
the provision of any such benefits to an Eligible Employee shall in no way
obligate the Company to provide such benefits to any other Eligible Employee or
to any other employee, even if similarly situated.

 

(c)           Certain
Reductions.  The Company, in
its sole discretion, shall have the authority to reduce an Eligible Employee’s
severance benefits, in whole or in part, by any other severance benefits, pay
in lieu of notice, or other similar benefits payable to the Eligible Employee
by the Company or an affiliate of the Company that become payable in connection
with the Eligible Employee’s termination of employment pursuant to (i) any
applicable legal requirement, including, without limitation, the Worker
Adjustment and Retraining Notification Act, the California Plant Closing Act,
or any other similar state law, (ii) a written employment or severance
agreement with the Company, or (iii) any Company policy or practice providing
for the Eligible Employee to remain on the payroll for a limited period of time
after being given notice of the termination of the Eligible Employee’s
employment, and the Plan Administrator shall so construe and implement the
terms of the Plan; provided, however, that notwithstanding the foregoing and
any other provision in the Plan to the contrary, such reductions shall in no
event reduce the cash severance benefits provided under this Plan to less than
two (2) weeks of Base Salary.  The Company’s
decision to apply such reductions to the severance benefits of one Eligible
Employee and the amount of such reductions shall in no way obligate the Company
to apply the same reductions in the same amounts to the severance benefits of
any other Eligible Employee, even if similarly situated.  In the Company’s sole discretion, such
reductions may be applied on a retroactive basis, with severance benefits
previously paid being re-characterized as payments pursuant to the Company’s
statutory obligation.

 

(d)           Non-Duplication
of Benefits.  No Eligible
Employee is eligible to receive benefits under this Plan more than one time.

 

(e)           Termination
of Benefits.  With respect
to each Eligible Employee, benefits under this Plan shall terminate immediately
if such Eligible Employee, at any time, violates any material proprietary
information, non-disparagement, confidentiality or non-solicitation obligation
to the Company.

 

(f)            Vesting
Acceleration of Equity Awards. In order to give effect to
any acceleration of vesting of Equity Awards to which an Eligible Employee may
be entitled under this Plan, notwithstanding anything to the contrary set forth
in the Eligible Employee’s Equity Award agreements or the Company’s equity
plans regarding immediate forfeiture of unvested shares upon termination or
service, following an Eligible Employee’s Covered Termination, the shares
subject to any unvested portion of such Eligible Employee’s Equity Awards shall
not be forfeited or returned to the applicable

 

6

 

equity
plan before any vesting acceleration of such Equity Awards provided by this
Plan is finally determined and given effect, if applicable; provided, however,
that nothing in this Section 3(f) prohibits the Company or a successor
organization (or its parent) from causing such Equity Awards to earlier
terminate pursuant to the terms of the applicable equity plan or award
agreements in connection with a Change of Control, merger, acquisition or other
similar corporate transaction where such Equity Awards will terminate and not
be assumed by the successor or acquiring entity.

 

Section 4.              SECTION
409A COMPLIANCE.

 

(a)           Notwithstanding
anything to the contrary set forth herein, any payments and benefits provided
under the Plan (the “Severance Benefits”)
that constitute “deferred compensation” within the meaning of Section 409A of
the Internal Revenue Code of 1986, as amended (the “Code”) and the regulations and other guidance thereunder
and any state law of similar effect (collectively “Section
409A”) shall not commence in connection with an Eligible
Employee’s termination of employment unless and until the Eligible Employee has
also incurred a “separation from service” (as such term is defined in Treasury
Regulation Section 1.409A-1(h) (“Separation From Service”),
unless the Company reasonably determines that such amounts may be provided to
the Eligible Employee without causing the Eligible Employee to incur the
additional 20% tax under Section 409A.

 

(b)           It is intended
that each installment of the Severance Benefits payments provided for in this
Plan is a separate “payment” for purposes of Treasury Regulation Section
1.409A-2(b)(2)(i).  For the avoidance of
doubt, it is intended that payments of the Severance Benefits set forth in this
Plan satisfy, to the greatest extent possible, the exemptions from the
application of Section 409A provided under Treasury Regulation Sections
1.409A-1(b)(4), 1.409A-1(b)(5) and 1.409A-1(b)(9).  However, if the Company (or, if applicable,
the successor entity thereto) determines that the Severance Benefits constitute
“deferred compensation” under Section 409A and the Eligible Employee is, on the
termination of service, a “specified employee” of the Company or any successor
entity thereto, as such term is defined in Section 409A(a)(2)(B)(i) of the
Code, then, solely to the extent necessary to avoid the incurrence of the
adverse personal tax consequences under Section 409A, the timing of the
Severance Benefit payments shall be delayed until the earlier to occur of: (i)
the date that is six months and one day after the Eligible Employee’s
Separation From Service, or (ii) the date of the Eligible Employee’s death
(such applicable date, the “Specified Employee Initial
Payment Date”), the Company (or the successor entity thereto, as
applicable) shall (A) pay to the Eligible Employee a lump sum amount equal to
the sum of the Severance Benefit payments that the Eligible Employee would
otherwise have received through the Specified Employee Initial Payment Date if
the commencement of the payment of the Severance Benefits had not been so
delayed pursuant to this Section and (B) commence paying the balance of the
Severance Benefits in accordance with the applicable payment schedules set
forth in this Plan.

 

(c)           Notwithstanding
anything to the contrary set forth herein, the Eligible Employee shall receive
the Severance Benefits described above, if and only if the Eligible Employee
duly executes and returns to the Company within the applicable time period set
forth therein, but in no event more

 

7

 

than
forty-five days following Separation From Service, a separation agreement
containing the Company’s standard form of release of claims in favor of the
Company (attached to this Agreement as Exhibits A, B and C) and other
standard provisions, including without limitation, those relating to
non-disparagement and confidentiality (the “Separation
Agreement”), and permits the release of claims contained therein
to become effective in accordance with its terms.  Notwithstanding any other payment schedule
set forth in this Plan, none of the Severance Benefits will be paid or
otherwise delivered prior to the effective date of the Separation Agreement.  Except to the extent that payments may be
delayed until the Specified Employee Initial Payment Date pursuant to the
preceding paragraph, on the first regular payroll pay day following the
effective date of the Separation Agreement, the Company will pay the Eligible
Employee the Severance Benefits the Eligible Employee would otherwise have
received under the Plan on or prior to such date but for the delay in payment
related to the effectiveness of the Separation Agreement, with the balance of
the Severance Benefits being paid as originally scheduled.

 

Section 5.              PARACHUTE
PAYMENTS

 

(a)           In the event
that the payments provided herein and benefits otherwise payable to an Eligible
Employee (i) constitute “parachute payments” within the meaning of Section 280G
of the Code, or any comparable successor provisions, and (ii) but for this
Section 5 would be subject to the excise tax imposed by Section 4999 of the
Code, or any comparable successor provisions (the “Excise
Tax”), then such Eligible Employee’s benefits hereunder shall be
either:

 

(i)            provided to such Eligible
Employee in full, or

 

(ii)           provided to such Eligible
Employee as to such lesser extent which would result in no portion of such
benefits being subject to the Excise Tax,

 

whichever
of the foregoing amounts, when taking into account applicable federal, state,
local and foreign income and employment taxes, the Excise Tax, and any other
applicable taxes, results in the receipt by such Eligible Employee, on an
after-tax basis, of the greatest amount of benefits, notwithstanding that all
or some portion of such benefits may be taxable under the Excise Tax (the “Reduced Amount”).  If a reduction in payments or benefits
constituting “parachute payments” is necessary so that the Payment equals the
Reduced Amount, reduction shall occur in the following order:  reduction of cash payments; cancellation of
accelerated vesting of stock awards; reduction of employee benefits.  If acceleration of vesting of stock award
compensation is to be reduced, such acceleration of vesting shall be cancelled
in the reverse order of the date of grant of the Eligible Employee’s stock
awards.

 

(b)           Unless the
Company and such Eligible Employee otherwise agree in writing, any
determination required under this Section 5 shall be made in writing in good
faith by the Company’s independent certified public accountants (the “Accountants”).  For purposes of making the calculations
required by this Section 5, the Accountants may make reasonable assumptions and
approximations concerning applicable taxes and may rely on reasonable, good
faith interpretations concerning the application of the Code, and other
applicable legal authority.  The Company
and such Eligible Employee

 

8

 

shall
furnish to the Accountants such information and documents as the Accountants
may reasonably request in order to make a determination under this Section
5.  The Company shall bear all costs the
Accountants may reasonably incur in connection with any calculations contemplated
by this Section 5.

 

(c)           If, notwithstanding
any reduction described in this Section 5, the IRS determines that such
Eligible Employee is liable for the Excise Tax as a result of the receipt of
the payment of benefits as described above, then such Eligible Employee shall
be obligated to pay back to the Company, within thirty (30) days after a final
IRS determination or in the event that such Eligible Employee challenges the
final IRS determination, a final judicial determination, a portion of the
payment equal to the “Repayment Amount.” 
The Repayment Amount with respect to the payment of benefits shall be
the smallest such amount, if any, as shall be required to be paid to the
Company so that such Eligible Employee’s net after-tax proceeds with respect to
any payment of benefits (after taking into account the payment of the Excise
Tax and all other applicable taxes imposed on such payment) shall be
maximized.  The Repayment Amount with
respect to the payment of benefits shall be zero if a Repayment Amount of more
than zero would not result in such Eligible Employee’s net after-tax proceeds
with respect to the payment of such benefits being maximized.  If the Excise Tax is not eliminated pursuant
to this paragraph, such Eligible Employee shall pay the Excise Tax.

 

(d)                           Notwithstanding any other provision
of this Section 5, if (i) there is a reduction in the payment of benefits as
described in this Section 5, (ii) the IRS later determines that such Eligible
Employee is liable for the Excise Tax, the payment of which would result in the
maximization of such Eligible Employee’s net after-tax proceeds (calculated as
if such Eligible Employee’s benefits had not previously been reduced), and
(iii) such Eligible Employee pays the Excise Tax, then the Company shall pay to
such Eligible Employee those benefits which were reduced pursuant to this
Section 5 contemporaneously or as soon as administratively possible after such
Eligible Employee pays the Excise Tax so that such Eligible Employee’s net
after-tax proceeds with respect to the payment of benefits is maximized.

 

(e)           If an Eligible
Employee either (i) brings any action to enforce such Eligible Employee’s
rights pursuant to this Section 5, or (ii) defends any legal challenge to such
Eligible Employee’s rights hereunder, such Eligible Employee shall be entitled
to recover attorneys’ fees and costs incurred in connection with such action,
regardless of the outcome of such action; provided, however, that in the event
such action is commenced by such Eligible Employee, the court finds the claim
was brought in good faith.

 

Section 6.              IMPACT
ON OTHER EMPLOYEE BENEFITS

 

(a)           Continued Group Health Plan Benefits. 
If the Eligible Employee was enrolled in a
group health plan (e.g., medical,
dental, or vision plan) sponsored by the Company or an affiliate immediately prior
to termination, the Eligible Employee may be eligible to continue coverage
under such group health plan (or to convert to an individual policy), at the
time of the Eligible Employee’s termination of employment, under the
Consolidated Omnibus Budget Reconciliation Act of 1985

 

9

 

(“COBRA”).  The Company will notify the Eligible Employee
of any such right to continue such coverage at the time of termination pursuant
to COBRA.  No provision of this Plan will
affect the continuation coverage rules under COBRA.

 

(b)           Other
Employee Benefits.  All other
benefits (such as life insurance, disability coverage, and 401(k) plan
coverage) terminate as of the Eligible Employee’s termination date (except to
the extent that a conversion privilege may be available thereunder).

 

Section 7.              COMPANY
PROPERTY.

 

(a)           Return
of Company Property.  Except as
provided in Section 7(b) below, an Eligible Employee will not be entitled to
any severance benefit under the Plan unless and until the Eligible Employee
returns all Company Property.  For this
purpose, “Company Property” means all
Company documents (and all copies thereof) and other Company property which the
Eligible Employee had in his or her possession at any time, including, but not
limited to, Company files, notes, drawings records, plans, forecasts, reports,
studies, analyses, proposals, agreements, financial information, research and
development information, sales and marketing information, operational and
personnel information, specifications, code, software, databases,
computer-recorded information, tangible property and equipment (including, but
not limited to, leased vehicles, computers, facsimile machines, mobile
telephones, servers), credit cards, entry cards, identification badges and
keys; and any materials of any kind which contain or embody any proprietary or
confidential information of the Company (and all reproductions thereof in whole
or in part).  As a condition to receiving
benefits under the Plan, Eligible Employees must not make or retain copies,
reproductions or summaries of any such Company property.

 

(b)           Retention
of Certain Company Equipment.  Notwithstanding the provisions of Section
7(a), the Company and an Eligible Employee may agree to allow the Eligible
Employee to retain certain Company equipment (e.g.,
laptops, printers, facsimile machines, copiers, etc.)
(“Company Equipment”) for his or her
personal use following the Eligible Employee’s termination of employment.  As a condition to retaining any Company
Equipment, the Eligible Employee must execute a general waiver and release in
substantially the form attached hereto as Exhibit A, Exhibit B or Exhibit C, as
appropriate, and such release must become effective in accordance with its
terms. The Eligible Employee acknowledges that the Eligible Employee will have
imputed income related to the retention of any Company Equipment.  The Eligible Employee will follow all Company
instructions as to the return and/or deletion of any Company information
contained on the Company Equipment.

 

Section 8.              WITHHOLDING
TAXES AND OFFSETS FOR INDEBTEDNESS.

 

All
payments under the Plan will be subject to applicable withholding for federal,
state and local taxes.  If an Eligible
Employee is indebted to the Company at his or her termination date, the Company
reserves the right to offset any severance payments under the Plan by the
amount of such indebtedness to the extent permitted by applicable laws.  Additionally, if an Eligible Employee is
subject

 

10

 

to
withholding for taxes related to any non-Plan benefits, the Company may offset
any severance payments under the Plan by the amount of such withholding taxes.

 

Section 9.              REEMPLOYMENT.

 

In the event of an Eligible Employee’s reemployment
by the Company or an affiliate of the Company during the period of time in
respect of which severance benefits pursuant to Sections 3(a) and 3(b) have
been paid, the Company, in its sole and absolute discretion, may require such
Eligible Employee to repay to the Company all or a portion of such severance
benefits as a condition of reemployment.

 

Section 10.            RIGHT
TO INTERPRET PLAN; AMENDMENT AND TERMINATION.

 

(a)           Exclusive
Discretion.  The Plan
Administrator (as defined in Section 13(a) herein) shall have the
exclusive discretion and authority to establish rules, forms, and procedures
for the administration of the Plan and to construe and interpret the Plan and
to decide any and all questions of fact, interpretation, definition,
computation or administration arising in connection with the operation of the
Plan, including, but not limited to, the eligibility to participate in the Plan
and amount of benefits paid under the Plan. 
The rules, interpretations, computations and other actions of the Plan
Administrator shall be binding and conclusive on all persons.

 

(b)           Amendment
or Termination.  The Company
reserves the right to amend or terminate this Plan (including Appendix A and
Appendix B) or the benefits provided hereunder at any time; provided, however, that no such amendment or termination
shall adversely affect the right to any unpaid benefit of any Eligible Employee
whose termination date has occurred prior to amendment or termination of the
Plan.  In addition, following a Change of
Control, no such amendment or termination may adversely affect the benefits to
which an employee would become entitled under the Plan as an Eligible Employee
upon a Covered Termination if the Plan had not been so amended or terminated,
without the consent of the affected employee. 
Furthermore, no such amendment or termination may adversely affect the
benefits to which a Company officer would become entitled under the Plan as an
Eligible Employee upon a Covered Termination if the Plan had not been so
amended or terminated, without the consent of such affected officer.  Any action amending or terminating the Plan
shall be in writing and executed by the Chief Executive Officer or Chief
Financial Officer of the Company.

 

Section 11.            NO
IMPLIED EMPLOYMENT CONTRACT.

 

The
Plan shall not be deemed (i) to give any employee or other person any
right to be retained in the employ of the Company or (ii) to interfere
with the right of the Company to discharge any employee or other person at any
time, with or without cause, which right is hereby reserved.

 

11

 

Section 12.            LEGAL
CONSTRUCTION.

 

This
Plan is intended to be governed by and shall be construed in accordance with
the Employee Retirement Income Security Act of 1974 (“ERISA”)
and, to the extent not preempted by ERISA, the laws of the State of California
(without regard to principles of conflict of laws).

 

Section 13.            CLAIMS, INQUIRIES
AND APPEALS.

 

(a)           Applications
for Benefits and Inquiries.  Any application for benefits, inquiries about
the Plan or inquiries about present or future rights under the Plan must be
submitted to the Plan Administrator in writing by an applicant (or his or her
authorized representative).  The Plan
Administrator is:

 

Optimer Pharmaceuticals, Inc.

 

Attn:  Director of Human Resources

 

10110 Sorrento Valley Road, Suite C

 

San Diego, CA  92121

 

(b)           Denial
of Claims.  In the event
that any application for benefits is denied in whole or in part, the Plan
Administrator must provide the applicant with written or electronic notice of
the denial of the application, and of the applicant’s right to review the
denial.  Any electronic notice will
comply with the regulations of the U.S. Department of Labor.  The notice 
of denial will be set forth in a manner designed to be understood by the
applicant and will include the following:

 

(1)           the specific
reason or reasons for the denial;

 

(2)           references to
the specific Plan provisions upon which the denial is based;

 

(3)           a description
of any additional information or material that the Plan Administrator needs to
complete the review and an explanation of why such information or material is
necessary; and

 

(4)           an explanation
of the Plan’s review procedures and the time limits applicable to such
procedures, including a statement of the applicant’s right to bring a civil
action under Section 502(a) of ERISA following a denial on review of
the claim, as described in Section 11(d) below.

 

This
notice of denial will be given to the applicant within ninety (90) days after
the Plan Administrator receives the application, unless special circumstances
require an extension of time, in which case, the Plan Administrator has up to
an additional ninety (90) days for processing the

 

12

 

application.  If an extension of time for processing is
required, written notice of the extension will be furnished to the applicant
before the end of the initial ninety (90) day period.

 

This
notice of extension will describe the special circumstances necessitating the
additional time and the date by which the Plan Administrator is to render its
decision on the application.

 

(c)           Request
for a Review.  Any person
(or that person’s authorized representative) for whom an application for
benefits is denied, in whole or in part, may appeal the denial by submitting a
request for a review to the Plan Administrator within sixty (60) days after the
application is denied.  A request for a
review shall be in writing and shall be addressed to:

 

Optimer Pharmaceuticals, Inc.

 

Attn:  Director of Human Resources

 

10110 Sorrento Valley Road, Suite C

 

San Diego, CA  92121

 

A
request for review must set forth all of the grounds on which it is based, all
facts in support of the request and any other matters that the applicant feels
are pertinent.  The applicant (or his or
her representative) shall have the opportunity to submit (or the Plan
Administrator may require the applicant to submit) written comments, documents,
records, and other information relating to his or her claim.  The applicant (or his or her representative)
shall be provided, upon request and free of charge, reasonable access to, and
copies of, all documents, records and other information relevant to his or her
claim.  The review shall take into
account all comments, documents, records and other information submitted by the
applicant (or his or her representative) relating to the claim, without regard
to whether such information was submitted or considered in the initial benefit
determination.

 

(d)           Decision
on Review.  The Plan
Administrator will act on each request for review within sixty (60) days after
receipt of the request, unless special circumstances require an extension of
time (not to exceed an additional sixty (60) days), for processing the request
for a review.  If an extension for review
is required, written notice of the extension will be furnished to the applicant
within the initial sixty (60) day period. 
This notice of extension will describe the special circumstances
necessitating the additional time and the date by which the Plan Administrator
is to render its decision on the review. 
The Plan Administrator will give prompt, written or electronic notice of
its decision to the applicant. Any electronic notice will comply with the
regulations of the U.S. Department of Labor. 
In the event that the Plan Administrator confirms the denial of the
application for benefits in whole or in part, the notice will set forth, in a
manner calculated to be understood by the applicant, the following:

 

(1)           the specific
reason or reasons for the denial;

 

(2)           references to
the specific Plan provisions upon which the denial is based;

 

13

 

(3)           a statement
that the applicant is entitled to receive, upon request and free of charge,
reasonable access to, and copies of, all documents, records and other
information relevant to his or her claim; and

 

(4)           a statement of
the applicant’s right to bring a civil action under Section 502(a) of
ERISA.

 

(e)           Rules and
Procedures.  The Plan
Administrator will establish rules and procedures, consistent with the
Plan and with ERISA, as necessary and appropriate in carrying out its
responsibilities in reviewing benefit claims. 
The Plan Administrator may require an applicant who wishes to submit
additional information in connection with an appeal from the denial of benefits
to do so at the applicant’s own expense.

 

(f)            Exhaustion
of Remedies.  No legal
action for benefits under the Plan may be brought until the applicant
(i) has submitted a written application for benefits in accordance with
the procedures described by Section 13(a) above, (ii) has been
notified by the Plan Administrator that the application is denied,
(iii) has filed a written request for a review of the application in
accordance with the appeal procedure described in Section 13(c) above,
and (iv) has been notified that the Plan Administrator has denied the
appeal.  Notwithstanding the foregoing,
if the Plan Administrator does not respond to a applicant’s claim or appeal
within the relevant time limits specified in this Section 13, the
applicant may bring legal action for benefits under the Plan pursuant to Section 502(a) of
ERISA.

 

Section 14.            BASIS
OF PAYMENTS TO AND FROM PLAN.

 

The
Plan shall be unfunded, and all cash payments under the Plan shall be paid only
from the general assets of the Company. 
An Eligible Employee’s right to receive payments under the Plan is no
greater than that of the Company’s unsecured general creditors.  Therefore, if the Company were to become
insolvent, the Eligible Employee might not receive benefits under the Plan.

 

Section 15.            OTHER
PLAN INFORMATION.

 

(a)           Employer
and Plan Identification Numbers. The Employer Identification
Number assigned to the Company (which is the “Plan
Sponsor” as that term is used in ERISA) by the Internal Revenue
Service is 33-0830300.  The Plan Number
assigned to the Plan by the Plan Sponsor pursuant to the instructions of the
Internal Revenue Service is  511.

 

(b)           Ending
Date for Plan’s Fiscal Year and Type of Plan.  The date of the end of the fiscal year for
the purpose of maintaining the Plan’s records is December 31.  The Plan is a welfare benefit plan.

 

(c)           Agent
for the Service of Legal Process.  The agent for the service of legal process
with respect to the Plan is:

 

14

 

Optimer Pharmaceuticals, Inc.

 

Attn:  Director of Human
Resources

 

10110 Sorrento Valley Road, Suite C

 

San Diego, CA  92121

 

(d)           Plan
Sponsor and Administrator.  The Plan Sponsor and the “Plan Administrator” of the Plan is:

 

Optimer Pharmaceuticals, Inc.

 

Attn:  Director of Human
Resources

 

10110 Sorrento Valley Road, Suite C

 

San Diego, CA  92121

 

The Plan Sponsor’s and Plan Administrator’s
telephone number is (858) 909-0736.  The
Plan Administrator is the named fiduciary charged with the responsibility for
administering the Plan.

 

Section 16.            STATEMENT
OF ERISA RIGHTS.

 

Participants
in this Plan are entitled to certain rights and protections under ERISA.  If you are an Eligible Employee, you are
considered a participant in the Plan and, under ERISA, you are entitled to:

 

(a)           Receive
Information About Your Plan and Benefits

 

(1)           Examine,
without charge, at the Plan Administrator’s office and at other specified
locations, such as worksites, all documents governing the Plan and a copy of
the latest annual report (Form 5500 Series), if applicable, filed by the
Plan with the U.S. Department of Labor and available at the Public Disclosure Room of
the Employee Benefits Security Administration;

 

(2)           Obtain, upon
written request to the Plan Administrator, copies of documents governing the
operation of the Plan and copies of the latest annual report (Form 5500
Series), if applicable, and an updated (as necessary) Summary Plan
Description.  The Administrator may make
a reasonable charge for the copies; and

 

(3)           Receive a
summary of the Plan’s annual financial report, if applicable.  The Plan Administrator is required by law to
furnish each participant with a copy of this summary annual report.

 

15

 

(b)           Prudent Actions by Plan Fiduciaries.  In addition to creating rights for Plan
participants, ERISA imposes duties upon the people who are responsible for the
operation of the employee benefit plan. 
The people who operate the Plan, called “fiduciaries” of the Plan, have
a duty to do so prudently and in the interest of you and other Plan
participants and beneficiaries.  No one,
including your employer, your union or any other person, may fire you or
otherwise discriminate against you in any way to prevent you from obtaining a
Plan benefit or exercising your rights under ERISA.

 

(c)           Enforce Your Rights.  If your claim
for a Plan benefit is denied or ignored, in whole or in part, you have a right
to know why this was done, to obtain copies of documents relating to the
decision without charge, and to appeal any denial, all within certain time
schedules as set forth in detail in Section 13 herein.

 

Under
ERISA, there are steps you can take to enforce the above rights.  For instance, if you request a copy of Plan
documents or the latest annual report from the Plan, if applicable, and do not
receive them within 30 days, you may file suit in a Federal court and you are
not required to follow the claims procedure set forth in Section 13
herein.  In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to $110
a day until you receive the materials, unless the materials were not sent
because of reasons beyond the control of the Plan Administrator.

 

If
you have completed the claims and appeals procedure described in Section 11
and have a claim for benefits which is denied or ignored, in whole or in part,
you may file suit in a state or Federal court.

 

If
you are discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a Federal
court.  The court will decide who should
pay court costs and legal fees.  If you
are successful, the court may order the person you have sued to pay these costs
and fees.  If you lose, the court may
order you to pay these costs and fees, for example, if it finds your claim is
frivolous.

 

(d)           Assistance with Your Questions.  If you have any
questions about the Plan, you should contact the Plan Administrator.  If you have any questions about this
statement or about your rights under ERISA, or if you need assistance in
obtaining documents from the Plan Administrator, you should contact the nearest
office of the Employee Benefits Security Administration, U.S. Department of
Labor, listed in your telephone directory or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications
about your rights and responsibilities under ERISA by calling the publications
hotline of the Employee Benefits Security Administration or accessing its
website at http://www.dol.gov/ebsa/.

 

16

 

Section 17.            GENERAL
PROVISIONS.

 

(a)           Notices.  Any notice, demand or
request required or permitted to be given by either the Company or an Eligible
Employee pursuant to the terms of this Plan shall be in writing and shall be
deemed given when delivered personally or deposited in the U.S. mail, First Class with
postage prepaid, and addressed to the parties, in the case of the Company, at
the address set forth in Section 15(d) and, in the case of an
Eligible Employee, at the address as set forth in the Company’s employment file
maintained for the Eligible Employee as previously furnished by the Eligible
Employee or such other address as a party may request by notifying the other in
writing.

 

(b)           Transfer
and Assignment.  The rights and
obligations of an Eligible Employee under this Plan may not be transferred,
assigned or alienated.  This Plan shall
be binding upon any surviving entity resulting from a Change of Control and
upon any other person who is a successor by merger, acquisition, consolidation
or otherwise to the business formerly carried on by the Company without regard
to whether or not such person or entity actively assumes the obligations
hereunder.

 

(c)           Waiver.
 Any party’s failure to enforce
any provision or provisions of this Plan shall not in any way be construed as a
waiver of any such provision or provisions, nor prevent any party from
thereafter enforcing each and every other provision of this Plan.  The rights granted the parties herein are
cumulative and shall not constitute a waiver of any party’s right to assert all
other legal remedies available to it under the circumstances.

 

(d)           Severability.
 Should any provision of this
Plan be declared or determined to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions shall not in
any way be affected or impaired.

 

(e)           Section Headings.  Section headings in this Plan are
included for convenience of reference only and shall not be considered part of
this Plan for any other purpose.

 

Section 18.            EXECUTION.

 

To
record the adoption of the Plan as set forth herein, effective as of May 5, 2010, Optimer
Pharmaceuticals, Inc.  has
caused its duly authorized officer to execute the same this 5th day of May, 2010.

 

 

	
   

  	
  OPTIMER
  PHARMACEUTICALS, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  John D. Prunty

  
	
   

  	
   

  	
   

  
	
   

  	
  Title:

  	
  Chief
  Financial Officer and Vice President

  

 

17

 

APPENDIX A

 

OPTIMER PHARMACEUTICALS, INC.
SEVERANCE BENEFIT PLAN

 

BENEFITS FOR ELIGIBLE EMPLOYEES
WITH LESS THAN ONE YEAR OF SERVICE

 

Certain
capitalized terms not specifically defined in this Appendix A are defined in
the Plan.

 

Severance
benefits to be provided to Eligible Employees under the Optimer Pharmaceuticals, Inc.  Amended and Restated Severance Benefit Plan (the “Plan”) who are terminated pursuant
to a Covered Termination and who have less than one Year of Service on the date
of such termination are as provided on this Appendix A.

 

1.             Conditions
to Receipt of Benefits:  Subject to the exceptions set forth in Section 2(b) of
the Plan, the Eligible Employee must meet all the requirements set forth in
Sections 2(a) and 7(a) of the Plan, including, without limitation,
executing a general waiver and release in substantially the form attached to
the Plan as Exhibit A, Exhibit B or Exhibit C,
as appropriate (the “Release”),
within the applicable time period set forth therein and permit such release to
become effective in accordance with its terms. 
The Company, in its sole discretion, may modify the form of the required
general waiver and release to comply with applicable law, and may incorporate
such waiver and release into a termination agreement or other agreement with
the Eligible Employee.

 

2.             Regular
Covered Termination Severance Benefits.  Eligible Employees that are terminated in a Covered Termination that
occurs either prior to, or more than 12 months following, a Change of Control,
and who have less than one Year of Service on the date of such termination,
shall receive the benefits set forth in this Section 2.

 

(a)           Base
Salary Continuation Benefit.  Eligible Employees shall be entitled to
receive continued Base Salary
payments for the time period following a Covered Termination as set forth below
next to the respective Eligible Employees’ position in effect at the time of
the Covered Termination.

 

	
  Position

  	
   

  	
  Base Salary Continuation Period

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  6 months

  
	
   

  	
   

  	
   

  
	
  Company
  Officers and Vice Presidents

  	
   

  	
  3 months

  
	
   

  	
   

  	
   

  
	
  All
  Director levels, Managers, and Non-Managerial Staff with annual Base Salary
  in excess of $100,000

  	
   

  	
  2 weeks, plus

  2 weeks for each Year of Service

  
	
   

  	
   

  	
   

  
	
  Non-Managerial
  Staff with annual Base

  	
   

  	
  2 weeks, plus

  

 

1

 

	
  Salary
  of $100,000 or less

  	
   

  	
  1 week for each Year of Service

  

 

(b)           Vesting
Acceleration for Non-Performance Vesting Equity Awards.  All Non-Performance Vesting
Equity Awards granted by the Company to the Eligible Employee (determined as of
the date of the Eligible Employee’s Covered Termination) shall be subject to
accelerated vesting, if any, for the time period or to the extent set forth
below next to the Eligible Employee’s respective position.  If such accelerated vesting is with respect
to less than 100% of the Non-Performance Vesting Equity Award, if applicable,
such acceleration shall be determined in accordance with the vesting schedule
applicable to such Equity Award as if the Eligible Employee had been employed
for the additional period of time indicated next to the Eligible Employee’s
position as of the date of his or her Covered Termination.

 

	
  Position

  	
   

  	
  Time Period or Extent of Vesting

  Acceleration for

  Non-Performance Vesting Equity

  Awards

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  6 months

  
	
   

  	
   

  	
   

  
	
  Company
  Officers and Vice Presidents

  	
   

  	
  6 months

  
	
   

  	
   

  	
   

  
	
  All
  Director levels, Managers, , and Non-Managerial Staff with annual Base Salary
  in excess of $100,000

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Non-Managerial
  Staff with annual Base Salary of $100,000 or less

  	
   

  	
  None

  

 

3.             Change
of Control Covered Termination Severance Benefits.  Eligible Employees that are
terminated in a Covered Termination that occurs upon or within twelve (12)
months following a Change of Control, and who have less than one Year of
Service on the date of such termination shall receive the benefits set forth in
this Section 3.

 

(a)           Base
Salary Continuation Benefit.  Eligible Employees shall be entitled to
receive continued Base Salary
payments for the time period following a Covered Termination as set forth below
next to the respective Eligible Employees’ position in effect at the time of
the Covered Termination.

 

2

 

	
  Position

  	
   

  	
  Base Salary Continuation Period

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  12 months

  
	
   

  	
   

  	
   

  
	
  Company
  Officers and Vice Presidents

  	
   

  	
  6 months

  
	
   

  	
   

  	
   

  
	
  All
  Director levels, Managers, and Non-Managerial Staff with annual Base Salary
  in excess of $100,000

  	
   

  	
  2 weeks, plus

  2 weeks for each Year of Service

  

 

3

 

 

	
  Non-Managerial
  Staff with annual Base Salary of $100,000 or less

  	
   

  	
  2 weeks, plus

  1 week for each Year of Service

  

 

(b)           Vesting
Acceleration of Equity Awards.

 

(1)           All Non-Performance Vesting
Equity Awards granted by the Company to the Eligible Employee (determined as of
the date of the Eligible Employee’s Covered Termination) shall be subject to
accelerated vesting for the time period or to the extent set forth below next
to the Eligible Employee’s respective position. 
If such accelerated vesting is with respect to less than 100% of the
Equity Award such acceleration shall be determined in accordance with the
vesting schedule applicable to such Equity Award as if the Eligible Employee
had been employed for the additional period of time indicated next to the
Eligible Employee’s position as of the date of his or her Covered Termination.

 

	
  Position

  	
   

  	
  Time Period or Extent of Vesting

  Acceleration for

  Non-Performance Vesting Equity Awards

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  All unvested Equity Awards immediately vest 100%

  
	
   

  	
   

  	
   

  
	
  Company
  Officers and Vice Presidents

  	
   

  	
  All unvested Equity Awards immediately vest 100%

  
	
   

  	
   

  	
   

  
	
  All
  Director levels, Managers, and Non-Managerial Staff with annual Base Salary
  in excess of $100,000

  	
   

  	
  12 months

  
	
   

  	
   

  	
   

  
	
  Non-Managerial
  Staff with annual Base Salary of $100,000 or less

  	
   

  	
  12 months

  

 

(2)           Any Performance Vesting
Equity Awards (determined as of the date of the Eligible Employee’s Covered
Termination) shall be subject to accelerated vesting with respect to 50% of the
then unvested shares.

 

4.             Time
and Form of Base Salary Continuation Payments.  Subject to the provisions of
Section 4 of the Plan, all Base Salary continuation payments shall be paid
in accordance with the Company’s standard payroll practices, and shall commence
with the first payroll period following the effective date of the Release.  The Company will pay the Eligible Employee
the Base Salary continuation severance benefits the Eligible Employee would
otherwise have received under the

 

4

 

Plan on or prior to such date but for the delay in payment related to
the effectiveness of the Release, with the balance of the Base Salary
continuation severance benefits being paid as originally scheduled.

 

5.             Reductions
Pursuant to Section 3(c) of the Plan. 
The severance benefits set forth
in this Appendix A are subject to certain reductions under Section 3(c) of
the Plan.

 

6.             Amendment
of Appendix A.  The foregoing
severance benefits are subject to such change as the Company, pursuant to Section 10(b) of
the Plan, may determine in its sole and absolute discretion.  Any such change in severance benefits shall
be set forth in a revised version of this Appendix A.

 

5

 

APPENDIX B

 

OPTIMER PHARMACEUTICALS, INC.
SEVERANCE BENEFIT PLAN

 

BENEFITS FOR ELIGIBLE EMPLOYEES
WITH ONE OR MORE YEARS OF SERVICE

 

Certain
capitalized terms not specifically defined in this Appendix B are defined in
the Plan.

 

Severance
benefits to be provided to Eligible Employees under the Optimer Pharmaceuticals, Inc.  Amended and Restated  Severance
Benefit Plan (the “Plan”) who are terminated
pursuant to a Covered Termination and who have one or more Years of Service on
the date of such termination are as provided on this Appendix B.

 

1.             Conditions
to Receipt of Benefits:  Subject to the exceptions set forth in Section 2(b) of
the Plan, the Eligible Employee must meet all the requirements set forth in
Sections 2(a) and 7(a) of the Plan, including, without limitation,
executing a general waiver and release in substantially the form attached to
the Plan as Exhibit A, Exhibit B or Exhibit C,
as appropriate (the “Release”),
within the applicable time period set forth therein and permit such release to
become effective in accordance with its terms. 
The Company, in its sole discretion, may modify the form of the required
general waiver and release to comply with applicable law, and may incorporate
such waiver and release into a termination agreement or other agreement with
the Eligible Employee.

 

2.             Regular
Covered Termination Severance Benefits.  Eligible Employees that are terminated in a Covered Termination that
occurs either prior to, or more than 12 months following, a Change of Control,
and who have one or more Years of Service on the date of such termination,
shall receive the benefits set forth in this Section 2.

 

(a)           Base
Salary Continuation Benefit.  Eligible Employees shall be entitled to
receive continued Base Salary
payments for the time period following a Covered Termination as set forth below
next to the respective Eligible Employees’ position in effect at the time of
the Covered Termination.

 

1

 

	
  Position

  	
   

  	
  Base Salary Continuation Period

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  12
  months

  
	
   

  	
   

  	
   

  
	
  Company
  Officers

  	
   

  	
  6
  months, plus

  1 month for each Year of Service above 1 year, up to a maximum of 12 months

  
	
   

  	
   

  	
   

  
	
  Vice
  Presidents

  	
   

  	
  3
  months, plus

  1 month for each Year of Service above 3 years, up to a maximum of 9 months

  
	
   

  	
   

  	
   

  
	
  All
  Director levels, Managers, and Non-Managerial Staff with annual Base Salary
  in excess of $100,000

  	
   

  	
  2
  weeks, plus

  2 weeks for each Year of Service, up to a maximum of 36 weeks

  
	
   

  	
   

  	
   

  
	
  Non-Managerial
  Staff with annual Base Salary of $100,000 or less

  	
   

  	
  2
  weeks, plus

  1 week for each Year of Service, up to a maximum of 26 weeks

  

 

2

 

(b)           Vesting
Acceleration for Non-Performance Vesting Equity Awards.  All Non-Performance Vesting
Equity Awards granted by the Company to the Eligible Employee (determined as of
the date of the Eligible Employee’s Covered Termination) shall be subject to
accelerated vesting, if any, for the time period or to the extent set forth
below next to the Eligible Employee’s respective position.  If such accelerated vesting is with respect
to less than 100% of the Equity Award such acceleration shall be determined in
accordance with the vesting schedule applicable to such Equity Award as if the
Eligible Employee had been employed for the additional period of time indicated
next to the Eligible Employee’s position as of the date of his or her Covered
Termination.

 

	
  Position

  	
   

  	
  Time Period or Extent of Vesting

  Acceleration for

  Non-Performance Vesting Equity

  Awards

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  24
  months

  
	
   

  	
   

  	
   

  
	
  Company
  Officers and Vice Presidents

  	
   

  	
  12
  months

  
	
   

  	
   

  	
   

  
	
  Managers,
  Executive Directors, and Non-Managerial Staff with annual Base Salary in
  excess of $100,000

  	
   

  	
  None

  
	
   

  	
   

  	
   

  
	
  Non-Managerial
  Staff with annual Base Salary of $100,000 or less

  	
   

  	
  None

  

 

3.             Change of
Control Covered Termination Severance Benefits. 
Eligible Employees that are terminated in a
Covered Termination that occurs upon or within twelve (12) months following a
Change of Control, and who have one or more Years of Service on the date
of such termination shall receive the benefits set forth in this Section 3.

 

(a)           Base
Salary Continuation Benefit.  Eligible Employees shall be entitled to
receive continued Base Salary
payments for the time period following a Covered Termination as set forth below
next to the respective Eligible Employees’ position in effect at the time of
the Covered Termination.

 

3

 

	
  Position

  	
   

  	
  Base Salary Continuation Period

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  12 months

  
	
   

  	
   

  	
   

  
	
  Company
  Officers

  	
   

  	
  12 months

  
	
   

  	
   

  	
   

  
	
  Vice
  Presidents

  	
   

  	
  9 months

  
	
   

  	
   

  	
   

  
	
  Managers,
  Executive Directors, and Non-Managerial Staff with annual Base Salary in
  excess of $100,000

  	
   

  	
  2 weeks, plus

  2 weeks for each Year of Service, up to a maximum of 36 weeks

  
	
   

  	
   

  	
   

  
	
  Non-Managerial
  Staff with annual Base Salary of $100,000 or less

  	
   

  	
  2 weeks, plus

  1 week for each Year of Service, up to a maximum of 26 weeks

  

 

(b)           Equity
Vesting Acceleration.

 

(1)           Vesting
Acceleration for Non-Performance Vesting Equity Awards.  All Non-Performance Vesting
Equity Awards granted by the Company to the Eligible Employee (determined as of
the date of the Eligible Employee’s Covered Termination) shall be subject to
accelerated vesting for the time period or to the extent set forth below next
to the Eligible Employee’s respective position.

 

	
  Position

  	
   

  	
  Time Period or Extent of Vesting

  Acceleration for

  Non-Performance Vesting Equity Awards

  
	
   

  	
   

  	
   

  
	
  Chief
  Executive Officer

  	
   

  	
  immediately vest 100%

  
	
   

  	
   

  	
   

  
	
  Company
  Officers and Vice Presidents

  	
   

  	
  immediately vest 100%

  
	
   

  	
   

  	
   

  
	
  Managers,
  Executive Directors, and Non-Managerial Staff with annual Base Salary in
  excess of $100,000

  	
   

  	
  immediately vest 100%

  
	
   

  	
   

  	
   

  
	
  Non-Managerial
  Staff with annual Base Salary of $100,000 or less

  	
   

  	
  immediately vest 100%

  

 

4

 

(2)           Any Performance Vesting Equity
Awards (determined as of the date of the Eligible Employee’s Covered
Termination) shall be subject to accelerated vesting, if any, to the extent set
forth below.

 

	
  Years
  of Service at time of Covered

  Termination

  	
   

  	
  Extent of Vesting Acceleration for

  Performance Vesting Equity Award

  
	
   

  	
   

  	
   

  
	
  At
  least one, but less than 2

  	
   

  	
  60% of unvested shares at time of Covered Termination

  
	
   

  	
   

  	
   

  
	
  At
  least 2, but less than 3

  	
   

  	
  75% of unvested shares at time of Covered Termination

  
	
   

  	
   

  	
   

  
	
  At
  least 3, but less than 4

  	
   

  	
  85% of unvested shares at time of Covered Termination

  
	
   

  	
   

  	
   

  
	
  At
  least 4

  	
   

  	
  100% of unvested shares at time of Covered Termination

  

 

4.             Time
and Form of Base Salary Continuation Payments.  Subject to the provisions of
Section 4 of the Plan, all Base Salary continuation payments shall be paid
in accordance with the Company’s standard payroll practices, and shall commence
with the first payroll period following the effective date of the Release.  The Company will pay the Eligible Employee
the Base Salary continuation severance benefits the Eligible Employee would
otherwise have received under the Plan on or prior to such date but for the
delay in payment related to the effectiveness of the Release, with the balance
of the Base Salary continuation severance benefits being paid as originally
scheduled.

 

5.             Reductions
Pursuant to Section 3(c) of the Plan. 
The severance benefits set forth
in this Appendix B are subject to certain reductions under Section 3(c) of
the Plan.

 

6.             Amendment
of Appendix B.  The foregoing
severance benefits are subject to such change as the Company, pursuant to Section 10(b) of
the Plan, may determine in its sole and absolute discretion.  Any such change in severance benefits shall
be set forth in a revised version of this Appendix B.

 

5

 

APPENDIX C

 

CERTAIN EQUITY AWARDS

 

 

	
  Award
  Type

  	
   

  	
  Grantee

  	
   

  	
  Shares Covered by

  Award

  	
   

  	
  Grant Date

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Restricted
  Stock Unit

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  20,000

  	
   

  	
  May 5, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Restricted
  Stock Unit

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  20,000

  	
   

  	
  May 5, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Restricted
  Stock Unit

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  20,000

  	
   

  	
  May 5, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Restricted
  Stock Unit

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  60,000

  	
   

  	
  May 5, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock
  Option

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  80,000

  	
   

  	
  May 5, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock
  Option

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  80,000

  	
   

  	
  May 5, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock
  Option

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  80,000

  	
   

  	
  May 5, 2010

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Stock
  Option

  	
   

  	
  Pedro
  Lichtinger

  	
   

  	
  240,000

  	
   

  	
  May 5, 2010

  

 

 

For Employees Age 40 or
Older

 

Individual Termination

 

EXHIBIT A

 

RELEASE AGREEMENT

 

I understand and agree completely to the terms set forth in the Optimer
Pharmaceuticals, Inc. Severance Benefit Plan (the “Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under my proprietary information and
inventions agreement with the Company.

 

Except as otherwise set forth in this Release, I hereby generally
and completely release the Company and its parents, subsidiaries, successors,
predecessors and affiliates, and their partners, members, directors, officers,
employees, stockholders, shareholders, agents, attorneys, predecessors,
insurers, affiliates and assigns, from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring at any time prior to
and including the date I sign this Release. 
This general release includes, but is not limited to: (a) all
claims arising out of or in any way related to my employment with the Company,
or its affiliates, or the termination of that employment; (b) all claims
related to my compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company, or its
affiliates; (c) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), and the California Fair
Employment and Housing Act (as amended); provided, however, that nothing in this paragraph shall be
construed in any way to release the Company or its affiliates from its
obligation to indemnify me pursuant to agreement or applicable law.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, and that the consideration given under
the Plan for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been advised
by this writing, as required by the ADEA, that: 
(a) my waiver and

 

 

release
do not apply to any rights or claims that may arise after the date I sign this
Release; (b) I should consult with an attorney prior to signing this
Release (although I may choose voluntarily not do so); (c) I have
twenty-one (21) days to consider this Release (although I may choose
voluntarily to sign this Release earlier); (d) I have seven (7) days
following the date I sign this Release to revoke the Release by providing
written notice to an officer of the Company; and (e) this Release shall
not be effective until the date upon which the revocation period has expired,
which shall be the eighth day after I sign this Release.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.

 

I acknowledge that to become effective, I must sign and return this
Release to the Company so that it is received not later than twenty-one (21)
days following the date it is provided to me.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

 

For Employees Age 40 or
Older

 

Group Termination

 

EXHIBIT B

 

RELEASE AGREEMENT

 

I understand and agree completely to the terms set forth in the Optimer
Pharmaceuticals, Inc. Severance Benefit Plan (the “Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under my proprietary information and
inventions agreement with the Company.

 

Except as otherwise set forth in this Release, I hereby generally
and completely release the Company and its parents, subsidiaries, successors,
predecessors and affiliates, and their partners, members, directors, officers,
employees, stockholders, shareholders, agents, attorneys, predecessors,
insurers, affiliates and assigns, from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring at any time prior to
and including the date I sign this Release. 
This general release includes, but is not limited to: (a) all
claims arising out of or in any way related to my employment with the Company,
or its affiliates, or the termination of that employment; (b) all claims
related to my compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company, or its
affiliates; (c) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), and the California Fair
Employment and Housing Act (as amended); provided, however, that nothing in this paragraph shall be
construed in any way to release the Company or its affiliates from its
obligation to indemnify me pursuant to agreement or applicable law.

 

I acknowledge that I am knowingly and voluntarily waiving and releasing
any rights I may have under the ADEA, and that the consideration given under
the Plan for the waiver and release in the preceding paragraph hereof is in
addition to anything of value to which I was already entitled.  I further acknowledge that I have been
advised by this writing, as required by the ADEA, that:  (a) my waiver and

 

1

 

release
do not apply to any rights or claims that may arise after the date I sign this
Release; (b) I should consult with an attorney prior to signing this
Release (although I may choose voluntarily not to do so); (c) I have
forty-five (45) days to consider this Release (although I may choose
voluntarily to sign this Release earlier); (d) I have seven (7) days
following the date I sign this Release to revoke the Release by providing
written notice to an office of the Company; (e) this Release shall not be
effective until the date upon which the revocation period has expired, which
shall be the eighth day after I sign this Release; and (f) I have received
with this Release a detailed list of the job titles and ages of all employees
who were terminated in this group termination and the ages of all employees of
the Company in the same job classification or organizational unit who were not
terminated.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all
rights and benefits under that section and any law of any jurisdiction of
similar effect with respect to my release of any claims hereunder.

 

I acknowledge that to become effective, I must sign and return
this Release to the Company so that it is received not later than forty-five
(45) days following the date it is provided to me.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

2

 

For Employees Under Age 40

 

Individual and Group Termination

 

EXHIBIT C

 

RELEASE AGREEMENT

 

I understand and agree completely to the terms set forth in the Optimer
Pharmaceuticals, Inc. Severance Benefit Plan (the “Plan”).

 

I understand that this Release, together with the Plan, constitutes the
complete, final and exclusive embodiment of the entire agreement between the
Company, affiliates of the Company and me with regard to the subject matter
hereof.  I am not relying on any promise
or representation by the Company that is not expressly stated therein.  Certain capitalized terms used in this
Release are defined in the Plan.

 

I hereby confirm my obligations under my proprietary information and
inventions agreement with the Company.

 

Except as otherwise set forth in this Release, I hereby generally
and completely release the Company and its parents, subsidiaries, successors,
predecessors and affiliates, and their partners, members, directors, officers,
employees, stockholders, shareholders, agents, attorneys, predecessors,
insurers, affiliates and assigns, from any and all claims, liabilities and
obligations, both known and unknown, that arise out of or are in any way
related to events, acts, conduct, or omissions occurring at any time prior to
and including the date I sign this Release. 
This general release includes, but is not limited to: (a) all
claims arising out of or in any way related to my employment with the Company,
or its affiliates, or the termination of that employment; (b) all claims
related to my compensation or benefits, including salary, bonuses, commissions,
vacation pay, expense reimbursements, severance pay, fringe benefits, stock,
stock options, or any other ownership interests in the Company, or its
affiliates; (c) all claims for breach of contract, wrongful termination,
and breach of the implied covenant of good faith and fair dealing; (d) all
tort claims, including claims for fraud, defamation, emotional distress, and
discharge in violation of public policy; and (e) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990 (as amended), the federal Age Discrimination in Employment Act (as
amended) (“ADEA”), the federal Employee
Retirement Income Security Act of 1974 (as amended), and the California Fair
Employment and Housing Act (as amended); provided, however, that nothing in this paragraph shall be
construed in any way to release the Company or its affiliates from its
obligation to indemnify me pursuant to agreement or applicable law.

 

I acknowledge that I have read and understand Section 1542 of the
California Civil Code which reads as follows: “A general
release does not extend to claims which the creditor does not know or suspect
to exist in his favor at the time of executing the release, which if known by
him must have materially affected his settlement with the debtor.”  I hereby expressly waive and relinquish all
rights

 

1

 

and
benefits under that section and any law of any jurisdiction of similar effect
with respect to my release of any claims hereunder.

 

I acknowledge that to become effective, I must sign and return
this Release to the Company so that it is received not later than fourteen (14)
days following the date it is provided to me.

 

	
   

  	
  EMPLOYEE

  
	
   

  	
   

  
	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Date:

  	
   

  

 

2Exhibit 10.2

 

***Text Omitted and Filed Separately

CONFIDENTIAL TREATMENT REQUESTED

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

 

API
Manufacturing and Supply Agreement

 

between

 

Biocon Limited

 

and

 

Optimer
Pharmaceuticals, Inc.

 

May 18,
2010

 

1

 

API
Manufacturing and Supply Agreement

 

This API Manufacturing
and Supply Agreement (Agreement) is
executed on May 18, 2010

 

by

 

Biocon
Limited, a company
incorporated under the laws of India,  having
its registered office at 20th K.M., Hosur Road, Electronics City P.O.,
Bangalore 560 100, India (Biocon);

 

and

 

Optimer
Pharmaceuticals, Inc., a company duly organized and existing under the laws
of Delaware, having its principal offices at 10110 Sorrento Valley Rd., Suite C,
San Diego, California 92121, U.S.A (Optimer).

 

The parties hereby
agree as follows.

 

1.                                      DEFINITIONS

 

In this Agreement,
unless the text expressly or the context necessarily requires otherwise, each
of the terms set out in bold below and all grammatical variations thereof shall
when capitalized in the manner shown below have the meaning correspondingly
assigned to such terms.

 

1.1          [***].

 

1.2          Active
Pharmaceutical Ingredient (API) means any substance
or mixture of substances intended to be used in the manufacture of a drug
(medicinal) product and that, when used in the production of a drug, becomes an
active ingredient of the drug product. 
Such substances are intended to furnish pharmacological activity or
other direct effect in the diagnosis, cure, mitigation, treatment, or
prevention of disease or to affect the structure and function of the body.

 

1.3          Actual Annual Product
Amount has the meaning
given in section 6.5

 

1.4          Affiliate means with respect to a party, any Person,
whether directly or indirectly, controlling, controlled by, or under common
control with such party or Person, as applicable.  For the purposes of this section 1.4 only,
the term “control” means (i) direct or indirect ownership of more than
fifty percent (50%) of the equity having the power to vote on or direct the
affairs of such party or Person, as applicable, or (ii) the power to
direct decisions of such party or Person, as applicable, including the power to
direct management and policies of such party or Person, as applicable, whether
by reason of ownership, by contract or otherwise.

 

1.5          Applicable Law means the applicable provisions of any
national, state and/or local statute, law, rule, regulation, administrative
code, ordinance, notification, decree, order, decision, injunction, award,
judgment, permit or license, as the case may be, issued by a governmental,
judicial or quasi-judicial authority with jurisdiction over a party, the
subject matter of this Agreement or the Compound

 

2

 

or Product,
including the applicable regulations of the FDA and all applicable current good
manufacturing practices, including the cGMPs.

 

1.6          Approval Date means the date on which Optimer receives
the first Marketing Authorization.

 

1.7          Availability
Date has the meaning given in section 7.2.

 

1.8          Batch  means the specific
quantity of Product produced in a single cycle of a manufacturing process under
the same conditions featuring identical properties.

 

1.9          Batch Record means a record of all materials, quantities,
and process steps used to manufacture and test a Batch.

 

1.10        Binding Forecast has the meaning given in section 6.3.

 

1.11        Binding Order has the meaning given in section 7.3.

 

1.12        Biocon Indemnitee has the meaning given in section 12.1.

 

1.13        Biocon Inventions has the meaning given in section 14.7.

 

1.14        Biocon Release Documents has the meaning given in section 7.7.

 

1.15        Campus means
Biocon’s manufacturing facility located at 20th KM
Hosur Road, Electronics City, Bangalore - 560 100, India for the
manufacture of API.

 

1.16        Capacity Reservation Fee has the meaning given in section 6.5.

 

1.17        cGMPs mean the current good
manufacturing practices and standards for the production of pharmaceutical
intermediates and APIs applicable to both commercial and investigational
quantities of compounds (as applicable), as set forth in: (a) Parts 210
and 211 of Title 21 of the U.S. Code of Federal Regulations (21 CFR 210 and 21
CFR 211); and (b) European Community Directive 2003/94/EC and the Rules Governing
Medicinal Products in the European Union, Volume 4 (Medicinal Products for
Human and Veterinary Use: Good Manufacturing Practice); in each case, as may be
amended from time to time after the Effective Date, including any successor provisions thereto, and
as interpreted by ICH Harmonised Tripartite Guideline, Good Manufacturing
Practice Guide for Active Pharmaceutical Ingredients.

 

1.18        Commercially Reasonable and
Diligent Efforts means those prompt efforts and the application or commitment of
resources and expertise consistent with the exercise of prudent scientific and
business judgment, as applied to other biopharmaceutical products of similar
potential and market size by participants in the biopharmaceutical industry
having similar resources to the party in question.

 

1.19        Compound means the molecule Fidaxomicin with the
molecular structure set out in Schedule 1.19.

 

1.20        Confidential Information means any information and data that a party
(Discloser) may from time to time
disclose, directly or indirectly, via written, graphic, verbal or electronic
form or make available to the other party (Recipient)

 

3

 

pursuant to this
Agreement, and that are regarded by the Discloser as confidential or
proprietary, including information and materials related to sales and product
information, customer information, manufacturing processes and technology,
formulations, information regarding applications and submissions made to any
Regulatory Authority, product plans, product development efforts, marketing
strategies, financial information and projections and other commercial data
that is proprietary or of commercial value. Provided that for each Recipient,
Confidential Information shall not include information that:

 

(a)           at the time of disclosure, is known publicly
or thereafter becomes known publicly through no fault of such Recipient or its
agents;

 

(b)           becomes available to such Recipient other
than on a confidential basis from a third party who is lawfully in possession
of such information and not subject to a contractual or fiduciary relationship
to the Discloser with respect thereto;

 

(c)           was developed by such Recipient
independently of information obtained from the Discloser and such independent
development can be properly demonstrated by the Recipient; or

 

(d)           was already known to such Recipient before
receipt from the Discloser, as shown by its prior written records.

 

1.21        Control means, with respect to any Intellectual
Property Right, possession by a party of the ability (whether by ownership,
license or otherwise) to grant access, a license or a sublicense to such
Intellectual Property Right without violating the terms of any agreement or
other arrangement with any third party as of the time such party would be first
required under this Agreement to grant such access, license or sublicense.

 

1.22        Dedication Fee means a sum of [***] from the amount paid by Optimer
to Biocon referenced in section 3.3 (which sum represents the fee paid by
Optimer for Biocon to undertake the obligations under section 5 of this
Agreement).

 

1.23        Discloser has the meaning given in section 1.20.

 

1.24        Drug Product means
a dosage form of the Product in the final immediate packaging intended for
marketing.

 

1.25        Effective Date means the date first set forth in this
Agreement.

 

1.26        Elective Termination Notice has the meaning given in section 15.4.

 

1.27        EMA means the European Medicines
Agency and any successor entity.

 

1.28        FDA means the United States Food and Drug
Administration and any successor entity.

 

1.29        FDCA means the United States Food, Drug and
Cosmetic Act and the regulations promulgated thereunder, as each may be amended
from time to time.

 

4

 

1.30        Fee Date means the day in each calendar year which
is the last day of the calendar quarter in which the Approval Date falls.

 

1.31        Force
Majeure Event means any act or event that prevents a party (the Nonperforming Party) in whole or in part,
from performing its obligations under this Agreement, or satisfying any
conditions to the other party’s obligations under this Agreement, is beyond the
reasonable control of and not the fault of the Nonperforming Party and that the
Nonperforming Party has been unable to avoid or overcome by the exercise of
Commercially Reasonable and Diligent Efforts.
It is clarified that a Force
Majeure Event includes, where all of the preceding conditions are
met, each of the following acts or events: shortages in the availability of raw
materials required for the manufacture of Product, flood, lightning,
earthquake, volcanic eruption, landslide, hurricane, cyclone, typhoon, tornado,
drought, famine, plague, or other act of God, fire, explosion, war, riot, civil
disturbance, act of public enemy, terrorist act, military action, epidemic,
shipwreck, action of a court or public authority, or strike, work-to-rule action,
go-slow or similar labor difficulty, each on an industry-wide, region-wide or
nationwide basis, but does not include, any event where any of the above
conditions are not met or any act or event caused by or attributable to
economic hardship, changes in market conditions, insufficiency of funds, or
strikes, work-to-rule actions, go-slows or similar labor difficulties that
are not industry-wide, region-wide or nationwide.

 

1.32        High-Potency Product means products such as [***].

 

1.33        [***] Equipment means the [***] equipment used in the
downstream purification of the Product at Park.

 

1.34        Initial Activities mean all activities to be performed by the
parties pursuant to section 3 prior to the manufacture and supply of Product by Biocon to Optimer for
the Territory.

 

1.35        Insolvency Proceeding means, with respect to a party, that such
party (a) commences a voluntary case under applicable bankruptcy
laws (as now or hereafter in effect), (b) files a petition seeking to take
advantage of any other laws relating to bankruptcy, insolvency, or composition
for adjustment of distressed or overdue debts, (c) consents to or fails to
contest within  120 days using
Commercially Reasonable and Diligent Efforts any petition filed against it in
an involuntary case under such bankruptcy laws or other laws, (d) applies
for or consents to, or fails to contest within 
120 days using Commercially Reasonable and Diligent Efforts, the
appointment of, or the taking of possession by, a receiver or liquidator of
itself or of a substantial part of its property, (e) admits in writing its
inability to pay its debts as they become due, (f) makes a general
assignment for the benefit of creditors, or (g) takes any corporate action
for the purpose of authorizing any of the foregoing.

 

1.36        Intellectual Property Right means any right, title or interest in or
arising from any business secret, compilation, computer program, copyright,
design, device, formula, invention, know-how, logo, manufacturing right,
method, pattern, process, product, patent right, patent application, program,
reverse know-how, technical data, technique, trademark, or trade secret or any
part, revalidation or renewal thereof and all other information that derives
independent economic value, actual or potential, from not being generally
known.

 

1.37        Latent Defect means a defect that causes a
Batch of Product to fail to conform to the Manufacturing Requirements or to the
warranties provided by

 

5

 

Biocon hereunder, which defect is not
discoverable upon reasonable physical inspection and testing upon receipt, but
is discovered at a later time.

 

1.38        Litigation Expense means any court filing fee, court cost,
arbitration fee or cost, witness fee, and any other reasonable fee or cost of
investigating or asserting a claim for indemnification under this Agreement.

 

1.39        Loss means any liquidated or admitted liability,
loss, claim, settlement payment, cost, expense, interest, award, judgment,
damages, fine, fee, penalty or other charge, including reasonable attorney fees
and disbursements and Litigation Expenses.

 

1.40        Manufacturing Requirement has the meaning given in section 7.7.

 

1.41        Marketing Authorization means a Regulatory Approval to market and
sell a Drug Product in any country in the Territory.

 

1.42        Minimum Volume means a volume that is:

 

(a)           [***] percent of Optimer’s actual quarterly
Product requirement for the Territory if the installation, qualification and
Validation conditions specified in clause (b) below have not been met due
to a reason not attributable to Optimer or its Affiliates or a Force Majeure
Event; or

 

(b)           in the event Biocon achieves the
installation and qualification (as required by this Agreement) of the [***]
Equipment at Park, and the parties complete the Validation of all Product
manufacturing processes at Park by the date specified in section 3.1(c), then
solely for the first eight (8) calendar quarters following the Approval Date,
[***] percent of Optimer’s actual quarterly Product requirement for the
Territory.  For purposes of
clarification, if Minimum Volumes are determined by this clause (b) for
the first eight (8) calendar quarters following the Approval Date,
beginning with the 9th calendar quarter following the Approval Date
and through the term of this Agreement, Minimum Volumes shall be determined
solely by clause (a) above.

 

1.43        NDA means
one or more New Drug Application(s), or the equivalent thereof, to make and/or
sell commercially Drug Products, filed with the FDA or with a Regulatory
Authority in any jurisdiction outside of the United States and within the
Territory, and all amendments and supplements thereto filed therewith.

 

1.44        Non-Binding Forecast has the meaning given in section 6.3.

 

1.45        Optimer Indemnitee has the meaning
given in section 12.2.

 

1.46        Park means Biocon’s manufacturing facility
located at Plot No. 2—4, Bommasandra-Jigani Link Road, Bommasandra Post,
Bangalore - 560 099, India for the manufacture of API.

 

1.47        Permitted Products means any non-High-Potency  Products such as
[***] or like compounds that can be produced using the [***] Equipment without
modification from the state used to produce the Product and without affecting
any US or European Regulatory Approval for the manufacture of the Product using
the [***] Equipment or any other condition specified by the FDA or EMA in
connection with the manufacture of the Product using the [***] Equipment.

 

6

 

1.48        Person means any natural or juristic person, and
includes any company or other body corporate, any trust, government agency, or
government, as well as any firm or association or partnership of two or more
Persons.

 

1.49        Product means the Compound in the form of finished
bulk API.

 

1.50        Prohibited Products means any High-Potency Products that can be
produced using the [***] Equipment and any non-High-Potency Products that are
not Permitted Products.

 

1.51        Purchase Order has the meaning given in section 7.2.

 

1.52        Quality Agreement means that certain Quality Agreement, dated
September 16, 2009, between the parties and related to the manufacture of
Product.

 

1.53        Recall Action has the meaning
given in section 8.5.

 

1.54        Recipient has the meaning given in section 1.20.

 

1.55        Reduction Notice has the meaning
given in section 6.5.

 

1.56        Regulatory Approval means, in relation to a Drug Product or API
for Drug Product, the registrations, authorizations and approvals of any
Regulatory Authority that are required to be obtained prior to the marketing or
sale of product in a jurisdiction in the Territory. Neither a tentative
approval nor an approvable letter shall be considered a Regulatory Approval.

 

1.57        Regulatory Authority means, with respect to any country or group
of countries, the governmental or regulatory agency or entity in such country
or group of countries having the responsibility, jurisdiction, and authority to
approve the manufacture, packaging, labeling, marketing or sale of a Drug
Product within such country or group of countries or any successor body to any
of them.

 

1.58        ROW means any country or market in the world
that is not included in the Territory.

 

1.59        Rules has the meaning given in section 19.2.

 

1.60        Specifications mean the manufacturing, quality control and
quality assurance procedures (including, without limitation, those set forth in
the Quality Agreement), processes, instructions and any other attributes that
the parties agree upon in connection with the manufacture of Product, as previously
agreed to by the parties and set forth in document number [***] and as may be
agreed upon by the parties after the Effective Date or as otherwise required by
Applicable Law, Regulatory Authorities or Regulatory Approvals.

 

1.61        Territory means the United States of America and
Canada.

 

1.62        Validated  Facility means
the Park, the Campus or another Biocon facility approved by Optimer, and all
equipment contained at each such facility, in each case in respect of which
Validation activities have been successfully completed for all processes
connected with the manufacture, storage, handling and shipping of the Product.

 

1.63        Validation or Validated means establishing, in accordance with

 

7

 

Applicable Law or
guidelines issued by the relevant Regulatory Authority (including in all cases
those issued by the FDA and EMA), that the manufacturing and supply activities
conducted by Biocon pursuant to this Agreement consistently produce Product in
accordance with the Specifications.

 

1.64        Validation Batches has the meaning given in Section 10.2.

 

1.65        Work Plan means the work plan previously agreed to by
the parties for the conduct of the Initial Activities regarding [***] and [***]
set forth in section 3 and the additional work plan to be agreed to by the
parties pursuant to section 3.4.

 

2.                                      INTERPRETATION AND
CONSTRUCTION

 

The following
provisions shall apply to the interpretation and construction of this
Agreement.

 

2.1                Captions in this Agreement are for convenience
and identification only and shall not affect the interpretation or construction
of this Agreement.

 

2.2                References to sections, clauses or schedules
without further specification are references to sections, clauses and schedules
of this Agreement.

 

2.3                Any reference to a statute or any provision
of a statute includes a reference to that statute or provision and any rule,
regulation, notification, circular, or direction made or issued pursuant to
that statute or provision, as may be from time to time modified or re-enacted,
whether prior to or after the date of this Agreement.

 

2.4                References to the singular include
references to the plural and vice versa.

 

2.5                Words denoting one grammatical gender are
intended to include references to all grammatical genders.

 

2.6                References to “include” or “including” shall mean “include
without limitation” and “including without limitation” respectively.

 

3.                                      INITIAL ACTIVITIES

 

3.1                Biocon shall use Commercially Reasonable and Diligent
Efforts to:

 

(a)           Successfully scale-up the fermentation process at Park to [***] capacity
as demonstrated by a successful production of a minimum of [***] of Compound;
and

 

(b)           Procure in its name, install, qualify and validate the [***] Equipment
at Park with a [***].  For purposes of
clarification, Biocon shall own the [***] Equipment subject to its obligations
and the restrictions set forth in this Agreement.

 

(c)           Cause the [***] Equipment at Park to be commissioned and
fully qualified by [***].

 

8

 

3.2                The parties shall cause the Validation of all Product
manufacturing processes, including the  [***] at Park and the [***], at Campus
and/or the [***] at Park in such manner and sequence as shall be agreed by the
parties in the Work Plan.

 

3.3                As compensation for Biocon’s efforts
pursuant to this section 3, Optimer has paid Biocon an upfront sum of $2.5
million which includes the cost of the [***] Equipment at Park ($1.5 million)
and a non-refundable Dedication Fee [***]. Biocon acknowledges the receipt of
said $2.5 million from Optimer on June 30, 2009 in the amount of [***] and
on October 1, 2009 in the amount of [***].

 

3.4                As promptly as practical after the Effective
Date, the parties shall discuss in good faith and agree upon a work plan detailing
their respective responsibilities and timing of the Initial Activities
described in this section 3, which work plan shall be consistent with
completing the Initial Activities as soon as practical and which, together with
the work plan previously agreed to with respect to the [***] and [***] referred
to in this section 3, shall constitute the Work Plan.

 

4.                                      MANUFACTURE AND SUPPLY OF
PRODUCT

 

4.1                Biocon shall manufacture the Product in
accordance with the Manufacturing Requirements at Validated Facilities and
supply such manufactured Product to Optimer or its designee(s) against
payment of the price in accordance with section 9 and subject to the other
terms of this Agreement.

 

4.2                Biocon
shall obtain Optimer’s prior written approval before Biocon implements any
change in the materials, equipment, process or procedures used to manufacture
or test Product that would constitute a major change under cGMPs or that would
otherwise require a filing with or notification to a Regulatory
Authority.

 

4.3                Biocon shall use Commercially
Reasonable and Diligent Efforts to continuously maintain a sufficient stock of
raw materials required to manufacture the Product in quantities no less than
those set forth in the applicable Non-Binding Forecast at any time; provided that
such quantity does not exceed [***] of Product per calendar quarter.  Biocon shall use and rotate all stock of such
raw materials on a first-in, first-out basis or as otherwise required by cGMPs
and other Applicable Laws.  Biocon will use Commercially Reasonable and
Diligent Efforts to obtain the  most
competitive price for any raw materials required in the manufacture of Product
and shall ensure such materials are released for use, in accordance with Biocon’s
quality system and requirements including the Manufacturing Requirements prior
to manufacturing any Batch of Product. 
Biocon will review its stock levels of raw materials on a regular basis
to maintain stock levels in accordance with this section 4.3.  Biocon shall purchase all
[***] raw materials and use [***] only in accordance with the [***]
specifications most recently agreed to by the parties as set forth in [***],
each as applicable to “fresh” or “recycled” [***] used at Park or Campus, or as
otherwise required by applicable Regulatory Authorities or by Regulatory
Approvals.  Biocon shall keep Optimer
reasonably informed with respect to any changes in [***] prices and shall
reasonably cooperate with Optimer should Optimer desire to obtain long-term
pricing of [***] supplies.

 

9

 

4.4                Optimer or its designee(s) shall use
the Product obtained pursuant to this Agreement solely in the research,
development or manufacture of Drug Product in the Territory or in any ROW
country or market. For clarification, Optimer shall be permitted to sell or
otherwise transfer Product to its commercial partners for such commercial
partner’s research, development and commercialization activities related to
Compound, Product and Drug Product or any salts, hydrates, solvates,
polymorphs, metabolites, prodrugs or analogs thereof, provided that Biocon
shall not be obligated to indemnify such commercial partners of Optimer.

 

5.                                      CAPACITY AND DEDICATED
FACILITIES

 

5.1                Subject to the other provisions of this
Agreement, Biocon shall ensure that the annual manufacturing capacities for
Product at Park together with the annual manufacturing capacities for Product
at Campus are sufficient to manufacture at least [***] of Product annually. The
foregoing sentence notwithstanding, Biocon’s obligation to ensure such
manufacturing capacities shall not apply (i) until both Park and Campus
are Validated Facilities (including Validation of the [***] at Park) or (ii) in
the event Optimer has not successfully obtained a Marketing Authorization in the
Territory by [***].

 

5.2                Any capacity enhancement beyond the
quantities mentioned in section 5.1 or as adjusted from time to time will
require a lead-time and will be negotiated under a separate agreement by the
parties.

 

5.3                Subject to the provisions of section 6,
during the term of this Agreement, Biocon shall cause the [***] Equipment to be
dedicated solely to the manufacture and supply of Product under this Agreement
and shall ensure that the [***] Equipment is not subject to any lien, pledge,
security interest or other encumbrances that could reasonably be expected to
materially impair Biocon’s ability to perform its obligations under this
Agreement, without prior written approval from Optimer. The foregoing sentence
notwithstanding, in the event Park is not successfully made a Validated
Facility by [***] due to Optimer’s failure to perform its obligations under the
Work Plan or in the event Optimer has not successfully obtained a Marketing
Authorization in the Territory by the date specified in clause (ii) of
section 5.1, Biocon shall be free to make other uses of the [***] Equipment
which would not impair Biocon’s ability to later use the [***] Equipment for
the manufacture of Product; provided,
however, that if and when the Park becomes a Validated Facility,
Biocon shall promptly cease such other uses and re-dedicate the [***] Equipment
solely to the manufacture of Product, provided Optimer has also obtained a
Marketing Authorization in the Territory at that time, and subject to the
provisions of section 6.

 

6.                                      MINIMUM VOLUMES AND
FORECASTS

 

6.1                Subject to the terms and conditions of this
Agreement and consistent with Section 7.2, for each calendar quarter
following the Approval Date and during the Term, Optimer shall be required to
purchase from Biocon the Minimum Volume of Product or the amount of Product set
forth in the Binding Forecast for the applicable calendar quarter; provided
that:

 

10

 

(a)           in the event Biocon believes in good faith,
due to a Force Majeure Event or
otherwise, that it may be unable to supply either (i) the entire amount of
Product specified in a Binding Forecast or (ii) [***] of the amount of
Product set out in a Non-Binding Forecast for any calendar quarter, Biocon
shall immediately notify Optimer of such fact as well as the amount of Product
that Biocon, in good faith, can ensure that it will be able to supply in such
calendar quarter, and, notwithstanding anything to the contrary in this
Agreement, Optimer shall be entitled to obtain such shortfall from a third
party(ies) and such amounts shall not count towards Optimer’s total Product
requirements in the Territory for purposes of calculating Minimum Volumes
during subsequent calendar quarters; and

 

(b)           if, in two (2) consecutive calendar
quarters, Biocon is unable to supply the amount of Product set forth in the
applicable Binding Forecast and such quantities of Product requested from
Biocon are no more than (i) [***] of Product over the 4 calendar quarters
ending with the second consecutive calendar quarter in which such supply
failure occurs, and (ii) [***] of Product per calendar quarter in which
such supply failure occurs, then, notwithstanding anything to the contrary in
this Agreement, (iii) Optimer shall be entitled to procure from a third
party(ies) the difference between the amount of Product requested from Biocon
during such two consecutive calendar quarters and the amount actually supplied
to Optimer by Biocon during such calendar quarters, and such amounts shall not
count towards Optimer’s total Product requirements in the Territory for
purposes of calculating Minimum Volumes during subsequent calendar quarters,
and (iv) beginning with the calendar quarter following the second
consecutive calendar quarter in which Biocon’s supply failure occurs and
continuing through the calendar quarter following the calendar quarter in which
Biocon is able to demonstrate to Optimer’s reasonable satisfaction its ability
to supply at least [***] of Product per quarter, Optimer shall only be
obligated to purchase from Biocon the lesser of (A) its Minimum Volume or
the amount of Product set forth in the relevant Binding Forecast for such
quarters and (B) the average quarterly amount of product that Biocon was
able to deliver during the two consecutive calendar quarters in which the
supply failure occurred.

 

6.2                The provisions set forth in clauses (a) and
(b) of section 6.1 shall be in addition to, and are without prejudice to,
any other remedies which may be available to Optimer under this Agreement or
otherwise as a result of Biocon’s inability to supply Product under this
Agreement, subject to section 18.

 

6.3                Approximately six (6) months prior to
the expected Approval Date, Optimer shall provide Biocon with a rolling
forecast of its requirements of Product from Biocon for the calendar quarter
immediately following the Approval Date which shall include, without
limitation, any Validation Batches as set forth in section 10.2 (the Binding Forecast) as well as a forecast for
its estimated requirements of Product from Biocon for the calendar quarter next
following (the Non-Binding Forecast).
Thereafter, during the term of this Agreement, one (1) calendar quarter
prior to the beginning of each applicable calendar quarter, Optimer shall
provide Biocon with a Binding Forecast for such quarter together with a
Non-Binding Forecast for the subsequent quarter. Without prejudice to the
foregoing, Schedule 6.3 contains Optimer’s non-binding, anticipated
forecasts of the quantities of Product required pursuant to this Agreement
(which forecasts are subject to

 

11

 

revision in
accordance with this Agreement, are based on the assumption that the Approval
Date occurs in [***] and shall not be deemed a Non-Binding or Binding
Forecast). Optimer shall promptly notify Biocon if Optimer believes in good
faith that the amount which will be specified in the next Binding Forecast will
be more than [***] or less than [***] of the amount in the current Non-Binding
Forecast for the same calendar quarter. If Optimer notifies Biocon that it
believes the amount of Product in the next Binding Forecast will be more than
[***] of the amount set forth in the current Non-Binding Forecast for the same
calendar quarter, Biocon shall thereafter, subject to the capacity limitations
in section 5.1, use Commercially Reasonable and Diligent Efforts to enable the
supply of such greater amount of Product in such subsequent calendar quarter
and shall promptly notify Optimer if it will be unable to supply such
amount.  For purposes of clarification,
Biocon shall not be deemed to be in breach of this Agreement if it is unable to
supply an amount of Product in a Binding Forecast which is greater than [***]
of the amount set forth in the previous Non-Binding Forecast for the same
calendar quarter.

 

6.4                Notwithstanding anything contained in
section 5.3 or section 6.3, in the event the amount of Product set forth in
Optimer’s Binding Forecast for any calendar quarter beginning with the fourth
calendar quarter after the Approval Date, when combined with the amount of
Product set forth in Binding Forecasts covering the preceeding three calendar
quarters (and only if the provisions of section 6.1(b) were not in effect for
any of such four calendar quarters), is below [***] of Product (representing
[***] of the maximum amount of Product that can be manufactured in a calendar
year at Campus and Park), Biocon shall be entitled to utilize the dedicated
capacity at Park to produce Permitted Products in such calendar quarter,
subject to the remainder of this section 6.4. Such production of Permitted
Products shall only be undertaken with Optimer’s prior written approval, which
shall not be unreasonably withheld provided Biocon demonstrates and certifies
in writing to Optimer, including through relevant cleaning experimental data
(via cleaning validation), that (a) cross-contamination with other Permitted
Products will not affect the quality of the Product to be produced in
accordance with the Specifications pursuant to this Agreement and (b) the use
of the dedicated capacity at Park for the production of Permitted Products will
not otherwise adversely affect Biocon’s ability to fully perform its future
obligations under this Agreement.

 

In the event that Biocon is entitled to produce
Permitted Products pursuant to the preceding paragraph and Biocon has not had
an obligation or use to manufacture any Permitted Product which can be
manufactured using the [***] Equipment for a period exceeding [***] prior to
the beginning of the calendar quarter in which Biocon is so entitled to produce
Permitted Products, Biocon shall be allowed to use the [***] Equipment in such
calendar quarter for Prohibited Products, subject to all of the requirements
set forth in the preceding paragraph with respect to the manufacture of
Permitted Products.

 

6.5                For each Fee Date beginning with the later
of (a) the first Fee Date following the third anniversary of the Approval Date
and (b) the first Fee Date after Campus and Park are Validated Facilities
capable of manufacturing at least [***] of Product per year and Biocon is
obligated to reserve such capacity for Product pursuant to section 5.1, if both
(c) Optimer has not submitted Purchase Orders providing for an aggregate of at
least [***] of Product with Availability Dates within the four calendar quarter
period ending on the applicable Fee Date and (d) during

 

12

 

such four
calendar quarters, Biocon did not have an obligation or use to manufacture
Permitted Products or Prohibited Products which can be manufactured using the
[***] Equipment, then Optimer shall pay Biocon a fee (the Capacity
Reservation Fee) [***] Purchaser Orders with Availability Dates
within the four calendar quarter period ending on the applicable Fee Date (the Actual Annual Product Amount), [***]; provided,
however, that if the Actual Annual Product Amount is less than
[***], the Capacity Reservation Fee shall be [***].  If any Capacity Reservation Fee is due with
respect to any Fee Date in a calendar year, such fee shall be paid within 30 days
of such Fee Date.

 

At any time,
Optimer may inform Biocon in writing that it is reducing the minimum annual
Product capacity requirement set forth in the first sentence of Section 5.1 to
an amount below [***] (a Reduction Notice).  After delivery of a Reduction Notice, Optimer
shall remain liable to pay any Capacity Reservation Fees pursuant to the
preceding paragraph that accrue on each of (a) the three Fee Dates after the
date of such Reduction Notice, if such date is more than six months prior to
the next Fee Date, or (b) the four Fee Dates after the date of such Reduction
Notice, if such date is less than six months prior to the next Fee Date.  The foregoing notwithstanding, in lieu of
paying any Capacity Reservation Fees required by the preceding sentence after
delivering a Reduction Notice, Optimer may pay to Biocon a lump sum payment of
[***].  Following delivery of a Reduction
Notice and after paying any Capacity Reservation Fees or lump sum payment
required pursuant to the preceding two sentences following the deliver of a
Reduction Notice, Optimer shall not be required to pay any further Capacity
Reservation Fees pursuant to this Section 6.5. 
Upon the date that Optimer is released from further obligations to pay
Capacity Reservation Fees due to the delivery of a Reduction Notice, Biocon’s
obligations to reserve annual Product manufacturing capacity shall be reduced
for the remainder of the term of this Agreement to the amount set forth in such
Reduction Notice, provided that Biocon’s use of the [***] Equipment other than
for the manufacture of Product shall be limited to the manufacture of Permitted
Products (or, upon Optimer’s prior approval which shall not to be unreasonably
withheld, Prohibited Products) and shall be subject to the demonstration and
certification requirements set forth in clauses (a) and (b) of section 6.4.

 

6.6                If Optimer intends to enter into an
agreement with a third party with respect to the commercial supply of [***] of
Optimer’s Product requirements in [***], Optimer shall so notify Biocon,
including the principal terms of such proposed agreement, and Biocon shall
thereafter have a first right of refusal for a period of [***] from the date of
such notice by Optimer to agree be the commercial supplier of [***] of Optimer’s
[***] Product requirements on substantially the same terms set forth in Optimer’s
notice, subject to the following:

 

(a)           Such right of refusal shall include
discussions on the quantities [***] to be supplied by Biocon in [***] and such
product volumes shall be provided by Biocon [***];

 

(b)           Such right of refusal shall not be construed
as mandating any minimum volumes, including any [***];

 

(c)           Nothing in this section 6.6 shall be
construed as an obligation

 

13

 

on Optimer’s
part to enter into any [***] agreement with Biocon, and Optimer shall remain
free to accept or reject any terms for such an agreement proposed by Biocon,
provided Optimer acts in good faith in rejecting such agreement proposed by
Biocon; and

 

(d)           In the event Optimer (or its Affiliate, as
the case may be) and Biocon do not reach a definitive agreement [***] within
said period of [***], Optimer shall have no further obligation to Biocon with
respect to negotiating or entering into any agreement relating to [***] and
shall be free to seek competitive bids from third party suppliers and enter
into a definitive agreement with any third party for [***].

 

7.                                      PURCHASE AND DELIVERY
PROCEDURE

 

7.1                During the Term, Optimer agrees to buy from
Biocon and Biocon agrees to sell and supply to Optimer, such quantities of the
Product as may be set forth on purchase orders placed by Optimer in accordance
with the provisions hereof; provided, however, that Biocon shall not be liable
for any inability to supply Product or any shortfall in the supply of Product
pursuant to this Agreement, if such inability or shortfall is due to Optimer
requesting an amount of Product in the Binding Forecast for any calendar
quarter which is greater than [***] of the amount previously set forth in the
Non-Binding Forecast for the same quarter, subject to the provisions of section
6.3.

 

7.2                No less than three months prior to the date
that a Binding Forecast is due from Optimer for any calendar quarter, Biocon
shall provide to Optimer the [***] price per kg applicable to the manufacture
of Batches to be supplied during such calendar quarter. Such [***] prices shall
be based upon documented price quotations available to Biocon (which shall be
provided to Optimer upon request) and shall account for any long-term pricing
arrangement in place with respect to [***] supplies and existing supplies of
[***] on-hand and available for the manufacture of Batches to be supplied
during such calendar quarter.  Subject to
the provisions of section 6, Optimer shall submit written orders for the
Product in substantially the form of its standard API purchase order (Purchase Orders) setting out the quantity
of Product required, value per kg, total value of the Purchase Order, the date
the quantity specified in the Purchase Order should be ready for delivery ex
works (Availability Date),
delivery address and instructions for shipping and packaging. The foregoing
sentence notwithstanding, the Availability Date for the first Purchase Order
shall not occur prior to six (6) months from the date of such Purchase Order
and the Availability Date for any subsequent Purchase Order shall not occur
prior to three (3) months from the date of such Purchase Order. In compliance
with the first sentence of Section 6.1, during each calendar quarter following
the Approval Date, Optimer shall submit Purchaser Orders which (a) collectively
cover at least an amount of Product equal to the Minimum Volume for the
subsequent calendar quarter or the amount of Product specified in the Binding
Forecast relating to the subequent calendar quarter and (b) specify an
Availability Date no later than the last day of the subsequent calendar quarter
(subject to the limitations in the preceding sentence).

 

7.3                Biocon shall respond to Optimer within ten
(10) working days after receipt of each Purchase Order of Product, either
accepting or rejecting the

 

14

 

order. No order
shall be binding upon Biocon unless accepted by Biocon in writing; provided
that Biocon shall not reject any Purchase Order that is (a) substantially in
the form set forth on Schedule 7.2, (b) does not request an amount of
Product that (i) is more than [***] per quarter, (ii) is more than [***] of the
amount of Product set forth in the prior Non-Binding Forecast for the same
calendar quarter, or (iii) when combined with amounts of Product delivered over
the preceding 12 month period, would equal more than [***], and (c) is
otherwise consistent with Biocon and Optimer’s obligations under this
Agreement.  Purchase Orders accepted in
writing by Biocon shall be binding on both the parties (Binding Orders). Binding Orders may only be
amended if agreed by both parties. In the event of any ambiguity, contradiction
or discrepancy between a Binding Order or other documents of the parties and
this Agreement, the provisions of this Agreement shall prevail.

 

7.4                Biocon shall notify Optimer immediately if
Biocon determines that it will not be able to meet any of the terms of a
Binding Order, including, but not limited to, quantity and Availability
Date.  In any event, Biocon shall provide
such notice at least sixty (60) days prior to the Availability Date specified
in the applicable Binding Order.  In
addition, Biocon will notify Optimer promptly of any supply constraints (e.g.
materials, third party contracts, facilities or capacity) of which it becomes
aware that may affect Biocon’s ability to supply the Product in accordance with
this Agreement or any Binding Order.  For
purposes of clarification, Biocon’s compliance with these notice provisions
shall in no way limit or prejudice any rights or remedies available to Optimer
under this Agreement or otherwise arising out of Biocon’s inability to perform
its obligations under a Binding Order or otherwise.

 

7.5                Biocon shall have the Product in each
Binding Order available for shipment ex works, Bangalore (INCOTERMS 2000) on
the Availability Date, or such other date as may be agreed by the parties. Biocon
shall thereafter promptly prepare Product for shipment and arrange for shipment
of Product to a location and by a date designated in writing by Optimer in the
applicable Binding Order. Shipment terms are Ex Works, Bangalore (INCOTERMS 2000). All shipments
must be accompanied by a packing slip which describes the articles, states the
Purchase Order number and shows the shipment’s destination. Biocon agrees to
promptly forward the original bill of lading or other shipping receipt for each
shipment in accordance with Optimer’s instructions. In accordance with Optimer’s
written instructions and at Optimer’s expense, Biocon will arrange for the
shipment of Product by the carrier designated by Optimer and for appropriate
shipping insurance, and Biocon shall (unless prohibited by Applicable Law) ship
Product to the
destinations designated by Optimer in containers
reasonably sufficient for delivery of Product in accordance with the
Specifications. Optimer shall be responsible for carriage, insurance and freight of the
Product so delivered at its sole expense, and for compliance with all
Applicable Law requirements to import the Product into the Territory. All
taxes, duties, charges, imposts, levies and other tariffs payable on the
purchase of the Product by and delivery of the Product to Optimer pursuant to
this Agreement will be borne by and to the account of Optimer.  Biocon shall provide to Optimer a prior
written estimate of the costs for the shipment services and fees described in
this section 7.5 and inform Optimer of any material changes to such costs and
fees.

 

7.6                If Optimer or its Affiliate or designee is
not ready to accept shipment of Product on the date set forth in the applicable
Binding Order, then

 

15

 

Biocon shall, at
cost to Optimer, store such Product in accordance with the Specifications and
Quality Agreement, Biocon procedures, and in a manner consistent with customary
practices for pharmaceutical products, until Optimer notifies Biocon that it,
or its Affiliate or designee is ready to accept delivery. If Optimer requests
Biocon to store the Product beyond thirty (30) days from the date set forth in
the applicable Binding Order, Optimer shall pay Biocon for the Product as per
the applicable payment terms no later than such 30th day
and Biocon shall store such product at cost to Optimer. Notwithstanding the
foregoing, Biocon shall not be obligated to store such Products beyond sixty
(60) days from the date set forth in the applicable Binding Order and Optimer
shall be obliged to accept shipment of such Product prior to such 60th day if requested by Biocon.

 

7.7                Biocon
shall manufacture, package, label, store and ship Product in accordance with
the Specifications, cGMPs, the Quality Agreement, the NDA and other applicable
Regulatory Approvals, and all Applicable Laws. 
Biocon will not
rework any Batch of the Product without Optimer’s prior written consent.  Biocon’s responsibilities and
obligations with respect to the manufacture of Product as set forth in this
section 7.7 are hereinafter referred to as the “Manufacturing Requirements.” Biocon shall perform such quality
control testing prior to delivery of Product to Optimer as is required to
ensure that the Product delivered to Optimer under this Agreement complies with
the Manufacturing Requirements and Biocon’s warranties described in section 11,
which testing shall include, without limitation, the performance of all
required release testing and stability testing described in the
Specifications.  Biocon shall perform
such tests itself or, with Optimer’s prior written consent, cause to be tested
by a third party, each lot of Product before delivery, and shall provide to
Optimer (a) a certificate of analysis containing the quality control test
results for each such lot, and confirming that each such lot of Product
conforms to the Specifications (the Certificate
of Analysis), signed by an authorized Biocon official, (b) a Certificate of Conformance confirming that
such lot of Product was made in accordance with cGMPs and the process defined
in the approved master Batch Record for the Product, signed by an authorized
Biocon official, and (c) copies of documents detailing any deviations from any
manufacturing processes then in effect (the documents and information described
in (a), (b) and (c), the “Biocon Release
Documents”). Upon completion of the manufacture and testing of each
lot of Product ordered by Optimer under this Agreement, Biocon shall send all
the Biocon Release Documents to Optimer as well as any other document required to comply with Applicable
Law prior to shipment of the Product.

 

7.8                The
Specifications may be modified from time to time by written agreement of the
parties without the necessity of amending this Agreement. If Optimer requests a
change in the Specifications that would result in an increase in Biocon’s cost
of manufacture, the parties shall discuss what impact, if any, such change
should have on the price of Product.   If
Optimer agrees in writing to a proposed price increase to implement such
change, the price change shall become effective only with respect to those
Binding Orders of Product that are manufactured in accordance with the modified
Specifications.

 

7.9                Biocon
shall keep complete, accurate, and authentic accounts, notes, data, and records
pertaining to its manufacture, processing, testing, packaging, storage and
distribution of Product, including, without limitation, master

 

16

 

production and control records and Product
complaint files, in accordance with Applicable Laws.  In addition, Biocon shall retain samples of
Products and isolated intermediates of each lot manufactured pursuant to this
Agreement for a period of [***] after Optimer’s acceptance of such lot.  The sample size shall be [***] necessary to
conduct quality control testing.  Biocon
shall retain such records and samples for a period of [***] following the date
of manufacture, or longer if required by Applicable Laws, and, upon request,
shall make available to Optimer copies of such records and portions of the
samples.  After such time period, Biocon
shall notify Optimer prior to destroying such records and samples and, at
Optimer’s request and expense, shall provide such records and samples to
Optimer.

 

7.10              Biocon shall provide Optimer
and its representatives with access during reasonable business hours and after
reasonable notice to those areas of Biocon’s manufacturing facilities where
Product or raw materials
for Product is manufactured, stored or handled and to
manufacturing records, and testing and control records (including without
limitation release and stability records), of Product manufactured by Biocon,
so that Optimer and its representatives may perform a quality assurance audit
of such facilities and activities. The duration of such quality assurance audit
and inspection shall not exceed 15 man days in a year.  Biocon shall allow employees of Optimer or its
designee to be present during all manufacturing of the Product.  Use of all information gained
in the course of audits is restricted to the purpose of quality assurance.
Likewise, Biocon shall grant similar access to any Regulatory Authority upon
reasonable notice so that such Regulatory Authority can perform inspections of
its facilities.

 

8.                                      INSPECTION AND RECALLS

 

8.1           Optimer may reject delivery of any Batch of Product that does not
conform to the Manufacturing Requirements, whether evidenced by the Biocon
Release Documents or otherwise. Optimer or its designee will be entitled to
test at its own cost to ascertain whether the Product received by it conforms
to the Manufacturing Requirements.  Biocon
shall also promptly notify Optimer in writing if it becomes aware that any
Products manufactured by Biocon are defective or do not conform to the
Manufacturing Requirements or other warranties given by Biocon, which notice
shall identify in reasonable detail the nature of the non-conformity and the
lot or Batch of Products affected.

 

8.2                In order to reject Product,
Optimer must give written notice to Biocon of such rejection within   60 days after receipt  of such Product and specify the reasons for
such rejection, and if no such notice of rejection is received, Optimer shall
be deemed to have accepted such delivery of Product within such 30 day period
from the delivery thereof, except in the case of Latent Defects.  Optimer shall have 10 days after the date of
discovery of a Latent Defect in any Product to notify Biocon of rejection of
such Product.

 

8.3          If Optimer provides a rejection notice
pursuant to section 8.2, Biocon shall, as promptly as practicable, notify
Optimer as to whether it agrees or disagrees with the alleged defect.  In the event Biocon disagrees with the defect
identified by Optimer, Product samples from the lots or batches in question
will be referred to an independent external laboratory acceptable to both the
parties for testing and the finding of such laboratory shall be final and
binding on the parties and the cost of

 

17

 

such laboratory
analysis will be to the account of the party in error with regard to the stated
defect. To the extent any applicable methods of analysis for the Product are
set forth in the Specifications or Quality Agreement, such methods shall be
employed by such independent external laboratory in conducting an analysis
pursuant to this section 8.3.

 

8.4          If Biocon agrees with any defect or if an
independent external laboratory agrees with Optimer with respect to the
existence of a disputed defect, Biocon shall replace the defective Product at
no additional cost, and as promptly as practicable, but in no event later than
[***] of being advised by Optimer in accordance with section 8.2 (if Biocon
agreed with the defect) or later than [***] of an independent external
laboratory finding in favor of Optimer (if Biocon disputed the defect).  Biocon will credit Optimer future batches to
the extent it is unable to supply replacement Product in accordance with the
time periods specified in the previous sentence (due to insufficient safety
stock or otherwise). Biocon will also credit Optimer the cost of  testing paid by Optimer to any independent
external laboratory that identified defects in the Product Batches that will be
replaced including, without limitation, any costs incurred by Optimer in
shipping and insuring such Product or replacement Product in connection
therewith.

 

8.5                In the event a recall, withdrawal, or field
correction is required or requested by any Regulatory Authority (a Recall Action) or if Optimer acting in good
faith, voluntarily decides to recall any Product manufactured by Biocon,
Optimer shall coordinate all recall activities.

 

8.6                Biocon will assist Optimer and its designees
in investigating any Recall Action upon request.

 

8.7                Biocon shall reimburse all of Optimer’s
direct, reasonable costs actually incurred in connection with the recall and
reimburse Optimer for the purchase price paid for the recalled Product, if a
recall arises primarily:

 

(a)           due to the Product not being manufactured,
packaged or delivered by Biocon in accordance with the Manufacturing
Requirements and this Agreement, or

 

(b)           from an act or omission attributable to
Biocon’s negligence, willful misconduct or breach of the Agreement, or

 

(c)           from Biocon’s breach of its warranties
stated in section 11.3.

 

8.8                With respect to recalls arising for any reason not
mentioned in section 8.7, Optimer shall bear all the costs of such recall and
Biocon shall not be liable to reimburse Optimer for the purchase price paid for
the recalled Product and any other related cost or expense.

 

9.                                      PRICE AND DISCOUNTS

 

9.1                In consideration for the supply of Product
pursuant to this Agreement, Optimer shall pay Biocon the price for Product in
United States dollars and at the rates specified in Schedule 9.1. All
amounts specified in Schedule 9.1 are stated exclusive of applicable
taxes.

 

18

 

9.2                Optimer shall pay all Biocon invoices
together with applicable taxes including in relation to any applicable value
added tax, service tax, or sales tax within thirty (30) days of receipt of the
relevant invoice, in immediately available funds to the bank accounts
designated by Biocon. Optimer shall not withhold any tax in respect of any
payments to Biocon.

 

9.3                Optimer shall further pay and be liable to
pay interest at the rate of [***] per month on amounts due and unpaid after 60
days from the date of receipt of the applicable invoice by Optimer. Without
prejudice to the foregoing and notwithstanding any other provision of this
Agreement, in the event of any delayed payment beyond 90 days, Biocon shall,
until the full amount owed including interest is received, be entitled, at its
sole discretion, to withhold further delivery of the Product notwithstanding
the previous acceptance of any Binding Order for such Product and
notwithstanding any other provisions contained in this Agreement.

 

9.4                The parties hereby agree to negotiate in
good faith an adjustment to the price of the Product specified in Schedule
9.1 to compensate for any increase or decrease in the cost of manufacturing
the Product caused by a variation in the costs of the primary raw materials in
excess of [***] excluding [***] (including due to inflation). The party
requesting the price adjustment must be able to demonstrate the requisite
increase or decrease in the price of such primary raw materials through supplier
invoices and/or other means, including, as applicable, the wholesale price
index published by the Department of Economic Affairs, Ministry of Finance,
Government of India.  As part of the
negotiations regarding any price adjustment pursuant to this section 9.4, the
parties shall also agree upon the date on which such price adjustment will take
effect, giving consideration to any stock of primary raw materials Biocon may
have prior to implementing the price adjustment.

 

9.5                The parties further agree to adjust the
price of the Product if the exchange rate between the United States dollar and
Indian rupee calculated using the two week moving average from December 15th through December 31st of
any year (the Two Week Average) varies by more
than [***] compared to the exchange rate between the United States dollar and
Indian rupee as on the Effective Date (the Base Rate).  For purposes of this section 9.5 the
prevailing exchange rates on any date shall be based on the United States
dollar—Indian rupee exchange rate as confirmed by the Wall Street Journal,
Eastern U.S. edition.  Any price
adjustment required by this section shall be retroactive to January 1 of the
year following the year used to calculate the Two Week Average resulting in the
adjustment.

 

For any adjustment
required by this section, the price per kg of Product shall be adjusted by
multiplying it by a fraction, the numerator of which is the number of Indian
rupees per 1 USD according to the Base Rate and the denominator of which is the
number of rupees per 1 USD according to the Two Week Average resulting in such
adjustment.  For purposes of
clarification, if, after any price adjustment required under this section 9.5,
the Two Week Average calculated at the end of any year varies by less than
[***] from the Base Rate, the price per kg of Product for the subsequent
calendar year shall be re-adjusted to the price per kg of Product that would be
in effect had no adjustments been made under this section 9.5.  For clarification purposes only, illustative
price adjustments pursuant to this section are set forth in Schedule 9.5.

 

19

 

9.6                In addition to any other discounts or price
reductions provided for under this Agreement, Optimer shall be entitled to a
discount on the price of the Product calculated in accordance with the other
provisions of this section 9 until such time as the aggregate discount provided
to Optimer under this section 9.6 for Product supplied pursuant to this
Agreement amounts to USD $1,500,000 (one million, five hundred thousand United
States dollars only).  The discount
pursuant to this section 9.6 in any given year after the Approval Date shall be
determined in accordance with Schedule 9.6; provided that at no time
during the term of this Agreement, shall the discount provided to Optimer
pursuant to this section 9.6 exceed [***].

 

9.7                Both parties agree to formally meet at least
once a year and review continuous improvement activities, financial
responsibilities and other activities resulting from experience in operating
the manufacturing process for the Product including potential price adjustments
in raw materials. Upon mutual agreement of parties to implement such measures
as contemplated under this section:

 

(a)           [***]
of all cost savings, after subtracting captive and implementation costs
achieved by the efforts of Optimer or its marketing partners shall be passed on
to Optimer through a price reduction on a per Kg basis effective as of the
beginning of the second full calendar quarter following the calendar quarter in
which the cost savings are achieved.

 

(b)           Cost savings achieved by the
efforts of Biocon shall be shared with Optimer at a ratio of [***] to Optimer
and [***] to Biocon, after subtracting captive and implementation costs. These
savings shall be passed on to Optimer through a price reduction on a per Kg
basis effective as of the beginning of the second full calendar quarter
following the calendar quarter in which the cost savings are implemented.

 

(c)           A batch size in the range of
[***] on a  [***] will be the base for
determining any process improvements. The batch range on the [***] will be
determined after the completion of the validation runs on this column.

 

10.                               REGULATORY MATTERS

 

10.1              Biocon
agrees to inform Optimer within 24 hours of notification of any regulatory
inquiry, communication or inspection, which directly or indirectly relates to
the manufacture of the Product, including any notice of inspection or an
inspection visit by any Regulatory Authority which involves the Product or
could impact Biocon’s ability to produce the Product.  Optimer, at its option, shall have the right
to have its representatives present at any such inspection by a Regulatory
Authority.  In the event there are
written observations (or any other written communication) by a Regulatory
Authority that involve the Product or could impact Biocon’s ability to produce
the Product, or any proposed written response by Biocon to any such inspection,
Optimer shall be informed within 24 hours and be provided with copies of all
documentation within 48 hours, and shall have a reasonable opportunity to
review and comment on the proposed response.

 

10.2              Optimer
shall be responsible for all filings necessary for approval

 

20

 

of the Product. 
Biocon further agrees to use Commercially Reasonable and Diligent
Efforts to assist Optimer, at Optimer’s expense, in obtaining Regulatory
Approvals with respect to  Drug Product
in the Territory, including approval of an NDA. 
Biocon specifically agrees to cooperate with any inspection by the FDA
or other Regulatory
Authority,
including but not limited to any inspection prior to approval of an NDA.  The conditions under which Product is
manufactured shall be provided to Optimer for inclusion in Optimer’s regulatory
filings.  Biocon further agrees to
provide to Optimer all information regarding any aspect of manufacture of
Product that is necessary and related to Optimer’s regulatory filings.  Biocon shall also provide to Optimer or, at
Optimer’s direction,  a Regulatory
Authority, such amounts of Product as are reasonably necessary for validation
testing or otherwise in connection with any Regulatory Approval (Validation Batches).  The parties will agree on the cost of any
Validation Batches, such cost not to exceed the cost for an equivalent amount
of Product ordered pursuant to section 7 hereof, and any Validation Batches
shall be included in determining whether Optimer has met its Minimum Volumes
for any applicable quarter.

 

10.3              Biocon shall, at its own
expense, obtain and maintain the necessary permits required for its manufacture
and supply of the Product in accordance with this Agreement, including all
required facility licenses.

 

11.                               REPRESENTATION AND
WARRANTIES

 

11.1              Each party represents and warrants to the
others as follows.

 

(a)           Such party has, and for the term of this
Agreement will have, all requisite power and authority to enter into and
perform all its obligations under this Agreement and to conduct its business as
conducted on the date of this Agreement and as proposed to be conducted by the
parties pursuant to this Agreement;

 

(b)           Such party has taken all actions, obtained
all regulatory, corporate and contractual authorizations, and submitted all
notices or filings required to be submitted, for such party to validly enter
into this Agreement and will use Commercially Reasonable and Diligent Efforts
to apply for and obtain all Regulatory Approvals necessary to perform its
obligations under this Agreement;

 

(c)           The execution and delivery of, or the
performance of obligations under, this Agreement do not violate or conflict
with any statute, rule, regulation, directive or other law, judgment, order,
decree or award applicable to such party, or any provision of such party’s
constituent documents, or any agreement, contract, promise, covenant,
undertaking, representation or warranty, applicable to or made by such party;

 

(d)           This Agreement constitutes a legal, valid
and binding obligation on such party enforceable against such party in
accordance with its terms;

 

(e)           Such party is the lawful owner or licensee of all Confidential
Information disclosed or to be disclosed by such party to the other party under
this Agreement, and it is has the right to disclose all such Confidential
Information to the other party;

 

21

 

(f)            Such party validly Controls all Intellectual Property Rights licensed by
such party to the other party pursuant to this Agreement, and it has the right
to license such Intellectual Property Rights; and

 

(g)           Each of the above representations and
warranties are true and correct as of the Effective Date.

 

11.2              Each of the representations and warranties
contained in this Agreement are separate and independent and shall not be
qualified or limited by any reference to any other representation or warranty
or any other provision of this Agreement or any prior knowledge on the part of
or attributable to the other party or its Affiliates. Each party covenants to
the other that each of the above representations and warranties shall remain
true and correct during the term of this Agreement.

 

11.3              PRODUCT WARRANTIES. Biocon represents and warrants that
Product delivered hereunder will:

 

(a)           be manufactured, packaged, labeled and
delivered by Biocon in accordance with the Manufacturing Requirements, relevant
Regulatory Approvals, Applicable Law and this Agreement;

 

(b)           conform to the Specifications at the time of
delivery;

 

(c)           not contain any contaminant or be
adulterated within the meaning of Section 301 of the FDCA, or any other
Applicable Law; and

 

(d)           be free and clear of any lien or
encumbrance.

 

11.4              To the best of Biocon’s
knowledge, and subject to Optimer’s warranty contained in section 11.1(f), the
manufacture of the Product in accordance with this Agreement will not infringe
any Intellectual Property Rights of a third party to which Biocon does not hold
a valid license.

 

11.5              Biocon hereby certifies that
it has not been debarred under the provisions of the Generic Drug Enforcement
Act of 1992, 21 U.S.C. §§ 306 and 335a. 
In the event that Biocon:  (a)
becomes debarred; or (b) receives notice of action or threat of action with
respect to its debarment, during the Term, Biocon agrees to notify Optimer
immediately.  In the event that Biocon
becomes debarred as set forth in clause (a) above or Biocon receives notice of action or threat
of action as set forth in clause (b) above which Optimer believes
in good faith is more likely than not to result in debarment, Optimer will have
the right to terminate this Agreement immediately.

 

11.6              Biocon
hereby represents and warrants that it has not knowingly used, and Biocon
covenants that it will not knowingly use, in any capacity the services of any
individual, corporation, partnership, institution or association which has been
debarred under 21 U.S.C. §30.  In the
event Biocon becomes aware of the debarment or threatened debarment of any
individual, corporation, partnership, institution or association providing
services to Biocon which directly or indirectly relate to Biocon’s activities
under this Agreement, Biocon will notify Optimer

 

22

 

immediately. 
Optimer will have the right to terminate this Agreement immediately in
the event of debarment of such individual, corporation, partnership,
institution or association providing services to Biocon in relation to Biocon’s
obligations under this Agreement , unless Biocon is able to demonstrate to the
reasonable satisfaction of Optimer that such debarment or threatened debarment
will have no effect on any Regulatory Approval or Optimer’s ability to market
and sell Drug Products incorporating Product manufactured under this Agreement.

 

11.7              EXCEPT FOR THE WARRANTIES SPECIFICALLY AND EXPRESSLY GIVEN IN THIS
AGREEMENT, BIOCON MAKES NO EXPRESS WARRANTIES AND HEREBY EXCLUDES AND DISCLAIMS
IN THEIR ENTIRETY ALL IMPLIED WARRANTIES, INCLUDING, WITHOUT LIMITATION, ANY
IMPLIED WARRANTIES OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE WITH
RESPECT TO ANY PRODUCT PROVIDED BY BIOCON, EVEN IF BIOCON HAS BEEN ADVISED OF
ANY PARTICULAR USE OF THE PRODUCT.

 

12.                               INDEMNIFICATION AND
LIMITATION OF LIABILITY

 

12.1              Optimer
shall defend, indemnify and hold Biocon and its Affiliates and their respective
employees, directors, officers, shareholders and agents (each, a Biocon Indemnitee) harmless against any
Loss actually incurred by such Biocon Indemnitee to the extent such Loss
directly arises from (a) Optimer’s negligence or wilful act or omission in the
possession, use, importation, marketing or sale of Product, (b) Optimer’s
material breach of this Agreement, or (c) Optimer’s breach of any
representation or warranty set forth in section 11, in each case, except to the
extent Biocon is obligated to indemnify any Optimer Indemnitee for such claim
or proceeding under section 12.2 below.

 

12.2              Biocon
shall defend, indemnify and hold Optimer and its Affiliates and their
respective employees, directors, officers, shareholders and agents (each, an Optimer Indemnitee) harmless against any
Loss actually incurred by such Optimer Indemnitee to the extent that such Loss
directly arises from (a) Biocon’s negligence or wilful act or omission in the
manufacture, storage, labeling or delivery of Product; (b) Biocon’s material
breach of this Agreement; or (c) Biocon’s breach of any representation or
warranty set forth in section 11, in each case, except to the extent Optimer is
obligated to indemnify any Biocon Indemnitee for such claim or proceeding under
Section 12.1 above.

 

12.3              Each
indemnified party agrees to give the indemnifying party prompt written notice
of any matter upon which such indemnified party intends to base a claim for
indemnification (an Indemnity Claim)
under this section 12. The indemnifying party shall have the right to
participate jointly with the indemnified party in the indemnified party’s
defense, settlement or other disposition of any Indemnity Claim. With respect
to any Indemnity Claim relating solely to the payment of money damages and
which could not result in the indemnified party’s becoming subject to
injunctive or other equitable relief or otherwise adversely affect the business
of the indemnified party in any manner, and as to which the indemnifying party
shall have acknowledged in writing the obligation to indemnify the indemnified
party hereunder, the indemnifying party shall have the sole right to defend,
settle or otherwise dispose of such Indemnity Claim, on such terms as the
indemnifying party, in its sole

 

23

 

discretion, shall deem appropriate, provided
that the indemnifying party shall provide reasonable evidence of its ability to
pay any damages claimed and with respect to any such settlement shall have
obtained the written release of the indemnified party from the Indemnity Claim.
The indemnifying party shall obtain the written consent of the indemnified
party, which shall not be unreasonably withheld, prior to ceasing to defend,
settling or otherwise disposing of any Indemnity Claim if as a result thereof the
indemnified party would become subject to injunctive or other equitable relief
or the business of the indemnified party would be adversely affected in any
manner.

 

12.4              EXCEPT AS PROVIDED IN SECTION 8.7 AND EXCEPT
FOR BREACH OF SECTION 13 OR LOSSES ARISING FROM A PARTY’S GROSS NEGLIGENCE
OR INTENTIONAL MISCONDUCT, IN NO EVENT SHALL EITHER PARTY BE LIABLE TO THE
OTHER FOR ANY LOST PROFITS, LOST SAVINGS, OR ANY OTHER INCIDENTAL, SPECIAL,
EXEMPLARY, INDIRECT, PUNITIVE OR CONSEQUENTIAL DAMAGES, EVEN IF SUCH PARTY
HAS BEEN ADVISED OF THE POSSIBILITY OF SUCH DAMAGES, ARISING OUT OF OR IN
CONNECTION WITH THIS AGREEMENT. THE FOREGOING NOTWITHSTANDING, NOTHING IN THIS SECTION 12.4
SHALL LIMIT EITHER PARTY’S INDEMNIFICATION OBLIGATIONS SET FORTH IN THIS SECTION 12.

 

12.5              Notwithstanding
anything contained in any other provision of this Agreement, except as provided
in section 8 except for breach of section 13, and except Losses caused by a
party’s fraud or fraudulent misrepresentation, each party’s aggregate liability
for the entire term of this Agreement to the other party or the other party’s
Affiliates and their respective employees, directors, officers, shareholders
and agents, for any Loss arising under, in connection with or otherwise in
relation to this Agreement shall not exceed [***} prior to the time that Biocon
has sold to Optimer at least [***] of Product in any 12 month period and shall
not exceed [***] after the time Biocon has sold to Optimer at least [***] of
Product in any 12 month period. The foregoing notwithstanding, nothing in this
section 12.5 shall limit either party’s indemnification obligations set forth
in this section 12 with respect to bodily injury (including death).

 

13.                               CONFIDENTIALITY

 

13.1              Each party agrees that where it is a
Recipient, unless it has the prior written consent of the Discloser, it shall
only use Confidential Information of the Discloser in furtherance of this
Agreement. Each party shall treat the terms and conditions of this Agreement as
Confidential Information for which it shall be deemed to be a Recipient.

 

13.2              Without prejudice to the generality of the
foregoing, each Recipient undertakes that it shall not, whether during the term
of this Agreement or for a period of ten (10) years thereafter, itself use
such information, except as provided in this Agreement, or disclose, publicize,
reveal or make available, directly or indirectly, any Confidential Information
to any Person, except for a disclosure required by statute, order of court or
otherwise by law (including any disclosure required by the United States
Securities and Exchange Commission or by the Securities and Exchange Board of
India), or any requirements of any stock exchange on which the securities of
the Recipient are listed, and then only after first

 

24

 

advising the
Discloser of such requirement with reasonably sufficient notice to afford the
Discloser an opportunity to object or otherwise seek a protective order (except
in the case of disclosure required by the United States Securities and Exchange
Commission or by the Securities and Exchange Board of India).  Each Recipient may disclose Confidential
Information of the Discloser to any of its employees, Affiliates, consultants
or agents provided that such Persons need to know such information for purposes
of carrying out the Recipient’s activities under this Agreement and such Person
is bound by confidentiality obligations regarding such Confidential Information
that are at least as strict as those set forth herein.  Each Recipient may also disclose the terms of
this Agreement without the prior consent of the Discloser to the extent
necessary to permit third parties who are in bona fide discussions with such
Recipient to acquire, by way of merger, asset purchase, equity purchase or
exclusive license, all or substantially all of such Recipient’s assets or
Intellectual Property Rights to which this Agreement relates or to engage in
financing transactions with such Recipient, to conduct due diligence, provided
that such third parties are bound by confidentiality obligations regarding the
terms of this Agreement that are at least as strict as those set forth herein.

 

13.3              Each Recipient agrees to advise its
employees, Affiliates, consultants and agents who receive the Confidential
Information that such information (a) is confidential to the Discloser and
(b) shall not be disclosed to anyone except as necessary to fulfill the
purposes of the provision of such Confidential Information pursuant to this
Agreement.

 

13.4              The Recipient shall, at the Discloser’s
request, return the Discloser’s Confidential Information, in whatever form
contained, including all notes or memoranda made by its employees, agents or
representatives obtained or derived from any such Confidential Information,
together with any listing that identifies the documents provided; provided,
however, that the Recipient’s legal counsel may retain one (1) copy of the
Confidential Information in a secure location for purpose of identifying such
Recipient’s obligations under this Agreement.

 

13.5              The Confidential Information disclosed by
the Discloser shall remain the sole and exclusive property and asset of such
Discloser and the Recipient shall acquire no ownership, right, title or
interest therein by virtue of this Agreement.

 

13.6              Each party further understands and
acknowledges that, due to the unique nature of the other party’s Confidential
Information, any unauthorized disclosure of any portion of Confidential
Information shall cause irreparable injury to the Discloser and that no
adequate or complete remedy shall be available to the Discloser to compensate
for such injury. Accordingly, each party hereby acknowledges that the Discloser
shall be entitle to injunctive relief in the event of such unauthorized disclosure
by the Recipient or any of its agents or employees, in addition to whatever
other remedies the Discloser might have at law or in equity.

 

14.                               INTELLECTUAL PROPERTY
RIGHTS

 

14.1              Biocon acknowledges that Optimer Controls
Intellectual Property Rights in the Compound and the Drug Product and
undertakes not to use such intellectual property for any purpose whatsoever
except to the extent necessary to

 

25

 

supply Product
to Optimer or its designee under this Agreement. Optimer hereby licenses to
Biocon during the Term on a fully paid-up, non-exclusive, non-sublicensable and
royalty free basis, all Intellectual Property Rights in the Compound and the
Drug Product Controlled by Optimer to the extent necessary to manufacture and
supply Product to Optimer pursuant to this Agreement.

 

14.2              Optimer acknowledges that Biocon Controls
certain Intellectual Property Rights or has proprietary know-how in the
technology or manufacturing process of API and Optimer undertakes not to use
such Intellectual Property Rights or proprietary know-how except as
contemplated under this Agreement and/or necessary for obtaining Regulatory
Authorizations for the Product or a Drug Product. Biocon herby licenses to
Optimer on a fully paid-up and royalty free basis, all Intellectual Property
Rights in the technology or manufacturing process of the Product Controlled by
Biocon to the extent necessary to obtain Regulatory Authorizations for the
Product or a Drug Product and to make full use in accordance with this
Agreement of any Product supplied by Biocon under this Agreement.

 

14.3              The
parties agree that Optimer shall be the sole and exclusive owner of all right,
title and interest in and to any NDA filed with the FDA and the other Regulatory
Authorities outside of the United States, and that Optimer shall be the sole
and exclusive owner of any Regulatory Approvals related to the Product or a
Drug Product.

 

14.4              Each party shall notify the other as soon as
practicable after becoming aware of any infringement, suspected infringement or
alleged infringement of (a) any Intellectual Property Rights of any third
party caused by activities conducted by such party under this Agreement and (b) the
other party’s Intellectual Property Rights related to this Agreement or the
Product by a third party.

 

14.5              All trademarks, trade names, copyrights,
trade secrets, patents or other proprietary rights currently owned by a party,
or which such party shall own in the future, in connection with the Compound, Product
or Drug Product, shall and shall continue to be owned by such party, and,
except as explicitly set forth in this Agreement, the other party shall not
acquire or be deemed to acquire any such rights solely by virtue of this
Agreement and the parties’ relationship hereunder.

 

14.6              All
Intellectual Property Rights (a) generated by Biocon in connection with
Biocon’s scale-up, Initial Activities and other activities related
to Product, and (b) generated in the
performance of work conducted under or contemplated by this Agreement by
Biocon or Biocon’s employees, agents, consultants, subcontractors or other
representatives, either solely or jointly with employees, agents, consultants
or other representatives of Optimer, including all patent and other intellectual
property rights therein (collectively, Optimer
Intellectual Property), will be owned solely by Optimer; provided, however, that Optimer
Intellectual Property shall not include Biocon Inventions (defined below).  At Optimer’s request and expense, Biocon will
provide Optimer with reasonable assistance to perfect Optimer’s ownership
interest in Optimer Intellectual Property and in obtaining, securing and
maintaining patents and other intellectual property rights therein.  Biocon shall and shall cause all its
employees, agents, consultants and subcontractors to sign and deliver to
Optimer all writings and do all such things

 

26

 

as may be necessary or appropriate to vest in
Optimer all right, title and interest in and to such Optimer Intellectual
Property.  Biocon will promptly disclose
to Optimer any Intellectual Property Rights arising under this
Agreement.  Optimer may, in its sole
discretion, file and prosecute in its own name and at its own expense, patent
applications on any patentable inventions within the Optimer Intellectual
Property.  Upon the request of Optimer,
and at the sole expense of Optimer, Biocon will assist Optimer in the
preparation, filing and prosecution of such patent applications and will
execute and deliver any and all instruments necessary to effectuate the
ownership of such patent applications and to enable Optimer to file and
prosecute such patent applications in any country.

 

14.7              As
used in this Agreement, Biocon Inventions
means any and all Intellectual Property Rights conceived or made by, or
generated in the performance of work conducted under this Agreement by, Biocon
or Biocon’s employees, agents, consultants, subcontractors or other
representatives that relate to general processes of manufacturing, packaging or
analyzing pharmaceutical products, including any API, and not such processes
that relate specifically to the Compound or Product.  Biocon hereby grants to Optimer a fully-paid,
sub licensable, non-exclusive license under Biocon Inventions in so far as such
inventions are useful for the research, development or commercialization the
Compound, Product or Drug Product, and solely for the research,
development and commercialization of the Compound, Product or Drug Product within the Territory.

 

15.                               TERM AND TERMINATION

 

15.1              The terms and conditions of this Agreement
shall supersede any term or condition in any order, confirmation or other
document furnished by Optimer or Biocon that is inconsistent with these terms
and conditions, unless it is mutually agreed between the parties hereto in
writing.

 

15.2              Unless terminated earlier pursuant to the
following provisions, the term of this Agreement shall commence on date hereof
and shall continue for a period of seven and a half  (7.5) years from the Approval Date.
Thereafter, the Agreement may be renewed for such further period upon such
terms and conditions as the parties may mutually agree. Both parties shall
negotiate any such renewal [***] prior to expiration of this Agreement.

 

15.3              Unless otherwise agreed to by the parties,
this Agreement shall automatically terminate in the event Optimer does not
obtain a Marketing Authorization for a Drug Product in the Territory on or
before December 31, 2013.

 

15.4              Either party may terminate this Agreement
without cause by giving at least two (2) years and six (6) months
advance notice (Elective Termination Notice)
to the other party, which Elective Termination Notice may not be given prior to
the fifth (5th) anniversary of the Effective Date but may be given
at any time thereafter. Optimer may also terminate this Agreement without cause
and without prior notice provided that if it terminates the Agreement without
cause and without prior notice, the provision of section 16.3 shall apply.

 

15.5              Optimer may terminate this Agreement for
cause and without advance notice to Biocon:

 

27

 

(a)           if, for any two calendar quarters during any
continuous four calendar quarter period, Biocon is unable to supply the Binding
Forecast volume of Product in accordance with this Agreement, provided that
each such Binding Forecast volume of Product was no more than (i) [***]
per quarter, and (ii) [***] of the previous Non-Binding Forecast for such
quarter, and such Binding Forecast volume of Product does not result in the
total supply required exceeding [***] in the relevant four calendar quarter
period;

 

(b)           if there is a recall for which Biocon is
obligated to reimburse Optimer pursuant to section 8.7 above;

 

(c)           if Optimer has previously notified Biocon in
writing of a material breach of Biocon’s obligations under this Agreement and
Biocon has not cured such breach within sixty (60) days of such notice;

 

(d)           pursuant to sections 11.5 or 11.6; or

 

(e)           if Biocon is subject to any Insolvency
Proceedings.

 

15.6              Biocon may terminate this Agreement for
cause and without advance notice to Optimer:

 

(a)           if Biocon has previously notified Optimer in
writing of a material breach of Optimer’s obligations under the Agreement and
Optimer has not cured such breach within sixty (60) days of such notice;

 

(b)           if Optimer is subject to any Insolvency
Proceedings; or

 

(c) if for any two calendar quarters during any continuous four calendar
quarter period, Optimer does not submit Purchase Orders covering at least the
amount of Product set forth in its Binding Forecast for each such quarter;
provided that Biocon notified Optimer in writing of the failure in the first of
two such calendar quarters.

 

15.7              In the event of termination or expiration of
this Agreement, Biocon shall provide reasonable assistance to Optimer or its
designee (at Optimer’s expense if the termination is by Optimer other than
pursuant to section 15.5 or is by Biocon pursuant to section 15.6, or at Biocon’s
expense if the termination is by Biocon other than pursuant to section 15.6 or
is by Optimer pursuant to section 15.5) to implement the transfer of
manufacturing responsibility and process for the Product to another
manufacturer, provided that Biocon shall not be required to transfer, license
or disclose any of Biocon’s Intellectual Property Rights to a third party.

 

16.                               CONSEQUENCES OF TERMINATION

 

16.1              In the event either party notifies the other
that it intends to terminate this Agreement (including through an Elective Termination
Notice), Biocon shall immediately stop incurring further costs related to any
on-going Initial Activities.

 

16.2              In the event of termination of this
Agreement pursuant to section 15.3:

 

28

 

(a)           Optimer shall reimburse Biocon for
reasonable and documented expenses incurred by Biocon until date of termination
for each of the Initial Activities including but not limited to expenses
incurred for the installation of [***] Equipment at Park and purchase of raw
material for the Validation and/or initial manufacture of Product, provided
that such reimbursement shall not exceed 
[***] including any sums previously paid to Biocon pursuant to section 3
or prior to the Effective Date for such activities; and

 

(b)           Biocon will pay Optimer the cost price of
the [***] Equipment after depreciation using straight line over 10 years
through the date of termination and Biocon shall not be obligated to refund the
Dedication Fee to Optimer.

 

16.3              If Optimer terminates this Agreement without
notice and without cause (except by issuing an Elective Termination Notice) in
accordance with section 15.4:

 

(a)           Optimer shall pay and be liable to pay
Biocon a fee equal to [***] of the sum of:

 

(i)            the total purchase price of Product that
Biocon would have received if Optimer had purchased the amount of Product set
forth in the most recent Binding and Non-Binding Forecasts covering the two (2) calendar
quarters subsequent to the calendar quarter in which such termination occurred;
and

 

(ii)           the total purchase price of Product that
Biocon would have received if Optimer had purchased four (4) additional
quarters of Product, using an estimated quarterly amount of Product equal to
the average amount of Product per quarter actually ordered from Biocon and
delivered in all quarters prior to such termination (excluding the lowest and
highest quarters during such period);

 

(b)           The foregoing notwithstanding, the amount
set forth in this section 16.3(a) shall not exceed [***]; and

 

(c)           The foregoing notwithstanding, Biocon shall
be under no obligation to refund the Dedication Fee to Optimer.

 

16.4              If Biocon terminates this Agreement without
cause, other than by issuing an Elective Termination Notice in accordance with
section 15.4, or if Optimer terminates this Agreement for cause pursuant to
section 15.5, Biocon shall compensate Optimer the cost amount necessary to
procure the Product from a third party supplier and Biocon shall also
compensate Optimer for any cost differences between Biocon and the third party
supplier for a period of up to six (6) quarters or the remaining term of
the Agreement, whichever is shorter. 
Biocon shall also refund a pro rata portion of the Dedication Fee to
Optimer for the remaining term of the Agreement had the Agreement not been so
terminated, and which pro rata portion shall be calculated on the basis of the
Dedication Fee being paid for a period of seven and a half  (7.5 years) years from the Approval Date.
However, in any event, the aggregate amount payable by Biocon for early
termination under this section will not exceed [***].

 

16.5              No termination shall have any effect on any
rights or amounts

 

29

 

due which
accrued prior to the effective date of such termination.

 

16.6              Upon any termination of this Agreement, each
party shall immediately discontinue use of any Confidential Information
provided by the other and cause all Confidential Information of the other that
is in its possession to be returned to the Discloser within thirty (30)
calendar days of the date of the notice of termination. The foregoing sentence
notwithstanding, each party shall be entitled to retain one copy of the other
party’s Confidential Information for purposes of record keeping.

 

16.7        For a period of [***] following any
termination of this Agreement, without Optimer’s prior written consent, Biocon
shall not, perform manufacturing services for a third party involving the
manufacture of any product containing the Compound or salts, hydrates, solvates,
polymorphs, metabolites, prodrugs or analogs thereof, or otherwise enable a
third party or an Affiliate to manufacture the same. The provisions of section
1 (definitions), section 2 (interpretation and construction), section 8
(inspection and recalls) and sections 12 through 21, together with any
schedules referred to in such sections, shall survive any expiry or termination
of this Agreement.

 

17.                               NON-SOLICITATION

 

17.1              Subject to applicable law relating to the
validity of such restrictive covenants, neither party shall knowingly solicit,
directly or indirectly (except by way of general solicitation to the public),
for employment, or otherwise knowingly employ, engage or contract in a position
related to or connected with pharmaceutical products, from the date of this
Agreement and until the expiration of six (6) months after the termination
or conclusion of this Agreement, any person who is employed or contracted by
the other party.

 

17.2              In the event of a breach of the foregoing
covenants which results in the hiring of the other party’s employee, the party
in default shall be required to pay the non-defaulting party as fair and
reasonable liquidated damages, a sum equivalent to the higher of one (1) year’s
gross annual salary for the employee in question that is (i) being paid by
the non-defaulting party or (ii) agreed to be paid by the defaulting
party.

 

18.                               FORCE
MAJEURE

 

18.1              If a Force
Majeure Event occurs, the party whose performance of its obligations
under this Agreement is prevented by such Force
Majeure Event shall be excused from such performance only to the
extent and for the time prevented.

 

18.2              When such party is able to resume
performance of its obligations, it shall immediately give the other party
written notice to that effect and shall resume performance no later than two (2) business
days after the notice is delivered.

 

18.3              The relief offered by this section 18 is the
exclusive remedy available to a party with respect to a Force Majeure Event.

 

30

 

19.                               GOVERNING LAW AND
ARBITRATION

 

19.1              The laws of England and Wales (without
giving effect to their conflict of laws principles) govern all matters arising
out of or relating to this Agreement (including, without limitation, its
interpretation, construction, performance, and enforcement).

 

19.2              The parties shall endeavor to resolve
amicably disputes or differences, if any, arising out of or in connection with
this Agreement through mutual discussions and negotiations between senior
executives of Biocon and Optimer. All disputes arising out of or in connection
with this Agreement, that cannot be resolved within thirty (30) days of
commencing such negotiations, shall be finally settled under the Rules of
Arbitration of the International Chamber of Commerce (Rules) by one arbitrator appointed in
accordance with said Rules. The venue for the arbitration shall be London,
United Kingdom.  The proceedings shall be
conducted in English.

 

19.3              The arbitral award shall be final,
conclusive and binding on the parties and may be enforced in any court of
competent jurisdiction.

 

20.                               NOTICE

 

20.1              Any notice or other communication given or
required to be given under or pursuant to this Agreement shall be in writing
and shall be sent by recognized electronic mail, recognized courier or
facsimile, provided that where such notice is sent by electronic mail or
facsimile, a confirmation copy shall be sent by recognized courier within two (2) working
days of the transmission by electronic mail or facsimile at the following
address of the receiving party, or at such other address as may be notified by
the receiving party to the other in writing, provided such change of address
has been notified at least ten (10) days prior to the date on which such
notice has been given pursuant to this Agreement.

 

If to Biocon:

 

Attention:      Murali
Krishnan

Rakesh Bamzai

Legal Department

Biocon Limited, 20 KM,
Hosur Road, Electronics City P.O, Bangalore 560 100, India

Facsimile:
91-80-2852-3423

 

If to Optimer:

Attention: Chief
Executive Officer

Optimer Pharmaceuticals, Inc.,
10110 Sorrento Valley Rd., Suite C, San Diego, California 92121, U.S.A

Facsimile: 858-909-0737

 

21.                               MISCELLANEOUS

 

21.1              Neither this Agreement nor its performance
shall be assigned or delegated by either party to a third party without the
prior written consent of the other party, except that such consent shall not be
required in connection with any assignment or delegation by either party to any
Affiliate or subsidiary of such party, to the acquirer of such party through merger,
sale of stock or otherwise, to the acquirer of all or substantially all of such
party’s business or assets to which this

 

31

 

Agreement relates or to an exclusive or co-exclusive licensee of all or
substantially all of such party’s Intellectual Property Rights to which this
Agreement relates.  Any purported
assignment of rights in violation of or contrary to this section 21.1 is and
shall be deemed to be void.

 

21.2              No provision of this Agreement may be
waived, except in writing by the party against whom the waiver is sought to be
enforced. No failure or delay in exercising any right or remedy or requiring
the satisfaction of any condition under this Agreement, and no course of
dealing between the parties shall operate as a waiver of any right, remedy or
condition. A waiver provided in writing on one occasion is effective only in
that instance and only for the purpose for which it is given.

 

21.3              The rights and remedies set forth in this
Agreement are the parties’ exclusive rights and remedies, and, except as
otherwise expressly provided in this Agreement, neither party has, or will have
in the future, any other rights or remedies.

 

21.4              If any provision of this Agreement should be
or become entirely or partly invalid or unenforceable, such invalidity or
unenforceability shall not affect the validity or enforceability of any other
provision of this Agreement. The invalid or unenforceable provision, as the
case may be, shall be regarded as replaced by such valid and enforceable
provision that as closely as possible reflects the economic purpose that the
parties hereto had pursued with the invalid or unenforceable provision.

 

21.5              Nothing in this Agreement shall, or shall be
deemed to constitute a partnership, joint venture or similar arrangement
between the parties or to constitute either party as the agent or trustee of
the other party for any purpose.

 

21.6              Each party shall bear its own costs and
expenses in connection with the preparation, execution and delivery of this
Agreement.

 

21.7              No amendment of this Agreement shall be
effective unless it is in writing and duly executed by all parties to this
Agreement.

 

21.8              This Agreement, including the preamble and
schedules and the documents referred to in this Agreement contain all the
promises, agreements, conditions and understandings between and among the
parties with respect to the subject matter of this Agreement, and supersede all
prior or contemporaneous promises, agreements, conditions and understandings,
whether oral or written, with respect to such subject matter, including that
certain Letter of Intent, dated January 9, 2009, between the parties.  For purposes of clarification, the parties
hereby agree that upon the Effective Date, that certain Supply Agreement, dated
August 29, 2005, between Biocon and Optimer (as assignee of Par
Pharmaceutical, Inc.) shall be deemed mutually terminated by the parties
pursuant to section 8.2 thereof.

 

21.9              The remedies expressly provided in this
Agreement are exhaustive and shall not be cumulative to any other remedies that
may otherwise be available to the parties.

 

32

 

21.10           No provision of this Agreement shall be
construed against any party on the ground that it or its counsel drafted that
provision.

 

[Signature Page Follows]

 

33

 

INTENDING
TO BE BOUND, the Parties have caused their authorized representatives to sign and
execute this Agreement on their behalf on the day and year first above written.

 

 

	
  /S/ ARUN CHANDAVARKAR

  	
   

  	
  /S/ PEDRO LICHTINGER

  
	
   

  	
   

  	
   

  
	
  FOR BIOCON LIMITED

  	
   

  	
  FOR OPTIMER PHARMACEUTICALS, INC.

  

 

34

 

SCHEDULE
1.19

 

[***]

 

35

 

SCHEDULE
6.3

 

[***]

 

36

 

SCHEDULE
9.1

 

[***]

 

37

 

SCHEDULE
9.5

 

FIRST ADJUSTMENT:

 

[***]

 

SECOND ADJUSTMENT:

 

[***]

 

38

 

SCHEDULE
9.6

 

[***]

 

39

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