Document:

HDFC Bank's Employee Stock Option Scheme

 Exhibit 4.1 
 EMPLOYEE’S STOCK OPTION SCHEME (‘ESOS’) XII 
 This ESOS has been framed by the Compensation Committee in accordance with Securities and Exchange Board of India (Employee Stock Options Scheme and Employees Stock Purchase Scheme) Guidelines, 1999, as amended, and the resolution of the
shareholders of the Bank passed at their meeting held on 16th June, 2007. 
 CLAUSE A : DEFINITIONS 
 Unless repugnant to the context or meaning
hereof, the following terms shall have the following meanings: 
 1. “Employee” shall mean 
 any permanent employee of the Bank from the grade of executive to the Managing Director and directors of the Bank, if any (either on the date of this scheme or
thereafter) and shall include any employee of the Bank who has joined on the request of the Bank the employment of any company which is a subsidiary, or an affiliate company or sister concern of the Bank. 
 2. “Bank” shall mean HDFC Bank Limited. 
 3. “Employee Stock
Option Scheme/ ESOS “ shall mean this scheme. 
 4. “Option” means a right but not an obligation granted to an Employee pursuant to this ESOS
to apply for Equity Shares of the Bank at a pre-determined price as mentioned hereafter. 
 5. “Grant” means the issue of Options to Employees
under this ESOS. 
 6. “Date of Vesting” shall mean the date on which the Employee is given a right to apply for shares of the Bank against the
Options granted to him under this ESOS. 
 7. “Exercise” shall mean the act of making an application by the Employee to the Bank for issue of
shares against Option vested in the Employee in pursuance of this ESOS. 
 8. “Price” shall mean the price communicated to the Employee at the time
of granting of the Option determined as mentioned hereunder, which price has to be paid by the Employee at the time of exercising the Option. 
 9. “
Applicable Tax” shall mean Fringe Benefit Tax (FBT) or any other tax levied by the Government from time to time. 
 “F.B.T.” shall mean the
amount of tax which has to be paid by the employee at the time of exercising the options. This is calculated at certain percentage on the differentiation of price being the grant price and the market price of the shares being quoted on the stock
exchange on its vesting day. In case, there is no trading on the vesting day then the market price quoted on the previous working day will be considered for this calculation. 
  

 1 

 10. “Exercise Period” shall mean the time period within which the Options vested in an Employee have to be
exercised by such Employee. 
 11. “Market price” of a share on a given date means the closing price of the shares on that date on the Stock
Exchange in India where there is highest trading volume. 
 12. “Vesting” shall mean the process by which the Employee is given the right to apply
for Equity Shares in the Bank against the Options granted to the Employee in pursuance of this ESOS. 
 13. “Compensation Committee” means a
committee of Board of Directors of the Bank constituted by the Board in accordance with the applicable regulations/ laws. 
 14. The term “shares”
or “Equity shares” shall mean equity shares of the Bank having a face value of Rs.10/- each per share. 
 CLAUSE B. COMPENSATION COMMITTEE

 The Compensation Committee has pursuant to the powers granted to it and in accordance with the terms
and conditions approved by the members of the Bank in the Annual General Meeting of the Bank held on the 16th June 2007 formulated this ESOS. In the event of any clarifications being required on the interpretation or application of this ESOS, the same shall be referred to the Compensation Committee. The decision of the Compensation
Committee shall be final and binding in this regard. The Compensation Committee has also reserved the right to vary this Scheme as and when required, subject as always to the Securities and Exchange Board of India (Employee Stock Options Scheme and
Employees Stock Purchase Scheme) Guidelines, 1999, as amended from time to time. 
 In the eventuality of any rights issue, bonus issues and other corporate
actions, the Compensation Committee shall consider and approve such adjustment as to the number of options granted and / or to the exercise price as per the then applicable acts, rules and regulations. 
 CLAUSE C. ELIGIBILE EMPLOYEES 
 All Employees are eligible for the Grant of
the Options. The total number of Options issued pursuant to this ESOS will be subject to a maximum of 10,000,000 (10 million only) Options. On Exercise of the Option in accordance with this ESOS, One Equity Share for each Option held by the Employee
would be issued by the Bank. 
 All Employees to whom the Compensation Committee has resolved that the aforesaid Options be granted would be informed of the
same by way of a separate communication by way of a separate letter or by way of an electronic mail. (except directors for the reasons mentioned in Clause P below) 
  

 2 

 An employee (including a director) who is a promoter or belongs to the promoter group shall not be eligible to
participate in the ESOS. 
 A director either by himself or through his relative or through any body corporate directly or indirectly holds more than
10 % of the outstanding equity shares of the Bank shall not be eligible to participate in the ESOS. 
 Further, no single employee/director shall be
granted options under the ESOS entitling such employee/director to equity shares in the Bank which would represent more than 1% of the paid-up share capital of the Bank as on the date of grant of options or 10% of the total number of options granted
under the scheme. The minimum number of options that can be granted under the ESOS are zero. 
 CLAUSE D : CRITERIA FOR GRANT OF OPTIONS 

While Granting the Options, the Compensation Committee has inter alia taken into consideration the grade, performance, merit, future potential contribution, conduct of
the Employee and such other appropriate relevant factors. The Compensation Committee has decided that Options shall not be granted to Employees whose performance in the immediately preceding appraisal is evaluated as ‘unacceptable’.

 CLAUSE E : DATE OF GRANT OF OPTIONS 
 The Compensation Committee at its meeting on the 27th June, 2007 has determined
the Employees eligible for Grant of such Options and the number of such Options to be granted to such Employees. The Compensation Committee has determined the 27th day June, 2007 as the date of Grant of such Options. 
 CLAUSE F: PRICING 
 As approved by the Shareholders in the Annual General Meeting of the Bank held on the 16th June, 2007, the price of the options shall be the closing market price quoted on the immediately preceding working day of
the date of grant of Options, on the stock exchange, where there is highest trading volume. 
 In
accordance with the above criteria and the date of Grant of Option being 27th day June, 2007, the Price in respect
of Options granted on 27th day June, 2007 is fixed at Rs 1098.70 (Rupees One Thousand and Ninety Eight and paise
Seventy only/-) per Option / Equity Share. 
 CLAUSE G. VESTING OF OPTIONS 
 The Options Granted to the Employees pursuant to this ESOS will Vest in two stages: 
 STAGE I 
 50% of the Options rounded off to the nearest 100 shall Vest in the Employees on the 27th day June, 2008 
  

 3 

 STAGE II 
 Balance Options shall Vest in the Employees on the 27th day June, 2009 
 CLAUSE H. THE EFFECT OF DEATH, PERMANENT
DISABLEMENT RESIGNATION AND TERMINATION OF THE EMPLOYMENT ON THE VESTING OF OPTIONS 
 No option shall Vest in any Employee if the employee ceases to be in
the employment of the Bank before the date of Vesting of the Options except in the following cases: 
 1. Death of an employee 
 In case of a death of an Employee to whom the Options are Granted, all Options that have been Granted to the Employee shall be deemed to have been Vested in the Employee
on the date of his / her death and shall be exercisable by his/her nominees and in the absence of any nominee, by the Employee’s legal heirs and successors. All such Options shall be exercisable by the legal heirs, successors and/or nominees,
as the case may be, within a period of six months from the date of death of the Employee. To enable the Employees to nominate persons in respect of the Options, the Bank shall make available to the Employees specific nomination forms from time to
time. 
 2. Permanent disablement 
 In case an Employee suffers a
permanent disablement/incapacity while in employment and as consequence of it his/her employment with the Bank comes to an end, all the Options granted to him / her as on the date of permanent disablement/incapacitation, shall Vest in him / her on
that date. All such Options shall be Exercisable within a period of six months from the date of such permanent disablement. 
 3. Resignation / Termination
of employment 
 In the event of resignation or termination of the Employee, all Options not Vested as on that date shall forfeit. However the Employee shall
be entitled to retain all the Vested Options and Exercise the same within a period of six months from the date of cessation of the employment. However such resignation or termination is not on account of misconduct or misdemeanour of the Employee.
After expiry of six months, the vested options shall get lapsed, if not exercised. The Compensation Committee shall have absolute discretion in determining whether there has been any “misconduct” or “misdemanour” on part of the
Employee and the decision of the Compensation Committee in this regard shall be final and binding on the Employee. If the resignation or termination of the Employee is attributable to misconduct / misdeamenour of the Employee, then in that event all
Options Vested in the Employee shall forthwith lapse and the Employee shall not be entitled to Exercise such Options. Such options shall be liable to be forfeited by the Bank. 
  

 4 

 4. Retirement of an employee 
 In case the Employee, including a Director to whom the Options are Granted retires, or vacates his/her office upon reaching the age of supper annuation as per the Bank’s rules or upon expiry of any extension thereof or on account of
any directives, statutory provisions, clarifications or guidelines of the Reserve Bank of India (other than a directive, provision, clarification or guideline relating to the misconduct or misdeamenour of an Employee) then in such case all Granted
Options shall forthwith Vest in such Employee. However, the Employee shall Exercise the Options within a period of six months from the date of such retirement / vacating of the office, failing which the said options shall lapse. 
 5. Merger and Amalgamation 
 The Options granted hereunder shall not be
affected by any takeover, merger, amalgamation of any other entity with the Bank. In the event of the Bank being merged or amalgamated into any other Entity or if there is any material and sizable change in the controlling interest / shareholdings
held by the promoters of the Bank or if any investor acquires more than 12% of the paid-up share capital of the Bank either by itself or together with relatives / group companies / entities acting in concert, then in such an event, all Options
granted shall forthwith Vest in the Employees and they shall be entitled to Exercise the same forthwith. 
 CLAUSE I. EXERCISING OF OPTIONS 
 Save and except as mentioned in clause H, Employees may Exercise Vested Options, before the expiry of two years from the respective date(s) of Vesting of the Options. At
the time of Exercising the Options, the Employees shall apply for a minimum of 200 shares or the entire unexercised Vested Options held by the Employee on such date, whichever is less. 
 The mode and manner of the Exercise of the Options shall be communicated separately to the Employees. On Exercise of the Options the Employee shall forthwith pay to the Bank the Price which includes the grant price
plus the F.B.T. amount or any other amount which the Bank has an option to recover from its past and present employees. The Bank shall be entitled to recover the Price by debiting the salary/saving/other account of the employees with the Bank. The
Employee shall issue necessary authorisations to the Bank in this regard. In case the Employee does not have an account with the Bank then the Bank shall accept the exercise price by such other means acceptable to the Bank 
 It is hereby clarified that the Options can be Exercised only after they are Vested in the Employees and the
allotment in respect thereof shall be made within 21 days from the last date specified for the exercise of options in each month / period. The data of Options Exercised during a particular calendar month shall be computed and furnished to the stock
exchanges for listing permission immediately thereafter or in accordance with the provisions of the regulations of the stock exchange then in force. Trading of such shares shall be subject to the approval of the stock exchanges. Hence if an Option
is exercised at any time between 1st of any month 
  

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 till the last date specified for exercise of options for that month, the allotment shall be made within 21 days from the
said last date specified for exercise of options for that month. The data for the said calendar month shall be computed thereafter and provided to the stock exchanges for listing purposes. 
 In case of employees who intend to go on long leave, they may request the ESOP Manager to subscribe for the shares on their behalf. ESOP Manager would insist on
authority letter in this regard. The shares will be issued and allotted in the name of such employees. 
 The above period of the calendar month may in the
discretion of the Compensation Committee be modified from time to time. 
 CLAUSE J. LAPSE OF OPTIONS AND GRANTING THEREOF 
 Without prejudice to the provisions of clause H, the options vested in an Employee shall lapse upon the expiry of two years from the date of such Vesting. If the Options
are not exercised by the Employees concerned within a period of two years from the date of Vesting of such Options, the right of the Employee to apply for Option / Equity Shares shall stand forfeited and such options shall forthwith lapse.

 In the event of any Options lapsed pursuant to the provisions of Clause Nos. H and J, the said lapsed Options shall be available to the Compensation
Committee for Grant to such other Employees as the Compensation Committee may deem fit. Provided that the Price of such Options shall be computed from the date of Grant of such Options and not in accordance with the Price under this Scheme.

 CLAUSE K. CASHLESS EXERCISE 
 Notwithstanding anything
contained in Clause I, in case any Employee is desirous of Exercising Options Vested in him / her, the Bank may permit the empanelled stock brokers of the Bank, to fund the payment of the Price which shall be adjusted against the sale proceeds of
some or all the Shares that would be required to be sold / transferred. To enable the Employee to avail of this procedure of Cashless Exercise the Compensation Committee shall be entitled to frame such rules, regulations and guidelines in this
regard from time to time. 
 CLAUSE L. NON - TRANSFERABILITY OF THE OPTIONS 
 The Options granted to an Employee shall not be transferable by the Employee to any other person. Except in case of death of an Employee, no other person shall be entitled to exercise the Option in lieu of or on
behalf of or in trust for the Employee. 
 The Option granted to an Employee shall not be hypothecated, mortgaged or otherwise alienated in any other manner.

 CLAUSE M. TAX - LIABILITY 
 The liability of paying tax, if
any, on the options granted / vested / exercised/ allotted pursuant to this ESOS- X and the shares issued pursuant to exercise of options, shall be entirely on the employees and shall be in accordance with the provisions of the Income Tax,

  

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 Act, 1961 and the rules framed there under. The Bank also has an option to recover the tax amount whether by way of FBT
or otherwise from its past and present employees. In the event of any amendments or modifications to the provisions of the Income Tax Act, 1961 and / or the rules framed there under as existing on the dates of this ESOS-X the Compensation Committee
shall have the power to amend or modify this ESOS-X at a suitable time without consent of the employees or shareholders as the case may be, in order to ensure that the Bank is in the same position as it would have been had the amendments or
modifications in the Income Tax act, 1961 and / or rules framed there under have not been made. 
 The Bank shall be entitled to recover from its employees
any tax that may be levied on the Bank from time to time by any regulatory authorities during granting / vesting / exercising / allotting of options. 
 CLAUSE N. RIGHTS AS A SHAREHOLDER 
 The Employee shall not be able to exercise any rights of a shareholder in respect of the Options granted to him
/ her until he / she is allotted the requisite Equity Shares upon his/her exercising the Option so granted to him / her in accordance with this ESOS. However, all the Option grantees will receive communications as per the SEBI (Employee Stock Option
Scheme and Employee Stock Purchase Scheme) Guidelines, 1999, as amended from time to time. 
 No Employee shall have a right to receive any dividend or to
vote at any meeting of the Bank or in any manner enjoy the benefits of a shareholder in respect of Options Granted or Vested in the Employee, until and unless Equity Shares are allotted to the Employee upon Exercise of the Options. All Equity Shares
of the Bank issued consequent to such Exercise shall rank on pari-passu basis (i.e. on par with and with the same rights and benefits of) with the then existing Equity Shares of the Bank. 
 CLAUSE O. INTERPRETATION 
 Any dispute or disagreement which shall arise
under, or as a result of, or pursuant to, or in connection with this ESOS shall be referred to the Compensation Committee and shall be determined by the Compensation Committee and any such determination / decision/interpretation by the Compensation
Committee shall be binding on all persons affected thereby. 
 CLAUSE P. REGULATORY APPROVALS 
 The ESOS shall be subject to such regulatory approvals as may be required from time to time. 
 It is further clarified that Granting of Options to directors shall be subject to the approval of Reserve Bank of India. On receipt of the approval referred to above, the intimation of receipt of such approval and the
Grant of the Options shall be given to such directors. Provided that the date of Grant of the Options to such directors shall be in any event deemed to be the 27th day June, 2007 at the Price mentioned in clause F. 
  

 7Letter Agreement between Genaera Corporation and MacroChem Corporation

 Exhibit 10.1 
 July 3, 2007 
 MacroChem Corporation 
 40
Washington Street, Suite 220 
 Wellesley Hills, MA 02481 
 Attention: Robert J. DeLuccia 
 Gentlemen: 
 This letter sets forth the terms of an exclusive option to license granted by Genaera Corporation (“Genaera”) to MacroChem Corporation (“MacroChem”). Capitalized terms used but not defined in this letter shall have the
meanings given to them in the form of the License Agreement attached hereto as Exhibit A (the “License Agreement”). 
 In
consideration for, and contingent on, the payment by MacroChem to Genaera of $250,000 (the “Option Payment”) on the date hereof, Genaera hereby grants to MacroChem an exclusive option (the “Option”) to obtain (i) an
exclusive license to the Subject IP and (ii) certain other rights and assets described in the License Agreement, in each case on the terms set forth in the License Agreement. The Option is initially exercisable at any time for ninety
(90) days following the date hereof (the “Initial Expiration Date”) in the manner set forth herein. The period for MacroChem to exercise the Option may be extended by MacroChem for an additional ninety (90) days from the Initial
Expiration Date (the “Extended Expiration Date”) by giving written notice of such extension to Genaera at any time prior to the Initial Expiration Date, which notice shall be accompanied by payment to Genaera of $250,000. MacroChem shall
have the right to additional ninety (90) day extensions of the Extended Expiration Date of the Option on the same terms and conditions set forth above and payment of $250,000 for each such extension. The Option Payment and any subsequent
Extended Option Payments are non-refundable and non-creditable against any payments required to be made under the License Agreement. 
 In
order to exercise the Option, MacroChem shall, on or before the Initial Expiration Date, or if applicable, the Extended Expiration Date or any extensions thereof, provide written notice to Genaera (the “Exercise Notice”) of its election to
exercise the Option, which Exercise Notice shall be accompanied by an executed counterpart of the License Agreement. Genaera shall, within three (3) business days of receipt of the Exercise Notice and the executed counterpart of the License
Agreement, countersign the License Agreement (with the date of such countersignature being the Effective Date of the License Agreement) and return such countersigned License Agreement to MacroChem. The Option shall expire if it has not been duly
exercised by MacroChem on or prior to the Initial Expiration Date, the Extended Expiration Date, or any extensions thereof, as applicable. 

 Genaera represents and covenants that (i) prior to the expiration of the Option, it shall not
assign, transfer, or grant any rights to the Subject IP or the other rights and assets as set forth in the License Agreement that are inconsistent with the rights to be granted under the License Agreement or that would in any manner reasonably be
expected to impair the ability of Genaera from fully complying with this letter agreement or the License Agreement and (ii) the execution of this letter agreement and the License Agreement have been duly authorized by all necessary action
required by law and any internal policies of Genaera. 
 MacroChem represents and covenants that the execution of this letter agreement and
the License Agreement have been duly authorized by all necessary action required by law and any internal policies of MacroChem. 
 The
parties will consult with respect to the appropriate public disclosure to be made with respect to the transaction contemplated by this Option and the License Agreement, and will make no such disclosure without the prior written consent of the other
party prior to such disclosure, which shall not be unreasonably withheld; provided, however, that a party may, without the prior consent of the other party (but after such consultation, to the extent practicable in the circumstances), make
such public disclosure as may be required by law or the rules or regulations of any stock exchange or other regulatory authority (a “Disclosure Obligation”), it being agreed by the parties that if the financial terms of this letter
agreement or the License Agreement are required to be disclosed pursuant to a Disclosure Obligation, each party shall be permitted to disclose, to the extent required by the Disclosure Obligation, the financial terms of this letter agreement and the
financial terms of the License Agreement. MacroChem agrees to take reasonable efforts to ensure that all such public disclosures as may be required by law or the rules or regulations of any stock exchange or other regulatory authority are submitted
as confidential documents and do not disclose the financial terms of the License Agreement, except as set forth in the immediately preceding sentence. Without limiting the foregoing, neither party shall disclose the terms of this letter agreement or
the License Agreement to an unaffiliated third party, except for legal, financial, accounting or other similar advisors who agree to keep the terms of this letter agreement and the License Agreement confidential, without the prior written approval
of the other party, provided that each party may disclose the aggregate of the consideration to be paid by MacroChem to Genaera under each of this letter agreement and the License Agreement in any press release announcing the transaction entered
into between the parties under this letter agreement and the License Agreement or any other communication by such party to investors and analysts, but not any individual milestones or the associated milestone payments specified in the License
Agreement. 
 This letter agreement and any disputes arising hereunder shall be governed by the laws of the State of Delaware, without giving
effect to its conflicts of laws rules. This letter agreement may be executed in counterparts which together shall constitute a single instrument. All notices and other communications hereunder shall be in writing and shall be deemed given by a party
to the other party (i) if delivered personally, on the date 

 
delivered, (ii) if delivered by facsimile (with confirmation of receipt), on the date such facsimile is transmitted and confirmation of receipt
obtained, and (iii) if delivered by overnight international courier service or any other means, the date on which such notice is actually received by the other party. 
 If the foregoing accurately sets forth your understanding with regard to the subject matter hereof, please countersign and date the enclosed copy of this
letter and return it to me at your earliest convenience. 
  

			
	Very truly yours,
	
	GENAERA CORPORATION
		
	By:	 	 /s/ John L. Armstrong, Jr.

	Name:	 	John L. Armstrong, Jr.
	Title:	 	President & CEO
	Date:	 	July 3, 2007

  

			
	Agreed:
	
	MACROCHEM CORPORATION
		
	By:	 	 /s/ Robert J. DeLuccia

	Name:	 	Robert J. DeLuccia
	Title:	 	President & CEO
	Date:	 	July 3, 2007

 EXHIBIT A 
 LICENSE AGREEMENT 
 See attached. 

 LICENSE AGREEMENT 
 DATED AS OF 
 [                    ], 2007 
 BETWEEN 
 MACROCHEM CORPORATION

 AND 
 GENAERA CORPORATION 

 TABLE OF CONTENTS 
  

			
	1. DEFINITIONS	  	1
		
	 1.1. DEFINITIONS
	  	1
	 1.2. OTHER DEFINED TERMS
	  	6
		
	 2. LICENSE
	  	6
		
	 2.1. LICENSE GRANT
	  	6
	 2.2. TRANSFER OF INVENTORY
	  	7
	 2.3. TRANSFER OF EXISTING REGULATORY
FILINGS
	  	7
	 2.4. DELIVERY OF TECHNOLOGY
	  	7
	 2.5. RESERVATION OF RIGHTS
	  	8
	 2.6. LIABILITIES
	  	8
	 2.7. PRODUCTS LIABILITY
	  	8
		
	 3. PAYMENT OBLIGATIONS
	  	9
		
	 3.1. CONSIDERATION
	  	9
	 3.2. INSTRUMENTS OF TRANSFER
	  	11
	 3.3. TAXES
	  	12
		
	 4. COMMERCIALIZATION; R&D; REGULATORY APPROVALS
	  	12
		
	 4.1. COMMERCIALIZATION
	  	12
	 4.2. RESEARCH AND DEVELOPMENT ACTIVITIES
	  	12
	 4.3. PRODUCT REGISTRATIONS 
	  	12
	 4.4. PRICING AND REIMBURSEMENT APPROVALS
	  	13
	 4.5. COMPLIANCE WITH APPLICABLE LAW
	  	13
		
	 5. REPRESENTATIONS AND WARRANTIES OF GENAERA.
	  	13
		
	GENAERA REPRESENTS AND WARRANTS AS OF THE EFFECTIVE DATE:	  	13
		
	 5.1. DUE ORGANIZATION
	  	13
	 5.2. AUTHORIZATION
	  	13
	 5.3. NO DEFAULT OR VIOLATION
	  	13
	 5.4. DOCUMENTATION
	  	14
	 5.5. LITIGATION, WARRANTY AND OTHER
CLAIMS
	  	14
	 5.6. SUBJECT IP
	  	14
	 5.7. DISCLAIMER
	  	15
		
	 6. REPRESENTATIONS AND WARRANTIES OF MACROCHEM
	  	15
		
	 6.1. DUE ORGANIZATION
	  	15
	 6.2. AUTHORIZATION
	  	15
	 6.3. NO DEFAULT OR VIOLATION
	  	15
	 6.4. SUFFICIENT FINANCIAL RESOURCES
	  	16
	 6.5. BROKERAGE
	  	16

			
	7. COVENANTS OF THE PARTIES	  	16
		
	 7.1. FURTHER ACTIONS
	  	16
	 7.2. COVENANT NOT TO COMPETE; NON-SOLICITATION OF
CUSTOMERS
	  	16
	 7.3. OWNERSHIP OF IP RIGHTS
	  	17
	 7.4. PATENT PROSECUTION
	  	17
	 7.5. PATENT ENFORCEMENT
	  	18
	 7.6. DEFENSE OF SUBJECT IP
	  	18
	 7.7. MARKING
	  	19
	 7.8. NON-SOLICITATION
	  	19
		
	8. POST-EXECUTION MATTERS	  	19
		
	 8.1. DEFENSE OF CLAIMS AND LITIGATION
	  	19
	 8.2. CONFIDENTIALITY
	  	19
		
	9. INDEMNIFICATION	  	20
		
	 9.1. INDEMNIFICATION
	  	20
	 9.2. CLAIMS FOR INDEMNIFICATION
	  	21
	 9.3. SURVIVAL OF REPRESENTATIONS AND WARRANTIES
	  	22
	 9.4. EXPECTED CLAIM NOTICE
	  	22
	 9.5. THIRD PARTY BENEFICIARIES
	  	22
	 9.6. INSURANCE
	  	22
	 9.7. LIMITATION OF LIABILITY
	  	23
		
	10. DISPUTE RESOLUTION	  	23
		
	 10.1. NEGOTIATION
	  	23
	 10.2. SUBMISSION TO ARBITRATION
	  	23
	 10.3. ARBITRATION REMEDY EXCLUSIVE
	  	24
	 10.4. SUBMISSION TO JURISDICTION
	  	25
		
	11. MISCELLANEOUS	  	25
		
	 11.1. TERMINATION
	  	25
	 11.2. EFFECT OF TERMINATION
	  	26
	 11.3. REVERSION OF RIGHTS UPON TERMINATION
	  	26
	 11.4. CONFIDENTIALITY UPON TERMINATION
	  	26
	 11.5. WAIVERS AND AMENDMENTS
	  	27
	 11.6. PERFORMANCE
	  	27
	 11.7. NOTICES
	  	27
	 11.8. EXPENSES
	  	28
	 11.9. PUBLICITY
	  	28
	 11.10. ENTIRE AGREEMENT
	  	28
	 11.11. GOVERNING LAW
	  	28
	 11.12. INTERPRETATION
	  	29
	 11.13. SEVERABILITY
	  	29
	 11.14. EXHIBITS, DISCLOSURE SCHEDULES AND
APPENDICES
	  	29
	 11.15. COUNTERPARTS AND FACSIMILE SIGNATURES
	  	29
	 11.16. NO ASSIGNMENT BY MACROCHEM
	  	29
	 11.17. WAIVER OF JURY TRIAL
	  	30

  

 ii 

 LICENSE AGREEMENT 
 THIS LICENSE AGREEMENT is made this
[            ] day of [                    ], 2007 (“Effective
Date”) by and between MacroChem Corporation, a corporation organized and existing under the laws of Delaware having a principle place of business at 40 Washington Street, Suite 220, Wellesley Hills, Massachusetts 02481
(“MACROCHEM”), and Genaera Corporation a corporation organized and existing under the laws of Delaware having a principle place of business at 5110 Campus Drive, Plymouth Meeting, Pennsylvania 19462 (“GENAERA”).
Capitalized terms used but not defined in this Preamble to this Agreement shall have the meanings defined in Section 1. 
 BACKGROUND

 A. GENAERA is in the business, among other things, of developing and manufacturing, various small molecule drugs, including the Product;
and 
 B. MACROCHEM wishes to license from GENAERA, and GENAERA wishes to license to MACROCHEM, certain intellectual property rights and
other materials that relate to the Product, in each case on the terms and conditions set forth herein. 
 In view of the foregoing and for
other good and valuable consideration, receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 
 1.
Definitions. 
 1.1. Definitions. In addition to the terms defined elsewhere in this Agreement, including the recitals, the
following terms, when used herein, shall have the following meanings: 
 “Affiliate” shall mean a person that directly, or
indirectly through one or more intermediaries, controls or is controlled by, or is under common control with, the person specified. For purposes of this definition, the terms “control,” “controlled by” and “under common
control with” shall mean the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of such person and, in the case of an entity, shall require (a) in the case of a corporate entity,
direct or indirect ownership of at least a majority of the securities having the right to vote for the election of directors, and (b) in the case of a non-corporate entity, direct or indirect ownership of at least a majority of the equity
interests with the power to direct the management and policies of such non-corporate entity. 
 “Agreement”, “this
Agreement,” “hereto,” “hereof,” “hereunder,” “by this Agreement,” and similar expressions refer to this License Agreement, including the schedules, appendices and exhibits
attached hereto, and not any particular article, section, subsection or other subdivision hereof or thereof. 
 “Active
Pharmaceutical Ingredient” or “API” shall for the purposes of this Agreement mean Pexiganan acetate peptide (f/k/a MSI-78), including its pharmacologically acceptable analogs, salts, solvents, hydrates, hemihydrates,
polymorphs, metabolites, free base forms, pro- drugs, esters, tautomers and if applicable, any isomers, stereoisomers, racemates, enantiomers and all optically active forms thereof. 

 “Bulk Goods Inventory” shall mean that product inventory, as of the Effective Date, of
Genaera Bulk Product that GENAERA delivers to MACROCHEM pursuant to this Agreement. 
 “Code” shall mean the Internal
Revenue Code of 1986, as amended. 
 “control” shall mean, with respect to any intellectual property rights or other rights,
control of such rights such that a person has the right to license or sublicense such rights to a third party without incurring any obligation to pay any fees or other liability in connection therewith. 
 “Cumulative Net Sales” shall mean all sales (world-wide) of Product whether by MACROCHEM, sublicensees of MACROCHEM, or MACROCHEM’s
distributors or agents. 
 “Drug Regulation” shall mean any statute, regulation, judicial or administrative interpretation,
guideline, recommendation or standard international guidance relating to any Regulated Product in the United States or any other country (i) in which GENAERA has facilities, does business, or directly or through others sells or offers for sale
any Regulated Product, or (ii) with respect to which MACROCHEM has notified GENAERA that it intends to sell or distribute Products. 
 “Disclosure Schedules” shall mean the lists and other information delivered by GENAERA to MACROCHEM in response to the requirements of Section 5. 
 “Exploit” or “Exploitation”, with respect to a product, shall mean to disclose, manufacture, import, use, sell, have
sold, offer for sale, research, develop, commercialize, register, modify, enhance, prepare derivative works, seek necessary or desirable regulatory approvals, improve, formulate, export, transport, distribute, promote and market such product.

 “Field” shall mean, with respect to any compound or composition, use of such compound or composition in the diagnosis,
cure, mitigation, treatment, or prevention of disease in humans, either as a prescription drug or an over the counter drug by reference to applicable law, rule or regulation governing such compound or composition. 
 “FDA” shall mean the United States Food and Drug Administration. 
 “Finished Goods Inventory” shall mean that product inventory, as of the Effective Date, of Genaera Finished Product that GENAERA
delivers to MACROCHEM hereunder. 
 “Genaera API” shall mean the approximately ten (10) kilograms of non-cGMP active
pharmaceutical ingredient (API) currently in the custody or control of GENAERA. 
 “Genaera Bulk Product” shall mean the
approximately one (1) quart of formulated API (unpackaged) that is in the custody or control of GENAERA. 
  

 2 

 “Genaera Confidential Information” shall mean any non-public and proprietary information
disclosed by or on behalf of GENAERA to MACROCHEM in connection with this Agreement (whether prior to, on or after the Effective Date), including the Product Documentation and Trade Secrets. 
 “Genaera Finished Product” shall mean the approximately five hundred (500) units of packed drug product in 7.5 g tubes that is
currently under the custody or control of GENAERA 
 “Genaera Product” shall mean any Product manufactured, distributed or
under development by or on behalf of GENAERA as of the Effective Date. 
 “GLP” shall mean Good Laboratory Practices as
promulgated by the FDA, as in effect from time to time. 
 “GMP” shall mean Good Manufacturing Practices as promulgated by
the FDA, as in effect from time to time. 
 “Governmental Authority” shall mean any nation, territory or government (or
union thereof), foreign, domestic or multinational, any state, local or other political subdivision thereof, and any bureau, court, tribunal, board, commission, department, agency or other entity exercising executive, legislative, judicial,
regulatory or administrative functions of government, including all taxing authorities and all European notification bodies and all other entities exercising regulatory authority over medical products or devices. 
 “Insolvency Event” means, with respect to any person, when: (a) such person at any time generally ceases or suspends the payment of
such person’s debts or is, or is deemed, unable to pay its debts; (b) any step, application or proceeding is taken by such person or against such person, for such person’s dissolution, winding up, or bankruptcy, or the appointment of
a receiver, administrative receiver, administrator, or similar officer to such person, or over all, or any part of, such person’s assets or business; (c) where such person is a partnership, such partnership is dissolved or joins or
amalgamates with any other partnership; or (d) such person suspends, ceases, or threatens to suspend or cease all, or substantially all, of such person’s operations. 
 “Lien” shall mean any interest, consensual or otherwise, in property, whether real, personal or mixed property or assets, tangible or
intangible, securing an obligation owed to, or a claim by a third person, or otherwise evidencing an interest of a person other than the owner of the property, whether such interest is based on common law, statute or contract, and including, but not
limited to, any security interest, security title or lien arising from a mortgage, recordation of abstract of judgment, deed of trust, deed to secure debt, encumbrance, restriction, charge, covenant, restriction, claim, exception, encroachment,
easement, right of way, license, permit, incorporeal hereditament, pledge, conditional sale, option trust (constructive or otherwise) or trust receipt or a lease, consignment or bailment for security purposes and other title exceptions and
encumbrances affecting the property (but not including mechanics’, carriers’, warehousemen’s, vendors’ or other similar liens arising in the ordinary course of the Business if and to the extent that GENAERA removes such liens by
prompt payment for services or materials rendered). 
  

 3 

 “Litigation Matter” shall mean any claim, investigation, arbitration, grievance,
litigation, action, suit or proceeding, administrative or judicial, to which GENAERA is (or, to GENAERA’s knowledge, is threatened to be made) a party and relating to the Products or Subject IP (whether GENAERA is a plaintiff, defendant or
otherwise), at law or in equity or otherwise, or before any Governmental Authority. 
 “Net Sales” shall mean the gross
revenue that a person or its Affiliates receives from the sale of the Products, less the following amounts: (i) cash discounts, distributor discounts or fees, and rebates actually allowed or granted, or group purchasing organization fees in
reasonable amounts customary in the trade; (ii) refunds, replacements, credits or allowances actually granted upon claims or returns regardless of the party requesting the return; (iii) freight charges paid for delivery, postage, insurance
and other shipping charges, to the extent included in the amounts invoiced; and (iv) taxes or other governmental charges levied on or measured by the invoiced amount, including sales taxes, use taxes and custom duties, to the extent included in
the amounts invoiced. 
 “Parties” shall mean each of GENAERA and MACROCHEM, each of which is sometimes referred to as a
“Party.” 
 “Patent Rights” shall have the meaning set forth in the definition of Subject IP. 

“Person” shall mean an individual, corporation, partnership, limited partnership, limited liability company, unincorporated
association, trust, joint venture, union or other organization or entity, including a Governmental Authority. 
 “Product”
or “Products” shall mean any pharmaceutical composition or preparation comprising or containing the API as an active ingredient and having a concentration of API greater than 0.2% by weight that is sold for use in the Field,
including without limitation all dosage forms of such compositions or preparations. 
 “Product Documentation” shall mean
any and all patterns, plans, designs, research data, formulae, specifications, manufacturing processes, vendor and raw material and component lists and specifications, quality testing procedures, process validations, environmental control
documentation, operating manuals, blueprints, sketches, drawings, manuals, data, records, procedures and research and development records, compositions, proposals, process descriptions and other technical data (including chemical formulations,
design specifications, standard operating procedures and manufacturing protocols) in each case that are owned by and in the possession of GENAERA as of the Effective Date and necessary for the manufacture or quality assurance testing of any existing
Product. 
 “Product IND” shall mean any and all Investigational New Drug Applications filed by GENAERA and relating to the
Genaera Product, including but not limited to IND No. 40,454 and IND No. 43,929. 
 “Product NDA” shall mean the
New Drug Application filed by GENAERA and relating to the Genaera Product including but not limited to NDA No. 20-930. 
  

 4 

 “Regulated Product” shall mean any product or component that is regulated as a drug by a
Governmental Authority. 
 “Regulatory Correspondence” shall mean any and all of the following to the extent that they
relate to any Product or the Exploitation of any Product and are in the possession of GENAERA as of the Effective Date: all applications, registrations, approvals, concurrences and filings with, and other submissions and correspondence relating to,
any Products to or from the FDA, any state counterpart, any European notified body and any other foreign Governmental Authority with similar authority, and, with respect to FDA filings and submissions, identifying the type of the filing or
submission (whether under an IND or NDA or otherwise), including all warning letters, all vigilance reports, all adverse event reports, all correspondence relating to clinical activities, all responses to FDA audits, all European notified body
audits, all responses to European notified bodies, all CE technical or CE Marking files, all facilities registration documentation and all device listing documentation. 
 “Start of Phase III Clinical Trial” shall mean that point at which the first human subject is dosed by MACROCHEM with any Product for the purpose of conducting a Phase III (large scale safety and
efficacy) or equivalent clinical trial anywhere in the world. 
 “Subject IP” shall mean: 
 (a) all unexpired United States and foreign patents, patent applications and Disclosures of Inventions, certificates of invention and all rights therein
owned by GENAERA as of the Effective Date that are necessary for the development, manufacture, use, import or sale of the Product in the Territory, and any continuations, continuations-in-part, divisionals, reissues, patents of addition,
registrations, confirmations, supplementary protection certificates, term extensions (under applicable patent law or regulation or other law or regulation) or reexaminations thereof, any subsequent filings in any country claiming priority therefrom
and any and all discoveries or inventions embodied within the foregoing, including, but not limited to, the foregoing identified in Section 1 of the Disclosure Schedules (the “Patent Rights”); 
 (b) the Product Documentation and all intellectual property disclosed or described therein that is owned by GENAERA as of the Effective Date that are
necessary for the development, manufacture, use, import or sale of the Product in the Territory; 
 (c) the trademarks CYTOLEX and LOCILEX,
to the extent that GENAERA owns any rights in such trademarks as of the Effective Date (the “Trademarks”); and 
 (d) the
Trade Secrets. 
 “Subsidiary” shall mean, and “subsidiaries” collectively shall mean, as to any particular
parent corporation, any corporation as to which more than 50% of the outstanding stock having ordinary voting rights or power is owned or controlled, directly or indirectly, by such parent corporation. 
 “Territory” shall mean worldwide. 
  

 5 

 “Trade Secret(s)” shall mean all data and information maintained in confidence by
GENAERA and owned by and in the possession of GENAERA as of the Effective Date that are necessary for the development, manufacture, use, import or sale of the Product in the Territory, including such data and information that are necessary for the
design, development, animal or clinical testing, obtaining regulatory concurrence or approval, manufacture, production, revision, maintenance, repair, quality assurance, marketing, labeling, packaging, advertising, sale, operation, use or other
Exploitation of the Product as of the Effective Date, and including all related processes, plans, designs, research, operating manuals, methods, compounds, formulae, discoveries, developments, designs, drawings, technology, techniques, procedures,
know-how, specifications, inventions, customer and supplier lists, computer programs, and other scientific or technical data or information conceived, memorialized, developed and/or reduced to practice, in each case whether or not patentable in any
jurisdiction, that are owned by GENAERA as of the Effective Date. Until such time as any particular patent has been published in accordance with the terms of a Patent Application or such Patent Application has been published, the term “Trade
Secrets” shall be deemed to include all inventions disclosed in such Patent Application. 
 1.2. Other Defined Terms.
Definitions of the defined terms listed below are contained in the Section set forth opposite the defined term in the table below: 
  

			
	 Defined Term
	  	 Section of Agreement

	AAA	  	Section 10.2
	Arbitrators	  	Section 10.2
	Claim Notice	  	Section 9.2(a)
	Commercial Arbitration Rules	  	Section 10.2
	Consideration	  	Section 3.1
	Damages	  	Section 9.1(a)
	Disclosure Obligation	  	Section 11.9
	DMF	  	Section 2.3
	Expected Claim Notice	  	Section 9.4
	GENAERA Indemnified Parties	  	Section 9.1(a)
	GENAERA Products Liability	  	Section 2.7(a)
	Indemnified Party	  	Section 9.2(a)
	Indemnifying Party	  	Section 9.2(a)
	License	  	Section 2.1
	MACROCHEM Indemnified Parties	  	Section 9.1(b)
	MACROCHEM Products Liability	  	Section 2.7(b)
	R&D Milestone I Deadline	  	Section 3.1(e)
	R&D Milestone II Deadline	  	Section 3.1(e)
	Representatives	  	Section 10.1

 2. License. 
 2.1. License Grant. Subject to MACROCHEM’s compliance with the terms and conditions hereof, GENAERA hereby grants, and MACROCHEM hereby accepts, a personal, exclusive, royalty-bearing, non-transferable
(except as permitted by Section 11.16), perpetual license in the Territory to and under the Subject IP to make, have made, sell, offer to sell, import 
  

 6 

 
and use the Products (the “License”). MACROCHEM shall have the right to grant sublicenses of equal or lesser scope of its rights under the
License to third parties, provided that (a) each such sublicensee shall agree in writing to be bound by all of the terms and conditions of this Agreement, (b) no sublicensee shall have the right to sublicense to any third party any of the
rights granted to it by MACROCHEM, and (c) any breach by a sublicensee of MACROCHEM of the terms and conditions of this Agreement shall be deemed a breach by MACROCHEM under this Agreement. Any sublicense granted by MACROCHEM shall terminate
upon the termination of this Agreement. For avoidance of doubt, MACROCHEM is not licensed under the Subject IP with respect to any active ingredient other than the API. 
 2.2. Transfer of Inventory. Upon the terms and subject to the conditions hereof, GENAERA shall sell, transfer and assign to MACROCHEM, and MACROCHEM shall purchase and acquire from GENAERA, all of
GENAERA’s right, title and interest in and to the following: 
 (a) all Finished Goods Inventory; 
 (b) the Genaera API; 
 (c) the Genaera Bulk
Product; and 
 (d) the Genaera Finished Product. 
 2.3. Transfer of Existing Regulatory Filings. (a) GENAERA shall use its commercially reasonable efforts to assign, within thirty (30) days of the Effective Date: 
 (i) the Product IND and Product NDA to MACROCHEM, and 
 (ii) the existing Drug Master File (“DMF”) relating to the Genaera Product(s) to MACROCHEM. 
 (b) GENAERA and its sublicensees shall have the right to retain a copy of and, upon request from time to time, access and receive from MACROCHEM any updates made to, the IND, NDA and DMF, and other regulatory filings made by MACROCHEM with
respect to the Product, for use in connection with products outside of the Field, including cosmetic products, and in connection with the rights reserved under Section 2.5(b). 
 2.4. Delivery of Technology. GENAERA will facilitate the transfer of all information owned by GENAERA and in the possession of GENAERA included
within the Subject IP that is covered by the License in the format and in accordance with the schedule mutually agreed upon by the Parties, giving priority to such information that is necessary for MACROCHEM to initiate formulation and clinical
trials in a prompt and efficient manner. GENAERA agrees from time to time during the term of this Agreement to make available at MACROCHEM’s reasonable request such additional information related to the Product, research data and operating
procedures and other Subject IP necessary for MACROCHEM to exercise its rights under the License, in each case to the extent the same are in the possession of GENAERA. Without limiting the foregoing, MACROCHEM shall reimburse GENAERA for all
reasonable costs and expenses incurred by it to perform the activities under this Section 2.4. 
  

 7 

 2.5. Reservation of Rights. (a) Except as expressly provided herein, no license,
immunity or other rights is granted to MACROCHEM to or under any intellectual property rights owned or controlled by GENAERA, either directly, by implication, estoppel or otherwise. Without limiting the foregoing, MACROCHEM acknowledges and agrees
that it shall have no right or license to any GENAERA trademark, name or logo, including “GENAERA”. 
 (b) GENAERA retains all
rights to the Subject IP and API outside of the Field, including, without limitation, to make, have made, sell, offer to sell, import and use any product having a formulation with API less than or equal to 0.2% by weight therein, subject to the
restrictions specified in Section 7.2. 
 2.6. Liabilities. (a) Effective as of the Effective Date, MACROCHEM shall
assume and be responsible for payment and performance of, and agrees to pay and perform, and be solely responsible for all (and GENAERA shall have no responsibility with respect to any of) MACROCHEM Products Liability and, subject to
Section 2.7, all other liabilities incurred or existing on or after the Effective Date related to the development, manufacture, import, sale or use of the Products on or after the Effective Date by or on behalf of MACROCHEM or any successor,
including with respect to any studies, clinical trials and other activities undertaken by MACROCHEM with respect to the Product. 
 (b)
GENAERA shall be responsible for payment and performance of, and agrees to pay and perform, and be solely responsible for all (and MACROCHEM shall not have any responsibility with respect to any) GENAERA Products Liability and, subject to
Section 2.7, all other liabilities incurred or existing as of the Effective Date related to the development, manufacture, import, sale or use of the Products by or on behalf of GENAERA prior to the Effective Date. 
 2.7. Products Liability. MACROCHEM and GENAERA have agreed upon the following to clarify any ambiguities that might otherwise exist with
respect to their respective liabilities and obligations relating to any Product. The provisions of this Section 2.7 shall supersede any and all other provisions of this Agreement to the extent referring to the subject matter hereof. The Parties
have agreed that: 
 (a) GENAERA shall be liable for any and all claims asserted by any person for the death of or injury to any person or any
damage to or loss of property or other products liability arising out of or related to any Product manufactured by or for GENAERA that has been used or sold by GENAERA prior to the Effective Date (regardless of when the injury occurs or when the
claim is asserted) (the “GENAERA Products Liability”). 
 (b) MACROCHEM shall be liable for any and all claims asserted by
any person for the death of or injury to any person or any damage to or loss of property or other products liability arising out of or related to any Product manufactured by or on behalf of MACROCHEM on or after the Effective Date, and any Genaera
API, Finished Goods Inventory and Bulk Goods Inventory that is at any time transferred to MACROCHEM (the “MACROCHEM Products Liability”). 
  

 8 

 3. Payment Obligations. 
 3.1. Consideration. Subject to the other provisions of this Agreement, MACROCHEM shall pay to GENAERA, for the License and other rights
granted herein, the following royalties and milestones (the “Consideration”): 
 (a) Milestones: MACROCHEM will make
the following payments to GENAERA on the occurrence of the following events, whether first achieved by MACROCHEM, an Affiliate of MACROCHEM or a sublicensee of MACROCHEM: 
  

			
	(i) Upon signing:	  	$** USD;
		
	(ii) On December 1, 2007	  	$** USD;
		
	(iii) On February 1, 2008	  	$** USD
		
	(iv) Start of Phase III Clinical Trial:	  	$** USD;
		
	(v) First Regulatory Approval of:	  	
		
	 (A) a Product in any jurisdiction:
	  	$** USD;
		
	 (B) a Product in the United States:
	  	$** USD;
		
	(vi) Cumulative Net Sales of $500 M:	  	$** USD;
		
	(vii) Cumulative Net Sales of $1,000 M:	  	$** USD; and
		
	(viii) Cumulative Net Sales of $2,000 M:	  	$** USD.

 Milestones under sub-section (iv) hereunder shall become due and payable within thirty
(30) days of the Start of Phase III Clinical Trials. All milestone payments pursuant to sub-sections (v) – (viii) hereunder, shall become due and payable within thirty (30) days of the first occurrence of the relevant
milestone. Such milestone payments shall be due only once and not on any recurrent basis. It is understood by the Parties that pursuant to sub-section (v), should the first regulatory approval of a Product be in the United States, a total payment of
$** USD shall become due and payable by MACROCHEM to GENAERA. 
 (b) Royalties: MACROCHEM shall pay to GENAERA a running royalty
equal to ** percent (**%) of the worldwide Net Sales of each Product by MACROCHEM on a country-by-country, Product-by-Product basis for a period not to exceed the later of (x) the date of the last to expire Patent Rights covering the applicable
Product in such country; or (y) five (5) years from the first commercial sale of the applicable Product in such country. Royalties shall be paid to GENAERA on a calendar quarterly basis. For avoidance of doubt, Net Sales of Products by
MACROCHEM’s Affiliates shall be subject to this Section 3.1(b), and not Section 3.1(d)(i), provided that Section 3.1(d)(ii) shall apply with respect to such Affiliate. Upon the expiration of MACROCHEM’s royalty obligations
under this Section 3.1(b) with respect to a Product in any country, MACROCHEM’s License shall become royalty free for such Product in such country. 
  

 9 

 (c) Milestone and Royalty Reduction: For the purposes of this Agreement and the foregoing
milestone and royalty payments, the Parties have assumed that MACROCHEM will be performing a single Phase III clinical trial in order to secure final FDA approval of the first Product in the United States. If MACROCHEM reasonably determines that
clinical trials in addition to those described in the preceding sentence are required by the FDA in order to secure final FDA approval of such Product in the United States, then the following reductions to the milestone and/or royalty payments shall
occur: (i) the milestone payments due under Section 3(b)(iv) above shall be reduced to $** USD; and (ii) the royalties due under Section 3.1(b) above shall be reduced to **% for the first $500 million of Cumulative Net Sales of
such Product. 
 (d) Sublicensing Income: 
 (i) Royalty Income from a sublicense: With respect to any royalty payments received by MACROCHEM from a sublicensee, MACROCHEM will
pay GENAERA an amount equal to the greater of ** percent (**%) of said royalty payments to GENAERA or ** percent (**%) of such sublicensee’s Net Sales of Products. Such royalty payments shall be made on a calendar quarterly basis. 

(ii) Non-royalty sublicense income: With respect to any non-royalty sublicense income received by MACROCHEM from any sublicensee
in any form (including licensing or milestone payments received in cash, or premiums on equity, but not including research and development funding or value directly attributed to equity), MACROCHEM will pay GENAERA an amount equal to ** percent
(**%) of such sublicense income. Such payments to GENAERA shall be made within thirty (30) days of MACROCHEM’s receipt of the sublicense income by MACROCHEM. 
 (e) Termination for Failure to Meet Milestones. GENAERA may at any time terminate this Agreement upon thirty (30) days’ prior written notice to MACROCHEM in the event that MACROCHEM fails to
(i) achieve the milestone described in Section 3.1(a)(iv) by two (2) years from the Effective Date (“R&D Milestone I Deadline”), or (ii) achieve the milestone described in Section 3.1(a)(v) by four
(4) years from the Effective Date (“R&D Milestone II Deadline”). Notwithstanding the foregoing, if MACROCHEM provides to GENAERA written notice at least thirty (30) days in advance of the applicable deadline reasonably
establishing that it is unable to complete that R&D Milestone I Deadline and/or R&D Milestone II Deadline despite using commercially reasonable efforts to do so or as a result due to force majeure events or factors (including regulatory
issues) which are out of the reasonable control of or not reasonably foreseeable by MACROCHEM (e.g., problems with clinical trial protocols or designs including randomization errors, product mislabeling, dosing errors, statistical miscalculations,
serious adverse events or Investigational Review Board-related delays) together with an adjusted timeline and plan for meeting such timeline, then GENAERA agrees to reasonably extend the timing for the R&D Milestone I and/or R&D Milestone II
Deadline to take into account such circumstances. 
 (f) Conversion to Non-Exclusive License. Without limiting Section 3.1(e),
MACROCHEM’s License automatically shall convert to a non-exclusive License in each country in the Territory in which MACROCHEM has not submitted a bona fide application for regulatory approval to sell a Product within six (6) years of the
Effective Date. 
  

 10 

 (g) Records. MACROCHEM shall keep, and shall cause its Affiliates and sublicensees to keep,
complete and accurate books, records and accounts which fairly reflect, in reasonable detail, Net Sales of Products and of all payments due GENAERA hereunder, in accordance with U.S. GAAP. All such books, records and accounts shall be maintained for
not less than three (3) years, or for such longer period if and as required by applicable law, following the date of such Net Sales. MACROCHEM shall deliver to GENAERA written reports of Net Sales of each Product by MACROCHEM and its Affiliates
and sublicensees, and any other sublicensee income received, during the preceding calendar quarter, on or before the thirtieth (30) day following the end of each calendar quarter. Such report shall include: 
 (i) a calculation of the royalty due for such preceding calendar quarter (based on the actual Net Sales of each Product) and any nonroyalty sublicense
income; and 
 (ii) the total amount of Net Sales of Products, including detailed descriptions of all reductions applicable thereto.

 Each such report shall be accompanied by the monies due in respect of the royalties owed by MACROCHEM for the preceding calendar quarter.

 (h) Audit. During the term and for a period of one (1) year thereafter, GENAERA shall have the right after thirty
(30) days advance written notice to MACROCHEM, at its own expense, to nominate an independent accountant who shall have full and unhindered access to MACROCHEM’s and its Affiliates’ and sublicensees’ books and records during
reasonable business hours for the sole purpose of verifying the Consideration payable as provided for in this Agreement for the preceding calendar year, but this right may not be exercised more than once in any calendar year, unless during any
particular audit a discrepancy of more than five percent (5%) is found in the amount of Consideration due to GENAERA, in which case GENAERA shall be entitled to perform two (2) audits in the subsequent calendar year and recovery of its
costs and expenses incurred in conducting such particular audit, as well as any shortfall in such Consideration due to GENAERA together with interest at the rate of one and one-half percent (1.5%) per month, or the maximum rate permitted by
applicable law, whichever is lower, from the date the royalties should have been paid 
 (i) Currency. All royalties and other
payments shall be made in U.S. dollars. Royalties payable on sales in countries other than the United States shall be calculated by multiplying the appropriate royalty rate times the sale in each currency in which they are made and converting the
resulting amount into United States dollars at the applicable rates of exchange specified in the Wall Street Journal at the time such royalty payments are made. 
 3.2. Instruments of Transfer. 
 (a) The transfer of the inventory pursuant to Section 2.2 and
regulatory filings pursuant to Section 2.3 to MACROCHEM shall be effected by the delivery of one or more Bills of Sale, an Assumption Agreement, or other documents, all in forms prepared by MACROCHEM and reasonably acceptable to GENAERA.

  

 11 

 (b) Such inventory and regulatory filings transferred to MACROCHEM will be either delivered, at
MACROCHEM’s expense, by GENAERA to a location specified by MACROCHEM on the Effective Date or promptly after the Effective Date, but in no event later than thirty (30) days after the Effective Date. 
 3.3. Taxes. MACROCHEM shall make all payments to GENAERA under this Agreement without deduction or withholding for taxes, and MACROCHEM shall be
responsible for any and all taxes payable in connection with any milestone, royalty or other payments owed to GENAERA hereunder, except for taxes owed in respect of GENAERA’s income, provided that, if MACROCHEM concludes that tax withholdings
under the laws of any country are required with respect to payments to GENAERA, MACROCHEM shall withhold the required amount and pay it to the appropriate Governmental Authority. In such case, MACROCHEM shall promptly provide GENAERA with original
receipts or other evidence reasonably required and sufficient to allow GENAERA to document such tax withholdings adequately for purposes of claiming foreign tax credits and similar benefits. The Parties shall use all reasonable and legal efforts to
reduce tax withholding on payments made to GENAERA. 
 4. Commercialization; R&D; Regulatory Approvals. 
 4.1. Commercialization. MACROCHEM, or its sublicensee, will use commercially reasonable efforts to develop the marketing strategy, marketing plan
and promotional materials for the Products, and to promote sales of the Products in the Field in the Territory. MACROCHEM will commence, within forty-five (45) days of the Effective Date, the activities necessary to obtain regulatory approval
for the Products in the United States, and shall diligently pursue and conduct such activities as may be necessary in order to obtain regulatory approval for the Product in the Field in each country in the Territory. MACROCHEM’s efforts shall
be commensurate with those efforts used to pursue regulatory approval for its own products of similar potential, value and status in each country in the Territory or, if MACROCHEM has no such similar products in a comparable country,
MACROCHEM’s efforts shall be commensurate with the efforts that other reputable pharmaceutical companies of comparable size and product portfolio would use with respect to a product of similar potential, value and status in such country.
MACROCHEM agrees to make commercial launch of each Product in each country within the Territory within six (6) months of obtaining regulatory approval to sell such Product in such country. 
 4.2. Research and Development Activities. Following the Effective Date, MACROCHEM shall assume and incur all costs and expenses in connection with
the research and development activities which are necessary to obtain regulatory approval for the Products. MACROCHEM also shall be responsible, at its cost and expense, for all preclinical studies, pre-marketing and compassionate use programs,
clinical trials, studies, chemistry/pharmacy data, and post approval studies, and any other information and data required as a condition for acquiring regulatory approval for the Products. 
 4.3. Product Registrations. MACROCHEM shall be solely responsible, at its cost and expense, for obtaining and maintaining all licenses, permits,
consents, approvals, authorizations, qualifications and orders of federal, state, local, foreign, international and multinational Governmental Authorities necessary for the sale of the Product in the Territory, 

  

 12 

 
and for all correspondence with governmental authorities, inspections, investigations, adverse reactions and event, reporting obligations and recalls with
respect to such Products. All such product registrations shall be filed in the name of MACROCHEM and MACROCHEM will be the owner of record sponsoring all regulatory filings on the Products in the Field in the Territory. Without limiting the
foregoing, MACROCHEM shall fund and be responsible for the conduct of all Phase III/IV activities that have been commenced by GENAERA with respect to the Product. 
 4.4. Pricing and Reimbursement Approvals. MACROCHEM shall be responsible for obtaining and maintaining pricing and reimbursement approvals required for the sale by MACROCHEM of the Products in each country in
the Territory. MACROCHEM shall use its commercially reasonable efforts to maximize the opportunities to obtain commercially reasonable pricing for the Products in each country in the Territory by the time of the initial launch of the Products in
such country. Such efforts shall be commensurate with those efforts use for its other products of similar potential, value and status in such country or, if MACROCHEM has no comparable product in such country, a comparable country in the Territory.

 4.5. Compliance with Applicable Law. MACROCHEM agrees that it shall comply with all applicable laws and regulations in connection
with its activities under this Agreement. 
 5. Representations and Warranties of GENAERA. 
 GENAERA represents and warrants as of the Effective Date: 
 5.1. Due Organization. GENAERA is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated. GENAERA has corporate power to own its
properties and to conduct its business as currently owned and conducted. 
 5.2. Authorization. GENAERA has the full legal right and
power to enter into and perform the transactions contemplated by this Agreement, without need for any consent, approval, authorization, license or order of, or notice to or filing with, any Governmental Authority or other person. The execution,
delivery and performance by GENAERA of this Agreement and the consummation by GENAERA of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate action of GENAERA, including
approval of this Agreement by the Board of Directors and stockholders of GENAERA if necessary. This Agreement evidences, or upon its execution will evidence, the legal, valid and binding obligations of GENAERA, enforceable against GENAERA in
accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium or similar laws relating to or affecting the rights and remedies of creditors generally. This Agreement has been duly
executed and delivered by GENAERA as of the execution date. 
 5.3. No Default or Violation. The execution, delivery and performance
by GENAERA of this Agreement does not and will not violate or require any registration, qualification, consent, approval, or filing under any law, statute, ordinance, rule or regulation or any judgment, injunction, order, writ or decree of any
court, arbitrator or Governmental 
  

 13 

 
Authority by which GENAERA or any of its assets or properties may be bound or conflict with, require any consent, approval, or filing under, or result in the
breach or termination of any provision of, constitute a default under, result in the acceleration of the performance of GENAERA’s obligations under, result in the loss of GENAERA’s rights under, result in the vesting or enhancement of any
other person’s rights under or result in the creation of any Lien upon any of GENAERA’s properties, assets or businesses to which this Agreement relates. 
 5.4. Documentation. GENAERA has delivered or will deliver in accordance with this Agreement to MACROCHEM a true, correct and complete copy of documentation relating to all present and past Product clinical
trials to the extent such documents exist and are in the possession of GENAERA. The Product Documentation includes all documentation owned by and in the possession of GENAERA that is used by GENAERA to manufacture the Products before the Effective
Date. 
 5.5 Litigation, Warranty and Other Claims. Section 5.5 of the Disclosure Schedules provides a true, correct and complete
list and brief description of all, to GENAERA’s knowledge, pending or threatened Litigation Matters; and all product liability claims made against GENAERA and warranty obligations outstanding with respect to any Product as of the date hereof.
Except as disclosed in the Disclosure Schedules, GENAERA has not been a defendant in any Litigation Matter involving products liability or warranty claims and, to the knowledge of GENAERA, no such Litigation Matter has been threatened in writing.

 5.6. Subject IP. 
 (a)
Title. GENAERA owns or has sufficient rights in and to the Subject IP, free and clear of any Liens, that are necessary to grant the rights to MACROCHEM as set forth in this Agreement. GENAERA has not granted to any other person any license,
option or other rights to develop, use, sell or Exploit the Subject IP, whether requiring the payment of royalties or not, and GENAERA is not obligated to grant to any other person any license, option or other rights to develop, use, sell or Exploit
the Subject IP, whether requiring the payment of royalties or not, in each case that would conflict with the rights granted to MACROCHEM as set forth in this Agreement. 
 (b) Validity; Patentability. To GENAERA’s knowledge, there is no pending or threatened Litigation Matter (and GENAERA has received no written notice in the past two (2) years) (i) contesting the
patentability, validity, enforceability or ownership of, or right to use or license, any intellectual property rights included in the Subject IP, or (ii) asserting that any Subject IP (or the development, manufacture, use, importation, offer
for sale or sale of any Product) conflict or will conflict with the intellectual property rights of any other person, except in the case of each of the foregoing, where any such event or circumstance would not have a material negative effect on the
value of the Subject IP to MACROCHEM. 
 (c) Misappropriation; Non-Infringement. To GENAERA’s knowledge, there are no rights
owned by GENAERA, any Affiliate of GENAERA or any third person which would prevent the development, quality assurance, licensing, manufacture, use, offer for sale, marketing, importation, or sale by GENAERA or MACROCHEM of any Product or any item
that includes Product, except in the case of each of the foregoing, where any such event or circumstance would not have a material negative effect on the value of the Subject IP to MACROCHEM. 
  

 14 

 (d) No Conflict. To GENAERA’s knowledge. the execution, delivery and performance by GENAERA
of this Agreement and the consummation of the transactions contemplated hereby and thereby does not constitute a breach of or result in a modification of any instrument, license or agreement to which GENAERA is a party that relates to any Subject
IP, or cause the (or give rise to a right of) forfeiture or termination of any Subject IP, or impair the right of GENAERA or MACROCHEM to develop, make, have made, use, offer for sale, market, import, or sell any Product under any Subject IP.

 5.7. Disclaimer. GENAERA does not make any warranty or representation that anything provided, made, used, sold, offered for sale,
or otherwise disposed of, marketed or promoted under the License, including the Products, is or will be free from infringement of any third person’s intellectual property rights. EXCEPT AS EXPRESSLY PROVIDED IN THIS ARTICLE 5, GENAERA DOES NOT
MAKE, AND THERE ARE NO WARRANTIES, REPRESENTATIONS OR CONDITIONS, EXPRESS OR IMPLIED, STATUTORY OR OTHERWISE, RELATING TO THIS AGREEMENT OR THE SUBJECT MATTER HEREOF. GENAERA EXPRESSLY EXCLUDES ANY WARRANTIES, CONDITIONS OR REPRESENTATIONS OF
MERCHANTABILITY, SUFFICIENCY, FITNESS FOR ANY PARTICULAR PURPOSE OR NON-INFRINGEMENT. WITHOUT LIMITING THE FOREGOING, THE GENAERA API, THE FINISHED GOODS INVENTORY AND THE BULK GOODS INVENTORY ARE BEING TRANSFERRED TO MACROCHEM ON AN
“AS-IS” BASIS, WITHOUT WARRANTIES OF ANY KIND. 
 6. Representations and Warranties of MACROCHEM 
 MACROCHEM represents and warrants that: 
 6.1.
Due Organization. MACROCHEM is a corporation duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated. MACROCHEM has corporate power to own its properties and to conduct its business
as currently owned and conducted and to execute, deliver and perform this Agreement. 
 6.2. Authorization. MACROCHEM has the full
legal right and power to enter into and perform the transactions contemplated by this Agreement, without need for any consent, approval, authorization, license or order of, or notice to, any court, Governmental Authority or other person. The
execution, delivery and performance by MACROCHEM of this Agreement and the consummation by MACROCHEM of the transactions contemplated hereby and thereby have been duly and validly authorized and approved by all necessary corporate action of
MACROCHEM. This Agreement evidences the legal, valid and binding obligations of MACROCHEM, enforceable against MACROCHEM in accordance with their respective terms, subject to bankruptcy, insolvency, reorganization, fraudulent conveyance, moratorium
or similar laws relating to or affecting the rights and remedies of creditors generally. 
 6.3. No Default or Violation. The
execution, delivery and performance by MACROCHEM of this Agreement and the consummation by MACROCHEM of the transactions 

  

 15 

 
contemplated hereby and thereby do not, and will not, conflict with any provision of the corporate charter or By-Laws of MACROCHEM, and do not, and will not,
violate any law, regulation, order, judgment or decree to which MACROCHEM or any of its properties is subject. 
 6.4. Sufficient
Financial Resources MACROCHEM has access to all funds necessary to enter into this Agreement and to pay the milestone payments specified in Sections 3.1(a)(i)-(ii). 
 6.5 Brokerage. There has been no intermediary or broker in negotiations or discussions incident to the execution of this Agreement or any of the transactions contemplated hereby on behalf of MACROCHEM. GENAERA
shall not be responsible for, and MACROCHEM hereby indemnifies GENAERA against, any commission or other compensation due or becoming due with respect to any such transactions as a result of the engagement of any such person. 
 7. Covenants of the Parties 
 7.1.
Further Actions. Subject to the terms and conditions of this Agreement, each of the Parties hereto agrees to use its commercially reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things
necessary, proper or advisable to consummate and make effective the transactions contemplated by this Agreement. 
 7.2. Covenant Not to
Compete; Non-Solicitation of Customers. 
 (a) Covenant. GENAERA agrees that, during the period beginning on the Effective Date
and ending on the last to expire of the Patent Rights existing as of the Effective Date, GENAERA and its Affiliates will not, without the written approval of MACROCHEM, use or license any third party to use the Subject IP anywhere in the world
involving the design, development, animal or clinical testing, obtaining regulatory concurrence or approval, manufacture, production, quality assurance, marketing, advertising, labeling, packaging, distribution, sale, or licensing of (A) a
product intended for use as a cosmetic that contains API in a concentration greater than 0.2% by weight or (B) a product containing API in any concentration that would be deemed a drug for human use as defined by applicable Drug Regulation or
(C) a product containing API which is not a Regulated Product but will be promoted for any use as a drug in humans. GENAERA also agrees not to use, and to contractually prohibit cosmetic licensees from using, the name “pexiganan” in
promotional, labeling or marketing materials except as legally required (e.g., list of ingredients in the absence of an alternative descriptive name). The restrictions set forth in this Section 7.2 shall not apply with respect to any
jurisdiction pursuant to which the License has been made non-exclusive pursuant to Section 3.1(f). 
 (b) Modification. The
Parties hereby request that any arbitrator (as set forth in Section 10) who may be requested to enforce this Agreement do so in accordance with its specific terms. However, if it should for some reason be contrary to public policy to effectuate
the intentions of the Parties in interpreting this Agreement, the Parties have agreed as follows: 
 (i) In the event that the
arbitrator determines that any provision of this Agreement is invalid or unenforceable by reason of its extending for too great a period of 

  

 16 

 
time or over too large a geographic area or over too great a range of activities, the Parties agree that the arbitrator shall have the power to reduce the
scope, duration, or geographic area of the term or provision, to delete specific words or phrases, or to replace any invalid or unenforceable term or provision with a term or provision that is valid and enforceable and that comes closest to
expressing the intention of the invalid or unenforceable term or provision, and this Agreement shall be enforceable as so modified after the expiration of the time within which the decision may be appealed. 
 (ii) If, after application of the immediately preceding Section 7.2(b)(i), the arbitrator shall determine that any provision of this
Agreement is invalid, illegal or otherwise unenforceable, the validity, legality and enforceability of the other provisions of this Agreement shall not be affected thereby. Any invalid, illegal or unenforceable provision of this Agreement shall be
severable, and after any such severance, all other provisions hereof shall remain in full force and effect. In all such cases, the Parties shall use their reasonable best efforts to substitute a valid, legal and enforceable provision which, insofar
as practicable, implements the original purposes and intents of this Agreement. 
 7.3. Ownership of IP Rights. Subject to the rights
and licenses granted herein, MACROCHEM acknowledges and agrees that GENAERA owns and shall own at all times all right, title and interest, throughout the world, in and to all Subject IP. MACROCHEM agrees that nothing in this Agreement, and no use of
the Subject IP by MACROCHEM pursuant to this Agreement, shall vest in MACROCHEM any right, title or interest in or to any Subject IP, other than the express rights and licenses provided for herein. 
 7.4. Patent Prosecution. The Parties jointly shall direct and control (i) the preparation, filing and prosecution of the Patent Rights
(including any interferences, oppositions, reexaminations, reissues or other post-issuance or inter-partes proceeding) and (ii) maintenance of the patents issuing therefrom. The Parties shall equally share in the costs of the foregoing
activities. The Parties mutually shall agree upon a patent attorney to handle such activities. GENAERA shall be the primary contact and interface with such patent attorney regarding such activities. Subject to limitations imposed by GENAERA to
protect confidential information of GENAERA or third persons, or to preserve attorney-client privileges and any other privileges, upon request MACROCHEM shall (1) be supplied by GENAERA with copies of all patent applications, amendments and
patent office correspondence with respect to the Patent Rights and reasonable opportunity to comment thereon, and (2) have the opportunity for periodic consultations with GENAERA and the patent attorney so selected on all material matters
relating to prosecution and maintenance of the Patent Rights. GENAERA agrees to incorporate MACROCHEM’s reasonable and timely comments into patent applications, amendments and patent office correspondence with respect to the Patent Rights. The
patent attorney shall be instructed to not discontinue prosecution or maintenance of any Patent Rights without written approval from both Parties, provided that in the event that no Products that are in commercial use or commercial development by
MACROCHEM are covered by at least one valid claim within an issued patent or pending patent application included within the Patent Rights, and GENAERA determines to discontinue prosecution or maintenance of such issued patent or pending patent
application as not commercially justifiable, GENAERA may instruct the patent attorney do so 

  

 17 

 
without liability, provided it shall notify MACROCHEM in writing of such decision at least sixty (60) days prior to such discontinuation, but in any
event at least sixty (60) days prior to abandonment or other forfeiture of any material rights under such Patent Rights, and MACROCHEM shall have the right to assume the prosecution and maintenance thereof. If GENAERA does not agree to file for
Patent Rights in any jurisdiction, MACROCHEM may, upon thirty (30) days’ prior written notice, elect to file for Patent Rights in such jurisdiction, at its sole expense, and to control the prosecution of such filings in such jurisdiction.
If any patent issues from such filing in such jurisdiction, MACROCHEM shall be entitled to deduct up to fifty percent (50%) of its reasonable filing and prosecution costs and expenses incurred with respect to such issued patent from any running
royalties owed to GENAERA in respect of such jurisdiction. 
 7.5. Patent Enforcement. The Parties shall promptly notify the other in
writing of any alleged or threatened infringement by a third party of any Subject IP of which they become aware. GENAERA shall have the first right to institute and prosecute, at its sole expense, actions, lawsuits and proceedings against all third
parties that infringe, or appear to infringe, the Subject IP with respect to the Product in the Field. The Parties shall reasonably cooperate with each other in all such suits and actions. After reimbursement of the Parties’ costs and expenses
incurred in connection with such suits and actions, the Parties shall evenly share in any and all items that may be received, collected or recovered in any such suit or action, whether by judgment, settlement or otherwise. If GENAERA elects not to
bring or maintain any such action, suit or proceeding, within one hundred and eighty days (180) days after becoming aware of a material, likely infringement of the Subject IP with respect to the Product in the Field, MACROCHEM shall have the
right to maintain at its sole expense such action, suit or proceeding with the reasonable cooperation of GENAERA (at MACROCHEM’s sole expense for such cooperation, including joining GENAERA as a party plaintiff, if necessary), and after
reimbursement of the Parties’ costs and expenses incurred in connection with such suits and actions MACROCHEM shall be entitled to retain any and all items that may be received, collected or recovered in any such suit or action, whether by
judgment, settlement or otherwise, provided that all such amounts shall be treated as sublicense royalties for which a payment shall be owed to GENAERA pursuant to Section 3.1(d)(i). GENAERA shall have sole control over instituting and
prosecuting, at its sole expense, all actions, lawsuits and proceedings against third parties that infringe, or appear to infringe, the Subject IP outside of the Field or within the Field that do not relate to the Product, and GENAERA shall retain
any and all items that may be received, collected or recovered in any such suit or action, whether by judgment, settlement or otherwise. 
 7.6. Defense of Subject IP. In the event that a declaratory judgment action, counterclaim or similar proceeding alleging invalidity or unenforceability of any of the Subject IP is brought or made against either of the Parties, such
Party promptly shall notify the other party thereof in writing. GENAERA will be responsible for the defense of, and will have the obligation to defend against, any such declaratory judgment action, counterclaim or similar proceeding, at
MACROCHEM’s expense, provided that MACROCHEM will have the right at any time to intervene and jointly control the defense of any such declaratory judgment action, counterclaim or similar proceeding. 
  

 18 

 7.7. Marking. MACROCHEM agrees to mark all Products made, used, imported, offered or sold under
any patents comprising the Patent Rights in conformity with the patent laws and practice of each jurisdiction in which such patents have been issued or as otherwise directed by GENAERA in its reasonable judgment. 
 7.8. Non-Solicitation. Each Party agrees that it shall not, for a period of two (2) years from the Effective Date, directly or indirectly,
contact or solicit (other than by general advertising) for the purpose of offering employment or hiring, induce or attempt to induce to accept employment, or actually hire (in each case, whether as an employee, consultant, agent, independent
contractor or otherwise), any employee of the other Party or any of its Affiliates with whom such Party had contact in connection with the negotiation or implementation of this Agreement. 
 8. Post-Execution Matters 
 8.1.
Defense of Claims and Litigation. At all times from and after the Effective Date, and without charge except for reimbursement of out-of-pocket expenses, each Party shall consult, confer and cooperate in good faith on a reasonable basis with
the other Party (including the making available of witnesses and cooperation in discovery proceedings) in the conduct or defense of any Litigation Matter against such other Party or any of its Affiliates by any third party that relates to the
Products or any matter that, directly or indirectly, arises therefrom, whether known at the Effective Date or arising thereafter. The foregoing notwithstanding, to the extent the indemnification provisions of this Agreement apply to any such conduct
or defense, they shall control as to the payment of costs and expenses. 
 8.2. Confidentiality. (a) MACROCHEM shall not disclose
the Genaera Confidential Information to any person (other than its employees, sublicensees, agents and contractors to whom disclosure is necessary to the performance of this Agreement or the exercise of rights granted under this Agreement), or use
the Genaera Confidential Information other than as necessary to exercise its rights under the License, without the prior written consent of GENAERA, except that MACROCHEM may disclose Genaera Confidential Information to the extent such disclosure is
reasonably necessary to prosecute or defend litigation, to comply with applicable law or regulations, to obtain necessary or desirable regulatory approvals, to respond to a valid order of a Governmental Authority, or to conduct preclinical or
clinical trials, provided that, other than with respect to disclosure for protecting intellectual property rights in which such disclosure is required by applicable law, MACROCHEM shall (i) use reasonable efforts to secure confidential
treatment of such Genaera Confidential Information required to be disclosed, and (ii) unless precluded by applicable law from doing so, give advance notice to GENAERA sufficiently in advance of the proposed disclosure so as to permit GENAERA to
have the opportunity to object to such disclosure or otherwise protect the Genaera Confidential Information. Any person to which MACROCHEM is permitted to disclose Genaera Confidential Information shall be instructed as to and shall have agreed to
MACROCHEM’s obligations under this Section 8.2. 
 (b) MACROCHEM shall use the same care as it uses to maintain the
confidentiality of the Genaera Confidential Information as it uses for its own confidential information of similar value, but in no event less than commercially reasonable measures. 
  

 19 

 (c) The obligations in this Agreement with respect to Genaera Confidential Information shall not apply
to any portion of the Genaera Confidential Information that MACROCHEM can demonstrate by legally sufficient evidence (1) now or hereafter, through no act or failure to act on the part of MACROCHEM, is or becomes generally known to the public;
(2) is known to MACROCHEM or one of its Affiliates at the time such person receives such Genaera Confidential Information without any obligation of confidentiality; (3) is hereafter furnished to MACROCHEM by an unrelated third party
without violating any agreement or with or confidentiality obligation to GENAERA; or (4) is independently developed by MACROCHEM or one of its Affiliates without use of any Genaera Confidential Information. 
 (d) Without limiting Section 11.9, neither Party shall disclose the financial terms of this Agreement to an unaffiliated third party, except for
legal, financial, accounting or other similar advisors who agree to keep the financial terms of this Agreement confidential, without the prior written approval of the other party, provided that each party may disclose the aggregate of the
consideration to be paid by MACROCHEM to GENAERA hereunder in any press release announcing the transaction entered into between the parties under this Agreement or any other communication by such party to investors and analysts. For avoidance of
doubt, the foregoing proviso permitting the Parties to disclose the aggregate of the consideration to be paid under this Agreement does not include the right to disclose any individual milestones or the associated milestone payments. 
 9. Indemnification 
 9.1.
Indemnification. 
 (a) MACROCHEM’s Indemnification Obligations. On and after the Effective Date, MACROCHEM by this
Agreement agrees to indemnify, defend and hold harmless GENAERA and each of its directors, officers, employees, stockholders, Affiliates and agents (collectively, the “GENAERA Indemnified Parties”) from and against and in respect of
any and all claims, losses, damages, costs, expenses, obligations, liabilities, charges, actions, suits, proceedings, deficiencies, interest, penalties and fines (including costs of collection, attorney’s fees and other costs of defense, costs
of enforcing indemnification provisions, and expenses of investigation) (collectively, “Damages”) imposed on, sustained, incurred or suffered by or asserted against them, directly or indirectly, in respect of, but only in respect of
a third party claim arising out of or relating to: 
 (i) any breach of MACROCHEM’s representations and warranties
contained herein, any such claim to be made by any GENAERA Indemnified Party within the period of survivability set forth in Section 9.3; 
 (ii) MACROCHEM’s failure to perform or otherwise fulfill any of its agreements, covenants, obligations or undertakings hereunder, or under any document delivered by MACROCHEM pursuant to this Agreement; or

 (iii) the MacroChem Products Liabilities or any of the other liabilities for which MACROCHEM is responsible under
Section 2.6. 
  

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 (b) GENAERA’s Indemnification Obligations. On and after the Effective Date, GENAERA by this
Agreement agrees to indemnify, defend and hold harmless MACROCHEM and each of its Affiliates and each of their respective directors, officers, employees, stockholders and agents (collectively, the “MACROCHEM Indemnified Parties”),
from and against and in respect of any and all Damages imposed on, sustained, incurred or suffered by or asserted against them, directly or indirectly, but only in respect of a third party claim arising out of relating to : 
 (i) any breach of GENAERA’s representations and warranties contained herein, any such claim to be made by any MACROCHEM Indemnified
Party within the period of survivability set forth in Section 9.3; 
 (ii) GENAERA’s failure to perform or
otherwise fulfill any of its agreements, covenants, obligations or undertakings hereunder, or under any document delivered by GENAERA pursuant to this Agreement; 
 (iii) the Genaera Products Liabilities or any of the other liabilities for which GENAERA is responsible under Section 2.6

 9.2. Claims for Indemnification. 
 (a) Claims Notice. Whenever any claim shall arise for indemnification hereunder, the person seeking indemnification (the “Indemnified Party”) shall promptly notify the party from whom
indemnification is sought in writing (the “Indemnifying Party”) of the claim (“Claim Notice”) and, when known, the facts constituting the basis for such claim, including, if known, the amount or an estimate of the
amount of the liability arising therefrom. The failure of the Indemnified Party to give the Indemnifying Party prompt notice as provided herein shall not relieve the Indemnifying Party of any of its obligations under this Section 9, except to
the extent that the Indemnifying Party is materially prejudiced by such failure. The Indemnifying Party shall have thirty (30) days after receipt of such notice to undertake, conduct and control, through counsel of its own choosing (but
reasonably satisfactory to the Indemnified Party) and at its own expense, the settlement or defense thereof, and the Indemnified Party shall cooperate with it in connection therewith; provided, that the Indemnified Party may participate in
such settlement or defense through counsel chosen by such Indemnified Party and the fees and expenses of such counsel shall be borne by such Indemnified Party unless the employment thereof has been specifically authorized by the Indemnifying Party
in writing, the Indemnified Party reasonably concludes that there exists a conflict of interest between the interests of the Indemnified Party and the Indemnifying Party, or the Indemnifying Party has after a reasonable time failed to employ counsel
to assume or to continue to maintain such defense, in each of which events the Indemnified Party may retain counsel which shall be reasonably satisfactory to the Indemnifying Party, and the Indemnifying Party shall pay the reasonable fees and
expenses of such counsel for the Indemnified Party (but in no event shall the Indemnifying Party be obligated to pay fees and expenses of more than one firm for all Indemnified Parties). So long as the Indemnifying Party is reasonably contesting any
such claim in good faith, the Indemnified Party shall not pay or settle any such claim without the consent of the Indemnifying Party. If the Indemnifying Party does not notify the Indemnified Party within thirty (30) days after the receipt of
the Indemnified Party’s notice of a claim of indemnity hereunder that it elects to undertake the defense thereof (or does not fulfill its commitment to undertake such defense), the Indemnified 

  

 21 

 
Party shall have the right to contest, settle or compromise the claim but shall not thereby waive any right to indemnity therefor pursuant to this Agreement.
The Indemnifying Party shall not, except with the consent of the Indemnified Party, consent to entry of any judgment or enter into any settlement that does not include as an unconditional term thereof the giving by the person asserting such claim to
all Indemnified Parties (i.e., GENAERA Indemnified Parties or MACROCHEM Indemnified Parties, as the case may be) an unconditional release from all liability with respect to such claim. Notwithstanding the foregoing, GENAERA shall have the
right, in its sole discretion and at its expense, to assume the investigation, defense and settlement of any claim involving the Subject IP. 
 9.3. Survival of Representations and Warranties. Notwithstanding any investigation conducted before or after the Effective Date, and notwithstanding any knowledge or notice of any fact or circumstance that either MACROCHEM or GENAERA
may have as the result of such investigation or otherwise, MACROCHEM and GENAERA shall each be entitled to rely upon the representations, warranties and covenants of the other in this Agreement. Each of the representations and warranties contained
in this Agreement or in any certificate delivered hereunder shall terminate upon the twelve (12) month anniversary of the Effective Date. 
 9.4. Expected Claim Notice. Notwithstanding the provisions of Section 9.3, if an Indemnified Party delivers to an Indemnifying Party, before expiration of a representation or warranty, either a Claim Notice based upon a
breach of such representation or warranty, or a notice that, as a result of a legal proceeding instituted by or claim made by a third party, the Indemnified Party reasonably expects to incur Damages (an “Expected Claim Notice”),
then the applicable representation or warranty (and the related obligations of the Indemnifying Party under this Section 9) shall survive until, but only for purposes of, the resolution of the matter covered by such notice. If the legal
proceeding or written claim with respect to which an Expected Claim Notice has been given is definitively withdrawn or resolved in favor of the Indemnified Party, the Indemnified Party shall promptly so notify the Indemnifying Party. 
 9.5. Third Party Beneficiaries. The MACROCHEM Indemnified Parties and GENAERA Indemnified Parties are intended to be third party
beneficiaries of the rights granted under this Section 9 and to have the right to enforce such rights directly against the applicable Indemnifying Party. 
 9.6. Insurance. MACROCHEM agrees that during the term hereof and for five (5) years thereafter it shall keep and maintain the following insurance with reputable carriers reasonably satisfactory to GENAERA:

 (a) Comprehensive public liability including products liability coverage with limits of not less than five million dollars ($5,000,000) per
incident, naming GENAERA as an additional insured from the Effective Date forward with respect to MACROCHEM’s performance hereof. Such insurance may be self insurance and may be a combination of primary and excess coverage, and shall waive
subrogation against GENAERA. 
 (b) Workers compensation insurance as required by law and employer’s liability insurance with limits of
at least two million dollars ($2,000,000). 
  

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 (c) MACROCHEM agrees to provide GENAERA certificates evidencing such coverage within sixty
(60) days after the Effective Date and at least annually thereafter. Such insurance certificates shall state that such insurance shall not be canceled or materially altered except that upon written notice to GENAERA. 
 9.7. Limitation of Liability. EXCEPT WITH RESPECT TO ITS INDEMNIFICATION OBLIGATIONS HEREUNDER, IN NO EVENT SHALL GENAERA, OR ANY OF ITS
AFFILIATES, OR THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, CONSULTANTS AND AGENTS, BE LIABLE TO MACROCHEM OR ITS AFFILIATES OR ANY OF THEIR RESPECTIVE DIRECTORS, OFFICERS, EMPLOYEES, CONSULTANTS AND AGENTS FOR ANY INDIRECT, CONSEQUENTIAL,
INCIDENTAL, EXEMPLARY, PUNITIVE, ENHANCED OR SPECIAL DAMAGES, IN EACH CASE ARISING OUT OF, OR IN ANY MANNER RELATING TO, THIS AGREEMENT, THE PERFORMANCE OR BREACH HEREOF, OR THE SUBJECT MATTER HEREOF, WHETHER OR NOT SUCH PARTY HAS BEEN ADVISED OF,
OR OTHERWISE MIGHT OR SHOULD HAVE ANTICIPATED, THE POSSIBILITY OF SUCH DAMAGES, AND REGARDLESS OF THE FORM OF ACTION, WHETHER IN CONTRACT, TORT OR OTHERWISE. IN NO EVENT WILL GENAERA’S AGGREGATE LIABILITY IN CONNECTION WITH THIS AGREEMENT
EXCEED TWELVE (12) MONTH’S WORTH OF FEES PAID TO IT BY MACROCHEM. 
 10. Dispute Resolution. 
 10.1. Negotiation. In the event of any dispute or disagreement between MACROCHEM and GENAERA as to the interpretation of any provision of this
Agreement (or the performance of any obligations hereunder), the matter, upon written request of either Party, shall be referred to representatives of the Parties for decision, each Party being represented by a senior executive officer (the
“Representatives”). The Representatives shall promptly meet in a good faith effort to resolve the dispute. If the Representatives do not agree upon a decision within thirty (30) calendar days after reference of the matter to
them, each of MACROCHEM and GENAERA shall be free to exercise the remedies available to it under Section 10.2 below. 
 10.2.
Submission to Arbitration. If MACROCHEM and GENAERA are unable to resolve such dispute pursuant to Section 10.1, the dispute shall be submitted to binding arbitration to be conducted in Delaware before a panel of three arbitrators (the
“Arbitrators”) in accordance with the Commercial Arbitration Rules (the “Commercial Arbitration Rules”) of the American Arbitration Association (the “AAA”) then in effect and the further procedures
set forth herein. Each Arbitrator shall have at least ten (10) years of experience in the pharmaceutical field and shall have no conflict of interest in deciding disputes between MACROCHEM and GENAERA. 
 (a) Applicable Rules. In the event of any conflict between the Commercial Arbitration Rules in effect from time to time and the provisions of
this Agreement, the provisions of this Agreement shall prevail and be controlling. 
 (b) Commencement of Arbitration. Either
MACROCHEM or GENAERA may commence the arbitration by filing a written submission with the Delaware office of the AAA in 
  

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accordance with Rule 4 (or any successor provision) of the Commercial Arbitration Rules and the other shall respond in accordance with said Rule 4 (or any
successor provision). Each of MACROCHEM and GENAERA shall select one Arbitrator from the list of persons knowledgeable in the pharmaceutical field provided by the AAA consistent with Rule 11(a) (or any successor provision) of the Commercial
Arbitration Rules and the two Arbitrators so chosen (or the AAA) shall jointly select a third person knowledgeable in pharmaceutical industry matters in accordance with Rule 13 (or any successor provision) of the Commercial Arbitration Rules.

 (c) Applicable Law. The substantive law to be applied in the arbitration shall be with respect to disputes involving general
contract matters, the internal laws of the State of Delaware and with respect to disputes involving patent rights in any jurisdiction, the patent laws of the applicable jurisdiction. Any award rendered by the Arbitrators shall be final, conclusive
and binding upon the Parties hereto, and judgment thereon may be entered and enforced in any state or federal court of competent jurisdiction located within the State of Delaware. 
 (d) Limitations on Authority of Arbitrators. Except as set forth in Section 7.2(b), the Arbitrators shall have no power or authority, under
the Commercial Arbitration Rules or otherwise, to modify or disregard any provision of this Agreement, address or resolve any issue not submitted by the Parties, or award any damages other than compensatory damages, and the Arbitrators are
specifically precluded from awarding punitive or exemplary damages, provided, however, that the Arbitrators may provide for the payment of punitive or exemplary damages to the extent required to reimburse (under the indemnification provisions
of this Agreement) an Indemnified Party for damages awarded against such Indemnified Party in favor of a third person in another forum. 
 (e) Costs and Expenses. In connection with any arbitration proceeding pursuant to this Agreement, unless the Arbitrators shall determine otherwise, each Party shall bear its own costs and expenses. Notwithstanding the foregoing, each
of MACROCHEM and GENAERA shall be responsible for one half of the fees and costs of the AAA and the Arbitrators, the costs and expenses of obtaining the facility where the arbitration hearing is held, and such other costs and expenses as the
Arbitrators may determine to be directly related to the conduct of the arbitration and appropriately borne jointly by the Parties. 
 (f)
Court Proceedings. Notwithstanding the applicability of the AAA’s Emergency Interim Relief Procedures, a Party may initiate an action in a court of competent jurisdiction in the State of Delaware and may seek interim measures (including,
without limitation, temporary restraining orders and preliminary injunctions) necessary to protect the interests of such Party pending the arbitration. In such case, the court shall be free to act on all requests for interim measures from time to
time, but shall stay the action in all other respects pending the arbitration (which the court may compel). If any such action is still pending at the time of the Arbitrators’ award, either Party may apply to such court for entry of judgment
on, and enforcement of, the Arbitrators’ award, including, without limitation, any equitable relief awarded by the Arbitrators. 
 10.3.
Arbitration Remedy Exclusive. Except as provided in Section10.2(f) (with respect to interim relief), the Parties agree and understand that arbitration pursuant to 

  

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Section 10.2 is the exclusive remedy available to the Parties with respect to any dispute, disagreement, claim or controversy arising out of or relating
to this Agreement, or the transactions contemplated by this Agreement that have not been resolved pursuant to Section 10.1. 
 10.4.
Submission to Jurisdiction. 
 (a) Recourse to courts is limited as provided in Sections 10.2(f) and 10.3. The following
provisions of this Section 10.4 apply with respect to such access to courts as is consistent with such Sections 10.2(f) and 10.3. 
 (b) The Parties by this Agreement irrevocably and unconditionally consent to submit to the exclusive jurisdiction of the courts located in the State of Delaware for any actions, suits or proceedings arising out of or relating to this
Agreement, or the transactions contemplated by this Agreement (and the Parties agree not to commence any action, suit or proceeding relating thereto except in such courts), and further agree that service of any process, summons, notice or document
by a recognized overnight courier service shall be effective service of process for any action, suit or proceeding brought against the Parties in any such court. The Parties by this Agreement irrevocably and unconditionally waive any objection to
the laying of venue of any action, suit or proceeding arising out of this Agreement or the transactions contemplated by this Agreement, in the courts located in the State of Delaware, and by this Agreement further irrevocably and unconditionally
waive and agree not to plead or claim in any such court that any such action, suit or proceeding brought in any such court has been brought in an inconvenient forum. 
 11. Miscellaneous. 
 11.1. Termination. This Agreement may be terminated upon written notice
effective immediately (except as otherwise stated below) at any time as follows: 
 (a) By mutual consent of MACROCHEM and GENAERA in a
written instrument; 
 (b) By MACROCHEM for any reason upon thirty (30) days written notice, provided that if MACROCHEM exercises such
right to terminate prior to having paid to GENAERA the milestone payment set forth in Section 3.1(a)(ii), then MACROCHEM shall, prior to exercising such termination right, be required to pay to GENAERA the milestone payment set forth in
Section 3.1(a)(ii) that has not already been paid to GENAERA as of the date of such termination notice; 
 (c) By either MACROCHEM or
GENAERA, if there has been a material breach on the part of the other Party of any representation, warranty, covenant or other agreement contained herein which cannot be or has not been cured within thirty (30) days after written notice of such
breach by the terminating Party to the Party in breach; 
 (d) By either MACROCHEM or GENAERA, if any permanent injunction or action by any
Governmental Authority preventing the development sale or marketing of any Product(s) have become final and non-appealable; 

  

 25 

 (e) By either MACROCHEM or GENAERA, if any action by any Governmental Authority rendering the Patent
Rights invalid or unenforceable becomes final and non-appealable; 
 (f) By GENAERA in the event that MACROCHEM challenges or contests the
validity, enforceability or ownership of any of the Subject IP, or assists any third party to do any of the foregoing; 
 (g) By GENAEA in
the event MACROCHEM experiences and Insolvency Event; or 
 (h) By GENAERA pursuant to Section 3.1(e). 
 11.2. Effect of Termination. In the event of termination of this Agreement by either GENAERA or MACROCHEM as provided in Section 11.1, this
Agreement shall forthwith terminate and there shall be no liability or obligation on the part of MACROCHEM or GENAERA or their respective directors, officers, employees, agents or Affiliates, except that the provisions of Sections 2.5, 2.6, 2.7,
3.1(g), 3.1(h), 3.3, 5.7, 7.3, 7.8, 8, 9, 10 and 11 shall survive such termination of this Agreement and remain in full force and effect, and notwithstanding anything to the contrary contained in this Agreement, each Party shall remain liable (in an
action at law or otherwise) for any liabilities or damages incurred prior to such termination and arising out of a breach of any of its representations, warranties, covenants or agreements set forth in this Agreement. 
 11.3. Reversion of Rights Upon Termination. Upon any termination of this Agreement under Section 11: 
 (a) MACROCHEM’s rights to all Products shall revert to GENAERA, including all research, pre-clinical and clinical data and GENAERA shall have the
unrestricted right to use such data and information; 
 (b) MACROCHEM or its sublicensee shall assign all regulatory filings, regulatory
approvals and other rights and licenses related to all Products to GENAERA without any further obligations to MACROCHEM or its licensee; and 
 (c) the License immediately shall terminate. 
 11.4. Confidentiality Upon Termination. Upon termination of this Agreement
under this Section 11, all Genaera Confidential Information promptly shall be destroyed or returned to GENAERA, including, to the extent reasonably practicable, all copies or reproductions thereof which may have been prepared. 
  

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 11.5. Waivers and Amendments. 
 (a) This Agreement may be amended, modified or supplemented only by a written instrument executed by the Parties hereto. 
 (b) No waiver of any provision of this Agreement, or consent to any departure from the terms hereof, shall be effective unless the same shall be in
writing and signed by the Party waiving or consenting thereto. No failure on the part of any Party to exercise, and no delay in exercising, any right or remedy hereunder shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or remedy by such Party preclude any other or further exercise thereof or the exercise of any other right or remedy. The waiver by any Party hereto of a breach of any provision of this Agreement shall not operate as a waiver of any
subsequent breach. Except as otherwise specifically provided herein, all rights and remedies hereunder are cumulative and are in addition to and not exclusive of any other rights and remedies provided by law. 
 11.6. Performance. Each Party hereto acknowledges that money damages alone will not adequately compensate the other Party for breach of such
Party’s obligations provided in this Agreement, and, therefore, agrees that in the event of the breach or threatened breach of any such obligation, in addition to all other remedies available to the other Party, at law, in equity or otherwise,
such other Party shall be entitled, if warranted, to an injunction restraining any such breach or threatened breach, or a decree of specific performance, without posting any bond or security. The remedy in this Section 11.6 is in addition to,
and not in lieu of, any other rights or remedies a Party may have. 
 11.7. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed given if delivered personally, by express international courier service, such as Federal Express or DHL, or by facsimile, confirmed by express international courier service, to the Parties at the following
addresses: 
 (a) if to GENAERA, to: 
 Genaera Corporation 
 5110 Campus Drive 
 Plymouth Meeting, PA 19462 
 Attention: Leanne M. Kelly 
 Telecopier No: (610) 238-5490 
     with a required copy to: 
 Dechert LLP 
 30 Rockefeller Plaza 
 New York, New York,
10112 
 Attention: Thomas A. Rayski 
 Telecopier No.: (212) 314-0049 
  

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 (b) if to MACROCHEM, to: 
 MacroChem Corporation 
 40 Washington Street, Suite 220 
 Wellesley Hills, Mass. 02481 
 Attention:
Robert J. DeLuccia 
 Telecopier No.: 1-781-489-7311 
     with required copies to: 
 Nutter McClennen & Fish LLP 
 155 Seaport Boulevard 
 Boston,
Massachusetts 02210 
 Attention: George A. Xixis , Esq. 
 Telecopier No.: (617) 310-9000 
 or at such other address for a Party as shall be specified by like
notice. 
 11.8. Expenses. Each Party hereto shall pay its own expenses in connection with the transactions contemplated by this
Agreement, whether or not they are completed. In the event of any conflict between this provision and the indemnification or termination provisions of this Agreement, the indemnification or termination provisions, as the case may be, shall control.

 11.9. Public Disclosure. The Parties will consult with respect to the appropriate public disclosure to be made with respect to the
transaction contemplated by this Agreement, and will make no such disclosure without the prior written consent of the other Party prior to such disclosure, which shall not be unreasonably withheld; provided, however, that a Party may, without
the prior consent of the other Party (but after such consultation, to the extent practicable in the circumstances), make such public disclosure as may be required by law or the rules or regulations of any stock exchange or other regulatory authority
(a “Disclosure Obligation”), it being agreed by the Parties that if the financial terms of this letter agreement or the License Agreement are required to be disclosed pursuant to a Disclosure Obligation, each Party shall be
permitted to disclose, to the extent required by the Disclosure Obligation, the financial terms of the Agreement. MacroChem agrees to take reasonable efforts to ensure that all such public disclosures as may be required by law or the rules or
regulations of any stock exchange or other regulatory authority are submitted as confidential documents and do not disclose the financial terms of the License Agreement. 
 11.10. Entire Agreement. This Agreement, the Disclosure Schedules, and the Appendices constitute the entire agreement between the Parties hereto with respect to the subject matter hereof and supersede all prior
agreements and understandings, whether written or oral, between the Parties in connection with such subject matter. 
 11.11. Governing
Law. This Agreement shall be governed by, and construed and enforced in accordance with, the substantive laws of the State of Delaware, without giving effect to its conflicts of laws rules. 
  

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 11.12. Interpretation. When reference is made in this Agreement to a Section, such reference shall
be to a Section of this Agreement, unless otherwise indicated. References to Sections include subsections, which are part of the related Section (e.g., a section numbered “Section 5.1(a)” would be part of “Section 5.1” and
references to “Section 5.1” would also refer to material contained in the subsection described as “Section 5.1(a)”). The table of contents and headings contained in this Agreement are for convenience of reference only and shall
not affect in any way the meaning or interpretation of this Agreement. The language used in this Agreement shall be deemed to be the language chosen by the Parties hereto to express their mutual intent, and no rule of strict construction shall be
applied against any Party. Whenever the context may require, any pronouns used in this Agreement shall include the corresponding masculine, feminine or neuter forms, and the singular form of nouns and pronouns shall include the plural, and vice
versa. Any reference to any federal, state, local, foreign, international or multinational statute or law shall be deemed also to refer to all rules and regulations promulgated thereunder, unless the context requires otherwise. Whenever the words
“include,” “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation.” No summary of this Agreement prepared by any Party shall affect the
meaning or interpretation of this Agreement. 
 11.13. Severability. Any provision of this Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such prohibition or unenforceability without invalidating the remaining provisions hereof or affecting the validity or enforceability of such provision
in any other jurisdiction. 
 11.14. Exhibits, Disclosure Schedules and Appendices. All Exhibits, Disclosure Schedules and Appendices
mentioned in this Agreement shall be attached to this Agreement and shall form an integral part hereof. All capitalized terms defined in this Agreement which are used in any Exhibit, Disclosure Schedule or Appendix shall, unless the context
otherwise requires, have the same meaning therein as given herein. 
 11.15. Counterparts and Facsimile Signatures. This Agreement and
all Exhibits, Disclosure Schedules and Appendices may be executed in one or more counterparts, all of which shall be considered one and the same agreement and shall become effective when one or more counterparts have been signed by each Party and
delivered to the other Party, it being understood that all Parties need not sign the same counterpart. Facsimile execution and delivery of this Agreement and any Exhibits, Disclosure Schedules and Appendices by any of the Parties shall be legal,
valid and binding execution and delivery of such document for all purposes. 
 11.16. Assignment by the Parties. This Agreement will
be binding upon, inure to the benefit of and be enforceable by the Parties and their respective successors and permitted assigns. Except as provided in this Section 11.16, neither Party shall have the right to assign or transfer (whether by
operation of law or otherwise) any of its rights or obligations under this Agreement without the other Party’s prior written consent. Without the consent of MACROCHEM, GENAERA may assign its rights under this Agreement and delegate its
obligations hereunder, in whole or in part, to any person that shall acquire the Subject IP if the assignee shall assume GENAERA’s obligations hereunder in writing, and assign this Agreement in connection with a sale or transfer of
substantially all of the assets of, or a majority interest in the voting shares of, GENAERA to, or the merger or consolidation of GENAERA with or into, 
  

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any other person. With the prior written consent of GENAERA in each case, which shall not be unreasonably withheld, MACROCHEM may assign its rights under
this Agreement and delegate its obligations hereunder, in whole or in part, to any person that shall acquire substantially all of MACROCHEM’s business related to the Product, if the assignee shall assume MACROCHEM’s obligations hereunder
in writing. Notwithstanding the immediately preceding sentence, MACROCHEM may assign all of its rights and obligations under this Agreement in connection with a sale or transfer of substantially all of the assets of, or a majority interest in the
voting shares of, MACROCHEM to, or the merger or consolidation of MACROCHEM with or into, any other person, without GENAERA’s prior written consent if the following conditions are satisfied: (a) the milestone payments set forth in Sections
3.1(a)(ii) and (iii), if not already paid to GENAERA, shall be paid in full to GENAERA within thirty (30) days after the consummation of such sale, transfer, merger or consolidation, by MACROCHEM or such other person, whichever is a party to
this Agreement after consummation of such transaction, and (b) neither such other person nor any of its Affiliates shall, at the time such transaction is consummated, own or hold under license any product approved by a Governmental Authority
that could compete with any Product, or any product in Phase III clinical trials that could compete with any Product, unless such other person or its Affiliates, as applicable, has agreed in writing with GENAERA not to use such other product owned
or licensed to compete with any Product. Any assignment or transfer of this Agreement in violation of this Section 11.16 shall be null and void, ab initio. 
 11.17. Waiver of Jury Trial. EACH OF GENAERA AND MACROCHEM BY THIS AGREEMENT IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHTS TO TRIAL BY JURY IN ANY LEGAL ACTION, PROCEEDING OR COUNTERCLAIM WITH RESPECT TO
ANY MATTER WHATSOEVER ARISING OUT OF OR IN CONNECTION WITH OR RELATED TO THIS AGREEMENT OR THE ENFORCEMENT HEREOF OR THEREOF. 
 * * * * *

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 IN WITNESS WHEREOF, the undersigned have duly executed and delivered this Agreement. 
  

			
	MACROCHEM CORPORATION
		
	By:	 	  

	Date:	 	
	
	GENAERA CORPORATION
		
	By:	 	  

	Date:	 	

  

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